Hatsun Agro Product Ltd

To the Members,

Your Directors are pleased to present their 39th Report along with the audited financial statements for the financial year ended March 31, 2024.

FINANCIAL RESULTS/STATE OF THE COMPANY'S AFFAIRS

The financial results of the Company for the year ended 31st March, 2024 are summarised below:

PERFORMANCE OF THE COMPANY

During the year under review, your Company clocked a total income of Rs. 8,01,299 Lakhs as against Rs. 7,25,753 Lakhs representing an increase of 10.41% over that of the previous year. The PBDIT has increased from Rs. 71,200 Lakhs (FY 2022-2023) to Rs. 92,156 Lakhs (FY 2023-2024) representing an increase of 29.43%. The Net Profit during the year was Rs. 26,729 Lakhs in comparison with previous year which stood at Rs. 16,586 Lakhs resulting in an increase of 61.15%.

CHANGE IN THE NATURE OF BUSINESS

There was no change in the nature of business. However, the Board of Directors of the Company at its meeting held on July 05, 2023 approved the Sale of Windmills of the Company to an identified buyer for a consideration of Rs. 13,500.00 Lakhs by way of transfer of all the related Assets and Liabilities on a Slump Sale basis. The sale was completed in the month of September 2023 on execution of necessary documents. The profit from the said sale amounting to Rs. 1,013.24 Lakhs has been classified under other income.

DIVIDEND

During the Financial Year 2023-2024, your Company declared an Interim dividend of Rs. 6/- (600%) per fully paid up equity share of the face value of Rs. 1 per share (ISININE473B01035) on 19th July, 2023.

The cash outflow on account of Interim dividend absorbing a sum of Rs. 133,64,89,608/- (Rupees One Hundred Thirty Three Crores Sixty Four Lakhs Eighty Nine Thousands Six Hundreds 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 2023-24 out of the accumulated profits of the Company.

During the year 2023-24, a Dividend amount of Rs. 18,18,039 (Rs. 9,26,600 - declared on 16.03.2016 and Rs. 8,92,039 - declared on 06.08.2016) which remained unclaimed for a period of 7 consecutive years) being unclaimed dividend pertaining to the financial years 2015-16 and 2016-17 (Interim dividends) was transferred to Investor Education & Protection Fund (IE&PF).

CHANGES IN SHARE CAPITAL

During the Financial Year 2023-24, your Company did not effect any change in the Share Capital and hence, the paid up Equity Share Capital of the Company stood at 22,27,48,268 Equity Shares of Re.1 per Equity Share amounting to Rs. 2,227.48 Lakhs.

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 increased from Rs. 1,44,793 Lakhs to Rs. 2,27,155 Lakhs due to requirement of funds for the Operations of the Company/improving the business of the Company.

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, 2024, was 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 2023-24, a Dividend amount of Rs. 18,18,039 (Rs. 9,26,600 - declared on 16.03.2016 and Rs. 8,92,039 - declared on 06.08.2016 which remained unclaimed for a period of 7 consecutive years) being unclaimed dividend pertaining to the financial years 2015-16 and 2016-17 (Interim dividends) 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 falling 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.

Appointments, Resignations and Changes

Dr. Archana Narayanaswamy was appointed as an Additional Director in the capacity of Non-Executive Independent Woman Director w.e.f., 29.03.2024 to hold office as such, subject to the approval of Shareholders, for a term of 5 (five) consecutive years w.e.f., 29.03.2024. The approval from the Shareholders will be obtained within three months through postal ballot.

Mr. B. Thenamuthan, Non-Executive Independent Director of the Company completed his 2 (two) terms of consecutive five years (i.e., 10 years) as an Independent Director on 31.03.2024 and hence ceased to be an Independent Director w.e.f., 31.03.2024.

Replacement for the Director Ceasing to be an Independent Director is to be made to maintain the proper Composition of the Board and hence the new Appointment.

Brief Profile of Director appointed and ceased to be the Director:

Appointment:

Dr. Archana Narayanaswamy aged 61 years is a highly accomplished dental professional with a stellar academic background and extensive expertise in the field. She obtained her B.Sc in Home Science from S.I.E.T. Women's College, Chennai, in 1982, followed by a BDS from Ragas Dental College, Chennai, in 1997. Driven by a passion for innovation, she further honed her skills through specialised training, including the Progressive Orthodontic Seminars in Singapore in 2001 and a Fellowship in Laser Dentistry from The Tamil Nadu Dr. MGR Medical University, Chennai, in 2014. With a commitment to excellence and patient-centric care, Dr. Narayanaswamy continues to lead the way in advancing dental healthcare, leveraging cutting-edge technologies and techniques to deliver superior outcomes and enhance patient satisfaction.

In the Opinion of the Board, the Independent Director Dr. Archana Narayanaswamy appointed during the financial year ended 31.03.2024 has the requisite Independence, Integrity, Expertise and Experience for being appointed as an Independent Director.

Cessation:

Mr. B. Thenamuthan, aged 63 years, was an Independent Director of the Company up to 31.03.2024. He was holding a Master's Degree in Communication and Journalism from the University of Madras. He had over 20 years of experience in the field of journalism and held the Managing Directorship in Karnataka News Publications Private Limited.

Other than the above, there were NO Resignations or Changes in the Directors and Key Managerial Personnel that happened during the financial year 2023 - 24 which is under review.

Re-appointments

As per the provisions of The Companies Act, 2013, Mr. D. Sathyanarayan, Non-Executive Director and Mr R.G. Chandramogan, 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. D. Sathyanarayan is a Non-Executive Director of our company. He is a Bachelor of Science and holds a Master's Degree in Public Administration. He has got more than three decades of experience in handling Factory Operations, Food Safety, Quality Control aspects and setting up of new plants.

Mr R.G. Chandramogan, aged 75 years is the Chairman of the Company. He has been in the Dairy business for more than five 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.

He was honoured with the prestigious Lifetime award for his outstanding contributions to the Dairy Sector by the Indian Dairy Association at its 50th Dairy Industry Conference.

Your Board recommends the reappointment of Mr. D. Sathyanarayan and Mr. R.G. Chandramogan 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, 2024.

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, 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.

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 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 Committees as of 31st March 2024 (including the changes effected up to the date of this report) and their meeting dates are given below:

Pursuant to the Cessation of Mr Balasubramanian Thenamuthan as an Independent Director,

i) the Audit Committee was re-constituted w.e.f., 01.04.2024. The Audit Committee at present (w.e.f.,01.04.2024) comprises of Mr. S.Subramanian, Mr. K.S. Thanarajan, Mr. P.Vaidyanathan, Mr V R Muthu, Dr. Archana Narayanaswamy and Mr. Tammineedi Balaji, as its Members.

ii) the Nomination and Remuneration Committee was re-constituted w.e.f., 01.04.2024. The Nomination and Remuneration Committee at present (w.e.f., 01.04.2024) comprises of Mr. S.Subramanian (Chairman), Mr. K.S. Thanarajan, Mr. Tammineedi Balaji and Dr. Chalini Madhivanan, as its Members.

iii) the Stakeholders' Relationship Committee was re-constituted w.e.f., 01.04.2024. The Stakeholders' Relationship Committee at present (w.e.f.,01.04.2024) comprises of Mr. S.Subramanian (Chairman), Mr. K.S. Thanarajan, Mr. Tammineedi Balaji and Dr. Chalini Madhivanan, as its Members.

After the Re-constitution of CSR Committee, presently, the Corporate Social Responsibility Committee comprises of Three Members viz., Mr. S. Subramanian (Chairman - Independent Director), Mr. K.S. Thanarajan (Member - Non-Executive Non- Independent Director) and Mr. C Sathyan (Member - Executive Director)

There is No Change in the constitution of Risk Management Committee and Borrowing & Investment Committee.

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 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 the same 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.

(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 three Independent Directors and One Non-Executive NonIndependent Director. 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 Managerial/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 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, 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 of 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 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 the 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 including identification of elements of risk, if any which in the opinion of the Board may threaten the existence of the Company. 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 for 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 the ongoing and new business activities.

• Evaluating significant risk exposures of the Company and assess management's actions to mitigate the exposures in a timely manner (including one-off initiatives, and ongoing activities such as business continuity planning and disaster recovery planning & testing).

• Co-coordinating its activities with the Audit Committee in instances where there is any overlap with audit activities (e.g. internal or external audit issue relating to risk management policy or practice).

• Reporting and making regular recommendations to the Board.

(iv) Whistle-Blower Policy - Vigil Mechanism

The Company is committed to adhere to the highest standards of ethical, moral and legal conduct of business operations. To maintain these standards, the Company encourages its employees who have concerns about suspected misconduct to come forward and express these concerns without fear of punishment or unfair treatment. A Vigil (WhistleBlower) 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 Pol icy/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's 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, COMMITTEES AND DIRECTORS

Pursuant to the provisions of The Companies Act, 2013 and Regulation 17 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 as amended, an annual performance evaluation of the performance of the Board, the Directors individually as well as the evaluation of the working of the Board Committees was carried out based on the criteria and framework adopted by the Board.

The evaluation process for measuring the performance of Executive/Non-Executive and Independent Directors is being conducted through a survey which contains a questionnaire capturing each Board and Committee Member's response to the survey which provides a comprehensive feedback to evaluate the effectiveness of the Board and its Committees as a whole and also their independent performance. The methodology adopted by each Director who responded to the survey has graded their peers against each survey item from 1 to 5 with 1 marking the lower efficiency and 5 the highest efficiency which revealed more realistic data on measuring the effectiveness of the Board dynamics, flow of information, decision making of Directors and performance of Board and Committee 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, 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 NonIndependent 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 was 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.

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 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 on financial statements 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 2023-24 was Rs. 85.71 Lacs (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 2024-25 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, Partner, M/s. S. Dhanapal & Associates LLP, a firm of Practising Company Secretaries to undertake the Secretarial Audit of the Company. The Secretarial Audit Report for the financial year 2023-2024 is annexed herewith marked as Annexure C which forms part of this report. The Secretarial Audit Report does not contain any qualification, reservation, adverse remark or disclaimer.

As required by the Listing Regulations, the Auditors' Certificate on Corporate Governance is enclosed as Annexure D.

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 2023-24.

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 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*:

*The Top ten Employees do not include Executive Directors and KMPs as their Remuneration details are shown separately in the Board's Report.

(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 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 was in receipt of remuneration in excess of that drawn by the Managing Director. None of the Employees except the Managing Director employed throughout the financial year or part thereof, 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.

Details required as per Section 197 and Rule 5(1) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

Percentage increase in the median remuneration of employees in the financial year

The median remuneration of Employees for the Financial Year ended 31st March, 2024 was arrived at *22,196/- per month and the median remuneration of Employees for the previous financial year ended 31st March, 2023 was arrived at *19,671/- per month and accordingly, there was an increase of 12.84% in the median remuneration of employees in the financial year.

Number of permanent employees on the rolls of the company as on 31.03.2024

The Number of permanent employees on the rolls of the Company as of 31st March, 2023 stood at 5,222.

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 10.79 % 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 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 except the Chairman were entitled to only the Sitting Fees of *50,000 for every board meeting they attend and a Sitting Fees 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.

Pursuant to the approval of the Board given at its Meeting held on 19th January, 2024, the Sitting Fees payable to all the Non-Executive Directors for attending the Meeting of the Board and its Committee were revised. As per the revision, all the Non-Executive Directors are entitled the Sitting Fees of *75,000 for every board meeting they attend and a Sitting Fees of *15,000 for every committee meeting they attend as Members of respective committees.

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 2024.

Mr. K.S. Thanarajan, Non-Executive Non-Independent Director held 6,68,179 Equity shares as of 31st March 2024.

Mr. V.R. Muthu, Non-Executive Independent Director held 59,773 Equity shares as of 31st March 2024.

Other than the Sitting Fees, Mr. D. Sathyanarayan, NonExecutive Non-Independent Director of the Company was paid a Remuneration for the Professional services rendered by him after obtaining the approval of the Members by passing a Special Resolution through Postal Ballot dated 13th December, 2023.

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 an 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 conducts 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 31.03.2024.

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 31.03.2024 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 31.03.2024 to which the financial statements relate until the date of this report.

EXTRACT OF ANNUAL RETURN

As per the MCA Notification dated 28th August, 2020 making an amendment to Rule 12(1) of The Companies (Management and Administration) Rules, 2014, a weblink of the Annual Return is furnished in accordance with sub section (3) of Section 92 of The Companies Act, 2013 and as prescribed in Form MGT 7 of The Companies (Management and Administration) Rules, 2014. You may please refer to our Company's weblink: https://www.hap.in/annual-return.php.

RELATED PARTY TRANSACTIONS

As required under Regulation 23 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 as amended, the Company has developed a policy on dealing with Related Party Transactions and such policy is disclosed on the Company's website. The weblink for the same is https://www.hap.in/policies.php

There were no Related Party Transactions entered into during the financial year by the company with the Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with the interest of the company at large other than the remuneration paid to the Executive Director/s and Non-Executive Director/s and Dividend received by them from the Company in proportion to the shares held by them, the transactions with HAP Sports Trust by way of contribution towards CSR activities and the payment made to the Registrar and Share Transfer Agents.

The details of Related Party Transactions are provided in the Notes to the Accounts and AOC-2 forming part of the Director's Report - Marked as Annexure G.

CORPORATE GOVERNANCE REPORT

The Company has complied with the corporate governance requirements under The Companies Act, 2013 and as stipulated under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 as amended. A report on Corporate Governance including Management Discussion and Analysis under Regulation 34 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 along with a certificate from M/s. S Dhanapal & Associates, LLP, a firm of Practising Company Secretaries, confirming to the compliance is annexed herewith marked as Annexure D which 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 which forms part of this report.

DIRECTOR'S RESPONSIBILITY STATEMENT

In terms of Section 134 (5) of The Companies Act, 2013, the Directors would like to state that:

1. In the preparation of the annual accounts, the applicable accounting standards have been followed.

2. The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for the year under review.

3. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

4. The Directors have prepared the annual accounts on a going concern basis.

5. The Directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

6. The Directors had devised proper system to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

DEPOSITORY SYSTEM

As the members are aware, your Company's shares are tradable in electronic form and the Company has established connectivity with both the Depositories i.e., National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). In view of the advantages of the Depository System, the members are requested to avail of the facility of dematerialisation of the Company's shares.

INDUSTRIAL RELATIONS

Industrial relations in all the units and branches of your Company remained cordial and peaceful throughout the year.

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.