To the Members,
Your Directors are pleased to present their 37 th Report along with the audited financial statement for the financial year ended March 31, 2022.
The financial results of the Company for the year ended 31st March, 2022 are summarised below:
|PARTICULARS||CURRENT YEAR ENDED||PREVIOUS YEAR ENDED|
|31st MARCH, 2022||31st MARCH, 2021|
|Revenue from operations (net)||6,39,648||5,56,974|
|Profit before Interest, Depreciation and Amortisation and Tax (PBDIT)||70,437||78,449|
|Finance Costs (net)||10,835||11,043|
|Depreciation and Amortisation||32,064||30,991|
|Profit before Taxes||27,538||36,415|
|Income tax pertaining to earlier years||78||(264)|
|Net Profit for the Y;ar||21,791||24,635|
|Other Comprehensive (Income) / Expenses||132||(1)|
|Total Comprehensive Income||21,659||24,636|
|Balance Brought Forward from Previous Year||36,293||24,679|
|Re-measurement of Defined Benefit Obligations||(158)||(87)|
|Amount Available for Appropriation||57,926||49,227|
|Interim Dividends on Equity Shares||12,934||12,934|
|Tax on Dividends||-|
|Transfer to General Reserve||-||-|
|Balance carried to Balance Sheet||44,992||36,293|
PERFORMANCE OF THE COMPANY
During the year, your Company registered a total income of Rs6,40,408 Lakhs as against 5,57,551 Lakhs representing an increase of 14.86% over that of the previous year. The PBDIT has decreased from Rs78,449 Lakhs (FY 2020-2021) to Rs70,437 Lakhs (FY 2021-2022) representing a decrease of 10.21%. The net profit during the year was Rs21,659 Lakhs in comparison with previous year which stood at Rs24,636 Lakhs resulting in a decrease of 12.08%.
For the Financial Year 2021-2022, your Company declared and paid an Interim dividend of Rs6/- (600%) per fully paid up equity shares of the face value of Rs1 per share (ISININE473B01035) on 14th July, 2021 for the Financial Year 2021-22 as First Interim Dividend.
The cash outflow on account of Interim dividend absorbing a sum of Rs129,33,79,938/- (Rupees One Hundred Twenty Nine Crore Thirty Three Lacs Seventy Nine Thousands Nine Hundreds 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 First Interim Dividend for the financial year 2021-22 out of the accumulated profits of the Company.
During the year 2021-22, a Dividend amount of Rs3,83,600 (which was declared on 24.01.2015 and remained unclaimed for a period of 7 consecutive years) being unclaimed dividend pertaining to the financial years 2014-15 (Interim dividend) was transferred to Investor Education & Protection Fund (IE&PF).
CHANGES IN SHARE CAPITAL
Further to the closure of Rights Issue and Bonus Issue which were made in the financial year 2020-21 which resulted in the change in Share Capital, your Company did not effect any change in the Share Capital during the financial year 2021-22 and hence, the paid up Equity Share Capital of the Company stands at 21,55,63,323 Equity Shares of Re.1 each amounting to Rs2155.63 Lakhs without change compared to the previous financial year.
During the financial year 2021-22, the Authorised Share Capital of the Company was increased from Rs30,00,00,000 comprising of 25,00,00,000 equity shares of Re 1/- each and 5,00,000 redeemable or convertible preference shares of Rs100/- each to Rs40,00,00,000 comprising of 35,00,00,000 equity shares of Re 1/- each and 5,00,000 redeemable or convertible preference shares of Rs100/- each by way of Special Resolution passed at the Annual General Meeting of the Members of the Company held on 1st September, 2021.
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.
The total borrowings has increased from Rs1,41,751 Lakhs to Rs1,70,827 Lakhs due to investments in various fixed assets / projects.
Your Company follows the 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.
The total amount of fixed deposits (excluding interest on Cumulative Deposits) from public, outstanding and unclaimed as at 31st March, 2022, 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 2021||NIL|
|ii. Maximum during April 2021 to March 2022.||NIL|
|iii. As at 31st March 2022.||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 (IEPF)
Pursuant to the applicable provisions of the Companies Act, 2013, read with the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("the IEPF Rules"), all the Unpaid or Unclaimed dividends are required to be transferred by the Company to the IEPF 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 IEPF Authority. During the year 2021-22, a Dividend amount of Rs3,83,600 which was declared on 24.01.2015 and remained unclaimed for a period of 7 consecutive years) being unclaimed dividend pertaining to the financial years 2014-15 (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 forms part of the notes on financial statements provided in this Annual Report.
DETAILS OF DIRECTORS AND KEY MANAGERIAL PERSONNEL Appointments, Resignations and Changes:
Mr. Rajendran Muthu was appointed as an Additional Director by the Board at their Meeting held on 19.10.2020, under the category of Non-Executive Independent Director with effect from 19th October, 2020. His appointment as Additional Director in the capacity of Non-Executive Independent Director continued up to the last Annual General Meeting held on 01st September, 2021. At the Annual General Meeting held on 01st September, 2021, Mr. Rajendran Muthu?s appointment as Non-Executive Independent Director for the first term of 5 consecutive years w.e.f., 19.10.2020 was approved by the Members.
Mr. Rajendran Muthu is a Graduate in Commerce and has rich experience in Business/Commercial spheres over a period of 20 years. He is the Managing Director of V.V.V & Sons Edible Oils Limited possessing the fastest growing oil brand in India named "Idhayam Mantra" which became the famous household name. Besides the above, he holds a Directorship in a Listed Company Thanga Mayil Jewellery Limited. He holds a Directorship in other Unlisted Companies viz., Idhayam - G Finance and Investment Services Limited, Idhayam - G Jagath Nidhi Limited, Virudhunagar Kamaraj Memorial Software Private Limited and Idhayam Parikshan Labs Limited. Also, he holds the Directorship in Virudhunagar Chamber of Commerce and Industry.
As per the provisions of the Companies Act, 2013, Mr. R. G. Chandramogan, Chairman and Mr. C Sathyan, Managing 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. R. G. Chandramogan, aged 73 years is the Chairman of the Company. He has been in the Dairy business for more than four decades.
In February, 2018, the Indian Dairy Association awarded Patronship to Mr. R. G. Chandramogan in recognition of the valuable services rendered by him in furthering the cause of the Indian Dairy Association and the Dairy Industry, through planning and development.
Mr. C. Sathyan, aged 43 years is the Managing Director of our Company. He was conferred with the title of ‘Doctor of Letters? for his entrepreneurship and philanthropy by the International Tamil University, USA. He has held various executive positions during his career, spanning over 18 years. He is in-charge of the day to day operations of our Company. He is the son of Mr. R. G. Chandramogan, the Chairman of the Company. Except the Managing Directorship held in this Company, Shri C. Sathyan does not hold any Directorship in any other Company.
Your Board recommends the reappointment of Mr. R. G. Chandramogan and Mr. C. Sathyan, Managing Director 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, 2022.
Independent Directors have complied with the Code for Independent Directors prescribed in Schedule IV of the Companies Act, 2013.
The Companies Act, 2013 and SEBI LODR Regulations, 2015 as amended, define a person, who, including his/her relatives is/was not a Promoter or Employee or KMP of the Company/its Subsidiaries and they do not have any material pecuniary relationship with the Company/its Subsidiaries during the three immediately preceding financial years or in the current financial year apart from receiving remuneration. The Company abides by the said definition. Further, in the opinion of the Board, the Independent Director/Independent Directors appointed have integrity, expertise and experience (including the proficiency) as required.
BUSINESS RESPONSIBILITY REPORT
As per the amendment made to Regulation 34 (2) (f) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 w.e.f., 05.05.2021, the top 1000 listed entities based on Market Capitalisation have to present the Business Responsibility and Sustainability Report (BRSR) in the format as specified by SEBI. However, the above said BRSR is voluntary for the FY 2021-22 and mandatory from the FY 2022-23.
Hence, your Company prefers to present the Business Responsibility Report (BRR) for the FY 2021-22 and BRSR for the FY 2022-23. The Business Responsibility Report forming part of this Annual Report elaborates the principles as prescribed by SEBI vide its Circular CIR/CFD/CMD/ 10/2015 dated November 04, 2015.
BOARD MEETINGS HELD DURING THE FINANCIAL YEAR
During the year under review, Seven (7) 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.
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 2022 (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 Six Members - 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.||Four meetings were held during the year on the following dates:- • 27th April, 2021 • 14th July, 2021 • 18th October, 2021 • 20th January, 2022|
|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:- • 1st December, 2021 • 20th January, 2022|
|Stakeholders? Relationship 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:- • 27th April, 2021 • 20th January, 2022|
|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||Two meetings were held during the year on following dates:- • 27th April, 2021 • 20th January, 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 Non-Independent Director.||Eight meetings were held during the year on following dates:- • 24th May, 2021 • 28th June, 2021 • 05th August, 2021 • 29th September, 2021 • 22nd October, 2021 • 29th December, 2021 • 15th February, 2022 • 15th March, 2022|
|Risk Management Committee||The Committee comprises of Four Members — One Executive Director, Two Non-Executive Non-Independent Directors and One Independent Director as on the date of this report. The Chairman of the Committee is a Non -Executive Non-Independent Director||Two meetings were held during the year on following dates:- • 18th October, 2021 • 20th January, 2022|
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 has considered all the recommendations made by the Audit Committee and has accepted and carried out all the recommendations suggested by the Audit 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 Non-Independent 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 and Key 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 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 for Directors and Key Managerial Personnel. It is affirmed that the remuneration to Directors and Key Managerial Personnel is being fixed based on the criteria and parameters mentioned in the above mentioned policy of the Company.
The Company recognizes 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 diversify 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 organizations.
Your Company endeavors 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, as stated above, and the Chairman of the Committee is 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 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 shall recommend to the Board of Directors to implement the CSR activities covering any of the areas as detailed under Schedule VII of Companies Act, 2013. Annual Report on CSR activities as required under the provisions of 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 minimising the risk and monitor the risk management for the Company.
The policy broadly defines the scope of the 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 the appropriate measures to achieve prudent balance between risk and reward in both 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 the 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.
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 ofthe working ofthe 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 of the 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 of the 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 it?s Committees as a whole.
The Independent Directors evaluation is being done by the entire Board with 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, fulfilment 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 bona fide 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 were also carried out to evaluate their performance.
The performance evaluation of the 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 the 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 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 into 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.
Meeting of Independent Directors:
The Independent Directors of the Company met on 31.03.2022 without the presence of Chairman, Managing Director, other Non Executive Directors and other Managerial Personnel.
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 24th July 2017, M/s. Deloitte Haskin & Sells, Chartered Accountants, (Firm Registration number 117366W /W100018) were appointed as Statutory Auditors of the Company to hold office till the conclusion of Thirty Seventh Annual General Meeting of the Company to be held in the calendar year 2022.
The provisions of Section 139 (2) of The Companies Act, 2013 provides for appointment of a "Firm" ofAuditors for appointment as Statutory Auditors for Two terms of Five consecutive years (Sec.139(2)(b) ofThe Companies Act, 2013). Applying the above provision, M/s Deloitte Haskins & Sells LLP Statutory Auditors of the Company are eligible for re-appointment for the second term of five consecutive years from the conclusion of the Annual General Meeting to be held in the year 2022 until the conclusion of the Annual General Meeting to be held in the year 2027.
The Company has received a written consent from the Statutory Auditors for the re-appointment and also has received the Certificate indicating that they satisfy the criteria as mentioned under Section 141 of The Companies Act, 2013. Besides the above, a Certificate from the Statutory Auditors to the effect that they are not disqualified to continue as Auditors of the Company has also been received.
Considering the above provisions of The Companies Act, 2013, satisfying the eligibility conditions, willingness of the Statutory Auditors for such re-appointment and satisfaction of criteria, the Audit Committee at its Meeting held on 27.04.2022 recommended to the Board, the re-appointment of M/s Deloitte Haskins & Sells LLP as the Statutory Auditors of the Company for the second term of five consecutive years. The Board considered the recommendation and approved the reappointment of Statutory Auditors for the second term of5 (five) consecutive years from the conclusion of 37th Annual General Meeting up to the conclusion of 42nd Annual General Meeting to be held in the year 2027 subject to the approval of Members at their ensuing Annual General Meeting (37th Annual General Meeting).
The Members to consider the re-appointment of Statutory Auditors of the Company M/s Deloitte Haskins & Sells LLP for a second term of five consecutive years.
The Notes on 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.
The Auditors" Report on the Financial Statements of the company for the financial year ended 31st March 2022 is unmodified i.e., it does not contain any qualification, reservation, adverse remark or disclaimer and notes thereto are self explanatory and do not require any explanation
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 2021-22 was Rs.92.99 Lacs (excluding tax). towards Fees for Statutory Audit, Limited Review, Tax Audit, GST Audit, GST Retainer, Direct Tax Retainer, Direct Tax Certificate and Out of Pocket Expenses.
The Board, in consultation with the Statutory Auditors and as per the recommendation of Audit Committee, will finalise the payment of Audit Fee to the Statutory Auditors for all their services including audit of accounts, tax audit etc., for the financial year 2022-23 excluding out of pocket expenses and taxes.
Pursuant to the provisions of Section 204 of the Companies Act, 2013and 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 2021-2022 is annexed herewith marked as Annexure C and forms part of this report. As required by the Listing Regulations, the 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.
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 2021-22.
The Company maintains the Cost Records as specified by the Central Government under section 148(1) ofthe 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 u/s.143(12) of the Companies Act 2013 details of which needs 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 f Per annum)||Nature of employment, whether contractual or otherwise||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 ifso, name of such Director or Manager|
|ThirunavukkarasuA||ChiefHuman Resources Officer||1,22,55,000||Permanent||Master of Social Work||25.01.2021||61||Cadila Pharmaceuticals||Nil||No|
|Prasanna Venkatesh J||Vice President - Sales & Marketing||61,48,128||Permanent||B.SC PG.D.BA||03.08.1998||57||Henkal SPIC||Nil||No|
|Shanmuga Priyan J||Chief Operating Officer||54,81,346||Permanent||M.COM||07.03.2001||44||First Employment in HATSUN||Nil||No|
|Jerome J||SeniorVice President - Sales||55,20,240||Permanent||B.SC.,||05.08.2002||63||Rasna Pvt ltd.,||Nil||No|
|Anil Kumar P A||Senior Vice President - Quality Assurance||71,62,222||Permanent||M.SC., Dairy Microbiology||25.03.2009||63||Heritage Food India Ltd.||Nil||No|
|Sam Joseph A||Senior General Manager - Sourcing & Animal Husbandry||44,60,057||Permanent||B.E||18.11.2009||48||Srinivasa Fine Arts Pvt Ltd.,||Nil||No|
|Ratnakar PSundara Raj R||Vice President - Commercial||73,05,372||Permanent||B.Com., PG.D.R.M||04.06.2010||62||Nilgiris Dairy Farms Pvt Ltd.,||Nil||No|
|*** Sayyad Mohammad Ghouse||Associate Vice President - Plant Operations||41,15,193||Permanent||Diploma in Dairy Technology||09.08.2021||59||NFPC Mega Plant, Abu Dhabi, UAE.||Nil||No|
|***Anand S||Senior General Manager - Sales||20,43,694||Permanent||Master of Business Administration - Marketing||15.10.2021||48||Devyani Food Industries Ltd.,||Nil||No|
|Muthusamy S||Associate Vice President - Human Resources||39,16,867||Permanent||B.E||09.11.1998||49||First Employment in HATSUN||Nil||No|
* The Top Ten Employees do not include Managing/Executive Director and KMPs as their Remuneration details are shown separately in the Board?s Report.
** Mr. A. Thirunavukkarasu was relieved from the Company on 31.03.2022 upon his resignation.
*** Remuneration paid for a part of the FY 2021-22 (Remuneration paid (i) to Mr. Sayyad Mohammad Ghouse - From 09.08.2021 to 31.03.2022 and (ii) to Mr. S Anand - From 15.10.2021 to 31.03.2022)
(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. - As shown in the first row of the Table above
(ii) Employees employed for a part of the financial year, was 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: (1) hold by himself / herself or along with his/her spouse and dependent children, more than two per cent of the equity shares of the Company and (2) are relatives of any of the Directors of the Company.
Details required as per Section 197 and Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014
|NAME OF DIRECTOR/KMP||AMOUNT OF REMUNERATION PERANNUM ( in f )||RATIO OF REMUNERATION TO MEDIAN REMUNERATION OF EMPLOYEES FOR THE FY||% INCREASE IN REMUNERATION DURING THE FY|
|Mr. C. Sathyan, Managing Director||81,11,200||36.36||1.25|
|Mr. H. Ramachandran, Chief Financial Officer||81,06,776||36.34||6.42|
|Mr. G. Somasundaram, Company Secretary||33,76,811||15.14||6.37|
Percentage increase in the median remuneration of employees in the financial year
The median remuneration of Employees for the Financial Year 31st March, 2022 was arrived at 18,588/- per month and the median remuneration of Employees for the previous financial year 31st March, 2021 was arrived at Rs20,799/- per month and accordingly, there was a decrease of 10.63% in the median remuneration of employees in the financial year.
Number of permanent employees on the rolls of the company as on 31.03.2022
The Number of permanent employees on the rolls of the Company as of 31st March, 2022 stood at 4356 employees. 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 8.31% 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 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 of 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 the Sitting fees of Rs50,000 for every board meeting they attend and the Sitting fee of Rs10,000 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 11,99,999 Equity Shares - in the capacity as Karta of Vaidyanathan P HUF (1,33,333 Equity Shares) and in the capacity as Karta of Panchapagesan Vaidyanathan S HUF (10,66,666 Equity Shares) as of 31st March 2022.
Mr. K.S. Thanarajan, Non-Executive Non Independent Director held 6,45,688 Equity shares as of 31st March 2022.
Other than the Sitting fees, Mr. D. Sathyanarayan, NonExecutive Non-Independent Director ofthe 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 2nd March, 2021. Even though the approval of Members was obtained by way of passing a Special Resolution dated 2nd March, 2021 for payment of Remuneration to Mr. R .G. Chandramogan, Chairman for the services rendered by him for the financial year 2021-22, he waived his entitlement and did not receive any remuneration for the FY 2021 — 22.
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 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 and trainees) are covered under this policy. The Company has not received any complaint on sexual harassment during the financial year ended 31.03.2022.
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 31.03.2022 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 31.03.2022 to which the financial statements relate until the date of this report.
Your Company overcame the problems faced due to restrictions imposed by the Central and State Governments due to Covid 19 and the operations of the Company were normal during the FY 2021 - 22.
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 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 report under Regulation 34 of Securities and Exchange Board oflndia (Listing Obligations and Disclosure Requirements) Regulations, 2015 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 as 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:
In the preparation of the annual accounts, the applicable accounting standards have been followed.
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.
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.
The Directors have prepared the annual accounts on a going concern basis.
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.
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.
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 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 FY An Operational Creditor initiated proceedings under IBC before the Hon?ble National Company Law Tribunal (NCLT), Chennai, the claim of which was disputed by the Company. However, a mutually agreeable compromise settlement has been reached with the said Operational Creditor by the Company. Based on which, the proceedings before the Hon?ble NCLT was dismissed by NCLT "as settled out of Court" vide its Order dated 11.02.2022.
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/-|
|R. G. Chandramogan||Managing Director|
|Chairman DIN: 00012389||DIN: 00012439|
|Place: Chennai Date: 27 th April, 2022|