Heritage Foods Limited | 30th Annual Report 2021-22

30 th Annual Report 2021-22 Heritage Foods Limited 102 RISK AND CONCERNS Type of Risk Description Mitigation Strategy Competition Risk The Company faces competition from local players, large private players and international players To mitigate this risk the Company- Ɣ Ensures that they know the competition · Produces differentiated products Ɣ Strategies to gain competitive advantage Ɣ Plans to update its brand image Ɣ Regularly listen to the existing customer Climate Risk Unpredictable weather conditions such as drought, rainfall, heat etc can affect the product of milk and thus cause fluctuations in price. The Company ensures that it has upgraded to newer technologies to help farmers in addressing varied climatic condition and its impact on dairy production. Operational Risk System failure, equipment failure and anything that can disruption in course of the business can result in losses. This risk is mitigated by Ɣ I dentifying risks in the market Ɣ Analysing risk levels and assessing the severity of the risk. Ɣ Introducing risk management tools and models Ɣ Monitoring and evaluating risks and the risk management system periodically. Ɣ Appointing right set of people to evaluate the risks and plan the strategy to face the risks Quality Risk Risk of the product not being of upmost quality and other issues such adulteration, contamination or tampering, which may result in product being recalled can lead to financial losses. Setting up of a standard production process, robust quality control process, advanced manufacturing process, planning preventive and corrective activities are adopted by the Company to mitigate this risk. Regulatory Risk Inability to comply with the applicable laws and regulations may lead to stringent penalties, claims and reputational damage. With efficient corporate governance practices, the Company ensures its functions are aligned with the industry. Raw Material Continuous change in prices can result in costly raw material which can increase cost of production and further cause losses to the Company. Sourcing of the highest grade materials, incoming raw material testing and inspection, dual sourcing of raw material and customer-specific raw material requirements are the steps adopted by the Company to lower raw material risk. HUMAN RESOURCES Human capital is the most essential part of the Company. The Company keeps promoting a collaborative work environment where all the employees feel safe and a part of the Company. The Human Resources policies of the Company are aimed at attracting, nurturing and retaining talent in a constantly evolving business environment while ensuring trust, transparency and teamwork amongst its employees. The Application Tracking System (ATS) is a robust digital platform deployed by the Company for talent acquisition. The Company offers various modules for skill development regularly and conducts a structured induction process at all locations and management development programmes to upgrade the managerial skills. Further, the employee recognition programme is a vital part of the Company. Towards this, regular communication is done with the top management for identifying and rewarding the best performers across different functions. In addition, objective appraisal system based on Key Performance Indicators (KPI’s) are in place to reward employees. As on March 31, 2022, the total number of employees was 3009. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY The Company has a well-framed internal control system commensurate with the size and nature of its business. These internal controls ensure safeguarding of assets from unauthorised use or disposition, proper recording and reporting of all transactions and compliance with applicable regulatory requirements. The internal control systems are reviewed and modified continually to keep up with the changes in business environment and statutory requirements.