hatsun agro product ltd share price Directors report

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 Boards 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 managements 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 Members 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 years 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 Companys 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 Boards 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 Boards 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 companys 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 COMPANYS 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 Companys 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 Companys 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 Companys 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 Directors 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.

DIRECTORS 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 Companys 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 Companys 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