HZPC Holding is a stable and well-managed company. Over the past financial year 2018/2019, the organisation has performed exceptionally well. Even though large parts of Europe faced extreme drought and the volume of seed potatoes was lower than expected, record financial turnover and highly satisfying results were realised.
The Supervisory Board accepts that HZPC is a business which trades in a specific agricultural product. Turnover and profits can vary from year to year. The results over the past year are line with the forecasts and long-term goals. It must be noted that operational processes are functioning effectively. This is a robust, well-managed business, with a well thought out strategy which exudes reliability.
Supervisory Board activities
The Supervisory Board is in charge of supervising and advising the Executive Board in determining and achieving the company’s strategy, policies and objectives. It also takes the role of employer and sets the remuneration levels for the Executive Board.
In HZPC Holding, a two-tier corporate structure under Dutch law, the Supervisory Board is a separate body operating fully independently of the Executive Board. Members of the Supervisory Board are appointed and reappointed by the Shareholder; that is, by ‘Vereniging HZPC’.
During financial year 2018/2019, the Supervisory Board has met six times. The meetings took place either fully or partially with the Executive Board. The chairman of the Supervisory Board and the CEO prepared the meetings. The agenda items for the various meetings are placed on the agenda on the initiative of the Supervisory Board or on the initiative of the Executive Board.
The Supervisory Board is confident that all members made adequate time available to give sufficient attention to HZPC Holding. A member of the Supervisory Board missed part of one meeting due to external circumstances. One member was absent for one other meeting. This did not delay the progress of the discussions and decision making.
Aside from regular meetings, the Supervisory Board also makes informal visits to the company every now and then. The Board is thus able to gain a good overview of the organisation. The Board was able to ascertain that HZPC has a very international team of employees and operates within an open and pleasant atmosphere.
In 2018/2019 HZPC Holding succeeded in realising record turnover of EUR 347.9 million and a great operating profit of EUR 13.7 million. This can be regarded as an exceptional achievement and even more so, when you consider that volumes of seed potatoes were low as a result of a dry growing season, particularly in Europe.
The Supervisory Board proposed paying out a dividend of EUR 6.1 million to the shareholders on the recommendation of the Executive Board. This means EUR 7.75 for each share certificate. This is consistent with the company’s aim to provide a stable percentage of profit.
Investments in R&D
HZPC is an interesting, innovative company with a great deal of know-how, which provides a huge contribution to the provision of food across the globe. The excellent performance justifies HZPC’s substantial investments in research and development. In the near future, the previously approved, extensive modernisation programme for the centre of expertise will begin in Metslawier.
HZPC is active in new markets, such as India. It is a challenging strategy. The Supervisory Board has worked hard on monitoring the development of the joint venture Mahindra-HZPC in India, which had to face challenging circumstances for the second year in a row and, as a result, made a loss. The board shares the confidence of the Executive Board but continues to critically assess where the boundaries lie in terms of responsible investments.
The Supervisory Board felt sufficiently well-informed over the past year regarding general management, risk-management, accountancy audits and the internal control systems within the business.
KPMG Accountants, HZPC Holding’s external auditor, reported in depth to the Supervisory Board on the agreed scope of the audit and the outcome. HZPC Holding’s financial statements, the annual report and accounts report from the external auditor were discussed with the auditor in the presence of the CEO and CFO. The Executive Board also shared the management letter with the Supervisory Board.
The accountant audited the financial statement for 2018/2019 and issued an unqualified audit opinion.
Supervisory Board evaluation
The Supervisory Board changed the composition of its members after the departure of E. Kraaijenzank last year. The Board would like to express its appreciation for his constructive and professional support. He will be succeeded by Mrs I. Frolova. The Board is delighted to welcome a female member. Mrs Frolova is a well-regarded financial expert with an excellent track-record and a great deal of international experience.
In the interests of transparent corporate governance, the Supervisory Board took the time, over the course of the last financial year, to assess its own effectiveness. During this evaluation, in my role of chairman, I interviewed all members of the Supervisory Board and the Executive Board.
The most important conclusion to be drawn from this assessment is that HZPC operates with an open and constructive communication process between the Executive Team and the Supervisory Board. The Board is kept up-to-date with prompt and accurate information on important developments within the business. This takes place on a requested and also ad hoc basis. The CEO functions as a genuine go-between for the organisation and the Supervisory Board. The evaluation’s findings were also positive. It has been agreed that this process will be repeated with a degree of regularity.
The Supervisory Board would like to thank all of the HZPC employees for their efforts over the past year. The employees are the most important asset for a robust business.
Joure, 3 October 2019
On behalf of the Supervisory Board,
Meerten Ubbens, Chairman