Your Directors are pleased to submit the 35th Annual Report on the Business andOperations of the Company along with its Audited Standalone and Consolidated FinancialStatements for the Financial Year (FY) ended 31st March 2020.
| Financial Highlights || || || ||(Rs. In Crores) |
|Particulars ||Standalone FY 2019-20 ||Consolidated FY 2019-20 ||Standalone FY 2018-19 ||Consolidated FY 2018-19 |
|Revenue From Operations ||1120.07 ||1120.07 ||1005.84 ||1005.84 |
|Other Income ||25.09 ||25.09 ||21.20 ||21.20 |
|Total Revenue ||1145.16 ||1145.16 ||1027.04 ||1027.04 |
|EBIDTA ||198.56 ||198.45 ||167.20 ||167.20 |
|Depreciation ||16.36 ||16.36 ||12.35 ||12.35 |
|Finance Cost ||1.56 ||1.56 ||0.89 ||0.89 |
|Profit before Tax ||180.64 ||180.53 ||153.96 ||153.96 |
|Provision for Taxation ||39.17 ||39.17 ||41.38 ||41.38 |
|Profit after Tax (PAT) ||141.47 ||141.35 ||112.58 ||112.58 |
|Other Comprehensive Income ||(3.72) ||(3.72) ||(0.51) ||(0.51) |
|Total Comprehensive Income for the Period ||137.75 ||137.63 ||112.07 ||112.07 |
|Balance of Profit brought forward from previous years ||631.26 ||631.26 ||597.85 ||597.85 |
|Total ||769.01 ||768.89 ||709.92 ||709.92 |
|Appropriations || || || || |
|Dividend on Equity Shares ||59.95 ||59.95 ||Nil ||Nil |
|Dividend Distribution Tax ||12.32 ||12.32 ||Nil ||Nil |
|Leases (Ind AS 116) transition effect ||Nil ||Nil ||Nil ||Nil |
|Balance Profit carried forward to balance sheet ||696.74 ||696.62 ||709.92 ||709.92 |
Note: A Wholly Owned Subsidiary M/s. Dhanuka Agri Solutions Private Limited has not yetstarted its operations.
During the Financial Year 2019-20 as per Standalone Audited Financials Revenue fromOperations was Rs. 1120.07 Crores increase by 11.36% from last year. EBITDA was stood atRs. 198.56 Crores increased by 18.76% from last year. EBITDA margin improved from 16.28%in FY 2019 to 17.34% in FY 2020.
Profit after Tax was at Rs. 141.47 Crores in FY2019-20 increased by 25.66% as comparedto Rs. 112.58 Crores in FY2018-19. PAT margin improved from 11.2% in FY2018-19 to 12.6% inFY2019-20.
Financial Year 2019-20 was a good year for the Company. Due to normal monsoon therewas good demand of the Company's product and therefore the overall performance of theCompany Improved. Further IMD has forecast normal monsoon this year. Dhanuka hopes tofurther improve its performance during Financial Year 2020-21.
Impact of COVID 19
World Health Organization (WHO) declared Covid-19 a pandemic and the outbreak whichinfected millions and has resulted in deaths of a significant number of people globally.
Covid-19 is seen having an unprecedented impact on people and economies worldwide. TheMinistry of Home Affairs Government of India on March 24 2020 notified the first evernationwide lockdown in India to contain the outbreak of Covid -19 pandemic.
The Company's operations were temporarily disrupted at manufacturing facilities andsales depots across the country. This resulted in partial deferment of the Company'srevenues from the month of March to the first quarter of FY21. The Company has resumedoperations in a phased manner from the beginning of April as per Government directives.
The pandemic is expected to slow down overall business activity across key sectors inIndia. However since our products fall under the essentials category we do not foreseeany major impact to the business due to the coronavirus pandemic. However The Company wasprompt to implement various measures to protect employees communities and operations toensure supply chain was not impacted. The Company was also encouraged non-criticaloperations to work from home and carry out interactions electronically. The
Company adheres to government advisories and guidelines in and around the sites. TheCompany closely engages with suppliers vendors and distributors to ensure that there is aminimal impact on business operations. Further relationships with the domesticmanufacturers and distributors have helped the Company sustain inventories in the pipelineduring the lockdown period.
Pursuant to Board Resolution dated 13th February 2020 your Directors have paidInterim Dividend @600% i.e. Rs. 12/- per Equity Share for each Equity Share having a FaceValue of Rs. 2/- each for the FY 2019-20. The total outgo on this account was Rs. 68.84Crores (approx.) inclusive of Corporate Dividend Tax of Rs. 11.74 Crores.
The Board has decided in its meeting held on 10th June 2020 to treat Interim Dividendas Final Dividend for FY 2019-20.
Dividend Distribution Policy
Regulation 43A of the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 ('Listing Regulations') requires the top 500listed entities based on market capitalization calculated as on March 31 of everyfinancial year to formulate a Dividend Distribution Policy and disclose the same in theAnnual Report and on the website of the Company.
The Board of Directors of the Company has adopted a Dividend Distribution Policy whichaims to ensure fairness sustainability and consistency in distributing profits to theShareholders. The Policy is attached as Annexure "A" and is alsoavailable on the website of the Company i.e. www.dhanuka.com under the "Investors-Corporate Governance" section.
Transfer of Unpaid/ Unclaimed Dividend and Shares to IEPF
During the FY 2019-20 Unclaimed Dividend for FY 2011-12 amounting to Rs. 848166/-(Rupees Eight Lakhs Forty Eight Thousand One Hundred and Sixty Six only) and InterimDividend for FY 2012-13 amounting to Rs. 590553/- (Rupees Five Lakhs Ninety ThousandFive Hundred and Fifty Three only) were transferred to the Investor Education andProtection Fund (IEPF) pursuant to the provisions of Section 124(5) of the Companies Act2013 and Investor Education and Protection Fund Authority (Accounting Audit Transfer andRefund) Rules 2016 (as amended from time to time).
Pursuant to the provisions of Section 124(6) of the Companies Act 2013 and the rulesmentioned aforesaid all Shares in respect of which Dividend has not been paid or claimedfor 7 (Seven) consecutive years or more were transferred in the name of IEPF afterrequisite notice to concerned Shareholders. During the FY 2019-20 7750 (Seven ThousandSeven Hundred and Fifty) Equity Shares related to FY 2011-12 and 20 (Twenty) Equity Sharesrelating to FY 2012-13 were transferred to IEPF. Details of such transferred Shares areavailable at the Company's website i.e. www.dhanuka.com under "Investors - CorporateGovernance" section and such shares can be claimed back from IEPF authority afterfollowing the prescribed procedure.
At present your Company has only one Wholly owned Subsidiary namely M/s. Dhanuka AgriSolutions Private Limited incorporated in Bangladesh. Operations of this Wholly ownedSubsidiary have not yet started. A Statement containing basic financial detail of thisCompany in Form AOC-1 is annexed as Annexure "B".
Pursuant to the provisions of Section 136 of the Companies Act 2013 the Company'sFinancial Statements Consolidated Financial Statements along with relevant documents andseparate Audited Accounts in respect of the Wholly owned Subsidiary are available on thewebsite of the Company i.e.www.dhanuka.com under "Investors - CorporateGovernance" Section.
The Company does not have any Material Subsidiary in terms of the provisions of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015. Hence Policy onMaterial Subsidiaries has not been formulated. There are no Associate Companies within themeaning of Section 2(6) of the Companies Act 2013.
The Paid up Equity Share Capital of the Company as on March 31 2020 was Rs. 9.52Crores. During the year under review the Company has not issued any shares.
Transfer to General Reserve
This year no amount has been transferred to General Reserve.
Deposits from Public
During the year under Report your Company has not accepted any Deposits from Public.
Dhanuka continues to remain debt-free due to robust financial management.Additionally it has a healthy Net worth of Rs. 707.70 Crores as on 31st March 2020. ICRAhas accorded (ICRA) AA- rating for fund based limits and (ICRA) A1+ rating for non-fundbased limits of the Company (placed under watch with negative implications).
This is the matter of Pride that your Company has awarded "NATIONAL BEST EMPLOYERBRAND 2019" by World HRD Congress on 16th February 2020.
Mr. Mahendra Kumar Dhanuka Managing Director of the Company has conferred the award"MOST RESPECTED ENTERPRENEUR" by Hurun Report on 4th December 2019 at St. RegisHotel Mumbai.
Mr. V. K. Bansal CFO of the Company was conferred the award "100 BEST CFO"on 22nd November 2019 at Mumbai.
A fire broke out at Company's factory situated in Keshwana Rajasthan on 30thSeptember 2018. There was no human injury due to fire. During this year the Company hasreceived insurance claim of Rs. 59 crores as full settlement amount for the loss incurredthere.
Transforming India Through Agriculture Dhanuka's Corporate Vision"Transforming India through Agriculture" leads us to be the responsivetrustworthy and farmers' friendly organization. We are advocating 'Dhanuka Kheti Ki NaiTakneek (DKKNT)' a holistic approach of Integrated Crop Management for higher yields andin turn higher farmers' income. Company is remarkably contributing towards"Transforming India Through Agriculture" educating Indian farmers with new andinnovative techniques of farming.
Dhanuka Innovative Agriculture Awards (DIAA)
On 9th January 2020 a gala event was organized at C. Subramaniam Auditorium NASCComplex New Delhi to announce the winners of Dhanuka Innovative Agriculture Awards 2018.With presence of Agri industry stalwarts and participation of more than 800 farmers acrossthe nation the event turned out to be a huge success in its first edition. Mr. GajendraSingh Shekhawat Minister of Jal Shakti Govt. of India graced the event as Chief Guest.
Winning farmers were felicitated by 32 awards in various categories. Twelve farmersreceived Innovative Farmers Award and one farmer received 'Farmer of the Year Award' atNational level with cash award of Rs.100000 for outstanding contribution in agriculture.Eight awards were given in the water and rainwater harvesting categories to farmers andinstitutions two awards were given for best working innovative technology in agricultureto both Krishi Vigyan Kendra (KVK) and agriculture universities at national and statelevel. And four awards were given for innovation in extension service to dealers anddistributors. The event was telecast in India's leading broadcast channel ABP News and wascovered by eminent publication houses.
Digital Media Campaigns
^ World Water Day - #harboondkeemtihai
The campaign focused on motivating the viewer for saving minimuml liter water daily.The engaging content urged to give back water to farmers for a better tomorrow was wellreceived by Dhanuka's social media followers. Many such campaigns saw positive reach insocial media platform and created niche for Dhanuka in digital media.
^ Kisan Diwas - #thankyoukisan
On occasion of Farmers day celebration several engaging contents were developedthanking the farmers for their hard work and efforts in feeding the nation. Viewers wereasked to share their Thank you Kisan video appreciating and recognizing farmer'sdetermination and struggle. The campaign witnessed good reach in social media platform andcreated a niche in digital platform.
^ COVID-19 Regional Booklet campaign for Precautions and Safety
Successfully driven and executed campaigns regional language wise on safety measures tocombat the crisis
^ Multiple Social Media campaigns - about COVID-19 Safety Measures Importance andRole played by Farmers and Dealers through official social media page of Dhanuka
^ TV campaign - Your Company has initiated a TV campaign for Product Sempra across UPHaryana and Punjab Sugarcane and Maize areas for almost 3 months from February 2020 endto mid-May 2020 across TV channels. This had also helped the Company to show Semprapromotions during PM modi's address to Nation on multiple channels 2-3 times duringlockdown.
Learning and Development of Employees
Your Company has identified and selected two potential employees for ExecutiveProgramme for Agricultural Input Marketing at IIM Ahmadabad
Dhanuka keeps adding new products every year and also endeavors to improvise theexisting products. Foreign Technological collaborations are always in the priority list ofthe Company in order to enhance the quality of our products.
During this year your Company has launched Seven Products:
Mycore is an Arbuscular Mycorrhizal Fungi (AMF) having endo mycorrhizal spores ingranular formulation. It enhances surface area of roots and facilitates increasedabsorption of soil nutrients and water ultimately helps the crop to be vigorous to beresistant against physical and biological stress. Eventually increasing the yield andproductivity of the crop. Mycore has huge opportunity in multiple crops including cerealcrops and vegetables. It is a great addition in our portfolio to increase our presenceover the emerging Biological product segments.
Zapac is a systemic and contact insecticide formulated by mixing two most trustedmolecules. It gives long-lasting and effective protection against broad range of pests. Ithas a better rain fastness and gives lush green leaves. Zapac benefits more branches andflower initiation.
The Company has re-launched Prorin a broad spectrum insecticide. Prorin has stomachand contact action. It is formulated as an emulsifiable concentrate containing profenofosactive ingredient 40% Cypermethrin active ingredient by 4% by mass and balance adjuvant.It is used to control bollworms of cotton and Kills insects on lower and upper surface ofleaves due to penetrating action.
The Company has re-launched Prodhan a broad spectrum insecticide. It is used tocontrol bollworms jassids aphidthrips & white flies in cotton. It has strongcontact and stomach action. It has excellent translaminar action when sprayed on theupper surface of leaf it immediately percolates down to lower surface of the leaf. It isabsorbed readily in plant cells thus not affected by rainfall.
World's best thripicide offers excellent control of important insects of CottonChillis and various horticulture crops).
An effective pre and post-emergence herbicide which controls broad leaf weeds sedgesand grassy weeds in paddy.
A new technology based systemic and translaminar insecticide to control brown planthopper.
Further the period of Lockdown your Company has launched 2 New Products Dabooch andDozo Maxx.
Dabooch is a member of Triazolopyrimidine Sulfonamide family is a pre-emergenceherbicide applied in Soybean crop within 3 days after sowing. It is Systemic in action andprovides superior control of key broadleaf weeds in soybean in addition to suppression ofkey grasses and sedges. Safe to soybean as well as succeeding crops at recommended dose.Dabooch inhibits Aceto Lactate Synthase enzyme (ALS) in weeds and stops protein synthesis& control the weeds.
^ DOZO MAXX
Dozo Maxx is a selective herbicide for cotton crop. It's having advance "ME"formulation which is superior & thermodynamically stable. It controls major broad andnarrow leaves weeds. Pyrithiobac sodium is absorbed by roots and shoots and translocatedto growing points. It inhibits the enzyme acetolactate synthase (ALS) involved in aminoacid synthesis. Quizalofop Ethyl does Inhibition of acetyl CoA carboxylase (ACCase).
Measures for Conservation of Energy Technology Absorption and Details ofForeign Exchange Earnings and Outgo
Information as required u/s 134(3)(m) of the Companies Act 2013 read with Rule 8(3) ofthe Companies (Accounts) Rules 2014 pertaining to measures for Conservation of EnergyTechnology Absorption and Details of Foreign Exchange Earning and Outgo forming part ofthis Report are given in Annexure "C".
Web address for Annual Return
The Annual Return of the Company pursuant to Section 92(3) of the Companies Act 2013is available on the website of the Company i.e.www.dhanuka.com under"Investors" Section.
Business Responsibility Reporting
Business Responsibility Report as stipulated under Regulation 34 of the SEBI (LODR)Regulations 2018 is available at the website of the Company i.e. www.dhanuka.com under"Investors- Corporate Governance" Section. Any Member interested in obtaining aphysical copy of the same may write to the Company Secretary at the Registered Officeaddress of the Company.
Meetings of the Board
Four meetings of the Board of Directors were held during the Financial Year 2019-20.Detailed information about meetings of the Board of Directors and its Committees is givenin the Corporate Governance Report annexed to this Report. The Company is in compliancewith the Secretarial Standards prescribed by the Institute of Company Secretaries of Indiafor the Board and Committee meetings.
Board of Directors and KMP
^ In accordance with the provisions of the Companies Act 2013 Mr. Ram Gopal Agarwaland Mr. Mridul Dhanuka Directors will be liable to retire by rotation at the ensuingAnnual General Meeting and being eligible have offered themselves for re-appointment.Their re-appointment is recommended for the Members' approval at the ensuing AnnualGeneral Meeting.
^ The Second Term of appointment of Mr. Indresh Narain as Independent Director wasconcluded on 20th May 2020 due to vacation of his office pursuant to the provision ofSection 167(1)(b) of the Companies Act 2013 as he has not attended single Board Meetingin the last Twelve months. Consequently he ceased to be Chairman of the Stakeholders'Relationship Committee and Member of the Audit Committee and CSR Committee. The Board ofDirectors placed on record Its sincere appreciation for the contributions made by Mr.Indresh Narain during his tenure as Independent Director of the Company.
^ Based upon recommendation of the Nomination and Remuneration Committee the Board ofDirectors has appointed Mr. Siraj Azmat Chaudhry as an Additional Director (Non-Executiveand Independent category) w.e.f. 22nd July 2020 in accordance with provisions of theCompanies Act 2013 and Rules framed thereunder. He shall hold office up to the date ofensuing Annual General Meeting. His appointment as Independent Director for a term of 5(Five) consecutive years is recommended for the Members' approval at ensuing AnnualGeneral Meeting.
^ The Shareholders at the 31st Annual General Meeting held on 11th August 2016re-appointed Mr. Mridul Dhanuka as Whole time Director for a period of 5 (Five) years from24th May 2016 to 23rd May 2021 (both days inclusive).
Further Mr. Mridul Dhanuka is appointed as an Executive Director of M/s. Orchid PharmaLimited on 29th June 2020. A Director cannot hold the position of Executive Director intwo Companies and accordingly based on recommendation of the Nomination and RemunerationCommittee approval of Board Members has given for change in designation of Mr. MridulDhanuka from Executive Director to Non-Executive Director of Dhanuka Agritech Limited andchange in his remuneration with effect from June 29 2020.
The same has been recommended to the members' for approval at ensuing Annual generalmeeting.
^ Section 149(11) provides that an Independent Director may hold office for up to 2(Two) consecutive terms of 5 (Five) Years. As the First term of Mr. Sachin Kumar BhartiyaIndependent Director will be over on 8th February 2021 based on recommendation of theNomination and Remuneration Committee the Board has recommended to the shareholders hisre-appointment for Second Term of 5 (Five) consecutive years. Mr. Bhartiya is very wellqualified and possesses very rich Industry experience in Diversified sectors. Besides heis having indepth knowledge of the industry where your Company work and he has madeexcellent contribution during his First Term.
^ Mrs. Jyoti Verma has resigned from the position of Company Secretary and KeyManagerial Personnel of the Company w.e.f. 12th November 2019. In her place Mr. JitinSadana has been appointed as Company Secretary and Key Managerial Personnel of the Companyw.e.f. 13th February 2020 based upon the recommendation of the Nomination andRemuneration Committee of the Board. Mr. Jitin Sadana is Fellow Member of Institute ofCompany Secretaries of India (ICSI) and has more than 15 years of experience ofSecretarial matters. He is acting as Company Secretary cum Compliance officer of theCompany.
There is no change in the Chief Financial Officer of the Company.
Details of Familiarization Program for Independent Directors are available on thewebsite of the Company i.e. www.dhanuka.com under the "Investors - about Board ofDirectors" Section.
Directors' Responsibility Statement
Pursuant to the provisions of Section 134(3)(c) of the Companies Act 2013 withrespect to the Directors' Responsibility Statement it is hereby confirmed that:
^ The applicable Accounting Standards have been followed along with proper explanationsrelating to material departures while preparing the Standalone and Consolidated AnnualAccounts.
^ 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 the Financial Year and ofthe Profit of the Company for that period.
^ The Directors have taken proper and sufficient care for the maintenance of adequateAccounting Records in accordance with the provisions of the Act for safeguarding theAssets of the Company and for preventing and detecting frauds and other irregularities.
^ The Directors have prepared the Standalone and Consolidated Annual Accounts on goingconcern basis.
^ The Directors have laid down Internal Financial Controls to be followed by theCompany and such Internal Financial Controls are adequate and operating effectively.
^ The Directors have devised proper systems to ensure compliance with the provisions ofall applicable laws and such systems are adequate and operating effectively.
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.
The Board has also evolved and adopted a Code of Conduct as per SEBI (ListingObligations and Disclosure Requirements) (Amendment) Regulations 2018 based on theprinciples of good Corporate Governance and best Management Practices. The Code isavailable on the Company's website i.e.www.dhanuka.com under "Investors- CorporateGovernance" Section.
As required by SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 a separate Report on Corporate Governance along with Statutory Auditors' Certificateconfirming compliance with Corporate Governance norms is annexed to this Report.
Management Discussion & Analysis
The Management Discussion and Analysis is given separately and forms part of the 35thAnnual Report.
Corporate Social Responsibility (CSR)
Agriculture is the culture of our Country and we are nurturing the "Culture"by protecting the same. CSR isn't just a particular program it's what your Company doevery day maximizing positive impact on society and thus helping people to be happier.Your Company undertakes enumerable initiatives like making water conservation through theconstruction of Check Dams Rejuvenation of old Water Bodies creating awareness among themasses about Water Conservation and Rainwater Harvesting. These are steps towardsnurturing Agriculture and rural prosperity. In continuation of water conservationinitiatives Dhanuka has constructed the 6th Check Dam at Malpura Keshwana Dist.Kotputli (Rajasthan). Dhanuka is driving a tree plantation campaign by planting more than16000 trees in Rajasthan State.
The detailed Annual Report on our CSR activities pursuant to Rule 8 of the Company's(Corporate Social Responsibility Policy) Rules 2014 is given in Annexure "D"forming part of this Report.
Internal Complaints Committee (ICC)
Your Company has zero tolerance for Sexual Harassment of Women at workplace. Inaccordance with the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition & Redressal) Act 2013 and Rules made thereunder your Company hasconstituted an Internal Complaints Committee (ICC) to inquire into the complaints ofSexual Harassment and to recommend appropriate action.
The ICC constitution has been revised w.e.f 12th November 2019. The ICC comprises Ms.Shubha Minz (Presiding Officer) Mr. Sudhir Sharma (Member) Ms. Puja Gogia (Member) andMs. Isha Thakur (Member). The Company has also formulated a Policy on PreventionProhibition & Redressal of Sexual Harassment of Women at workplace. The Company'sPolicy under this Act is available on the Corporate Website i.e. www.dhanuka.com under"Investors- Corporate Governance" Section. The ICC provides a mechanism forreporting and redressing complaints related to Sexual Harassment of Women at workplace.The Committee has not received any complaint of Sexual Harassment during the FinancialYear 2019-20 nor has any complaint been received in previous years.
Committees of the Board
The details of Committees of the Board are provided in the Corporate Governance Reportforming part of this Report.
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 behavior 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 Governance and is available on theCompany's website i.e.www.dhanuka.com under "Investors- Corporate Governance"Section. No complaint under this head has been received by the Company during the year.
Material Changes and Commitments affecting the Company's Financial Positionbetween the end of the Financial Year and Date of Report u/s 134 of the Companies Act2013
Except as disclosed in the Report there have been no material changes and commitmentsaffecting the financial position of the Company between the end of the Financial Year tillthe date of this Report.
Declaration by Independent Directors
The Non-Executive Independent Directors of the Company have given declaration statingthat they continue to confirm the criteria set out for Independent Directors under Section149(6) of the Companies Act 2013 and Regulation 16 of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.
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 evaluated and assessed the performance of the Company's Chairman IndividualDirectors Board as a whole and its Committees on the basis of parameters set by theNomination and Remuneration Committee in the form of questionnaire based on emerging andleading practices and performance criteria such as strategic engagement knowledgediligence ethics & values oversight of the financial reporting process includingInternal Controls and Composition of the Board and its Committees etc. The Nomination andRemuneration Committee has also carried out evaluation of the performance of all theDirectors. Independent Directors of your Company have also conducted in-depth evaluationof performance of Executive Directors Chairman of the Board and Committee(s) of theBoard.
Policy on Appointment and Remuneration of the Directors Key ManagerialPersonnel and Other Employees
In accordance with SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 and Section 178(3) of the Companies Act 2013 Company's Policy relating to theappointment and remuneration of the Directors Key Managerial Personnel and SeniorManagement is given in the Corporate Governance Report forming part of this Report.
Particulars of Inter Corporate Loans Guarantees or Investments
The particulars of Inter Corporate Loans and investments of the Company have beenprovided in the Notes to the Financial Statements.
Particulars of Contracts or Arrangements with Related Parties
Particulars of contracts or arrangements with related parties pursuant to Section134(3)(h) of the Companies Act 2013 read with Rule 8(2) of the Companies (Accounts)Rules 2014 in Form AOC-2 are given in Annexure "E" forming part of thisReport. Notes to Accounts cover information on Related Party Transactions entered into bythe Company.
All contracts/ arrangements entered with Related Parties in terms of Section 188(2) ofthe Companies Act 2013 were in the ordinary course of business and on arm's length basis.During the year under review the Company has not entered into any transactions withRelated Parties which could be considered material in terms of the Company's policy onmateriality of Related Party Transactions read with SEBI (Listing Obligations andDisclosure Requirements) Regulation 2015.
However for significant Related Party transactions even though not material Members'approval has been taken.
The Revised Policy on Related Party Transactions has been approved by the Board ofDirectors in their Meeting held on 13th February 2020 and is available on the website ofthe Company i.e. www.dhanuka.com under the "Investors - Corporate Governance"Section.
Risk Management Policy and Internal Adequacy
For Dhanuka on-going Risk Management is a core function of Company's Management and werecogniz the fact that the Company's ability to pro-actively identify assess and minimizerisk is critical in achieving its corporate objectives. The Board of Directors of theCompany has approved a Risk Identification Assessment and Mitigation Report to ensureappropriate and timely Risk Management in compliance with the provisions of the CompaniesAct 2013 and Listing Regulations. The Company's Internal Control systems are commensuratewith the nature of its business and the size and complexity of its operations.
Risk Management Committee
A Risk Management Committee of the Board of Directors has been constituted in the BoardMeeting held on 10th June 2020 Mr. Rahul Dhanuka as a Chairperson and Mr. Harsh Dhanukaand Mr. VK Bansal as members of the Committee to identify the elements of risk indifferent areas of operations and to develop a policy for actions associated to mitigatethe risks as well as identify new and emergent risks. This Committee will inform theBoard on a timely basis about risk assessment and minimization procedures which in theopinion of the Committee may threaten the existence of the Company if any. A RiskManagement Policy has also been adopted in the Board Meeting held on 10th June 2020 whichis also available on the website of the Company under Investors section.
Internal Control Systems and their adequacy
The Company has Internal Control System commensurate with the size scale andcomplexity of its operations. The Company has appointed M/s. Manoj Ritu and AssociatesChartered Accountants as Internal Auditors and along with them there is in house InternalAudit team functioning as well. The Audit Committee defines the scope and area of InternalAudit and periodically reviews the Internal Audit Plans and Internal Audit Reports. Basedon Internal Audit Reports and
observations appropriate corrective actions are suggested by the Audit Committee.During the year Internal Audit was regularly carried out and no material weakness wasobserved. There are adequate Internal Financial controls with reference to the financialsystems. The same are periodically reviewed by the in-house Internal Auditors andStatutory Auditors and by the Management Board and Committees thereof.
As per Section 139 of the Companies Act 2013 read with the Companies (Audit andAuditors) Rules 2014 the Members of the Company in the 33rd Annual General Meeting heldon 10th August 2018 has appointed M/s. S.S. Kothari Mehta & Co. CharteredAccountants (FRN - 000756N) having their Registered Office at Plot No. 68 First FloorPhase-3 Okhla Industrial Area New Delhi-110 020 as the Statutory Auditors of theCompany for 5 (Five) Years.
The Audit Report given by M/s. S.S. Kothari Mehta & Co. Chartered Accountants onthe Financial Statements of the Company (on Standalone and Consolidated basis) for theFinancial Year 2019-20 forms part of the Annual Report. There has been no qualificationreservation or adverse remark or disclaimer in their Report. During the year under reviewthe Auditors have not reported any matter under Section 143(12) of the Companies Act 2013and hence no detail is required to be disclosed under Section 134(3) of the Act.
No frauds have been reported by Auditors under Sub-section (12) of Section 143 ofCompanies Act 2013.
The Secretarial Audit was carried out by M/s. R&D Company Secretaries PracticingCompany Secretaries (PCS) for the Financial Year 2019-20. The Report given by theSecretarial Auditors is annexed as Annexure "F" and forms an integralpart of this Board's Report. Further in terms of Regulation 24A of SEBI (ListingObligations and Disclosure Requirements) (Amended) Regulations 2018 Annual Report onCompliance from Secretarial Auditors also forms part of Secretarial Audit Report as Annexure"G".
There has been no qualification reservation or adverse remark or disclaimer in theirReport. During the year under review the Secretarial Auditors have not reported anymatter under Section 143(12) of the Companies Act 2013 and therefore no detail isrequired to be disclosed under Section 134(3) of the Act. In terms of Section 204 of theAct read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 and in terms of Regulation 24A of Listing Regulations the Audit Committeerecommended and the Board of Directors appointed M/s. R&D Company Secretaries (PCS)having their Registered Office at 785 Pocket E Mayur Vihar Phase-II New Delhi-110 091as the Secretarial Auditors of the Company for the Financial Year 2020-21. The Company hasreceived their written consent stating that the appointment is in accordance with theapplicable provisions of the Act and rules framed thereunder.
Cost Records and Cost Auditors
In terms of provision of Section 148(1) of the Companies Act 2013 maintenance of CostRecords is required by the Company and accordingly such accounts and records are made andmaintained.
The Board of Directors in compliance with the provisions of the Companies Act 2013Rules and Notifications issued thereunder have appointed M/s. S. Chander &Associates Cost Accountants having their Registered Office at 212 2nd Floor SaraiPipal Thala G.T Karnal Road Adarsh Nagar Delhi- 110 033 as Cost Auditors to conductAudit of the Cost Accounts maintained by the Company for the Financial Year 2020-21.
Status of Listing Fees
Listing Fees for the Financial Year 2020-21 have been duly paid to BSE and NSE whereCompany's shares are Listed.
Material Orders passed by Regulators Courts or Tribunal
There were no significant or material orders passed by the Regulators Courts orTribunal which impact the going concern status of the Company and the Company's operationsin future.
Particulars of Employees
The Statement of Disclosure of Remuneration under Section 197 of the Companies Act2013 and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 ("Rules") is appended as Annexure "H" to thisReport. The information as per Rule 5(2) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 forms part of this Report. However as per Firstproviso to Section 136(1) of the Companies Act 2013 and Second proviso to Rule 5(2) ofthe Rules the Report and Financial Statements are being sent to the Members of theCompany excluding the Statement of Particulars of Employees under Rule 5(2) of the Rules.Any Member interested in obtaining a copy of the said statement may write to the CompanySecretary at the Registered Office of the Company.
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 and other Government Agencies Bankers ShareholdersDealers Distributors Vendors U.S. & Japanese MNCs and the Farming Community whohave reposed their trust and confidence in the Company.
Your Directors wish to place on record their appreciation for the cordial industrialrelations maintained by workmen and dedicated efforts put in by staff towards Company'scontinuous growth and success.
|For and on behalf of the Board ||For and on behalf of the Board |
|Sd/- ||Sd/- |
|Ram Gopal Agarwal ||Mahendra Kumar Dhanuka |
|Chairman ||Managing Director |
|DIN:00627386 ||DIN:00628039 |
|Date: 22nd July 2020 || |
|Place: Gurugram || |