DIRECTORS' REPORT

Your Directors are pleased to present their 41st Report along with the audited financial statements for the financial year ended
31st March, 2026.

FINANCIAL SUMMARY/STATE OF THE COMPANY’S AFFAIRS

The financial results of the Company for the year ended 31st March, 2026 are summarised below: (? i_n Crores)

* includes restated financial information of Milk Mantra Dairy Private Limited with effect from 27th January, 2025
PERFORMANCE OF THE COMPANY

During the year under review, your Company clocked a total income of ^9,959.22 Crores as against ^8,699.76 Crores
representing an increase of 14.48% over that of the previous year. The PBDIT has increased from ^1,029.67 Crores (FY
2024-2025) to ^1,190.34 Crores (FY 2025-2026) representing an increase of 15.60%. The Net Profit during the year was
^356.20 Crores in comparison with previous year which stood at ^278.81 Crores resulting in an increase of 27.76%.

The Board of Directors of the your Company at their meeting held on 28th April, 2025, had approved the Scheme of
Amalgamation under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013 and the rules made
thereunder for the merger/amalgamation of your Company’s wholly-owned subsidiary, Milk Mantra Dairy Private Limited
with your Company i.e., Hatsun Agro Product Limited, with an appointed date of 1st April, 2025 or such other date as
approved by the appropriate authority. The said Scheme has been sanctioned with effect from the appointed date of 1st
April, 2025 by the Honorable National Company Law Tribunal ("NCLT") Cuttack Bench, vide its order dated 10th March,
2026. Accordingly, the Company has given effect to the merger/amalgamation in the financial statements during the year
ended 31st March, 2026, and restated the financial information for the previous year as if the merger/amalgamation had
occurred from the date when the control was acquired, i.e. 27th January, 2025.

CHANGE IN THE NATURE OF BUSINESS

During the year under review, there was no change in the
nature of business.

DIVIDEND

For the Financial Year 2025-2026, your Company declared
an Interim dividend of ^6/- (600%) per fully paid up equity
share of the face value of ^1 per share (ISIN: INE473B01035)
on 18th July, 2025.

The cash outflow on account of Interim dividend absorbing a
sum of ^133,64,89,608/- (Rupees One Hundred Thirty Three
Crores Sixty Four Lakhs Eighty Nine Thousand Six Hundred
Eight only), including Tax deducted at source 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 2025-26 out of the
accumulated profits of the Company.

During the year 2025-26, a Dividend amount of ^25,52,884.60/-
( ^15,08,247/- declared on 21.05.2018 and ^10,44,637.60/-
- declared on 24.01.2019) which remained unclaimed for a
period of 7 consecutive years) being unclaimed dividend
pertaining to the financial years 2017-18 and 2018-19
(Interim dividends) was transferred to Investor Education &
Protection Fund (IE&PF).

CHANGES IN SHARE CAPITAL

During the Financial Year 2025-26, as per the Scheme of
Amalgamation between your Company and Milk Mantra
Dairy Private Limited, Wholly Owned Subsidiary of the
Company, approved by the Honorable National Company
Law Tribunal (NCLT) Cuttack Bench, the Authorised Share
Capital of your Company increased from 35,00,00,000
equity shares of ^1 each amounting to ^35.00 Crores to
42,50,00,000 equity shares of ?1/- each amounting to
^42.50 Cores and 5,00,000 preference shares of ^100 each

to 7,00,000 Preference shares of ^100 each amounting to
T7.00 Crores. Apart from increase in the Authorised Share
Capital due to Amalgamation as said above, 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 ^1 per Equity Share
amounting to ^22.28 Crores.

AMALGAMATION

The Board of Directors of the Company (‘Board’), at its
meeting held on 28th April, 2025, approved the scheme of
amalgamation of Milk Mantra Dairy Private Limited, a
wholly-owned subsidiary of Hatsun Agro Product Limited,
into and with the Company (Scheme). NCLT, Cuttack Bench
vide its order dated 10th March, 2026 sanctioned the
Scheme. The effective date of amalgamation of Milk Mantra
Dairy Private Limited with the Company was 1st April, 2025.
As per the terms of the Scheme, the entire shareholding of
the Company in Milk Mantra Dairy Private Limited stands
cancelled.

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 borrowing reduced from ^2,096.51 Crores to
^1,331.95 Crores mainly on account of reduction in inventory
levels and also due to internal accruals from operations/
improvement in the business of the Company.

Your Company follows a 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.

of 7 consecutive years) being unclaimed dividend pertaining
to the financial years 2017-18 and 2018-19 (Interim dividends)
was transferred to Investor Education & Protection Fund
(IE&PF).

The details in respect of transfer of unclaimed dividends are
provided in the Notice of 41st Annual General Meeting and
are available on our website, at
https://www.hap.in/unclaimed-dividened.php.

PARTICULARS OF LOANS, GUARANTEES OR
INVESTMENTS UNDER SECTION 186

During the Financial Year 2025-26, 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
PERSONNELAppointments, Resignations and Changes

Mr. V Rajendran Muthu (DIN: 01908841) Non-Executive
Independent Director of the Company completed his first
term of consecutive five years as an Independent Director on
18th October, 2025. On the recommendation of Nomination
and Remuneration Committee and Board, the members of
the Company re-appointed Mr. V. Rajendran Muthu as
Non-Executive Independent Director of the Company for the
second term of consecutive five years with effect from 19th
October, 2025 by way of Postal Ballot.

It is with deep grief and regret, your Directors place on record
the demise of Mr. V. Rajendran Muthu (DIN: 01908841), on
4th March, 2026. On his demise, he ceased to be an
Independent Director and member of the Committees of the
Board of the Company from 4th March, 2026. The Directors
place on record their appreciation for the contributions made
by Mr. V Rajendran Muthu as an Independent Director of the
Company.

To fill the casual vacancy caused by the demise of Mr. V.
Rajendran Muthu, your Company identified, Mr. Rajprabu
Harshan (DIN: 09827866), satisfying the criteria of
Independence and he was appointed as an Additional
Director under the category of Non-Executive Independent
Director with effect from 10th April, 2026. He was appointed
as Non-Executive Independent Director with the approval of
Members through Postal Ballot dated 14th May, 2026 to
hold office as Non-Executive Independent Director of the
Company for a period of 5 (five) consecutive years w.e.f.,
10th April, 2026.

Mr. Rajprabu Harshan aged 23 years pursued Business
Administration in Madurai. He is a seasoned business leader
with experience in operational strategy and organisational
growth. With a strong foundation in Business Administration,
he has contributed significantly for improving the business
performance while supporting warehousing and logistics
operations. He currently holds a board position at Startex
Knitwears Private Limited and serves as Managing Partner
of Rice Land and MKAC Jayaraj Nadar & Sons, Madurai.

In the Opinion of the Board, the Independent Director
Mr. Rajprabu Harshan appointed on 10th April, 2026, has the
requisite Independence, Integrity, Expertise and Experience.
Mr. C. Sathyan, Executive Vice-Chairman, Mr. J. Shanmuga
Priyan, Managing Director, Mr. H. Ramachandran, Chief
Financial Officer and Mr. C. Subramaniam, Company
Secretary are the Key Managerial Personnel (KMPs) of the
Company as per Section 203 of the Companies Act, 2013.

Other than the above, there were no Resignations or
Changes in the Directors and Key Managerial Personnel
during the financial year 2025 - 26.

Re-appointments

As per the provisions of the Companies Act, 2013, Mr. R.G.
Chandramogan, Chairman and Non-Executive Director and
Mr. J. Shanmuga Priyan, 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 77 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.

Mr. J. Shanmuga Priyan, aged 48 years, is the Managing
Director of the Company. He holds a Post Graduate Degree
in Commerce and possesses a rich experience in the Dairy
Industry by serving in the various positions in Hatsun Agro
Product Limited up to the level of Chief Operating Officer
handling Commercials, Procurement, Logistics, Operations,
Finance & Accounts, Auditing etc., in the Company and his
Service/Experience in Hatsun Agro Product Limited spans
over a period of more than two decades.

Your Board recommends the reappointment of Mr. R.G.
Chandramogan and Mr. J. Shanmuga Priyan, who are
retiring by rotation at 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 SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 in respect of
the financial year ended 31st March, 2026. Independent
Directors have complied with the Code for Independent
Directors prescribed in Schedule IV of the Companies Act,
2013.

Mr. Rajprabu Harshan (DIN: 09827866), Non-Executive
Independent Director has also confirmed that he is in
compliance with Rules 6(1) and 6(2) of the Companies
(Appointment and Qualifications of Directors) Rules, 2014,
with respect to his registration with the data bank of
Independent Directors maintained by the Indian Institute of
Corporate Affairs (‘IICA’).

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, Four (4) Board Meetings were convened and held, the details of which are given in the
Corporate Governance Report. The intervening gap between the Meetings was within the time period prescribed under the
Companies Act, 2013.

BOARD COMMITTEES

The primary five committees of the Board are Audit Committee, Nomination and Remuneration Committee, Stakeholders'
Relationship Committee, Corporate Social Responsibility Committee and Risk Management Committee. Other than the
above said primary committees, the Board has the following additional committees also viz., Borrowing & Investment
Committee and Core Committee. A detailed note on the committees is provided under the Corporate Governance Report
forming part of this Board's Report. The composition of the Committees as of 31st March 2026 (including the changes
effected up to the date of this report) and their meeting dates are given below:

Pursuant to the Appointment, Resignation and Cessation of
Directors,

i) The Audit Committee was re-constituted w.e.f., 19th May,
2026. The Audit Committee at present (w.e.f., 19th May,
2026) comprises of Mr. S. Subramanian (Chairman), Mr. K.S.
Thanarajan, Dr. Archana Narayanaswamy, Mrs. Bharathi
Baskar, and Mr. Rajprabu Harshan as its Members.

ii) The Nomination and Remuneration Committee was
re-constituted w.e.f., 19th May, 2026. The Nomination and
Remuneration Committee at present (w.e.f., 19th May, 2026)
comprises of Mr. S. Subramanian (Chairman), Mrs. Bharathi
Baskar, and Mr. Rajprabu Harshan as its Members.

iii) The Stakeholders’ Relationship Committee was
re-constituted w.e.f., 19th May, 2026. The Stakeholders’
Relationship Committee at present (w.e.f., 19th May, 2026)
comprises of Mr. S. Subramanian (Chairman), Mr. K.S.
Thanarajan, Dr. Archana Narayanaswamy, and Mr. Rajprabu
Harshan as its Members.

Mr. V Rajendran Muthu passed away and ceased as member
of Audit Committee, Stakeholders’ Relationship Committee
and Nomination & Remuneration Committee on 4th March,
2026.

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 its 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 the SEBI (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
were 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 the SEBI (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; ¹

• 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. 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 the SEBI (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 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. Policy is available in the Web-link:
https://www.hap.in/policies.php.

(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, as stated above, and the Chairman
of the Committee is Non-Executive 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. The Corporate Social Responsibility
Policy is available in the Web-link:
https://www.hap.in/policies.php.

(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 Risk Management Policy
is available in the Web-link: https://www.hap.in/policies.php.

The policy broadly defines the scope of the Risk
Management Committee which comprises of:- ²

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, any
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. The Whistle¬
Blower Policy is available in the Web-link:
https://www.hap.in/policies.php.

(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
31st March of every financial year) has framed the Dividend
Distribution Policy which is attached in this Annual Report
marked as Annexure E. The Dividend Distribution Policy is
available in the Web-link: https://www.hap.in/policies.php.

(vi) Material Subsidiary Policy

Pursuant to the provisions of SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015, as amended,
your Company has framed the Material Subsidiary Policy
which is available in the Wfeb-link: https://www.hap.in/policies.php.
The Company does not have any material subsidiary.

EVALUATION OF BOARD, COMMITTEE AND
DIRECTORS

Pursuant to the provisions of the Companies Act, 2013 and
Regulation 17 of the SEBI (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 were 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 the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015
as amended and their independence from the Management
etc., ensuring non-participation of the 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 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 following 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 the weblink for 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

The Wholly Owned Subsidiary viz., Milk Mantra Dairy Private
Limited amalgamated with your Company as per the scheme
of Amalgamation approved by the Hon’ble National
Company Law Tribunal (NCLT) Cuttack Bench Order dated
10th March, 2026.

Apart from the above, your Company does not have any
other subsidiary or joint venture or associate companies.

AUDITORSStatutory Auditors

At the Annual General Meeting held on 20th September,
2022, M/s. Deloitte Haskin & Sells LLP, Chartered
Accountants, (Firm Registration number 117366W/W-100018)
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 that 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 2025-26 was ^1.49 Crores (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 2026-27 excluding out of pocket expenses.

Secretarial Auditors

At the Annual General Meeting held on 28th August, 2025,
M/s. S Dhanapal & Associates LLP, Practicing Company
Secretaries (Firm Registration Number - L2023TN014200)
were appointed as Secretarial Auditors of the Company for
the first term of five consecutive years from the Financial
Year 2025-26 to the Financial Year 2029-30.

The Secretarial Audit Report for the financial year 2025-2026
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.

Total Fees for all the Services paid by the Company, to
M/s. S Dhanapal & Associates LLP, Secretarial Auditors,
during the financial year 2025-26 was ^0.09 Crores
(excluding tax).

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 and Associates, Cost Accountants
(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 2025-26.

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 drawn³:

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.

(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 Executive Vice Chairman 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

Note: Retirement benefits like Gratuity not included since the same is not comparable.

& Appointed with effect from on 12th September, 2024. Hence, not comparable
$ Appointed with effect from 14th September, 2024. Hence, not comparable

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

The median remuneration of Employees for the Financial
Year 2025-26 was arrived at ^3,20,350/- per annum and the
median remuneration of Employees for the previous
Financial Year 2024-25 was arrived at ^3,33,048/- per annum
and accordingly, there was a decrease of 3.96% in the
median remuneration of employees in the Financial Year
2025-26.

Number of permanent employees on the rolls of the
Company as on 31st March, 2026

The Number of permanent employees on the rolls of the
Company as of 31st March, 2026 stood at 5,702.

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 7.75% for all the
employees who went through the compensation review
cycle in the year. For the Key Managerial Personnel (KMP),
the average percentile increase was about 3.07% and for
Employess other than KMPs was about 7.84%. The
remuneration for the Executive Vice Chairman and 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 within the remuneration ceiling
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 T75,000 for every board
meeting they attend and a Sitting fee of ^15,000 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 19th January,
2024.

Mr. K.S. Thanarajan, Non-Executive Non-Independent
Director held 6,68,179 Equity shares as of 31st March 2026.

Dr. Archana Narayanaswamy, Non-Executive Independent
Woman Director held 26,793 Equity Shares as of 31st March
2026.

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, trainees) are covered under this
policy.

The table furnished below provides the details of complaints
received/disposed off during the financial year 2025-26:

DISCLOSURES UNDER MATERNITY BENEFIT ACT, 1961

During the financial year 2025-26, your Company has
complied with the applicable provisions of the Maternity
Benefit Act, 1961.

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 were 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 HAVE OCCURRED SINCE 31ST
MARCH, 2026 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
31st March, 2026 to which the financial statements relate
until the date of this report.

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 web-link 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, 2015. You may please refer to our
Company’s web-link https://www.hap.in/annual-return.php.

RELATED PARTY TRANSACTIONS

As required under Regulation 23 of the SEBI (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 web-link 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.

The details of Related Party Transactions are provided in the
Notes to the Financial Statements and Form AOC-2 forming
part of the Director’s Report - Marked as Annexure H.

CORPORATE GOVERNANCE REPORT

The Company has complied with the Corporate Governance
requirements under the Companies Act, 2013 and as
stipulated under the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 as amended. A report on
Corporate Governance and Management Discussion and
Analysis under Regulation 34 of the SEBI (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 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:

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

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

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

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

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

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

DEPOSITORY SYSTEM

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

INDUSTRIAL RELATIONS

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

DETAILS OF APPLICATION MADE / PROCEEDINGS PENDING UNDER INSOLVENCY AND BANKRUPTCY CODE, 2016
DURING THE YEAR AND THEIR STATUS AS AT THE END OF FINANCIAL YEAR: NIL.

DETAILS OF DIFFERENCE BETWEEN THE AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE TIME
SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS
ALONG WITH THE REASONS THEREOF: NA.

DETAILS OF ONE TIME SETTLEMENT, IF ANY: NILACKNOWLEDGEMENTS

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.

By order of the BoardFor HATSUN AGRO PRODUCT LIMITEDSd/- Sd/-

R.G. Chandramogan C. Sathyan

Chairman Vice Chairman

DIN: 00012389 DIN: 00012439

Place: Chennai
Date: 19th May, 2026

1

Relationship of remuneration to performance is clear and
meets appropriate performance benchmarks; and

2

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

3

The top ten Employees do not include Executive Directors and KMPs and their Remuneration details are shown separately
in the Board’s Report.