Hatsun Agro Product Ltd
Directors Reports
To the Members,
Your Directors are pleased to present their 38th Report along with the
audited financial statements for the financial year ended March 31,2023.
FINANCIAL RESULTS
The financial results of the Company for the year ended 31st March,
2023 are summarised below:
(f in Lakhs)
| PARTICULARS |
CURRENT YEAR ENDED 31st
MARCH, 2023 |
PREVIOUS YEAR ENDED 31st
MARCH 2022 |
| Revenue from operations (net) |
7,24,697 |
6,39,648 |
| Other Income |
1,056 |
760 |
| Total Income |
7,25,753 |
6,40,408 |
| Operating Expenditure |
6,54,553 |
5,69,971 |
| Profit before Interest, Depreciation and Amortisation and Tax
(PBDIT) |
71,200 |
70,437 |
| Finance Costs (net) |
12,592 |
10,835 |
| Depreciation and Amortisation |
36,152 |
32,064 |
| Profit before Taxes |
22,456 |
27,538 |
| Tax Expenses |
5,854 |
5,669 |
| Income tax pertaining to earlier years |
16 |
78 |
| Net Profit for the Year |
16,586 |
21,791 |
| Other Comprehensive (Income) / Expenses |
141 |
132 |
| Total Comprehensive Income |
16,445 |
21,659 |
| Balance Brought Forward from Previous Year |
44,992 |
36,293 |
| Re-measurement of Defined Benefit Obligations |
(141) |
(158) |
| Amount Available for Appropriation |
61,437 |
57,926 |
| Appropriations |
|
|
| Interim Dividends on Equity Shares |
12,934 |
12,934 |
| Tax on Dividends |
|
- |
| Transfer to General Reserve |
- |
- |
| Balance carried to Balance Sheet |
48,503 |
44,992 |
PERFORMANCE OF THE COMPANY
During the year under review, your Company clocked a total income of
f7,25,753 Lakhs as against f6,40,408 Lakhs representing an increase of 13.33 % over that
of the previous year. The PBDIT has increased from f70,437 Lakhs (FY 2021-2022) to f
71,200 Lakhs (FY 2022-2023) representing an increase of 1.08%. The Net Profit during the
year was f 16,586 Lakhs in comparison with previous year which stood at f 21,791 Lakhs
resulting in a decrease of 23.89 %.
DIVIDEND
For the Financial Year 2022-2023, your Company declared an Interim
dividend of f6/- (600%) per fully paid up equity share of the face value of f1 per share
(ISININE473B01035) on 19th July, 2022 for the Financial Year 2022-23.
The cash outflow on account of Interim Dividend absorbing a sum of f
129,33,79,938/- (Rupees One Hundred Twenty Nine Crores Thirty Three Lakhs Seventy Nine
Thousand Nine Hundred Thirty Eight only) including a dividend tax calculated at different
rates as per the Certificates/Submissions made by the Shareholders as per the Income Tax
Act was paid as Interim Dividend for the financial year 2022-23 out of the accumulated
profits of the Company.
During the year 2022-23, a Dividend amount of f23,24,646 (f7,70,652 -
declared on 28.05.2015, f9,08,330 - declared on 15.07.2015 and f6,45,664 declared on
20.10.2015) which remained unclaimed for a period of 7 consecutive years) being unclaimed
dividend pertaining to the financial year 2015-16 (Interim dividend) was transferred to
Investor Education & Protection Fund (IE&PF).
CHANGES IN SHARE CAPITAL
During the Financial Year 2022-23, the Company came out with an issue
of 71,85,444 Equity Shares on "Rights Issue" basis to the existing Equity
Shareholders of the Company at a price of Re.1 per Rights Equity Share with a Premium of
f418 for raising the funds not exceeding f30,107.01 Lakhs. Further to the closure of
Rights Issue in the month of January, 2023, the Company, in consultation with the Lead
Manager to the Issue viz., Axis Capital Limited and the Registrar to the Issue viz.,
Linkintime India Pvt. Ltd., allotted 71,84,945 Equity Shares on Rights basis to the
eligible Equity Shareholders and kept in abeyance 499 Rights Equity Shares pending
disposal of a Suit between the litigants on the title to the Shares by the Court. Upon the
allotment of above said 71,84,945 Rights Equity Shares, the paid up Equity Share Capital
of the Company got increased from 21,55,63,323 Equity Shares of Re.1 each amounting to
Rs.2,155.63 Lakhs to 22,27,48,268
Equity Shares of Re.1 each amounting to f2,227.48 Lakhs compared to the
previous financial year. The Company, though received the excess subscription, retained
the money of f30,104.92 Lakhs towards the number of Rights Equity Shares allotted i.e.,
71,84,945 and refunded the balance excess subscription received.
Out of the issue proceeds of the f30,104.92 Lakhs, your Company has
utilised the receipt in full towards full or partial repayment or prepayment of the
borrowings availed by the Company from Banks/Financial Institutions. The utilisation of
the proceeds has been in accordance with the Objects stated in the Letter of Offer dated
03rd December, 2022 in respect of the Rights Issue of the Company in compliance with
Regulation 32(1) of the Securities and Exchange Board of India (Listing Obligations and
Disclosure Requirements) Regulations, 2015 as amended and there is no deviation as regards
the utilisation of funds.
TRANSFER TO RESERVES
The Company retained the entire surplus in the Profit and Loss Account
and hence no transfer to General Reserve was made during the Year.
FINANCE
The total borrowings decreased from f 1,70,827 Lakhs to f 1,44,793
Lakhs due to repayment of some of the high cost debt.
Your Company follows judicious management of its Short Term and Long
Term Borrowings with strong relationship with various reputed Banks from whom your Company
has availed Credit facilities at very competitive rates.
DEPOSITS
The total amount of fixed deposits (excluding interest on Cumulative
Deposits) from public, outstanding and unclaimed as at 31st March, 2023, was NIL.
| (a) Accepted during the Year |
NIL |
| (b) Remained unpaid or unclaimed as at the end of the year.
(Including interest thereon) |
NIL |
| (c) Whether there has been any default in repayment of
deposits or payment of interest thereon during the year and if so, number of such cases
and the total amount involved: |
No deposit has been accepted by the Company during the year
and there did not arise any default during the year. |
| i. As at 1st April 2022 |
NIL |
| ii. Maximum during April 2022 to March 2023. |
NIL |
| iii. As at 31st March 2023. |
NIL |
| (d) Details of deposits which are not in compliance with the
requirements of Chapter V of the Act |
NIL |
INVESTOR EDUCATION AND PROTECTION FUND (IE&PF)
Pursuant to the applicable provisions of the Companies Act, 2013, read
with the IE&PF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016
("the IE&PF Rules"), all the Unpaid or Unclaimed dividends are required to
be transferred by the Company to the IE&PF Authority after the completion of seven
years. Further, according to the Rules, the Shares on which dividend has not been paid or
claimed by the shareholders for seven consecutive years or more shall also be transferred
to the demat account of the IE&PF Authority. During the year 2022-23, a Dividend
amount of Rs.23,24,646 (f7,70,652 - declared on 28.05.2015, Rs.9,08,330 - declared on
15.07.2015 and Rs.6,45,664 declared on 20.10.2015) which remained unclaimed for a period
of 7 consecutive years) being unclaimed dividend pertaining to the financial year 2015-16
(Interim dividend) was transferred to Investor Education & Protection Fund
(IE&PF).
The details in respect of transfer of unclaimed dividends are provided
in the Shareholder information section of this Annual Report and are also available on our
website, at https://www.hap.in/unclaimed-dividened.php
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186
There were no loans and guarantees given by the Company falling under
Section 186 of the Companies Act, 2013. Investments under the provisions of Section 186 of
The Companies Act, 2013 have been made. Particulars of investments covered under Section
186 form part of the notes on financial statements are provided in this Annual Report.
DETAILS OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
Appointments, Resignations and Changes
There were no new appointment or resignations or Changes in the
Directors and Key Managerial Personnel that happened during the financial year 2022 - 23
which is under review.
Re-Appointments
As per provisions of The Companies Act, 2013, Mr. P. Vaidyanathan (DIN:
00029503), Non-Executive
Director and Mr. K.S. Thanarajan (DIN: 00012285), Non-Executive
Director are liable to retire by rotation at the ensuing Annual General Meeting and being
eligible, offer themselves for re-appointment. The Board of Directors recommends their
re-appointment.
Brief Profile of Directors proposed to be Re-appointed:
Mr. P. Vaidyanathan is a fellow member of the Institute of Chartered
Accountants of India, associate member of the Institute of Company Secretaries of India
and the Institute of Cost and Works Accountants of India. He has over 30 years of
experience in the finance functions and has expertise in the field of Corporate Finance.
Mr. K.S. Thanarajan is a Master in Economics from the University of
Madras. He has been in the dairy business for more than 20 years and brings with him a
deep functional experience of the dairy industry.
Your Board recommends the reappointment of Mr. P. Vaidyanathan and Mr.
K.S. Thanarajan who are retiring by rotation in the ensuing Annual General Meeting.
Declaration by Independent Directors
The Company has received declarations from all its Independent
Directors that they meet the criteria of Independence as laid down under section 149(6) of
the Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations
and Disclosure Requirements) Regulations, 2015 in respect of the financial year ended
March 31, 2023.
Independent Directors have complied with the Code for Independent
Directors prescribed in Schedule IV of the Companies Act, 2013.
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT (BRSR)
As per the requirements of SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 as amended, your Company presents the Business
Responsibility and Sustainability Report (BRSR) in the format as specified by SEBI which
is forming part of this report.
BOARD MEETINGS HELD DURING THE FINANCIAL YEAR
During the year under review, Eight (8) Board Meetings were convened
and held, the details of which are given in the Corporate Governance Report. The
intervening gap between the Meetings was within the time period prescribed under The
Companies Act, 2013.
BOARD COMMITTEES
The primary five committees of the Board are Audit Committee,
Nomination and Remuneration Committee, Stakeholders' Relationship Committee, Corporate
Social Responsibility Committee and Risk Management Committee. Other than the above said
primary committees, the Board has the following additional committees also viz., Borrowing
& Investment Committee and Core Committee. A detailed note on the committees is
provided under the Corporate Governance Report forming part of
this Board's Report. The composition of the Primary Committees as of
31st March 2023 (including the changes effected up to the date of this report) and their
meeting dates are given below:
| NAME OF THE COMMITTEE |
COMPOSITION |
DETAILS OF MEETINGS HELD DURING THE YEAR |
| Audit Committee |
The Committee comprises of Four Non-Executive Independent
Directors and Two Non-Executive Non-Independent Directors. The Chairman of the Committee
is an Independent Director. |
Four meetings were held during the year on the following
dates:- |
|
|
• 27th April, 2022 |
|
|
• 19th July, 2022 |
|
|
• 19th October, 2022 |
|
|
• 19th January, 2023 |
| Nomination and Remuneration Committee |
The Committee comprises of Four Non-Executive Independent
Directors and Two Non-Executive Non-Independent Directors as on the date of this report.
The Chairman of the Committee is an Independent Director. |
Two meetings were held during the year on the following
dates:- |
|
|
• 19th July, 2022 |
|
|
• 19th January, 2023 |
| Stakeholders' Relationship Committee |
The Committee comprises of Four Non-Executive Independent
Directors and Two Non-Executive Non-Independent Directors. The Chairman of the Committee
is an Independent Director. |
Two meetings were held during the year on the following
dates:- |
|
|
• 27th April, 2022 |
|
|
• 19th January, 2023 |
| Corporate Social Responsibility Committee |
The Committee comprises of Four Members - One Executive
Director, One Non-Executive Independent Director and Two Non-Executive Non-Independent
Directors as on the date of this report. The Chairman of the Committee is an Independent
Director |
One meeting was held during the year on the following date:- |
|
|
• 27th April, 2022 |
| Borrowing & Investment Committee |
The Committee comprises of Four Members - One Executive
Director, One Non-Executive Independent Director and Two Non-Executive Non-Independent
Directors as on the date of this report. The Chairman of the Committee is a Non-Executive
NonIndependent Director. |
Three meetings were held during the year on the following
dates:- |
|
|
• 27th May, 2022 |
|
|
• 11th August, 2022 |
|
|
• 14th February, 2023 |
| Risk Management Committee |
The Committee comprises of Four Members - One Executive
Director, Two Non-Executive NonIndependent Directors and One Independent Director as on
the date of this report. The Chairman of the Committee is a Non-Executive NonIndependent
Director. |
Three meetings were held during the year on the following
dates:- |
|
|
• 19th July, 2022 |
|
|
• 19th October, 2022 |
|
|
• 19th January, 2023 |
Details of recommendations of Audit Committee which were not accepted
by the board along with reasons The Audit Committee generally makes certain
recommendations to the Board of Directors of the Company during their meetings held to
consider any financial results (Unaudited and Audited) and such other matters placed
before the Audit Committee as per The Companies Act 2013 and Securities and Exchange Board
of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 from time to
time. During the year the Board of Directors considered all the recommendations made by
the Audit Committee accepted and carried out all the recommendations suggested by the
Committee to its satisfaction. Hence there are no recommendations of Audit Committee
unaccepted by the Board of Directors of the Company during the year under review.
DETAILS OF POLICIES DEVELOPED BY THE COMPANY
(i) Nomination and Remuneration Policy
The Company has formulated the Nomination and Remuneration Policy in
compliance with Section 178 of The Companies Act, 2013 read along with the applicable
Rules thereto and Part D of Schedule II of Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations, 2015, as amended from time to time.
The objective of this policy is to ensure:
• The level and composition of remuneration is reasonable and
sufficient to attract, retain and motivate directors of the quality required to run the
company successfully;
• Relationship of remuneration to performance is clear and meets
appropriate performance benchmarks; and
• Remuneration to Directors, Key Managerial Personnel and Senior
Management involves a balance with short and long-term performance objectives appropriate
to the working of the Company and its goals.
This policy is being governed by the Nomination and Remuneration
Committee comprising of members of the Board, as stated above, comprising of four
Independent Directors and two Non-Executive NonIndependent Directors. The policy lays down
the standards to be followed by the Nomination and Remuneration Committee with respect to
the appointment, remuneration and evaluation of Directors, Key Managerial Personnel and
Senior Management Personnel. Salient features of the Nomination and Remuneration Policy is
annexed herewith marked as Annexure A and forms part of this report. The detailed policy
is hosted on the website of the Company and the web link for the same is
https://www.hap.in/policies.php.
Affirmation that the remuneration is as per the remuneration policy of
the company
The Company has formulated the Nomination and Remuneration Policy in
compliance with Section 178 of The Companies Act, 2013 read along with the applicable
rules thereto and Part D of Schedule II of Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations,
2015, as amended from time to time. This policy governs the criteria
for deciding the remuneration to Directors, Key Managerial Personnel and Senior Management
Personnel. It is affirmed that the remuneration to Directors, Key Managerial Personnel and
Senior Management Personnel is being fixed based on the criteria and parameters mentioned
in the above mentioned policy of the Company.
Board Diversity
The Company recognises and values the importance of a diverse board as
part of its corporate governance and success. The Company believes that a truly diverse
Board will leverage differences in ideas, knowledge, thought, perspective, experience,
skill sets, age, ethnicity, religion and gender which will go a long way in retaining its
competitive advantage. The Board has on the recommendation of the Nomination and
Remuneration Committee, adopted a Board Diversity Policy which sets out the approach to
diversity of the Board of Directors.
(ii) Corporate Social Responsibility Policy (CSR)
Your Company recognises that its business activities have wide impact
on the societies in which it operates, and therefore an effective practice is required
giving due consideration to the interests of its stakeholders including shareholders,
customers, employees, suppliers, business partners, local communities and other
organisations.
Your Company endeavours to make CSR an important agenda and is
committed to its stakeholders to conduct its business in an accountable manner that
creates a sustained positive impact on society. Your Company satisfying the threshold as
stipulated under Section 135 of The Companies Act, 2013 has established the CSR Committee
comprising of members of the Board and the Chairman of the Committee is a Non-Executive
and Independent Director. The said Committee has formulated and approved the CSR policy as
per the approach and direction given by the Board pursuant to the recommendations made by
the Committee including guiding principles for selection, implementation and monitoring of
activities as well as formulation of Annual Action Plan for the Company with its major
focus on:-
• Devising meaningful and effective strategies for carrying out
CSR activities and engaging with all stakeholders towards implementation and monitoring.
• Make sustainable contributions to communities.
• Identify socio-economic opportunities to perform CSR activities.
• Focus on social welfare activities and programmes as envisaged
in Schedule VII of The Companies Act, 2013.
• Modalities of utilising the funds and implementation of
schedules for the Projects or Programmes.
• Monitoring and Reporting mechanism for the Projects or
Programmes; and
• Details of need and impact assessment study, if any, for the
Projects undertaken by the Company.
The CSR Committee recommends to the Board of Directors to implement the
CSR activities covering any of the areas as detailed under Schedule VII of The Companies
Act, 2013 as per CSR Policy of the Company. Annual Report on CSR activities as required
under the provisions of The Companies Act, 2013 is annexed herewith marked as Annexure B
and forms part of this report.
(iii) Risk Management Policy
The Board of Directors of your Company has adopted a Risk Management
Policy which details the procedures to be followed by the Company with regard to risk
management. The Company has formed a Risk Management Committee comprising of four members
of the Board who shall evaluate and review the risk factors associated with the operations
of the Company and recommend to the Board the methods to mitigate the risk and advise from
time to time various measures to minimise the risk and monitor the risk management for the
Company.
The policy broadly defines the scope of Risk Management Committee which
comprises of:-
• Review and approve the Risk Management Policy and associated
frameworks, processes and practices of the Company.
• Ensuring that the Company is taking appropriate measures to
achieve prudent balance between risk and reward in both the ongoing and new business
activities.
• Evaluating significant risk exposures of the Company and assess
management's actions to mitigate the exposures in a timely manner (including one-off
initiatives, and ongoing activities such as business continuity planning and disaster
recovery planning & testing).
• Co-coordinating its activities with the Audit Committee in
instances where there is any overlap with audit activities (e.g. internal or external
audit issue relating to risk management policy or practice).
• Reporting and making regular recommendations to the Board.
(iv) Whistle-Blower Policy - Vigil Mechanism
The Company is committed to adhere to the highest standards of ethical,
moral and legal conduct of business operations. To maintain these standards, the Company
encourages its employees who have concerns about suspected misconduct to come forward and
express these concerns without fear of punishment or unfair treatment. A Vigil (Whistle
Blower) Mechanism provides a channel to the Employees and Directors to report to the
management concerns about unethical behavior, actual or suspected fraud or violation of
the Code of Conduct or Policy. The Mechanism provides for adequate safeguards against
victimisation of employees and directors to avail of the mechanism and also provide for
direct access to the Chairman of the Board/Chairman of the Audit Committee in exceptional
cases.
In line with the statutory requirements, the Company has formulated a
Whistle-Blower Policy/Vigil Mechanism, which covers malpractices and events which have
taken place/suspected to have taken place, misuse or abuse of authority, fraud or
suspected fraud, violation of company rules, manipulations, negligence causing danger to
public health and safety, misappropriation of monies, and other matters or activity on
account of which the interest of the Company is or is likely to be affected and formally
reported by whistle blowers concerning its employees.
The Managing Director is responsible for the administration,
interpretation, application and review of this policy. The Managing Director is also
empowered to bring about necessary changes to this Policy, if required at any stage with
the concurrence of the Audit Committee. The mechanism also provides for access to the
Chairman of the Audit Committee in required circumstances.
(v) Dividend Distribution Policy
According to Regulation 43A of SEBI (Listing Obligations and Disclosure
Requirements) Regulations 2015 as amended, your Company falling under top 1000 listed
entities based on the market capitalisation (calculated as on March 31 of every financial
year) has framed the Dividend Distribution Policy which is attached in this Annual Report
marked as Annexure E. Weblink: https://www.hap.in/policies.php.
EVALUATION OF BOARD, COMMITTEE AND DIRECTORS
Pursuant to the provisions of The Companies Act, 2013 and Regulation 17
of Securities and Exchange Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015 as amended, an annual performance evaluation of the
performance of the Board, the Directors individually as well as the evaluation of the
working of the Board Committees was carried out based on the criteria and framework
adopted by the Board.
The evaluation process for measuring the performance of
Executive/Non-Executive and Independent Directors is being conducted through a survey
which contains a questionnaire capturing each Board and Committee Member's response to the
survey which provides a comprehensive feedback to evaluate the effectiveness of the Board
and its Committees as a whole and also their independent performance. The methodology
adopted by each Director who responded to the survey has graded their peers against each
survey item from 1 to 5 with 1 marking the lower efficiency and 5 the highest efficiency
which revealed more realistic data on measuring the effectiveness of the Board dynamics,
flow of information, decision making of Directors and performance of Board and Committees
as a whole.
The Independent Directors' evaluation is being done by the entire Board
with a main focus on their adherence to the Corporate Governance practices and their
efficiency in monitoring the same. They are also being evaluated on various parameters
viz., their performance by way of active participation in Board and Committee meetings,
discussing and contributing to strategic planning, fulfillment of Independence criteria as
specified under SEBI (LODR) Regulations, 2015 as amended and their independence from the
Management etc., ensuring non participation of Independent Director being evaluated.
Apart from the above, the performance of Non-Independent Directors and
the Board as a whole in terms of prudent business practices adopted by them towards
governance of the operations of the Company, adherence to the highest standards of
integrity and business ethics, exercising their responsibilities in a bonafide manner in
the best interest of the Company and not allowing any extraneous consideration that shall
impede their decision making authority in the best interest of the Company was also
carried out to evaluate their performance.
The performance evaluation of Non-Independent Directors was carried out
by the entire Board of Directors (excluding the Director being evaluated) and they have
expressed their satisfaction with the evaluation process which considered their commitment
and the exercise of their responsibilities in the best interest of the Company.
The performance of Chairman of the Company was reviewed by the
Independent Directors who ensured during their review, that the Chairman conducted the
Board proceedings in an unbiased manner without any conflict with his personal interest at
any point of time. It was further ascertained by the Independent Directors that the
Chairman allowed the Board Members to raise any concerns on any business of the Board
during their Meetings and addressed them in the best interest of the Company.
As per the SEBI Circular SEBI/HO/CFD/CMD/CIR/ P/2018/79 dated 10th May
2018, the followings details are being provided on Board evaluation.
| Observations of board evaluation carried out for the year. |
There were no observations arising out of board evaluation
during the year as the evaluation indicates that the Board has functioned effectively
within its powers as enumerated under The Companies Act, 2013 and in consonance with the
Articles of Association of the Company. |
| Previous year's observations and action taken. |
There were no observations during the previous year
warranting any action. |
| Proposed actions based on current year observations. |
As there were no observations, the action to be taken does
not arise. |
TRAINING AND FAMILIARISATION PROGRAM FOR INDEPENDENT DIRECTORS
Every Independent Director on being inducted on the Board attends an
orientation program. To familiarise the new directors with the strategy, operations and
functions of our Company, the Executive Directors/Senior Managerial Personnel make
presentations to the inductees about the Company's strategy, operations, product
offerings, organisation structure, human resources, technologies, facilities and risk
management.
Further, at the time of appointment of Independent Directors, the
Company issues a formal letter of appointment outlining his/her role, functions, duties
and responsibilities as a Director. The detailed familiarisation program for Independent
Directors is hosted on the website of the Company and the weblink for the same is
https://www.hap.in/policies.php.
COMPLIANCE WITH SECRETARIAL STANDARDS
The Directors state that applicable Secretarial Standards, i.e. SS-1
and SS-2, issued by the Institute of Company Secretaries of India, relating to 'Meetings
of the Board of Directors' and 'General Meetings', respectively, have been duly
followed/complied with by the Company.
NAMES OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES,
JOINT VENTURES OR ASSOCIATE COMPANIES DURING THE YEAR.
Your Company has no subsidiaries, joint venture or associate companies
and hence the disclosure does not arise.
AUDITORS Statutory Auditors
At the Annual General Meeting held on 20th September, 2022, M/s.
Deloitte Haskin & Sells, Chartered Accountants,(Firm Registration number 117366W
/W100018) were re-appointed as Statutory Auditors of the Company to hold office for a
Second and Final Term of 5 consecutive years from the conclusion of Thirty Seventh (37th)
Annual General Meeting of the Company until the conclusion of Forty Second (42nd) Annual
General Meeting of the Company to be held in the calendar year 2027.
The Company has received a Certificate from the Statutory Auditors to
the effect they are not disqualified to continue as Auditors of the Company.
The Notes to financial statement referred to in the Auditors' Report
are self-explanatory and do not call for any further comments. The Auditors' Report does
not contain any qualification, reservation, adverse remark or disclaimer.
Total Fees for all the Services paid by the Company, on a consolidated
basis, to the Statutory Auditors
Total Fees for all the Services paid by the Company, on a Consolidated
basis to M/s. Deloitte Haskins & Sells LLP for the financial year 2022-23 was
Rs.149.27 Lakhs (excluding tax).
The Board, in consultation with the Statutory Auditors and as per the
recommendation of Audit Committee, will decide the payment of Audit Fee payable to the
Statutory Auditors for all their services including audit of accounts, tax audit etc., for
the financial year 2023-24 excluding out of pocket expenses.
Secretarial Auditor
Pursuant to the provisions of Section 204 of The Companies Act, 2013
and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the
Company has appointed Mr. S. Dhanapal, Senior Partner, M/s. S. Dhanapal & Associates,
a firm of Practising Company Secretaries to undertake the Secretarial Audit of the
Company. The Secretarial Audit Report for the financial year 2022-2023 is annexed herewith
marked as Annexure C and forms part of this report. As required by the Listing
Regulations, the Secretarial Auditors' Certificate on Corporate Governance is enclosed as
Annexure D to the Board's report. The Secretarial Audit Report does not contain any
qualification, reservation, adverse remark or disclaimer.
Cost Auditor
Pursuant to the provisions of clause (g) of sub-section (3) of Section
141 read with sub section (3) of Section 148 of The Companies Act, 2013, the Company has
appointed M/s. Ramachandran & Associates, Cost Auditors (Firm Registration No.000799)
as Cost Auditor of the Company to conduct the audit of the Cost Accounting records
maintained by the Company relating to those products as mandated by The Companies Act,
2013 and the Companies (Cost records and audit) Rules, 2014 as amended. In this regard the
units manufacturing Milk Powder at Palacode, Salem and Kanchipuram have been covered under
Cost Audit for the financial year 2022-23.
The Company maintains the Cost Records as specified by the Central
Government under Section 148(1) of the Companies Act, 2013 as applicable to the Company.
During the year under review, the Statutory Auditors, Cost Auditors and
Secretarial Auditors have not reported any instance of fraud committed in the Company by
its Officers or Employees to the Audit Committee under Section 143(12) of The Companies
Act, 2013 details of which need to be mentioned in this report.
PARTICULARS OF EMPLOYEES AND REMUNERATION
Details as required under Section 197 of The Companies Act, 2013 read
with Rule 5(2) of The Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014 :
| Details of Top ten Employees in terms of
Remuneration drawn*: Name of the Employee |
Designation of the Employee |
Remuneration received (Amount in ^ Per
annum) |
|
Qualifications and experience of the
Employee |
Date of commencement of employment |
Age of such Employee |
Last employment held by such Employee
before joining the company |
Percentage of Equity Shares held by the
Employee by himself or along with his /her spouse and dependent Children, being not less
than two percent of the Equity Shares of the Company |
Whether any such Employee is a relative
of any Director or Manager of the Company and if so, name of such Director or Manager |
| **Prasanna Venkatesh J |
AVP Sales & Marketing |
58,19,682 |
Permanent |
B.SC PG.D.B.A |
03.08.1998 |
60 |
Henkal SPIC |
Nil |
No |
| Shanmuga Priyan J |
Chief Operating Officer |
58,58,617 |
Permanent |
M.COM |
07.03.2001 |
46 |
First Employment in HATSUN |
Nil |
No |
| Shahnavaz Mohammad |
Senior General Manager - Sourcing |
43,80,546 |
Permanent |
B.Sc., Dairy Tech, LLB & EPBM |
15.06.2016 |
47 |
Tirumala Milk Products Ltd. |
Nil |
No |
| Anil Kumar P A |
Vice President - Quality Assurance |
76,35,367 |
Permanent |
M.SC., Dairy Microbiology |
25.03.2009 |
64 |
Heritage Food India Ltd. |
Nil |
No |
| Sam Joseph A |
Senior General Manager - Sourcing & Animal Husbandry |
49,60,453 |
Permanent |
B. E |
18.11.2009 |
49 |
Srinivasa Fine Arts Pvt Ltd., |
Nil |
No |
| ***Ratnakar R P.Sundara Raj R |
Associate Vice President - Commercial |
55,09,826 |
Permanent |
B.Com., PG.D.R.M |
04.06.2010 |
63 |
Nilgiris Dairy Farms Pvt Ltd., |
Nil |
No |
| Sayyad Mohammad Ghouse |
Associate Vice President - Plant Operations |
64,63,663 |
Permanent |
Diploma in Dairy Technology |
09.08.2021 |
60 |
NFPC Mega Plant, Abu Dhabi, UAE. |
Nil |
No |
| Anand S |
Senior General Manager - Sales |
44,83,726 |
Permanent |
Master of Business Administration -
Marketing |
15.10.2021 |
49 |
Devyani Food Industries Ltd., |
Nil |
No |
| Muthusamy S |
Associate Vice President - Human Resources |
45,43,223 |
Permanent |
B.E |
09.11.1998 |
50 |
First Employment in HATSUN |
Nil |
No |
| Senthilkumar |
SGM - Plant Operations |
44,51,918 |
Permanent |
M.Sc., |
06.06.2005 |
43 |
First Employment in HATSUN |
Nil |
No |
*The Top ten employees do not include Executive Directors as their
Remuneration details are shown separately in the Board's Report.
**Mr. Prasanna Venkatesh J was relieved from the Company on 06.02.2023
upon his Superannuation.
*** Mr. Ratnakar P Sundararaj R was relieved from the Company on
19.11.2022 upon his Superannuation.
(i) Details of the employees employed throughout the year and drawing
remuneration which in the aggregate is not less than Rupees One Crore and Two Lakhs per
annum, during the financial year. - Nil
(ii) Employees employed for a part of the financial year, who were in
receipt of remuneration for any part of that year, which, in the aggregate exceeds Rupees
Eight Lakhs and Fifty Thousand per month, during the financial year.- NIL.
(iii) None of the employees except the Managing Director employed
throughout the financial year or part thereof, holds by himself/herself or along with
his/her spouse and dependent children, more than two per cent of the equity shares of the
Company.
Details required as per Section 197 and Rule 5(1) of The Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014
| NAME OF DIRECTOR/KMP |
AMOUNT OF REMUNERATION PER ANNUM ( in I
) |
RATIO OF REMUNERATION TO MEDIAN
REMUNERATION OF EMPLOYEES FOR THE FY |
% INCREASE IN REMUNERATION DURING THE FY |
| Mr. C. Sathyan, Managing Director |
94,20,367 |
39.92 |
16.14 |
| Mr. H. Ramachandran, Chief Financial Officer |
85,72,577 |
36.33 |
5.75 |
| Mr. G. Somasundaram, Company Secretary |
36,03,731 |
15.27 |
6.72 |
*Retirement benefits like Gratuity not included since the same is not
comparable.
Percentage increase in the median remuneration of employees in the
financial year
The median remuneration of Employees for the Financial Year ended 31st
March, 2023 was arrived at T19,671/- per month and the median remuneration of Employees
for the previous financial year ended 31st March, 2022 was arrived at T18,588/- per month
and accordingly, there was an increase of 5.83 % in the median remuneration of employees
in the financial year.
Number of permanent employees on the rolls of the company as on
31.03.2023
The number of permanent employees on the rolls of the Company as of
31st March, 2023 stood at 5310.
Average percentile increase already made in the salaries of employees
other than the managerial personnel in the last financial year and its comparison with the
percentile increase in the managerial remuneration and justification thereof and point out
if there are any exceptional circumstances for increase in the managerial remuneration;
The average percentile increase was about 9.31 % for all the employees
who went through the compensation review cycle in the year. For the managerial personnel,
the compensation has increased marginally for Managing Director, CFO and the Company
Secretary, due to annual increment based on their performance. The remuneration for the
Managing Director and Executive Director is determined by the Shareholders for a defined
term as stipulated under The Companies Act, 2013.
The compensation decisions are taken after considering at various
levels of the benchmark data and the compensation budget approved for the financial year.
The Nomination and Remuneration Committee recommends to the Board of Directors any
compensation revision for the managerial personnel. In respect of Whole-time Directors the
remuneration fixed for them is finally approved by the Shareholders.
Details of pecuniary relationship or transactions of the Non-Executive
directors vis-a-vis the company
All the Non-Executive Directors are entitled to only the Sitting fees
of '50,000 for every board meeting they attend and a Sitting fee of '10,000 for every
committee meeting they attend as Members of respective committees pursuant to the revision
in the Sitting fees approved by the Board at its meeting held on 27th April 2017.
Mr. P. Vaidyanathan, Non-Executive Non-Independent Director held in
total 12,41,798 Equity Shares - in the capacity as Karta of Vaidyanathan .P HUF (1,37,977
Equity Shares) and in the capacity as Karta of Panchapagesan Vaidyanathan .S HUF
(11,03,821 Equity Shares) as of 31st March 2023.
Mr. K.S. Thanarajan, Non-Executive Non-Independent Director held
6,68,179 Equity shares as of 31st March 2023.
Mr. V.R. Muthu, Non-Executive Independent Director held 59,773 Equity
Shares as of 31st March 2023.
Other than the Sitting fees, Mr. D. Sathyanarayan, Non -Executive
Non-Independent Director of the Company was paid a Remuneration for the services rendered
by him after obtaining the approval of the Members by passing a Special Resolution through
Postal Ballot dated 15th January, 2022.
ADEQUACY OF INTERNAL FINANCIAL CONTROLS
The term Internal Financial Controls has been defined as the policies
and procedures adopted by the company to ensure orderly and efficient conduct of its
business, including adherence to company's policies, safeguarding of its assets,
prevention and detection of frauds and errors, accuracy and completeness of accounting
records, and the timely preparation of reliable financial information.
Your Company has a adequate and robust Internal Control System,
commensurate with the size, scale and complexity of its operations. To maintain its
objectivity and independence, the Internal Audit reports are submitted to the Audit
Committee of the Board. The Internal Audit Department monitors and evaluates the efficacy
and adequacy of internal control system in the Company, its compliance with operating
systems, accounting procedures and policies at all locations of the Company. Based on the
report of internal audit function, process owners undertake corrective action in their
respective areas and thereby strengthen the controls. Significant audit observations and
recommendations along with corrective actions thereon are presented to the Audit Committee
of the Board. The Audit Committee also conduct discussions about Internal Control System
with the Internal and Statutory Auditors and the Management of the Company and satisfy
themselves on the integrity of financial information and ensure that financial controls
and systems of risk management are robust and defensible.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
(PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has in place an Anti Sexual Harassment Policy in line with
the requirements of The Sexual Harassment of Women at the Workplace (Prevention,
Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set
up to redress complaints received regarding sexual harassment. All the employees
(permanent, contractual, temporary, trainees) are covered under this policy.
The Company has not received any complaint on sexual harassment during
the financial year ended 31.03.2023.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR
TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE
During the year there are no significant and/or material Orders passed
by the Regulators or Courts or Tribunals impacting the going concern status and the
Company's operations in future.
MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL
POSITION OF THE COMPANY WHICH HAS OCCURRED SINCE 31.03.2023 TILL THE DATE OF THIS REPORT
There have been no material changes and commitments which affect the
financial position of the company which have occurred between the end of the financial
year i.e., from 31.03.2023 to which the financial statements relate until the date of this
report.
EXTRACT OF ANNUAL RETURN
As per the MCA Notification dated 28th August, 2020 making an amendment
to Rule 12(1) of The Companies (Management and Administration) Rules, 2014, a weblink of
the Annual Return is furnished in accordance with sub section (3) of Section 92 of The
Companies Act, 2013 and as prescribed in Form MGT 7 of The Companies (Management and
Administration) Rules, 2014. You may please refer to our Company's weblink
https://www.hap.in/annual-return.php.
RELATED PARTY TRANSACTIONS
As required under Regulation 23 of Securities and Exchange Board of
India (Listing Obligations and Disclosure Requirements) Regulations, 2015 as amended, the
Company has developed a policy on dealing with Related Party Transactions and such policy
is disclosed on the Company's website. The weblink for the same is
https://www.hap.in/policies.php
There were no Related Party Transactions entered into during the
financial year by the company with the Promoters, Key Managerial Personnel or other
designated persons which may have potential conflict with the interest of the company at
large other than the remuneration paid to the Executive Director/s and Non Executive
Director/s and Dividend received by them from the Company in proportion to the shares held
by them, the transactions with HAP Sports Trust by way of contribution towards CSR
activities and the payment made to the Registrar and Share Transfer Agents.
The details of Related Party Transactions are provided in the Notes to
the Accounts and AOC-2 forming part of the Director's Report - Marked as Annexure G.
CORPORATE GOVERNANCE REPORT
The Company has complied with the corporate governance requirements
under The Companies Act, 2013 and as stipulated under the Securities and Exchange Board of
India (Listing Obligations and Disclosure Requirements) Regulations, 2015 as amended. A
report on Corporate Governance including Management Discussion and Analysis under
Regulation 34 of Securities and Exchange Board of India (Listing Obligations and
Disclosure Requirements) Regulations, 2015 as amended along with a certificate from M/s. S
Dhanapal & Associates, a firm of Practising Company Secretaries, confirming the
compliance is annexed herewith marked as Annexure D and forms part of this report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO
The details on conservation of energy, technology absorption, foreign
exchange earnings and outgo are annexed herewith marked as Annexure F and forms part of
this report.
DIRECTOR'S RESPONSIBILITY STATEMENT
In terms of Section 134 (5) of The Companies Act, 2013, the Directors
would like to state that:
1. In the preparation of the annual accounts, the applicable accounting
standards have been followed.
2. The Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that were 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 and of the profit or loss of the Company for the year under review.
3. The Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the provisions of this Act
for safeguarding the assets of the Company and for preventing and detecting fraud and
other irregularities.
4. The Directors have prepared the annual accounts on a going concern
basis.
5. The Directors had laid down internal financial controls to be
followed by the company and that such internal financial controls are adequate and were
operating effectively.
6. The Directors had devised proper system to ensure compliance with
the provisions of all applicable laws and that such systems were adequate and operating
effectively.
DEPOSITORY SYSTEM
As the members are aware, your Company's shares are tradable in
electronic form and the Company has established connectivity with both the Depositories
i.e., National Securities Depository Limited (NSDL) and Central Depository Services
(India) Limited (CDSL).In view of the advantages of the Depository System, the members are
requested to avail of the facility of dematerialisation of the Company's shares.
INDUSTRIAL RELATIONS
Industrial relations in all the units and branches of your Company
remained cordial and peaceful throughout the year.
DETAILS OF APPLICATION MADE/PROCEEDINGS PENDING UNDER IBC CODE 2016
DURING THE YEAR AND THEIR STATUS AT THE END OF FINANCIAL YEAR
NIL
DETAILS OF ONE TIME SETTLEMENT IF ANY
NIL
ACKNOWLEDGEMENTS
The Directors wish to thank the business associates, customers,
vendors, bankers, farmers, channel partners and investors for their continued support
given by them to the Company. The Directors would also like to thank the employees for the
contributions made by them at all levels.
| For and on behalf of the Board of HATSUN AGRO PRODUCT LIMITED |
| Sd/- |
Sd/- |
| R.G. Chandramogan |
C. Sathyan |
| Chairman |
Managing Director |
| DIN:00012389 |
DIN: 00012439 |
| Place: Chennai |
|
| Date: 09th May, 2023 |
|
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