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Dhanuka Agritech Ltd.

BSE: 507717 Sector: Agri and agri inputs
NSE: DHANUKA ISIN Code: INE435G01025
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P/E 15.28
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OPEN 705.10
CLOSE 691.25
VOLUME 1025
52-Week high 938.00
52-Week low 635.20
P/E 15.28
Mkt Cap.(Rs cr) 3,200
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Dhanuka Agritech Ltd. (DHANUKA) - Director Report

Company director report

Dear Members

Your Directors are pleased to submit the 37th Annual Reporton the Business and Operations of the Company along with its Audited Standalone andConsolidated Financial Statements for the Financial Year (FY) ended 31st March2022.

Financial Highlights

Particulars Standalone Standalone Consolidated Consolidated
FY 2021-22 FY 2020-21 FY 2021-22 FY 2020-21
Revenue From Operations 1477.77 1387.47 1477.77 1387.47
Other Income 33.59 33.70 33.59 33.70
Total Revenue 1511.36 1421.17 1511.36 1421.17
EBIDTA 296.97 302.81 297.06 302.81
Depreciation 16.28 15.18 16.28 15.18
Finance Cost 3.20 2.69 3.20 2.69
Profit before Tax 277.48 284.94 277.59 284.94
Provision for Taxation 68.70 74.38 68.70 74.38
Profit after Tax (PAT) 208.78 210.56 208.89 210.56
Other Comprehensive Income 1.91 1.30 1.91 1.30
Total Comprehensive Income for the Period 210.69 211.86 210.80 211.86
Balance of Profit brought forward from previous years 785.35 696.74 785.23 696.62
Total 996.04 908.60 996.03 908.48
Appropriations
Less: Amount utilized for Buyback of Equity Shares Nil (99.80) Nil (99.80)
Less: Amount Transferred to Capital Redemption Reserve on Buyback of Equity Shares Nil (0.20) Nil (0.20)
Less: Tax Paid on Buyback Nil (23.25) Nil (23.25)
Less:Dividend on Equity Shares (46.58) Nil (46.58) Nil
Leases (Ind AS 116) transition effect Nil Nil Nil Nil
Balance Profit carried forward to Balance Sheet 949.46 785.35 949.45 785.23

Note: The Wholly Owned Subsidiaries of the Company namely M/s. DhanukaAgri Solutions Private Limited and M/s Dhanuka Chemicals Private Limited have not yetstarted operations and therefore figures are same for Standalone and on Consolidatedbasis.

During the period under review Revenue from Operations was Rs. 1477.77Crores 6.51% up over last year . Operating Profit Before Tax decreased to Rs. 247.09Crores from Rs. 253.92 Crores in FY2020-21 2.69% down over last year. Profit after Taxwas at Rs. 208.78 crores down by 0.85% over last year.

• Business Operations

There was adverse impact of weather conditions in the first half of theFinancial Year 2021-22 which has impacted the Company's Financials of First Half ofFinancial Year Ended 30th September 2021. However the situation becamefavourable for consumption of agrochemicals which helped the Company recover itsperformance in the Second Half of the Financial Year ended March 312022.

As per IMD Report the monsoon is expected to be normal during the year2022 in the country and this has brought a smile on the faces of the farmers. Also thehigh commodity prices will encourage farmers to spend more on their crop and we expecthigher consumption of Agrochemicals during the Financial Year 2022-23.

Further there was a fire incident in the manufacturing unit situatedat Udhampur J&K on 27th May 2021. Due to fire Loss of Inventory andother tangible assets worth Rs. 51.64 crores has been recognized in book of accounts andsimilar amount has been recorded under claim receivable head as the management is fullyconfident of recovering the said amount from the Insurance Company.

Dhanuka continues to remain debt-free due to robust FinancialManagement. Additionally it has a healthy Net worth of Rs. 960.42 Crores as at 31stMarch 2022. ICRA has upgraded its credit rating to [ICRA]AA (pronounced ICRA double A)from [ICRA]AA- rating for fund-based limits and accorded [ICRA]A1 + (pronounced ICRA A oneplus) rating for its non-fund based limits.

During the year the Company has received a 9(3) registrationcertificate for import of Halosulfuron Methyl Tech. Min. 97%. The Company has launched aComarketing product under brand name TORNADO containing Quizalofop Ethyl 7.5%+ Imazthpyre15% to control broad leaf as well as narrow leaf weeds in Soybean and other crops. TheCompany has also launched a product ONEKILL a combination of Quizalofop Ethyl 4% +Oxyflourfen 6% EC which will be used for the control of weeds in Onion Crop. The Companyhas received the Registration Certificate for Export u/s 9(3) for Bifenthrin 20% EC andLambda Cyhalothrin 25% CS and also for Formulation of Indigenous Manufacture u/s 9(4) forPymetrozine 50% WG to be used for protecting Rice crop from Brown Plant Hopper (BPH).

Dhanuka has been granted Patent for the new herbicide combination ofHalosulfuron Methyl and Metribuzin for control of various weeds in sugarcane. Productlaunch is expected in 2023.

The Company has executed Shareholders Subscription Agreement andShareholders Agreement with M/s.

IotechWorld Avigation Private Limited in August 2021 with an investmentof Rs. 20 crores. Iotech is a manufacturer of various types of Drones especiallyAgricultural survey and spray drones.

The Company has conducted the auspicious ritual of "BhoomiPoojan" for the new R&D facility site at Palwal in September 2021. Dr. YogendraSehrawat Ex-Director - Horticulture Government of Haryana graced the Bhoomi Pujan asChief Guest along with prominent dignitaries including Dr. Mahaveer Singh (DDA Faridabad& Palwal).

The Company has entered/signed MoUs with various universities tojointly conduct research in crop protection chemicals with various universities includingGovind Ballabh Pant University of Agriculture and Technology Pantnagar (GBPUA&T)Chaudhary Charan Singh Haryana Agricultural University Hisar Sri Karan NarendraAgriculture University Jobner Jaipur Lovely Professional University Punjab MaharanaPratap Horticultural University Karnal.

In Financial Year 2021-22 the Company has taken a hit of Rs. 20 croreapprox. on its revenue due to discontinuation of the sale of Red Triangle Products. Nowin the basket of the Company's products there is no Red Triangle Product.

• Impact of COVID 19

Due to Covid-19 Pandemic the Company's operations were temporarilydisrupted at its manufacturing facilities and sales depots across the Country. However asthe Company's products covered under Essential Commodities there has been no major impactof Covid 19 on the business. During the second wave of Covid 19 Company's Factories andDepot(s) were fully operational with adequate safety security and other measures /precautions as required by Government and Health advisories ensuring uninterrupted supplyof essential commodities.

The Company was prompt to implement various measures to protect itsemployees communities and operations from ensuring that the supply chain was notdisrupted. The Company also encouraged non-critical operations to work from home and carryout interactions electronically. The Company adheres to government advisories andprescribed guidelines in and around the sites and also closely engages with suppliersvendors and distributors to ensure against any adverse impact on its business operations.Favorable relations with the domestic manufacturers and distributors have helped theCompany to sustain inventories in the pipeline during the lockdown period.

• Dividend

The Board of Directors of the Company in its Meeting held on 2ndFebruary 2022 has declared and paid an Interim Dividend @ 400% i.e. Rs. 8/- per EquityShare having Face Value of Rs. 2/- per Equity Share amounting to Rs. 37.26 Crores to theMembers of the Company who held shares of the Company as on 12th February 2022(Record Date).

Further the Board in its Meeting held on 23rd May 2022 hasproposed a Final Dividend @ 300% i.e. Rs. 6/- per Equity Share having Face Value of Rs.2/- for the FY 202122. The said Dividend is subject to Shareholders' approval in the 37thAnnual General Meeting scheduled on 02nd August 2022.

• Dividend Distribution Policy

Regulation 43A of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 ('Listing Regulations')requires the top 500 listed entities based on market capitalization calculated as onMarch 31 of every financial year to formulate a Dividend Distribution Policy and disclosethe same in the Annual Report and on the website of the Company.

The Board of Directors of the Company has adopted a DividendDistribution Policy which aims to ensure fairness sustainability and consistency indistributing profits to the Shareholders. The Policy is attached as "Annexure A"and is also available 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 Financial Year 2021-22 Unclaimed Final Dividend forFinancial Year 2013-14 amounting to Rs. 557872/- (Rupees Five Lakh Fifty Seven Thousandand Eight Hundred Seventy Two Only) was transferred to the Investors 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 2013and the rules mentioned therein all Shares in respect of which Dividend has not been paidor claimed for 7 (Seven) consecutive years or more were transferred in the name of IEPFafter requisite notice given to concerned Shareholders. During the FY 2021-22 No EquityShares were transferred to IEPF. Details of transferred Shares in previous years areavailable at the Company's website i.e. www.dhanuka.com under the "Investors -Corporate Governance" section and such shares can be claimed back from IEPF Authorityafter following the prescribed procedure.

• Subsidiary Company

At present your Company has only two Wholly-owned Subsidiary Companiesnamely M/s. Dhanuka Agri Solutions Private Limited incorporated in Bangladesh and M/sDhanuka Chemicals Private Limited incorporated in India. Operations of both the Companieshave not yet started. A Statement containing basic financial details of this Company inForm AOC-1 is annexed as Annexure "B."

M/s Dhanuka Agri Solutions Private Limited ("DASPL") has notstarted operations since incorporation. Therefore the Board of Directors in its Meetingheld on 2nd February 2021 has approved the disposal/liquidation of thisCompany. The Company is in process of fling documents for liquidation of DASPL with theappropriate authorities of Bangladesh.

M/s Dhanuka Chemicals Private Limited was incorporated in India on 21stJune 2021 and the Company along-with its nominee(s) has fully subscribed 10000 EquityShares of M/s Dhanuka Chemicals Private Limited.

Pursuant to the provisions of Section 136 of the Companies Act 2013the Company's Standalone and Consolidated Financial Statements along with relevantdocuments and separate Accounts in respect of the Wholly-owned Subsidiary are available onthe website of the Company i.e. www.dhanuka.com under "Investors - CorporateGovernance" Section.

The Company does not have any Material Subsidiary in terms of theprovisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.Hence a Policy on Material Subsidiaries has not been formulated. There are no AssociateCompanies within the meaning of Section 2(6) of the Companies Act 2013.

• Share Capital

The paid-up Equity Share Capital as at 31st March 2022 wasRs. 9.32 Crores. 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 anyDeposits from Public.

• Future Prospects

Dhanuka's Corporate Vision "Transforming India throughAgriculture" signifies a responsive trustworthy and farmers' friendly organization.'Dhanuka Kheti Ki Nai Takneek (DKKNT)' is being a holistic approach of Integrated CropManagement for higher yields and in turn higher farmers' income. Company is remarkablycontributing towards "Transforming India Through Agriculture" by educatingIndian farmers with new and innovative techniques of farming.

The Company will endeavor towards engaging with all the participantsacross the value chain both upstream and downstream in order to deliver a strong kharifseason and build a solid momentum for the remaining part of FY2022-

23. As per the IMD Report the monsoon is expected to be normal duringthe Financial Year 2022-23. Also the high commodity prices will encourage the farmers toprotect their crops with higher investment and we expect higher consumption ofAgrochemicals this year. The Company has a strong pipeline of section 9(3) and 9(4)products as the CIBRC has approved three 9(3) Registration for the Company's products.This will drive revenue growth in the coming years.

The Company is working on its greenfield project at Dahej Gujarat asper the scheduled plan. Some new initiatives for business expansion that the Company hasundertaken in the last financial year comprises an investment in a Drones ManufacturingStart-up the establishment of a Biological Products Division and a plan to set up a newExports Division for creating new revenue streams for the Company for mid to long termgrowth.

Product(s) Launch

Following New Products have been launched in the Financial Year2021-22.

0 Tornado (Quizalofop ethyl 7.5% + Imazethapyr 15% EC) a comprehensivesolution for weeds in Oilseeds Crops. TORNADO took its first digital imprint in apan-India launch on 10th July 2021. It is a broad-spectrum herbicide forpost-emergence control of Broadleaf & Narrow-leaf weeds. It has a dual-mode of actionand has excellent translocation activity.

0 ONEKIL (Quizalofop-ethyl 4% + Oxyfluorfen 6% EC) complete solutionfor weed-free Onion crop. ONEKIL took its first digital imprint in a pan-India launch on28th July 2021. ONEKIL is a post emergence systemic herbicide that controlsNarrow Leaf Weeds as well as Broad Leaf Weeds. Once ONEKIL is absorbed by the Onion crop'sfoliage and root system it provides longer residual control to most of the weeds.Moreover ONEKIL has effective rain fastness. ONEKIL has a dual mode of action and hasexcellent translocation activity. When it is absorbed through leaves it moves downwardsthrough the phloem and when absorbed by roots it moves upward through the xylem.

• Measures for Conservation of Energy Technology Absorption andDetails of Foreign Exchange Earnings and Outgo Information as required u/s 134(3)(m) ofthe Companies Act 2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014pertaining to measures for Conservation of Energy Technology Absorption and Details ofForeign Exchange Earning and Outgo forming part of this Report are given in Annexure"C".

• Web address for Annual Return

The Annual Return of the Company pursuant to Section 92(3) of theCompanies Act 2013 is 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 theSEBI (LODR) Regulations 2015 is available at the website of the Company i.e.www.dhanuka.com under "Investors- Corporate Governance" Section. Any Memberinterested in obtaining a physical copy of the same may write to the Company Secretary atthe Registered Office address of the Company.

• Meetings of the Board

Four Meetings of the Board of Directors were held during the FinancialYear 2021-22. Detailed information about meetings of the Board of Directors and itsCommittees is given in the Corporate Governance Report annexed to this Report. The Companyis in compliance with the Secretarial Standards prescribed by the Institute of CompanySecretaries of India for the Board and Committee Meetings.

• Board of Directors and KMP

0 In accordance with the provisions of the Companies Act 2013 Mr.Arun Kumar Dhanuka and Mr Rahul Dhanuka Whole-time Directors will be liable to retire byrotation at the ensuing Annual General Meeting and being eligible have offeredthemselves for re-appointment. Their reappointment are recommended for the Members'approval at the ensuing 37th Annual General Meeting.

0 Based upon the recommendation of the Nomination and RemunerationCommittee and the Board of Directors of the Company in their respective Meetings held on02nd February 2022 the Members have re-appointed Mr Rahul Dhanuka asWhole-time Director of the Company for further period of Five (5) Years w.e.f. 1stMay 2022 through Postal Ballot dated 02nd February 2022. The process of thePostal Ballot was completed on 16th March 2022.

0 The Board of Directors after the consent and recommendation of theNomination and Remuneration Committee at its Meeting held on 23rd May 2022 hasreappointed Mr. Ram Gopal Agarwal as the Whole-time Director under the Designation ofChairman of the Company for a further period of Five Years from 1st November2022 to 31st October 2027 (both days inclusive) even after his attaining theage of 70 years which is subject to the approval of Members at the ensuing 37thAnnual General Meeting of the Company.

0 The Board of Directors after the consent and recommendation of theNomination and Remuneration Committee at its Meeting held on 23rd May 2022 has reappointedMr. Sanjay Saxena as an Independent Director of the Company not liable to retire byrotation for Second Term of 5 (Five) consecutive years on the Board of the Companyeffective from 22nd May 2023 which is subject to the approval of Members at the ensuing37th Annual General Meeting of the Company.

0 There is no change in the Chief Financial Officer and CompanySecretary of the Company.

• Familiarization Program

Details of Familiarization Program for Independent Directors isavailable on the website of the Company i.e. www.dhanuka.com under the "Investors -about Board of Directors" Section.

• Directors' Responsibility Statement

Pursuant to the provisions of Section 134(3)(c) of the Companies Act2013 with respect to the Directors' Responsibility Statement it is hereby confirmedthat:

0 The applicable Accounting Standards have been followed along withproper explanations relating to material departures while preparing the Company'sStandalone and Consolidated Annual Accounts for the Financial Year ended March 312022.

0 The Directors have selected such Accounting Policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the State of Affairs of the Company at the end of theFinancial Year and of the Profit of the Company for that period.

0 The Directors have taken proper and sufficient care for themaintenance of adequate Accounting Records in accordance with the provisions of the Actfor safeguarding the assets of the Company and for preventing and detecting frauds andother irregularities.

0 The Directors have prepared the Standalone and Consolidated AnnualAccounts on a going concern basis.

0 The Directors have laid down Internal Financial Controls to befollowed by the Company and such Internal Financial Controls are adequate and operatingeffectively.

0 The Directors have devised proper systems to ensure compliance withthe provisions of all applicable laws and such systems are adequate and operatingeffectively.

• Corporate Governance

Your Company maintains the highest level of transparencyaccountability and good management practices through the adoption and monitoring ofcorporate strategies goals and procedures to comply with its legal and ethicalresponsibilities.

The Board has also evolved and adopted a Code of Conduct as per SEBI(Listing Obligations and Disclosure Requirements) (Amendment) Regulations 2015 based onthe principles of good Corporate Governance and Best Management Practices. The Code isavailable on the Company's website i.e. www.dhanuka.com under

"Investors- Corporate Governance" Section.

As required by SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 a separate Report on Corporate Governance along with the StatutoryAuditors' Certificate confirming compliance with Corporate Governance norms is annexed tothis Report.

• Management Discussion & Analysis

The Management Discussion and Analysis is given separately and formspart of the 37th Annual Report.

• Corporate Social Responsibility (CSR)

Agriculture is the culture of our Country and we are nurturing the"Culture" by protecting the same. CSR is not just a particular program but iswhat your Company does every day maximizing positive impact on society and thus helpingpeople to be happier. Your Company undertakes several initiatives like implementation ofvarious education and training programs construction of school creating awareness amongthe masses about Water Conservation and Rainwater Harvesting. These are steps aimed atnurturing Agriculture and rural prosperity.

The detailed Annual Report on the Company CSR activities pursuant tothe Company's (Corporate Social Responsibility Policy) Rules 2021 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 theworkplace. In accordance with the provisions of the Sexual Harassment of Women atWorkplace (Prevention Prohibition & Redressal) Act 2013 and Rules made thereunder.Your Company has constituted an Internal Complaints Committee (ICC) to inquire into thecomplaints of Sexual Harassment and to recommend appropriate action.

The ICC comprises Ms. Abhilasha Singh (Presiding Officer) Mr. SudhirSharma (Member) Ms. Puja Gogia (Member) and Ms. Isha Thakur (Member). The Company hasalso formulated a Policy on Prevention Prohibition & Redressal of Sexual Harassmentof Women at the workplace. The Company's Policy under this Act is available on theCorporate Website i.e. www.dhanuka.com under "Investors- Corporate Governance"Section. The ICC provides a mechanism for reporting and redressing complaints related toSexual Harassment of Women at the workplace. The Committee has not received any complaintof Sexual Harassment during the Financial Year 2021-22 nor has any complaint beenreceived in previous years.

• Committees of the Board

The details of Committees of the Board are provided in the CorporateGovernance Report forming part of this Report.

• Whistle Blower Policy

In compliance with the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 Whistle Blower Policy has been implemented as a mechanismfor employees to report concerns about unethical behavior or actual or suspected fraud ofall kinds including alleged fraud by or against the Company abuse of authority whethermade by a named complainant or anonymously.

The Policy is a step towards better Corporate Governance and isavailable on the Company's website i.e. www.dhanuka.com under "Investors- CorporateGovernance" Section. No complaint under this Policy has been received by the Companyduring the year.

• Material Changes and Commitments affecting the Company'sFinancial Position between the end of the Financial Year and Date of Report u/s 134 of theCompanies Act 2013

Except as disclosed in the Report there have been no material changesand commitments affecting the financial position of the Company between the end of theFinancial Year till the date of this Report.

• Declaration by Independent Directors

The Non-Executive Independent Directors of the Company have given thedeclarations stating that they continue to confirm the criteria set out for IndependentDirectors under Section 149(6) of the Companies Act 2013 and Regulation 16 of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015.

• Performance Evaluation

In compliance with the requirement of Section 134(3)(p) and Schedule IVof the Companies Act 2013 and Rules framed thereunder and Regulation 17(10) of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the Board ofDirectors of the Company evaluated and assessed the performance of the Company's ChairmanIndividual Directors Board as a whole and its Committees on the basis of parameters setby the Nomination and Remuneration Committee in the form of questionnaire based onemerging and leading practices and performance criteria such as strategic engagementknowledge diligence ethics & values oversight of the financial reporting processincluding Internal Controls and Composition of the Board and its Committees etc. TheNomination and Remuneration Committee has also carried out evaluation of the performanceof all the Directors. Independent Directors of your Company have also conducted in-depthevaluation of performance of Executive Directors Chairman of the Board and Committee(s)of the Board.

• Policy on Appointment and Remuneration of the Directors KeyManagerial Personnel and Other Employees

In accordance with SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 and Section 178(3) of the Companies Act 2013 Company'sPolicy relating to the appointment and remuneration of the Directors Key ManagerialPersonnel and Senior Management is given in the Corporate Governance Report forming partof this Report.

• Particulars of Inter Corporate Loans Guarantees or Investments

The particulars of Inter Corporate Loans and investments of the Companyhave been provided in the Notes to the Financial Statements.

• Particulars of Contracts or Arrangements with Related Parties

Particulars of contracts or arrangements with Related Parties pursuantto Section 134(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 ofthis Report. Notes to Accounts cover information on Related Party Transactions enteredinto by the Company.

All contracts/ arrangements entered with Related Parties in terms ofSection 188(2) of the Companies Act 2013 were in the ordinary course of business and onarm's length basis. During the year under review the Company has not entered into anytransactions with Related Parties which could be considered material in terms of theCompany's policy on materiality of Related Party Transactions read with SEBI (ListingObligations and Disclosure Requirements) Regulation 2015.

However for significant Related Party transactions even though notmaterial Members' approval has been obtained.

The Policy on Related Party Transactions 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'sManagement and it recognizes that the Company's ability to pro-actively identify assessand minimize risk is critical in achieving its corporate objectives. The Board ofDirectors of the Company has approved a Risk Identification Assessment and MitigationReport to ensure appropriate and timely Risk Management in compliance with the provisionsof the Companies Act 2013 and Listing Regulations. The Company's Internal Control systemsare commensurate with the nature of its business and the size and complexity of itsoperations.

• Risk Management Committee

A Risk Management Committee of the Board of Directors has beenconstituted in the Board Meeting held on 10th June 2020. Mr. Rahul Dhanuka wasappointed as a Chairman and Mr. Harsh Dhanuka and Mr. VK Bansal were appointed as membersof the Committee.

The said Committee was reconstituted on 21st May 2021 by appointing MrSanjay Saxena Independent Director as Additional Member of the Committee. The scope ofthe Committee is to identify the elements of risk in different areas of operations and todevelop a policy for actions associated to mitigate the risks and to identify new andemergent risks. This Committee will inform the Board on a timely basis about riskassessment and minimization procedures which in the opinion of the Committee may threatenthe existence of the Company if any.

A Risk Management Policy has also been adopted in the Board Meetingheld on 10th June 2020 which is also available on the website of the Companyunder the Investors section.

• Internal Control Systems and their adequacy

Mr. Gautam Mittal Deputy General Manager was appointed as ChiefInternal Auditor of the Company for the Financial Year 2021-22. Considering thecontribution made by him and based on recommendation of the Audit Committee the Board hasre-appointed him as the Chief Internal Auditor. He is a Chartered Accountant having 15years of rich experience in developing and implementing risk based audit strategy and SOXimplementation. He heads the Internal Team to handle the complete Internal Audit functionsof the Company.

The Audit Committee defines the scope and area of Internal Audit andperiodically reviews the Internal Audit Plans and Internal Audit Reports. Based onInternal Audit Reports and observations appropriate corrective actions are suggested bythe Audit Committee. During the year Internal Audit was regularly carried out and nomaterial weakness was observed. There are adequate Internal Financial controls withreference to the financial systems. The same are periodically reviewed by the StatutoryAuditors and by the Management Board and Committees thereof.

• Statutory Auditors

As per Section 139 of the Companies Act 2013 read with the Companies(Audit and Auditors) Rules 2014 the Members of the Company in the 33rd AnnualGeneral Meeting held on 12th August 2018 have ratified the appointment of M/s.S.S. Kothari Mehta & Co. Chartered Accountants (FRN - 000756N) having theirRegistered Office at Plot No. 68 First Floor Phase-3 Okhla Industrial Area NewDelhi-110 020 as the Statutory Auditors of the Company.

The Audit Report given by M/s. S.S. Kothari Mehta & Co. CharteredAccountants on the Financial Statements of the Company (on Standalone and Consolidatedbasis) for the Financial Year 2021-22 forms part of the Annual Report. There have been noqualification reservation or adverse remark or disclaimer in their Report. During theyear under review the Auditors have not reported any matter under Section 143(12) of theCompanies Act 2013 and hence no detail is required to be disclosed under Section 134(3)of the Act.

No frauds have been reported by Auditors under Subsection (12) ofSection 143 of Companies Act 2013.

• Secretarial Auditors

The Secretarial Audit of the Company was carried out by M/s. R&DCompany Secretaries Practicing Company Secretaries (PCS) for the Financial Year 2021-22.The Report given by the Secretarial Auditors is annexed as Annexure "F" andforms an integral part of this Director's Report. Further in terms of Regulation 24A ofSEBI (Listing Obligations and Disclosure Requirements) (Amended) Regulations 2015 AnnualReport on Compliance from Secretarial Auditors also forms part of Secretarial Audit Reportas Annexure "G".

There have been no qualification reservation or adverse remark ordisclaimer in their Report during the year under review. The Secretarial Auditors havenot reported any matter under Section 143(12) of the Companies Act 2013 and therefore nodetail is required to be disclosed under Section 134(3) of the Act. In terms of Section204 of the Act read with the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 and in terms of Regulation 24A of Listing Regulations the AuditCommittee has recommended and the Board of Directors has appointed M/s. R&D CompanySecretaries (PCS) having their Registered Office at 785 Pocket E Mayur ViharPhase-II New Delhi-110 091 as the Secretarial Auditors of the Company for the FinancialYear 2022-23. The Company has received their written consent stating that the appointmentis in accordance with the applicable 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 2013maintenance of Cost Records is required by the Company and accordingly such accounts andrecords are made and maintained.

The Board of Directors in compliance with the provisions of theCompanies Act 2013 Rules and Notifications issued thereunder has appointed M/s. N.Khandelwal & Associates Cost Accountants having their Registered Office at A-71Triveni Nagar Gopalpura Bypass Jaipur Rajasthan-302018 as Cost Auditors to conductAudit of the Cost Accounts maintained by the Company for the Financial Year 2022-23.

• Status of Listing Fees

Listing Fees for the Financial Year 2022-23 have been duly paid to BSEand NSE where Company's shares are Listed.

• Material Orders passed by Regulators Courts or Tribunal

There were no significant or material orders passed by the RegulatorsCourts or Tribunal which impact the going concern status of the Company and the Company'soperations in future.

• Particulars of Employees

The Statement of Disclosure of Remuneration under Section 197 of theCompanies Act 2013 and Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 ("Rules") is appended as Annexure"H" to this Report. The information as per Rule 5(2) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 forms part of thisReport. However as per First proviso to Section 136(1) of the Companies Act 2013 andSecond proviso to Rule 5(2) of the Rules the Report and Financial Statements are beingsent to the Members of the Company excluding the Statement of Particulars of Employeesunder Rule 5(2) of the Rules. Any Member interested in obtaining a copy of the saidstatement may write to the Company Secretary at the address of the Corporate Office of theCompany.

• Acknowledgement:

Your Directors take this opportunity to record their deep sense ofgratitude for the valuable support and cooperation extended to the Company by the CentralInsecticides Board Directorates of Agriculture Gujarat J&K Rajasthan otherGovernment Agencies Bankers Shareholders Dealers Distributors Vendors U.S. &Japanese MNCs and the Farming Community who have reposed their trust and confidence in theCompany.

Your Directors wish to place on record their appreciation for thecordial industrial relations maintained by workmen and dedicated efforts put in by stafftowards Company's continuous growth and success.

For and on behalf of the Board
Sd/- Sd/-
Mahendra Kumar Dhanuka Rahu l Dhanuka
Managing Director Chief Operatin g Officer
DIN: 00628039 DIN : 00150140
Place: Gurugram
Date: 23rd May 2022

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