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Dhanuka Agritech Ltd.

BSE: 507717 Sector: Agri and agri inputs
NSE: DHANUKA ISIN Code: INE435G01025
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OPEN 721.50
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VOLUME 298
52-Week high 940.00
52-Week low 600.00
P/E 30.55
Mkt Cap.(Rs cr) 3,550
Buy Price 701.70
Buy Qty 10.00
Sell Price 709.95
Sell Qty 8.00

Dhanuka Agritech Ltd. (DHANUKA) - Director Report

Company director report

Dear Members

Your Directors are pleased to present the 31 st Annual Report on the business andoperations of the Company along with the Audited

Standalone and Consolidated Financial Statements of the Company for the Financial Yearended 31st March 2016.

It is a proud moment for the entire Dhanuka Parivaar that Dhanuka has created anothermilestone while taking its UDAAN-UDAAN AASMAN CHUNE KI with the setting up astate-of-the-art manufacturing facility at Keshwana (Rajasthan). The Plant wascommissioned on Wednesday 16 March 2016.

1. Financial Highlights

(Rs. in Lacs)
Particulars Figures as at the end of current reporting period Figures as at the end of previous reporting period
Gross Turnover 90803.64 86738.45
Profit before Depreciation & Taxation (PBDT) 15124.26 13523.89
Deductions:
Depreciation 590.53 585.59
Provision for Taxation 3802.67 2330.03
Profit after Tax (PAT) 10731.06 10608.27
Balance of Statement of Profit & Loss of Previous Year 31944.76 25108.59
Amount available for Appropriations 42675.82 35716.86
Appropriations:
• Transfer to General Reserve 1073.00 1063.00
• Final Dividend (Proposed) NIL 2250.88
• Interim Dividend (Paid) 3251.27 NIL
• Dividend Tax (Interim FY 2015-16 & Final FY 2014-15) 664.42 458.23
• Surplus carried to Balance Sheet 37687.13 31944.76

2. Business Operations

Your Company has seen moderate sales growth across geographies during this scalinspite of de cient rainfall price erosion & degrowth of industry. The new launchedproducts-SEMPRA and COVER have performed well. Your Company is well positioned to pursueits strong growth potential and has been moving forward with introducing its new products.

Forecast of a good monsoon this year is a good sign of revival for the troubledagriculture sector. It will not benefit only agriculture and farmers but will give a boostto India's economy also.

Results financial year ended 31.03.2016

Your Company has recorded a growth of 5.57% increase in its Net Turnover ofRs.82878.73 Lacs against Rs. 78507.58 Lacs in the financial year 2014-15. Your Companyhas also reported EBIDTA of Rs.15234.64 Lacs and Net Profit of Rs.10731.06 Lacs for thefinancial year 2015-16 as compared to EBIDTA of Rs.13783.86 Lacs and Net Profit ofRs.10608.27 Lacs in the financial year 2014-15.

Your Company continues to remain debt-free due to it's strong performance in therecent years. Additionally it has healthy Net Worth of Rs. 48044.02 Lacs.

Your Company has been continuously re-af rmed (ICRA) A+ (Stable outlook) for fund basedlimits and (ICRA) A1+ for non fund based limits.

CRISIL has assigned Fundamental grade 4/5 (Superior Fundamentals) and Valuation gradeof 4/5 (upside from Current Market Price) to your Company.

3. Dividend

During the financial year 2015-16 your Company haddistributed I Interim Dividend@125% ( i.e. Rs. 2.50 per Equity Share having Face Value of Rs. 2/- each) in the MonthFebruary 2016 and II Interim Dividend @ 200% (i.e. Rs. 4/- per Equity Share having FaceValue of Rs. 2/- each) in the Month of March 2016. The total outgo on account of abovestated both the Interim Dividends was Rs.3915.69 Lacs (including total tax on InterimDividends was Rs. 664.42 Lacs). The payment of both the Interim dividends has been madewithin prescribed time period.

The total payout on account of Interim Dividends was Rs.6.50 per equity shares duringthe financial year 2015-16 as compared to nal dividend Rs.4.50 per equity share offinancial year 2014-15.

In view of above Interim Dividends payout the Board of Directors has not recommendednal dividend for the nancial Year 2015-16.

4. Subsidiary Company

At present your Company has one Wholly Owned Subsidiary Company namely M/s. DhanukaAgri-Solutions Pvt. Ltd. incorporated in Bangladesh and its operations have not yetstarted. A Statement containing salient features of the Financial Statements of thesubsidiary in Form AOC-1 is attached with Financial Statement of the Company. TheStatement also provides details of performance and financial position of the Subsidiary.

Pursuant to the provisions of Section 136 of the Act the Company's FinancialStatements Consolidated Financial Statements along with relevant documents and separateAudited Accounts in respect of the Subsidiary are available on the website of theCompany.

The Company does not have any material Subsidiary in terms of SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015. Hence Policy on Material Subsidiaries hasnot been formulated. There are no Associate Companies within the meaning of Section 2(6)of the Companies Act 2013 (“the Act”).

5. Transfer to General Reserve

Your Company proposes to transfer Rs. 1073 Lacs to the General Reserve.

6. Deposits from Public

The Company has not accepted any Deposits from Public and hence no principal orinterest was outstanding as on the Balance Sheet date.

7. Future Prospects

The Agriculture Sector has been given top most weightage

by the Government of India while announcing Budget for the Financial Year 2016-17. TheGovt. has announced nancial aids insurance policy for crops and other bene cial policies& schemes for farmers and strengthening the Infrastructure of Agriculture Sector. TheMinistry of Agriculture & Farmers Welfare has been continuously launching effectiveprogrammes to educate farmers about the use of modern techniques & technology inagriculture allocation and focus on irrigation including issuance of soil health card toevery farmer.

These initiatives and result oriented steps are going to change the entire framework ofAgriculture Sector in India in terms of sustainable growth of agriculture produce andincome of farmers in coming years. The Indian Metrological Department has predicted thatyear 2016 will be a La- Nina year which means above normal monsoon and good rainfall ofmore than 105%.

The normal monsoon directly favours your Company resulting in increased sale of itsproducts. Your Company has been consistent launching two to three innovative products u/s9(3) and two to four products u/s 9 (4) of the Insecticides Act 1968 every year. Thispractice has yielded better response from distributors and farmers and also led toincrease in its market share.

Your Company has already built adequate capacity at its new unit at Keshwana(Rajasthan) to cater to the growing demand of its products in near future. A thrust isalso being given to expand the distributor base of the Company.

Your Company's Management committed to use of high-tech machines & apparatus in themanufacturing operations of its products. All materials and chemicals are processed andstored with effective safety guidelines in all manufacturing units of the Company.

Your Company expects to perform well amid all positive factors during the FinancialYear 2016-17.

Further vision of the Hon'ble Prime Minister of doubling farmers' income can only be asuccess with improved productivity of farmland.

Your Company is fully committed to the cause of farmers prosperity.

8. Measures for Energy Conservation R&D and Technology Absorption andDetails of Foreign Exchange Earnings and Outgo

Information as required u/s 134(3)(m) of the Act is given in

Annexure 'A' forming part of this Report.

9. Extract of Annual Return

The extract of the Annual Return in form MGT-9 is given in Annexure 'B' forming part ofthis Report.

10.Meetings of the Board

Six Meetings of the Board of Directors were held during the Financial Year 2015-16. TheCorporate Governance Report covers detailed information on Meetings of the Board and itsCommittees.

11.Directors & Key Managerial Personnel

In accordance with the provisions of the Act Mr. Mahendra Kumar Dhanuka and Mr. ArunKumar Dhanuka will retire by rotation at the ensuing Annual General Meeting and beingeligible offer themselves for re-appointment.

The tenure of Mr. Mridul Dhanuka as a Whole time Director of the Company has been overon 22 May 2016 and being eligible he has offered himself for reappointment as a Wholetime Director of the Company. Your Board has recommended his re-appointment for a furtherperiod of 5 years based on the recommendation of Nomination and Remuneration Committee.

The tenure of Mr. Rahul Dhanuka as a Whole time Director of the Company will be over on1 May 2017 and being eligible he has offered himself for re-appointment as a Whole timeDirector of the Company. Your Board has recommended his re-appointment for a furtherperiod of 5 years based on the recommendation of Nomination and Remuneration Committee.

It is informed that Mr. Sachin Kumar Bhartiya has resigned from the post of NomineeDirector of 2020 Equity Investors Limited in view of termination of Share SubscriptionAgreement entered into between the Company and 2020 Equity Investors Limited w.e.f. 25thJanuary 2016.

In order to avail the qualitative guidance for investors the Board of Directors hasrecommend the appointment of Mr. Sachin Kumar Bhartiya as Independent Director of theCompany in accordance with the provisions of the Companies Act 2013 and Rules framedthere under for a period of five consecutive years with effect from 9 February 2016based on the recommendation of the Nomination and Remuneration Committee.

Mr. Kapil Garg was appointed as Additional/Executive Director & Company Secretaryw.e.f. 09.02.2016 upto the date of forthcoming Annual General Meeting of the Company.Since he has not offered himself for appointment as a Director your Board has notrecommended his appointment as Executive Director of the Company.

The details of familiarisation programmes for Independent Directors are available onthe Company's website (web link: http://www.dhanuka.com/wp-content/uploads/2015/07/Familiarization-Programmes-for-Independent-Directors.pdf).

Pursuant to the provisions of Section 203 of the Act Mr. Mahendra Kumar DhanukaManaging Director Mr. Vinod Kumar Bansal Chief Financial Oficer and Mr. Kapil GargCompany Secretary have been designated as Key Managerial Personnel of the Company.

12.Directors' Responsibility Statement

Pursuant to the provisions of Section 134(3)c of the Act with respect to Directors'Responsibility Statement it is hereby con rmed that:

1. In the preparation of the Standalone and Consolidated Annual Accounts theapplicable Accounting Standards have been followed along with proper explanations relatingto material departures;

2. The Directors have selected such Accounting Policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of Financial Year and of theProfit of the Company for that period;

3. The Directors have taken proper and sufficient care for the maintenance of adequateAccounting Records in accordance with the provisions of this Act for safeguarding theAssets of the Company and for preventing and detecting frauds and other irregularities;

4. The Directors have prepared the Standalone and Consolidated Annual Accounts on agoing - concern basis;

5. The Directors have laid down internal financial controls to be followed by theCompany and that such internal nancial controls are adequate and are operatingeffectively; and

6. The Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.

13. Corporate Governance

Your Company maintains highest level of transparency accountability and goodmanagement practices through the adoption and monitoring of corporate strategies goalsand procedures to comply with its legal and ethical responsibilities.

As required by SEBI (Listing Obligations and Disclosure Requirement) Regulations 2015a separate Report on Corporate Governance forms part of the Annual Report. A

Certi cate by the Statutory Auditors of the Company con rming compliance with CorporateGovernance forms a part of this Report.

14.Corporate Social Responsibility (CSR)

The Annual Report on CSR activities is given in Annexure 'C' forming part of thisReport.

15.Internal Complaints Committee (ICC)

Your Company has constituted Internal Complaints Committee (ICC) in accordance withthe provisions of the Sexual Harassment of Women at Workplace (Prevention Prohibition& Redressal) Act 2013 and Rules made thereunder. The ICC comprises of Mrs. ShubhaMinz (Chairperson) Mr. Rajesh Sahni Mr. Ankur Dhanuka and Mrs. Seema Salwan. TheCompany's Policy under this Act is available on the corporate website. ICC provides amechanism for reporting and redressing complaints related to sexual harassment atworkplace.

16.Committees of Board

The details of the Committees of Board are provided in the Corporate Governance Reportforming part of the Annual Report.

17.Whistle Blower Policy

In compliance with the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 Whistle Blower Policy has been implemented as a mechanism for employeesto report concerns about unethical behaviour or actual or suspected fraud of all kindsincluding alleged fraud by or against the Company abuse of authority whether made by anamed complainant or anonymously. The Policy is a step towards better Corporate Governanceand is available on the Company's website.

18.Management Discussion & Analysis

The Management Discussion and Analysis is given separately and forms part of thisAnnual Report.

19.Insider Trading Regulations

Based on the requirements under SEBI (Prohibition of Insider Trading) Regulations2015 as amended from time to time the Code of Conduct for prevention of Insider Tradingwas in force during last scal.

20.Material Changes and Commitments affecting the

Company's Financial Position between the end of the Financial Year and Date of Reportu/s 134 of the

Companies Act 2013

Except as disclosed elsewhere in the Report there have been no material changes andcommitments which can affect the financial position of the Company between the end of theFinancial Year till the date of this Report.

21.Comprehensive Scheme of Amalgamation

The Hon'ble High Court of Delhi has approved the Comprehensive Scheme of Amalgamationbetween M/s. A.M. Bros. Fintrade Private Limited and M/s. Dhanuka Finvest Private Limitedwith M/s. Dhanuka Agritech Limited and their respective Shareholders and Creditors. Theorder of the High Court has been led on 01.12.2015 with the Registrar of the CompaniesNCT Delhi & Haryana.

22.Performance Evaluation

In compliance with the requirement of Section 134(3)(p) and Schedule IV of theCompanies Act 2013 and Rules framed thereunder and Regulation 17(10) of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 the Board of Directors of theCompany has evaluated and assessed the performance of the Company's Chairman IndividualDirectors Board as a whole and its Committees through a questionnaire based on emergingand leading practices and performance criteria such as strategic engagement knowledgediligence ethics & values oversight of the Financial Reporting Process includingInternal Controls and Composition and Quality of Board and Committees etc.

23.Policy on Appointment and Remuneration of the Directors Key Managerial Personneland Other Employees

The Policy of the Company relating to the appointment and remuneration of theDirectors Key Managerial Personnel and other employees in accordance with SEBI (ListingObligations and Disclosure Requirement) Regulations 2015 and Section 178(3) of theCompanies Act 2013 is given in the Corporate Governance Report forming part of theAnnual Report.

24.Particulars of Loans Guarantees or Investments

The particulars of loans guarantees and investments have been provided in the Notes tothe Financial Statement.

25.Particulars of Contracts or Arrangements with

Related Parties

Particulars of contracts or arrangements with related parties pursuant to Section134(3)(h) of the Act read with rule 8(2) of the Companies (Accounts) Rules 2014 in FormAOC-2 is given in Annexure 'D' forming part of this Report. Notes to Accounts cover moreinformation on Related Party Transactions entered into by the Company.

In addition the following contracts or arrangements with Related Parties were enteredinto by the Company during the Financial Year in terms of Section 188(2) of the CompaniesAct 2013:

a. Transactions for sale and/or purchase with M/s. Otsuka Chemicals (India) PrivateLimited for FY2015-16 approved in the Board Meeting held on 28th May 2015 onrecommendation of the Audit Committee. Transactions have been carried out at arm lengthbasis in ordinary course of business.

b. Transactions for sale and/or purchase with M/s.  Dhanuka Laboratories Limitedfor FY 2015-16 approved in the Board Meeting held on 28th May 2015 on recommendation ofthe Audit Committee. Transactions have been carried out at arm length basis in ordinarycourse of business.

c. Promotion of Mr. Harsh Dhanuka was approved in the Board Meeting held on 28 May2015 from Senior General Manager (Marketing) to Vice President (Marketing) of the Companywith salary of Rs. 300000- 50000- 500000 p.m. with effect from 01.06.2015 with theapproval of the Shareholders in the AGM held on 29.12.2015.

d. Execution of Lease Agreement with M/s. Dhanuka Private Limited for taking on leasefor Commercial Purpose at Hyderabad for operating Ofice-Cum- Godown for a period of fouryears starting from 1st October 2015 to 30th September 2019 approved in the BoardMeeting held on 12 August 2015 on recommendation of the Audit Committee. Transaction hasbeen carried out at arm length basis in ordinary course of business.

e. Renewal of the Lease Agreement with Mridul Dhanuka (HUF) for taking on lease OfficePremises at Kolkata for continuing Company's Office for a period of five years startingfrom 20 January 2016 to 19 January 2021 approved in the Board Meeting held on 5November 2015 on recommendation of the Audit Committee. Transaction has been carried outat arm length basis in ordinary course of business.

f. Grant of License to group Companies to use Company's Registered Office for thepurpose of maintaining the registered office at a rental of Rs. 2000/- approved in theBoard Meeting held on 2nd December 2015 on recommendation of the Audit Committee.Transactions have not been carried out at arm length basis in ordinary course of businessand approval of shareholders in this regard has been obtained in the 29 AGM held on 17Sep. 2014.

The Policy on Related Party Transactions has been approved by the Board of Directorsand is available on the company's website (web link:http://www.dhanuka.com/wp-content/uploads/2015/05/Policy-on-Related-Party-Transactions.pdf).

26.Risk Management Policy and Internal Adequacy

The Company considers on-going Risk Management to be a core function of theCompany's Management and understands that the Company's ability to pro-actively identifyassess and minimize risk is critical in achieving its Corporate Objectives. The Companyhas implemented Risk Management Plan and drafted Risk Identi cation Assessment &Mitigation Document to ensure appropriate and timely Risk Management in compliance withthe provisions of the Companies Act 2013 and SEBI (Listing Obligations and DisclosureRequirement) Regulations 2015. The Company's Internal Control systems are commensuratewith the nature of its business and the size and complexity of its operations.

27.Internal Financial Control

The Company has in place adequate Internal Financial controls with reference toFinancial Statements. The same are periodically reviewed by the Internal Statutory andSecretarial Auditors and by the Management Board and Committees thereof.

28.Shares under Compulsory Dematerialization

Your Company falls in the category in which delivery of Shares in dematerialized formis compulsory if the same are traded on a Stock Exchange. As on 31 March 2016 98.41%Equity Shares were held in dematerialized form.

29.Statutory Auditors

M/s. Dinesh Mehta & Co. Chartered Accountants having Registered Office at 21Daya Nand Road Darya Ganj New Delhi-110002 were appointed as Statutory Auditors of theCompany in the 29 AGM to hold office until the conclusion of 32 AGM subject to the ratication of their appointment at each subsequent AGM. The Board recommends the rati cationof their appointment for Financial Year 2016-17. The Auditors Report does not contain anyquali cation reservation or adverse remark.

30.Secretarial Auditors

The Board of Directors in compliance with the provisions of Section 204 of theCompanies Act 2013 and Rules framed thereunder has appointed M/s R&D CompanySecretaries having their Registered Office at 785 Pocket E Mayur Vihar Phase-II NewDelhi-110 091 as Secretarial Auditors of the Company for the Financial Year 2015-16. TheSecretarial Audit Report does not contain any quali cation reservation or adverse remarkand is given in Annexure 'E' forming part of this Report.

31.Cost Auditors

The Board of Directors in compliance with the provisions of the Companies Act 2013Rules and Noti cations issued thereunder has appointed M/s S. Chander & AssociatesCost Accountants having their Registered Ofice at 212 2 Floor Sarai Pipal Thala G.T.Karnal Road Adarsh Nagar Delhi 110 033 as Cost Auditors to conduct Audit of theCost Accounts maintained by the Company for the Financial Year 2016-17.

32.Status of Listing Fees

Your Company has been regularly paying listing fees to the BSE & NSE Mumbai whereits Equity Shares are listed.

33.Particulars of Employees

Information in accordance with the provisions of Section 197 of the Companies Act2013 read with the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014

i) The ratio of the remuneration of each Director to the median remuneration of theemployees of the Company the percentage increase in remuneration of each Director ChiefFinancial Oficer and Company Secretary and comparison of remuneration of each KeyManagerial Personnel (KMP) against the performance of the Company for FY 2015-16 are asunder:

Name of Director/ KMP and Designation Remuneration for FY2015-16 (Rs. in Lacs) Ratio of remuneration of each Director to median remuneration of employees** % increase in Remuneration in FY2015-16

Comparison of KMP's remuneration against the Company's performance in FY2015-16

Ratio to Gross # Revenues (Rs. 90803.64 Lacs) # Ratio to Net profit (Rs. 10731.06 Lacs)
1. Mr. Ram Gopal Agarwal Chairman 340.19 122.37 11.20% 0.00 0.03
2. Mr. Mahendra Kumar Dhanuka Managing Director 333.47 119.95 12.47% 0.00 0.03
3. Mr. Arun Kumar Dhanuka Director (Works) 307.25 110.52 10.74% 0.00 0.03
4. Mr. Rahul Dhanuka Director (Marketing) 295.47 106.28 10.28% 0.00 0.03
5. Mr. Mridul Dhanuka Director (Operations) 210.45 75.70 10.85% 0.00 0.02
6. Mr. Priya Brat Independent Director 2.10 *N.A *N.A N.A N.A.
7. Mr. Vinod Kumar Jain Independent Director 2.20 *N.A *N.A N.A N.A
8. Mr. Indresh Narain Independent Director 2.20 *N.A *N.A N.A N.A
9.Mr. Subhash Chandra Lakhotia Independent Director 0.80 *N.A *N.A N.A N.A
10. Mr. Sachin Kumar Bhartiya Independent Director 1.90 *N.A *N.A N.A N.A
11. Mrs. Asha Mundra Independent Director (w.e.f. 06.02.2014) 1.40 *N.A *N.A N.A N.A
12. Mr. Om Prakash Khetan Independent Director 1.60 *N.A *N.A N.A N.A
13. Mr. Vinod Kumar Bansal CFO 57.25 20.59 N.A 0.00 0.00
14. Mr. Kapil Garg Company Secretary (appointed w.e.f. 09.02.2016) 1.68 0.60 NA 0.00 0.00
15 Ms. Shubha Singh Company Secretary (ceased on 06.11.2015) 10.38 3.73 NA 0.00 0.00

* Managing Director & Executive Directors are whole-time Directors & otherDirectors are non -Executive Directors who are paid only sitting fees for attending theBoard & Committees thereof. Hence ratios provided are only for Managing Director &Wholetime Directors.

* *Median salary of employees during FY 2014-15 : Rs. 2.41 Lacs p.a. and F.Y.2015-16 : Rs. 2.78 Lacs p.a.

#Rounded off to two decimals. ii) The percentage increase in the median remuneration ofemployees in the Financial Year: 15.33%

iii) The number of permanent employees on the rolls of Company as on 31.3.2016: 1214

iv) The explanation on the relationship between average increase in remuneration andCompany performance:

The increase in remuneration is based on the company’s performance amidstchallenging drought affected scal and other attributes like employee’s performanceprofessional and technical quali cations experience skill sets growth of Industry &economy with future growth prospects etc.

All these attributes are taken into consideration judiciously for revision ofremuneration.

v) Market Capitalization as on 31 March 2016 was Rs. 2946 Crs. as against Rs. 3401Crs. as on 31st March

2015. Price Earnings Ratio of the Company was 27.46 as on 31 March 2016 and was 32.06as at 31st March 2016.

The closing price of the Equity Shares of the Company as on 31 March 2016 was Rs.585.00 and Rs. 589.05 on the BSE and NSE respectively representing 292.50 times and294.53 times increase over the IPO price of Rs. 10/ (the face value was split to Rs. 2/ inthe year 2010) on BSE and NSE respectively adjusted for the Stock splits to date.

vi) Average percentile increase already made in the salaries of employees other thanthe Managerial Personnel in the last Financial Year i.e. FY 2015-16 and its comparisonwith the percentile increase in the Managerial Remuneration and justi cation thereof andpoint out if there are any exceptional circumstances for increase in the ManagerialRemuneration:

Average percentile increase in salaries of employees other than Managerial Personnel inthe last Financial Year i.e. FY 2015-16 was approx. 14%. Percentile increase in ManagerialRemuneration was 11.5%.

The increase in the managerial remuneration was based on the recommendation of theNomination & Remuneration Committee and also within the salary range as pre-approvedby the shareholders of the Company.

vii) The key parameters for any variable component of remuneration availed by theDirectors: Commission as percentage of net profit calculated in accordance with Section198 of the Companies Act 2013 is the only variable component of remuneration paid to theDirectors as per approval accorded by the Shareholders of the Company on recommendationof the Board and Nomination and Remuneration Committee.

viii) The Ratio of remuneration of the highest paid Director to that of the employeeswho are not Directors but receive remuneration in excess of the highest paid Directorduring the year:

No employee received remuneration in excess of the highest paid Director during theyear.

ix) The Company af rms that the remuneration is as per the

Remuneration Policy of the Company.

x) Statement showing the details of employees drawing remuneration exceeding Rs. FiveLacs per month or Rs. 60 Lacs per annum. All these employees are in whole time employmentof the Company.

Name & Age Designation/ Nature of Duties Remuneration p.a. (Rs. in Lacs) Quali cation Experience (Years) Date of Joining Previous Employment & Designation %age Shareholding in Dhanuka Agritech Ltd. as on st 31 March 2016 Relation to any Director or Manager
Mr. R.G. Agarwal (67 years) Chairman 340.19 B.Com (Hons) 46 Since incorporation Own Business 0.76% (379753 Shares) Brother of Mr. M.K. Dhanuka Father of Mr. Rahul Dhanuka
Mr. M.K. Dhanuka (61 years) Managing Director 333.47 B.Com (Hons) 40 Since Incorporation Own Business 0.06% (30959 Shares) Brother of Mr. R.G. Agarwal Father of Mr. Mridul Dhanuka
Mr. A.K. Dhanuka (59 Years) Director (Works) Gurgaon unit 307.25 B.Com 37 23.05.2007 Own Business 0.08% (39607 Shares) No
Mr. Rahul Dhanuka (41 years) Director (Marketing) 295.47 B.Sc & M.B.A. 18 01.02.2002 Own Business 0.76% (381494 Shares) Son of Mr. R.G. Agarwal
Mr. Mridul Dhanuka (35 years) Director (Operations) 210.45 B.Tech. & M.B.A. 11 01.04.2005 Own Business 0.06% (30959 Shares) Son of Mr. M.K. Dhanuka

34. Acknowledgement :

Your Directors take this opportunity to record their deep sense of gratitude for thevaluable support and co-operation extended to the Company by the Central InsecticidesBoard Directorates of Agriculture Haryana Gujarat J&K Rajasthan other GovernmentAgencies Bankers Shareholders Dealers Distributors Vendors U.S. & Japanese MNCsand the farming community who have reposed their trust and con dence in the Company.

Your Directors wish to place on record their appreciation for cordial industrialrelations maintained by workmen and dedicated efforts put in by staff for Company'scontinuous growth and success.

For and on behalf of the Board
Sd/-
R.G. Agarwal
Place: Gurgaon Chairman
Date: 24 May 2016 DIN: 00627386

Annexure ‘A’

(A) Technology absorption-

(i) The efforts made towards technology absorption:

a. An insecticidal combination WG formulation of Diafenthuron + Etofenprox has beendeveloped and patent applied and registration process started.

b. Wettable Granular Herbicide combination formulations of Halosulfuron Methyl withAtrazine & Metribuzin have been developed and registration process after ndingsuitability in in-house trials has been started of Halosulfuron methyl + Atrazine inMaize.

c. A new granular formulation of Cartap Hydrochloride 75% SG has been developedmanufacturing process optimized and product launched. Patent application based on thebio-ef cacy trials has been led. The product has been launched in the market and very wellaccepted by the farming community.

d. The recipe and manufacturing process for a new generation capsule suspension(Lambda cyhalothrin 4.9% CS ) has been developed and product launched.

e. Butachlor 50% EW formulation (Emulsion in Water) the recipe and manufacturingprocess has been developed and product launched.

f. Fipronil 5% SC and 0.3% Granular formulation recipe and manufacturing process hasbeen developed and in-house manufacturing has been initiated.

The benefits derived like product improvement cost reduction product development orimport substitution:

The formulation recipe of Quinalphos 25% EC and Triazophos 40% EC have been revised byusing different emulsi ers at lower dose level resulted in cost reduction.

(ii) In case of imported technology (imported during the last three years reckoned fromthe beginning of the Financial

Year):

The Company has not imported any technology during the last three Financial Years.

Details of Technology Imported Year of Import Status absorption / implementation Reason if not fully absorbed
NIL NA NA NA

Your Company's strategic collaborations with MNCs have resulted in technology transferand adoption of scienti cally advanced high-ef cacy plant-protection chemicals by theIndian farmers resulting in increased crop yields and farm incomes. This goes a long waytowards ensuring food security for the nation.

Your Company's Gurgaon laboratory is NABL- accredited. Also Company's R&D centreis recognized by the Department of Science & Technology Ministry of Chemicals Govt.of India. The Company's Udhampur Unit received re-certi cation for ISO 9001:2008 forQuality Management and ISO 14000:2004 for Environmental Management. The OHSAS 18001:2007certi cation Awarded to the Company's Udhampur unit demonstrates the Company's commitmentto its employees employees' families and other stakeholders regarding the health safetyand wellness of each person that may be exposed to the health and safety risks associatedwith the activities and operations of the Company. Further it helps reduce accidentsdisruptions and their associated costs thereby increasing productivity.

(B) Research & Development

Looking at the imperative role of Research and Development (R&D) for qualityproducts and services from the very beginning your Company took the initiative for strongR&D. This Division therefore forms our core strength for expanding Brand portfolio asan on-going process to provide the farming community new generation eco-friendly worldclass molecules. In this endeavor the Division is actively engaged in evaluating new andcurrent product formulations in different agro- climatic regions of the country plays apivotal role in promotion and creating awareness about new products amongst differentstakeholders channelizes information to consumers for safe and judicious use developsinterface with State Agricultural Universities (SAU) / ICAR and its Institutes and othersuch organizations imparts training to Marketing staff Dealers and Farmers. The Divisionalso generates data on different parameters for registration of pesticides in India andfor expansion of existing label claims on suitable crops. Further it also facilitatesregistration of pesticides in Nepal and Bangladesh.

Introduction of New Products

During the scal 2015-16 Your Company has obtained approval of the Central InsecticideBoard & Registration Committee (CIB & RC) Govt. of India for two molecules namelyKasugamycin 5% + Copper Oxychloride 45% WP(CONIKA 50% WP) for control of Neck blast andLeaf blast in rice and Quizalofop Ethyl 10% EC + Chlorimuron Ethyl 25% WP + Surfactant(MAX-SOY) for control of weeds in soybean under section 9(3) of the Insecticides Act.

Another on-going activity by the Division is of expansion of existing label claimspackaging endorsements bio-ef cacy claims and registration of products under section9(4) of the Insecticides Act etc. During 2015-16 the CIB & RC issued certi cates(me-too) for fteen products and Bio-ef cacy claims on four products (Lambda Cyhalothrin4.9% CS for soybean Diafenthiuron 50% WP for citrus Fipronil 0.4% GR for wheat andThiamethoxam 70% WS for potato). In addition Packaging Endorsement Certi cate was issuedby CIB & RC for nine products.

Registration Certi cates under section 9(4) of the Insecticides Act received

Molecule Crop
1. Pager-Diafenthiuron 50% WP Cotton Cabbage Brinjal Chilli Cardamom
2. Fluid-Fenpyroximate 5% SC Tea Chilli
3. Spiromesifen 22.9 % SC Cotton Tea Tomato
4. Thiram 40% FS Maize
5. Thi uzamide 24% SC Rice
6. Fenpyroximate 5% EC Tea Chilli Coconut
7. Defend-Fipronil 80% WG Grapes Rice
8. Oxadiargyl 80% WP Rice
9. Tebuconazole 25% WG Groundnut
10.Fipronil 40% + Imidacloprid 40% WG Sugarcane
11. Mancozeb 75% WG Potato Tomato
12. FUZITA-Isoprothiolane 40% EC Rice
13.DELIGHT-Propiconazole 13.9% + Difenoconazole 13.9% EC Rice
14.Novaluron 5.25% + Indoxacarb 4.5% SC Tomato
15. Difenoconazole 25% EC Grapes Rice Chilli Apple

The registration process being an on-going activity the proposals are in the pipelinefor 4 fungicides and one each of insecticide and herbicide.

International collaborations

Your Company continues to have technical collaboration with MNC giants like M/S DowAgro Sciences M/S Dupont M/S FMC Corporation M/S Arysta Life Sciences and M/S Oro Agriof USA; M/S Sumitomo Corporation M/S Hokko Chemical Co. Limited M/S Mitsui ChemicalsInc. M/S Nissan Chemical Industries Ltd. M/S Nippon Soda Co. Ltd. and OAT Agrio Co.Ltd. of Japan and has introduced a good number of eco-friendly highly effectivepesticides immensely bene ting the country to enhance on-farm crop productivity and inturn increased income.

Capacity building of agri-input dealers

Recognizing the role of Agri-input Dealers as an important source of agriculturalinformation for farmers Dhanuka Group is in the forefront for up- gradation of the skillsof agri- input dealers so as to make them credible source. As a part of initiative by YourCompany under public-private partnership (PPP) an Out-reach Diploma course has beenlaunched with three SAUs in Gujarat- Anand Agricultural University Navsari AgriculturalUniversity and Junagadh Agricultural University. The course has become so popular that atthese SAUs Agri-input Dealers are now enrolling by paying full fee. This is in addition toour earlier partnership with the National Institute of Agricultural Extension Management(MANAGE) Hyderabad. We are constantly following with ICAR Ministry of Agriculture Govt.of India for other Universities to start such a course.

Field extension programmes

The PPP with Swami Keshwanand Rajasthan Agricultural University Bikaner for a Diplomain Agri-Business Management and with Bihar Litchi Growers Association continues to be inoperation during this year as well. The R&D team put up eld exhibitions undertooktraining of eld personnel; interactive meetings with agri-input dealers for creatingawareness of the new products farmer's training camps training of Krishi Mitra RoadShows publishing technical and popular literature on regular basis participation andkey-note addresses during Agro Summit / Conferences etc.

Bene ts Derived

Grant Oficerti cates for a good number of molecules under section 9(4) of theInsecticides Act during financial year 2015-16 will open newer opportunities of growth inmany other crop segments as these are already well established in the market. National andState level Public-Private and Private-Private Partnerships continue to positively impactthe credibility of the Company and in development of positive attitudinal dispositionsamongst the stakeholders including Policy Makers and Politico system.

The expenditure incurred on R&D during financial year 2015- 16 and in the previousyear is as below:

Particulars 2015-16 2014-15
a) Capital Nil Nil
b) Recurring 110.71 103.91
c) Total 110.71 103.91
d) Total R&D expenditure as a % of total turnover 0.13 0.13

Our Vision

The R&D Division continuously looks forward to explore newer opportunities forcollaboration and undertaking studies for label expansion on new crops/insects pests anddiseases and also for registration of new molecules of our foreign collaborators.

UN World Water Day Celebrations-every year on 22 March

Recognizing the fast decreasing availability of water for human consumption andagriculture followed by impending climate change which is expected to further impactagriculture the United Nations is organizing 'World

Water Day' every year on 22 March. This year the focus was on 'Water & SustainableDevelopment'. In our country rainfall pattern is highly erratic hence there are frequentoccurrences of droughts and oods leading to decreased food production devastations oflife and property etc. With high demand for water which otherwise is a limited naturalresource there is recognition at the highest level for maintenance of water bodies andadoption of water conservation practices by the farmers.

This year too Our Group organized several activities to create mass awarenessincluding release and mass circulation of Brochure 'Save Water Enhance Water Use Efciency at Farm Level' painting competition for school children on save water theme in 180Schools across the country and cash prizes were given to the best entries. A week longtelevision campaign (16 to 22 March) was also launched on 2 National and 12 RegionalChannels in Bihar Maharashtra Odisha Punjab Rajasthan Uttar Pradesh and West Bengalto create awareness both for rural and urban population about water conservation.

Check Dams with Community Participation

Our Company is a strong believer of conserving the limited water resource and istherefore continuously emphasizing it in all our interactions with differentstakeholders especially of motivating farmers to dig ponds in the low-lying areas oftheir farms for collecting run-off rainwater and reusing it during dry-spells.

This year two check dams have been constructed through PHD Rural Development Foundation(PHDRDF) in the villages of Mainpura ki Dhani and Sankotra (Jaipur districtRajasthan) and the design structures are a combination of concrete and stone masonry inline with the terrain dam stability likely water head etc. These Dams were inauguratedby Mr. R. G. Agarwal Chairman on 21 March 2016. These check dams have been constructed ina record time of less than 3 months and part of the labour was by the villagersthemselves. The Mainpura Ki Dhani dam is 187ft long while the Sankotra dam is 450ftlong. Both have a height of 6ft at the point of over ow. These dams together are expectedto benefit approximately 800 households with a population of approximately 5000 villagersand over 9000 milch animals. The catchment area for Mainpura would be 90000 m3 and ofSankotra 120000 m3. When full it is expected to recharge 73 wells in the catchment(Mainpura-41 and Sankotra-32). These two check dams are in addition to two similarstructures in Jugalpura Neem Ka Thana & Devipura (Sikar district Rajasthan)which are now are now fully operational.

A press Conference was also organized on 22 March at Jaipur in conjunction with WaterDay Celebrations followed by an Interactive session with acclaimed AgriculturalScientists to brief about our accomplishments of encouraging rainwater conservation andreuse. It is a matter of great pride for us to be the first Pesticide Industry in thecountry for undertaking such a project at the eld level which is expected to bring abouta sea-change in the life of over five thousand villagers by ensuring them availability ofsome irrigation water for crop cultivation and also recharging the existing dry wells.Way-back in 2005 when we were celebrating 25 years of Your Company we initiated‘Save Water Campaign’ by advocating “Khet Ka Pani Khet Mein aur Gaon kaPani Gaon Mein”. Since 2010 we have started organizing UN World Water Day everyyear the beginning of which was at Vrindavan with Atirudra Mahayagya wherein alarge number of scientists distributers dealers and our staff across the country joined.

For and on behalf of the Board
Sd/-
R.G.Agarwal
Place: Gurgaon Chairman
Dated: 24th May 2016 DIN: 00627386

Annexure ‘C’

Annual Report on CSR Activities

1. A brief outline of the Company's CSR Policy including overview of projectsor programs proposed to be undertaken and a reference to the web-link to the CSR Policyand projects or programs.

The CSR Policy recommended by the CSR Committee has been approved by the Board ofDirectors and is available on the

Corporate website (web link:http://www.dhanuka.com/wp-content/uploads/2013/04/CSR-Policy-DAL-v1.pdf).

Your Company lays special emphasis on promoting education eradication of hungerpoverty and mal-nutrition; conservation of water deployment of water for agriculture andhuman use.

The thrust is on training and education of farmers and dealers and transfer oftechnology to improve food production. The Company's CSR efforts have been to conserve“Gaon ka paani gaon mein aur khet ka pani khet mein” and will continue to workin this direction.

2. The Composition of the CSR Committee.

Your Company has constituted CSR Committee in accordance with the CSR provisions u/s135 and Schedule VII of the Companies Act 2013 and the Rules made thereunder. The CSRCommittee comprises Mr. Ram Gopal Agarwal (Chairman) Mr. Indresh Narain and Mr. ArunKumar Dhanuka. The Corporate Governance Report covers more information on the CSRCommittee.

3. Average Net Profit of the Company for last three Financial Years: Rs.10818.38 Lacs as per applicable Section 198 of the Companies Act 2013.

4. Prescribed CSR Expenditure (two per cent of the amount as in item 3 above): Rs.216.37 Lacs.

5. Details of CSR spent during the Financial Year:

a. Total amount spent for the Financial Year: Rs. 225.39 Lacs. b. Amount unspent: Nilc. Manner in which the amount spent during the Financial Year is detailed below

CSR project or activity identified / bene ciary Sector in which the project is covered Location of the Projects / programs Amount outlay (budget) Amount spent on the projects or programs Subheads: (1) Direct expenditure (2) Overheads Cumulative expenditure upto the reporting period. Amount spent: Direct/ Implementing Agency
1 Facilities for Senior Citizen Setting up old age homes day care centres and such other facilities for Senior Citizens New Delhi 1.00 1.00 1.00 Age Care India
2 Facilities for Senior Citizen Setting up old age homes day care centres and such other facilities for Senior Citizens New Delhi 0.51 0.51 0.51 Directly
3 Donation for Children Education Promoting Education PAN India 6.00 6.00 6.00 Bharat Lok Shiksha Parishad
4 Donation for Children Education Promoting Education Jammu & Kashmir 5.00 5.00 5.00 Bhartiya Shiksha Samati
5 Construction of School Building Promoting Education Ratangarh Rajasthan 120.00 120.00 120.00 Chiranji Lal Dhanuka Charitable Trust
6 Construction of Dam at- Sankotra- Jaipur Ensuring Environmental Sustainability Jaipur Rajasthan 16.22 16.22 16.22 Directly
7 Construction of Dam at- Mainpura ki Dhani- Jaipur Ensuring Environmental Sustainability Jaipur Rajasthan 6.07 6.07 6.07 Directly
8 Donation for Children Education Promoting Education PAN India 0.12 0.12 0.12 Donation for Children Help- Cry
9 Facilities for Senior Citizen Setting up old age homes day care centres and such other facilities for Senior Citizens PAN India 0.10 0.10 0.10 Helpage India
10 Laying Drainage Promoting preventive health care and sanitation Gurgaon Haryana 4.00 4.00 4.00 Directly
11 Mid Day Meal to Students Promoting Education Mathura Uttar Pradesh 30.00 30.00 30.00 Akshaya Patra
12 Donation for Polio Hospital Promoting preventive Health Care Udaipur Rajasthan 7.11 7.11 7.11 Narayan Seva Sansthan
13 Donation for Eyes Operations Promoting preventive Health Care Vrindavan Mathura Uttar Pradesh 2.80 2.80 2.80 Ramakrishna Mission Sevashrama
14 Donation for Eyes Operations Promoting preventive Health Care Delhi Coimbatore 11.00 11.00 11.00 Sant Parmanand Hospital United
15 Donation for Disabled Livelihood Enhancement Projects Tamil Nadu 0.50 0.50 0.50 Orphanage for the Disabled
16 Water Day Art/ Drawing Competition Ensuring Environmental Sustainability PAN India 14.96 14.96 14.96 Directly
Total Direct Expense 225.39 225.39 225.39
Overhead - - -
TOTAL 225.39 225.39 225.39

6. In case the Company has failed to spend the two per cent of the average NetProfit of the last three Financial Years or any part thereof the Company shall providethe reasons for not spending the amount in its Board report.

Please refer to item no. 5(b) above.

7. A Responsibility Statement of the CSR Committee that the implementation andmonitoring of CSR Policy is in compliance with CSR Objectives and Policy of the Company.

We hereby state that the implementation and monitoring of CSR Policy is in compliancewith CSR objectives and Policy of the Company.

Sd/- Sd/-
R.G. Agarwal M.K. DHANUKA
(Chairman CSR Committee) (Managing Director)
DIN : 00627386 DIN : 00628039

Annexure ‘D’

Form No. AOC-1

STATEMENT PURSUANT TO FIRST PROVISO TO SUB-SECTION (3) OF SECTION 129 OF THE COMPANIESACT 2013 READ WITH RULE 5 OF COMPANIES (ACCOUNTS) RULES 2014 IN THE PRESCRIBED FORMAOC-1 RELATING TO WHOLLY OWNED SUBSIDIARY COMPANY - M/S DHANUKA AGRI-SOLUTIONS PVT.LIMITED

(Rs. in Lacs)
Name of the Subsidiary Company M/s. Dhanuka Agri-Solutions Pvt. Limited Bangladesh
Reporting period for the subsidiary concerned if different from the holding company's reporting period Same (i.e. 31 March)
Reporting currency and Exchange rate as on the last date of the relevant Financial year in the case of foreign subsidiaries. Bangladeshi Taka (Exchange Rate 1 BDT=INR 0.8449)
Share Capital (Rs.) 0.09
Reserves & Surplus -3.28
Total Assets 1.96
Total Liabilities 5.15
Investments Nil
Turnover Nil
Profit before Taxation NA
Provision for Taxation NA
Profit after Taxation NA
Proposed Dividend NA
% of Shareholding 100%

 

For DINESH MEHTA & CO. For and on behalf of Board of Directors of
Chartered Accountants Dhanuka Agritech Limited
Firm Registration No:000220-N
Sd/- Sd/- Sd/- Sd/- Sd/-
ANUP MEHTA KAPIL GARG V.K. BANSAL M.K. DHANUKA RAHUL DHANUKA
Partner Company Secretary C.F.0. Managing Director Executive Director
Membership No : 093133 DIN: 00628039 DIN: 00150140
Place : Gurgaon
Dated : 24th May 2016

Annexure ‘E’

Form No. AOC-2

(Pursuant to clause (h) of sub-section (3) of Section 134 of the Act and Rule 8(2) ofthe Companies (Accounts) Rules 2014)

Form for disclosure of particulars of contracts/arrangements entered into by theCompany with Related Parties referred to in sub-section (1) of Section 188 of theCompanies Act 2013 including certain arms length transactions under third proviso thereto

1. Details of contracts or arrangements or transactions not at arm’s length basis:A. C&F Agreement with M/s Dhanuka Marketing Company (“DMC”).

(a) Name(s) of the Related Party and nature of relationship: M/s Dhanuka MarketingCompany. Mr.R.G.Agarwal Chairman and

Mr.M.K.Dhanuka Managing Director are brothers of Mr.S.N.Agarwal partner of DMC.

(b) Nature of contracts/arrangements/transactions: It was proposed that DMC continue toact as C&F agent and care-taker of the Company’s operations in the State ofAndhra Pradesh and Telangana.

(c) Duration of the contracts / arrangements/transactions: For a period of fiveFinancial Years from FY 2014-15 to FY 2018-19 i.e. ongoing.

(d) Salient terms of the contracts or arrangements or transactions including the valueif any: Payment of Commission through banking channel to DMC as a percentage of the netsales of Andhra Pradesh and Telangana as approved by the Audit Committee and the Board ofDirectors.

(e) Justi cation for entering into such contracts or arrangements or transactions: DMChas been providing C&F Agent services to M/s Northern Minerals Limited (presentlyDhanuka Agritech Limited) since 1980. DMC has strong network of dealers/distributors inAndhra Pradesh and Telangana and in addition provides various value added services to theCompany.

(f) Date(s) of approval by the Board: 30 July 2014.

(g) Amount paid as advances if any: Nil.

(h) Date on which the Special Resolution was passed in General Meeting as requiredunder first proviso to Section 188: 17 September 2014.

B. Grant of License to use Company’s Registered Office for the purpose ofmaintaining the Registered Office Oficertain Related Party Companies / rms.

(a) Name(s) of the Related Party and nature of relationship: M/s Golden Overseas Pvt.Ltd. M/s Exclusive Leasing & Finance Ltd. M/s Hindon Mercantile Ltd. M/s DhanukaLaboratories Ltd. M/s Sikkim Agro Industries Ltd. M/s IKO Overseas M/s SynmedicLaboratories M/s MD Buildtech Pvt. Ltd. M/s HD Realtors Pvt. Ltd. M/s Otsuka Chemical(India) P.Ltd. and M/s Dhanuka Infotech Pvt. Ltd.

Mr. R.G. Agarwal Chairman Mr. M.K. Dhanuka Managing Director Mr. Arun KumarDhanuka Mr. Rahul Dhanuka and Mr. Mridul Dhanuka Directors hold either directly orindirectly themselves or through their relatives more than two percent of Shareholdingof aforementioned Companies or are Director Promoter Partner Member of aforementionedCompanies/Firms.

(b) Nature of contracts/arrangements/transactions: Company has granted License to useits Registered Office for the purpose of maintaining Registered Office of these Companies/Firms.

(c) Duration of the contracts / arrangements/transactions: For a period of 15 yearsw.e.f. 1 April 2014 i.e. ongoing.

(d) Salient terms of the contracts or arrangements or transactions including the valueif any: Rent @Rs.2000/- p.m. from each of these Companies/Firms.

(e) Justi cation for entering into such contracts or arrangements or transactions:These Companies/Firms had given the address of Registered Office of Dhanuka AgritechLimited for their Incorporation/Registration purpose and the same is continuing till date.They are not using the premises for any other purpose.

(f) Date(s) of approval by the Board: 30 July 2014.

(g) Amount paid as advances if any: Nil.

(h) Date on which the Special Resolution was passed in General Meeting as requiredunder first proviso to Section 188: 17 September 2014.

2. Details of material contracts or arrangement or transactions at arm’slength basis:

During the year the Company had not entered into any contract or arrangement ortransaction with Related Parties which could be considered material in accordance with thePolicy of the Company on materiality of Related Party Transactions.

Annexure ‘F’

Secretarial Audit Report

For the Financial Year ended 31 March 2016

To

The Members

Dhanuka Agritech Limited

First Floor 82 Abhinash Mansion Joshi Road Karol Bagh New Delhi-110005

In terms of the provisions of Section 204(1) of the Companies Act 2013 and Rule 9 ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 andother applicable provisions if any we have conducted the Secretarial Audit of thecompliance of applicable Statutory provisions and the adherence to good corporatepractices by Dhanuka Agritech Limited a Company incorporated under the provisions of theCompanies Act 1956 vide CIN L 24219 DL 1985 PLC 020126 and having its Registered Officeat First Floor 82 Abhinash Mansion Joshi Road Karol Bagh New Delhi-110005(hereinafter referred to as "the Company"). Secretarial Audit was conducted in amanner that provided us a reasonable basis for evaluating the corporate conducts/statutorycompliances and expressing our opinion thereon.

Based on our veri cation of the books papers minute books forms and returns led andother records maintained by the Company and also the information provided by the Companyits Oficers agents and authorized representatives during the conduct of the SecretarialAudit we hereby report that in our opinion the Company has during the audit periodcovering the Financial Year ended on 31 March 2016 complied with the Statutoryprovisions listed hereunder and also that the Company has proper Board processes andcompliance mechanism in place to the extent in the manner and subject to the reportingmade hereinafter.

We have examined the books papers minute books forms and returns led and otherrecords maintained by the Company for the Financial Year ended on 31 March 2016according to the provisions of:

i. The Companies Act 2013 (the Act) and the Rules made there under;

ii. The Securities Contracts (Regulation) Act 1956 ('SCRA') and the Rules madethereunder;

iii. The Depositories Act 1996 and the Regulations and Bye- laws framed thereunder;

iv. The Foreign Exchange Management Act 1999 and the Rules and Regulations madethereunder to the extent of Foreign Direct Investment Overseas Direct Investment andExternal Commercial Borrowings;

v. The following Regulations and Guidelines prescribed under the Securities andExchange Board of India Act 1992 ('SEBI Act'):

a. The Securities and Exchange Board of India (Substantial Acquisition of Shares andTakeovers) Regulations 2011;

b. The Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations 2015;

c. The Securities and Exchange Board of India (Issue of Capital and DisclosureRequirements) Regulations 2009;

d. The Securities and Exchange Board of India (Employee Stock Option Scheme andEmployee Stock Purchase Scheme) Guidelines 1999; Not applicable as the Company has notissued/ proposed to issue any Employee Stock Option Scheme and Employee Stock PurchaseScheme during the Financial Year under review.

e. The Securities and Exchange Board of India (Issue and Listing of Debt Securities)Regulations 2008; Not applicable as the Company has not issued any debt securities duringthe Financial Year under review.

f. The Securities and Exchange Board of India (Registrars to an Issue and ShareTransfer Agents) Regulations 1993 regarding the Companies Act and dealing with client;

g. The Securities and Exchange Board of India (De-listing of Equity Shares)Regulations 2009; Not applicable as the Company has not delisted/ proposed to delist itsEquity Shares from any stock exchange during the Financial Year under review.

h. The Securities and Exchange Board of India (Buy-back of Securities) Regulations1998; Not applicable as the Company has not bought back/ propose to buy back any of itssecurities during the Financial Year under review.

vi. The Company has identified the following laws as speci cally applicable to theCompany.

a. The Insecticide Act 1968;

b. The Legal Metrology Act 2009;

c. The Legal Metrology (Packaged Commodities) Rules2011

We have also examined compliance with the applicable clauses of the following:

I. Secretarial Standards issued by The Institute of Company Secretaries of India; Notapplicable as not noti ed during the period under review.

ii. The Listing Agreements entered into by the Company with Stock Exchanges;

During the period under review the Company has complied with the provisions of the ActRules Regulations Guidelines Standards etc. mentioned above.

We further report that

During the period under review the Board of Directors of the Company was dulyconstituted with proper balance of Executive Directors Non-Executive Directors andIndependent Directors. The changes in the composition of the Board of Directors that tookplace during the period under review were carried out in compliance with the provisions ofthe Act.

Adequate notices were given to all Directors to schedule the Board Meetings agenda anddetailed notes on agenda were sent adequately in advance and a system exists for seekingand obtaining further information and clari cations on the agenda items before the Meetingand for meaningful participation at the Meeting.

Majority decision is carried through while the dissenting Members' views are capturedand recorded as part of the Minutes wherever applicable.

We further report that there are adequate systems and processes in the Companycommensurate with the size and operations of the Company to monitor and ensure compliancewith applicable laws Rules Regulations and guidelines.

We further report that during the audit period the Company has entered into/carriedout the following specific events/actions which may have a major bearing on the Company'saffairs:

For R&D
Company Secretaries
Sd/-
Debabrata Deb Nath
Place: New Delhi Partner
Date: 24 May 2016 FCS No.: 7775; CP No. : 8612

This Report is to be read with our letter of even date which is annexed as Annexure andforms an integral part of this report.

Annexure

To

The Members

Dhanuka Agritech Limited

First Floor 82 Abhinash Mansion Joshi Road Karol Bagh New Delhi-110005

Our report of even date is to be read along with this letter.

1. Maintenance of Secretarial record is the responsibility of the Management of theCompany. Our responsibility is to express an opinion on these Secretarial records based onour audit.

2. We have followed the audit practices and process as were appropriate to obtainreasonable assurance about the correctness of the contents of the Secretarial records. Theveri cation was done on test basis to ensure that correct facts are re ected inSecretarial records. We believe that the process and practices we followed provide areasonable basis for our opinion.

3. We have not veri ed the correctness and appropriateness of financial records andBooks of Accounts of the Company.

4. Where ever required we have obtained the Management representation about theCompliance of laws Rules and Regulations and happening of events etc.

5. The Compliance of the provisions of Corporate and other applicable laws RulesRegulations standards is the responsibility of Management. Our examination was limited tothe veri cation of procedure on test basis.

6. The Secretarial Audit Report is neither an assurance as to the future viability ofthe Company nor of the ef cacy or effectiveness with which the Management has conductedthe affairs of the Company.

For R&D
Company Secretaries
Sd/-
Debabrata Deb Nath
Place: New Delhi Partner
Date: 24th May 2016 FCS No.: 7775; CP No. : 8612