Dhanuka Agritech Ltd Directors Report.

Your Directors are pleased to submit the 35th Annual Report on the Business and Operations of the Company along with its Audited Standalone and Consolidated Financial Statements 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 yet started its operations.

During the Financial Year 2019-20, as per Standalone Audited Financials, Revenue from Operations was Rs. 1,120.07 Crores, increase by 11.36% from last year. EBITDA was stood at Rs. 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 compared to Rs. 112.58 Crores in FY2018-19. PAT margin improved from 11.2% in FY2018-19 to 12.6% in FY2019-20.

Financial Year 2019-20 was a good year for the Company. Due to normal monsoon, there was good demand of the Companys product and therefore the overall performance of the Company Improved. Further, IMD has forecast normal monsoon this year. Dhanuka hopes to further improve its performance during Financial Year 2020-21.

• Impact of COVID 19

World Health Organization (WHO) declared Covid-19 a pandemic and the outbreak, which infected 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. The Ministry of Home Affairs, Government of India on March 24, 2020 notified the first ever nationwide lockdown in India to contain the outbreak of Covid -19 pandemic.

The Companys operations were temporarily disrupted at manufacturing facilities and sales depots across the country. This resulted in partial deferment of the Companys revenues from the month of March to the first quarter of FY21. The Company has resumed operations 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 in India. However, since our products fall under the essentials category, we do not foresee any major impact to the business due to the coronavirus pandemic. However, The Company was prompt to implement various measures to protect employees, communities and operations to ensure supply chain was not impacted. The Company was also encouraged non-critical operations to work from home and carry out interactions electronically. The

Company adheres to government advisories and guidelines in and around the sites. The Company closely engages with suppliers, vendors and distributors to ensure that there is a minimal impact on business operations. Further, relationships with the domestic manufacturers and distributors have helped the Company sustain inventories in the pipeline during the lockdown period.

• Dividend

Pursuant to Board Resolution dated 13th February, 2020, your Directors have paid Interim Dividend @600% i.e. Rs. 12/- per Equity Share for each Equity Share having a Face Value of Rs. 2/- each for the FY 2019-20. The total outgo on this account was Rs. 68.84 Crores (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 Dividend as Final Dividend for FY 2019-20.

• Dividend Distribution Policy

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

The Board of Directors of the Company has adopted a Dividend Distribution Policy, which aims to ensure fairness, sustainability and consistency in distributing 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 FY 2019-20, Unclaimed Dividend for FY 2011-12 amounting to Rs. 8,48,166/- (Rupees Eight Lakhs Forty Eight Thousand One Hundred and Sixty Six only) and Interim Dividend for FY 2012-13 amounting to Rs. 5,90,553/- (Rupees Five Lakhs Ninety Thousand Five Hundred and Fifty Three only) were transferred to the Investor Education and Protection Fund (IEPF), pursuant to the provisions of Section 124(5) of the Companies Act, 2013 and Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (as amended from time to time).

Pursuant to the provisions of Section 124(6) of the Companies Act, 2013 and the rules mentioned aforesaid, all Shares in respect of which Dividend has not been paid or claimed for 7 (Seven) consecutive years or more were transferred in the name of IEPF after requisite notice to concerned Shareholders. During the FY 2019-20, 7,750 (Seven Thousand Seven Hundred and Fifty) Equity Shares related to FY 2011-12 and 20 (Twenty) Equity Shares relating to FY 2012-13 were transferred to IEPF. Details of such transferred Shares are available at the Companys website i.e. www.dhanuka.com under "Investors - Corporate Governance" section and such shares can be claimed back from IEPF authority after following the prescribed procedure.

• Subsidiary Company

At present your Company has only one Wholly owned Subsidiary namely, M/s. Dhanuka Agri Solutions Private Limited, incorporated in Bangladesh. Operations of this Wholly owned Subsidiary have not yet started. A Statement containing basic financial detail of this Company in Form AOC-1 is annexed as Annexure "B".

Pursuant to the provisions of Section 136 of the Companies Act, 2013, the Companys Financial Statements, Consolidated Financial Statements, along with relevant documents and separate Audited Accounts in respect of the Wholly owned Subsidiary are available on the website of the Company i.e.,www.dhanuka.com under "Investors - Corporate Governance" 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 on Material Subsidiaries has not been formulated. There are no Associate Companies within the meaning of Section 2(6) of the Companies Act, 2013.

• Share Capital

The Paid up Equity Share Capital of the Company as on March 31, 2020 was Rs. 9.52 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 any Deposits from Public.

• Business Operations

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. ICRA has accorded (ICRA) AA- rating for fund based limits and (ICRA) A1+ rating for non-fund based limits of the Company (placed under watch with negative implications).

This is the matter of Pride that your Company has awarded "NATIONAL BEST EMPLOYER BRAND 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. Regis Hotel, 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 Companys factory situated in Keshwana, Rajasthan on 30th September, 2018. There was no human injury due to fire. During this year, the Company has received insurance claim of Rs. 59 crores as full settlement amount for the loss incurred there.

Transforming India Through Agriculture Dhanukas Corporate Vision "Transforming India through Agriculture" leads us to be the responsive, trustworthy and farmers friendly organization. We are advocating Dhanuka Kheti Ki Nai Takneek (DKKNT), a holistic approach of Integrated Crop Management for higher yields and in turn higher farmers income. Company is remarkably contributing towards "Transforming India Through Agriculture" educating Indian farmers with new and innovative techniques of farming.

Dhanuka Innovative Agriculture Awards (DIAA)

On 9th January 2020, a gala event was organized at C. Subramaniam Auditorium, NASC Complex, 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 across the nation, the event turned out to be a huge success in its first edition. Mr. Gajendra Singh 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 farmers received Innovative Farmers Award and one farmer received Farmer of the Year Award at National level with cash award of Rs.1,00,000 for outstanding contribution in agriculture. Eight awards were given in the water and rainwater harvesting categories to farmers and institutions, two awards were given for best working innovative technology in agriculture to both Krishi Vigyan Kendra (KVK) and agriculture universities at national and state level. And four awards were given for innovation in extension service to dealers and distributors. The event was telecast in Indias leading broadcast channel ABP News and was covered 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 well received by Dhanukas social media followers. Many such campaigns saw positive reach in social media platform and created niche for Dhanuka in digital media.

^ Kisan Diwas - #thankyoukisan

On occasion of Farmers day celebration, several engaging contents were developed thanking the farmers for their hard work and efforts in feeding the nation. Viewers were asked to share their Thank you Kisan video appreciating and recognizing farmers determination and struggle. The campaign witnessed good reach in social media platform and created 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 to combat the crisis

^ Multiple Social Media campaigns - about COVID-19, Safety Measures, Importance and Role 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 UP Haryana and Punjab, Sugarcane and Maize areas for almost 3 months from February 2020 end to mid-May 2020 across TV channels. This had also helped the Company to show Sempra promotions during PM modis address to Nation on multiple channels 2-3 times during lockdown.

Learning and Development of Employees

Your Company has identified and selected two potential employees for Executive Programme for Agricultural Input Marketing at IIM, Ahmadabad

Product Launch

Dhanuka keeps adding new products every year and also endeavors to improvise the existing products. Foreign Technological collaborations are always in the priority list of the Company in order to enhance the quality of our products.

During this year your Company has launched Seven Products:

^ MYCORE

Mycore is an Arbuscular Mycorrhizal Fungi (AMF) having endo mycorrhizal spores in granular formulation. It enhances surface area of roots and facilitates increased absorption of soil nutrients and water, ultimately helps the crop to be vigorous, to be resistant against physical and biological stress. Eventually increasing the yield and productivity of the crop. Mycore has huge opportunity in multiple crops including cereal crops and vegetables. It is a great addition in our portfolio to increase our presence over the emerging Biological product segments.

^ ZAPAC

Zapac is a systemic and contact insecticide formulated by mixing two most trusted molecules. It gives long-lasting and effective protection against broad range of pests. It has a better rain fastness and gives lush green leaves. Zapac benefits more branches and flower initiation.

^ PRO-RIN

The Company has re-launched, Prorin a broad spectrum insecticide. Prorin has stomach and contact action. It is formulated as an emulsifiable concentrate containing profenofos active 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 of leaves due to penetrating action.

^ PRODHAN

The Company has re-launched, Prodhan a broad spectrum insecticide. It is used to control bollworms, jassids, aphid,thrips & white flies in cotton. It has strong contact and stomach action. It has excellent translaminar action, when sprayed on the upper surface of leaf, it immediately percolates down to lower surface of the leaf. It is absorbed readily in plant cells thus not affected by rainfall.

^ LARGO

Worlds best thripicide, offers excellent control of important insects of Cotton, Chillis and various horticulture crops).

^ CHEMPA

An effective, pre and post-emergence herbicide which controls broad leaf weeds, sedges and grassy weeds in paddy.

^ APPLY

A new technology based systemic and translaminar insecticide to control brown plant hopper.

Further the period of Lockdown your Company has launched 2 New Products Dabooch and Dozo Maxx.

^ DABOOCH

Dabooch is a member of Triazolopyrimidine Sulfonamide family, is a pre-emergence herbicide applied in Soybean crop within 3 days after sowing. It is Systemic in action and provides superior control of key broadleaf weeds in soybean in addition to suppression of key 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. Its having advance "ME" formulation which is superior & thermodynamically stable. It controls major broad and narrow leaves weeds. Pyrithiobac sodium is absorbed by roots and shoots and translocated to growing points. It inhibits the enzyme acetolactate synthase (ALS) involved in amino acid synthesis. Quizalofop Ethyl does Inhibition of acetyl CoA carboxylase (ACCase).

• Measures for Conservation of Energy, Technology Absorption and Details of Foreign Exchange Earnings and Outgo

Information as required u/s 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 pertaining to measures for Conservation of Energy, Technology Absorption and Details of Foreign 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 the Companies 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 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 a physical copy of the same may write to the Company Secretary at the Registered Office address 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 given in the Corporate Governance Report annexed to this Report. The Company is in compliance with the Secretarial Standards prescribed by the Institute of Company Secretaries of India for the Board and Committee meetings.

• Board of Directors and KMP

^ In accordance with the provisions of the Companies Act, 2013, Mr. Ram Gopal Agarwal and Mr. Mridul Dhanuka, Directors will be liable to retire by rotation at the ensuing Annual General Meeting and being eligible, have offered themselves for re-appointment. Their re-appointment is recommended for the Members approval at the ensuing Annual General Meeting.

^ The Second Term of appointment of Mr. Indresh Narain, as Independent Director was concluded on 20th May, 2020 due to vacation of his office pursuant to the provision of Section 167(1)(b) of the Companies Act, 2013 as he has not attended single Board Meeting in 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 of Directors 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 of Directors has appointed Mr. Siraj Azmat Chaudhry as an Additional Director (Non-Executive and Independent category), w.e.f. 22nd July, 2020, in accordance with provisions of the Companies Act, 2013 and Rules framed thereunder. He shall hold office up to the date of ensuing Annual General Meeting. His appointment as Independent Director for a term of 5 (Five) consecutive years is recommended for the Members approval at ensuing Annual General Meeting.

^ The Shareholders at the 31st Annual General Meeting held on 11th August, 2016 re-appointed Mr. Mridul Dhanuka as Whole time Director for a period of 5 (Five) years from 24th May, 2016 to 23rd May, 2021 (both days inclusive).

Further, Mr. Mridul Dhanuka is appointed as an Executive Director of M/s. Orchid Pharma Limited on 29th June, 2020. A Director cannot hold the position of Executive Director in two Companies and accordingly based on recommendation of the Nomination and Remuneration Committee approval of Board Members has given for change in designation of Mr. Mridul Dhanuka from Executive Director to Non-Executive Director of Dhanuka Agritech Limited and change in his remuneration with effect from June 29, 2020.

The same has been recommended to the members for approval at ensuing Annual general meeting.

^ 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 Bhartiya, Independent Director will be over on 8th February, 2021, based on recommendation of the Nomination and Remuneration Committee the Board has recommended to the shareholders his re-appointment for Second Term of 5 (Five) consecutive years. Mr. Bhartiya is very well qualified and possesses very rich Industry experience in Diversified sectors. Besides, he is having indepth knowledge of the industry where your Company work and he has made excellent contribution during his First Term.

^ Mrs. Jyoti Verma has resigned from the position of Company Secretary and Key Managerial Personnel of the Company w.e.f. 12th November, 2019. In her place, Mr. Jitin Sadana has been appointed as Company Secretary and Key Managerial Personnel of the Company w.e.f. 13th February, 2020 based upon the recommendation of the Nomination and Remuneration Committee of the Board. Mr. Jitin Sadana is Fellow Member of Institute of Company Secretaries of India (ICSI) and has more than 15 years of experience of Secretarial matters. He is acting as Company Secretary cum Compliance officer of the Company.

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

• Familiarization Program

Details of Familiarization Program for Independent Directors are available 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 Act, 2013, with respect to the Directors Responsibility Statement, it is hereby confirmed that:

^ The applicable Accounting Standards have been followed along with proper explanations relating to material departures while preparing the Standalone and Consolidated Annual Accounts.

^ The Directors have selected such Accounting Policies and applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the State of Affairs of the Company at the end of the Financial Year and of the Profit of the Company for that period.

^ The Directors have taken proper and sufficient care for the maintenance of adequate Accounting Records in accordance with the provisions of the Act for safeguarding the Assets of the Company and for preventing and detecting frauds and other irregularities.

^ The Directors have prepared the Standalone and Consolidated Annual Accounts on going concern basis.

^ The Directors have laid down Internal Financial Controls to be followed by the Company and such Internal Financial Controls are adequate and operating effectively.

^ The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.

• Corporate Governance

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

The Board has also evolved and adopted a Code of Conduct as per SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018 based on the principles of good Corporate Governance and best Management Practices. The Code is available on the Companys 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 Statutory Auditors Certificate confirming 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 35th Annual Report.

• Corporate Social Responsibility (CSR)

Agriculture is the culture of our Country and we are nurturing the "Culture" by protecting the same. CSR isnt just a particular program, its what your Company do every day, maximizing positive impact on society and thus helping people to be happier. Your Company undertakes enumerable initiatives like making water conservation through the construction of Check Dams, Rejuvenation of old Water Bodies, creating awareness among the masses about Water Conservation and Rainwater Harvesting. These are steps towards nurturing Agriculture and rural prosperity. In continuation of water conservation initiatives, Dhanuka has constructed the 6th Check Dam at Malpura, Keshwana, Dist. Kotputli (Rajasthan). Dhanuka is driving a tree plantation campaign by planting more than 16,000 trees in Rajasthan State.

The detailed Annual Report on our CSR activities pursuant to Rule 8 of the Companys (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. In accordance with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 and Rules made thereunder, your Company has constituted an Internal Complaints Committee (ICC), to inquire into the complaints of Sexual 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) and Ms. Isha Thakur (Member). The Company has also formulated a Policy on Prevention, Prohibition & Redressal of Sexual Harassment of Women at workplace. The Companys Policy under this Act is available on the Corporate Website i.e., www.dhanuka.com under "Investors- Corporate Governance" Section. The ICC provides a mechanism for reporting and redressing complaints related to Sexual Harassment of Women at workplace. The Committee has not received any complaint of Sexual Harassment during the Financial Year 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 Report forming 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 employees to report concerns about unethical behavior or actual or suspected fraud of all kinds, including alleged fraud by or against the Company, abuse of authority, whether made by a named complainant or anonymously.

The Policy is a step towards better Corporate Governance and is available on the Companys 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 Companys Financial Position between the end of the Financial Year and Date of Report u/s 134 of the Companies Act, 2013

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

• Declaration by Independent Directors

The Non-Executive Independent Directors of the Company have given declaration stating that they continue to confirm the criteria set out for Independent Directors 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 IV of the Companies Act, 2013 and Rules framed thereunder and Regulation 17(10) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors of the Company evaluated and assessed the performance of the Companys Chairman, Individual Directors, Board as a whole and its Committees on the basis of parameters set by the Nomination and Remuneration Committee in the form of questionnaire based on emerging and leading practices and performance criteria such as strategic engagement, knowledge, diligence, ethics & values, oversight of the financial reporting process, including Internal Controls and Composition of the Board and its Committees etc. The Nomination and Remuneration Committee has also carried out evaluation of the performance of all the Directors. Independent Directors of your Company have also conducted in-depth evaluation of performance of Executive Directors, Chairman of the Board and Committee(s) of the Board.

• Policy on Appointment and Remuneration of the Directors, Key Managerial Personnel and Other Employees

In accordance with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Section 178(3) of the Companies Act, 2013, Companys Policy relating to the appointment and remuneration of the Directors, Key Managerial Personnel and Senior Management 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 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 pursuant to 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 of this Report. Notes to Accounts cover information on Related Party Transactions entered into by the Company.

All contracts/ arrangements entered with Related Parties in terms of Section 188(2) of the Companies Act, 2013 were in the ordinary course of business and on arms length basis. During the year under review the Company has not entered into any transactions with Related Parties which could be considered material in terms of the Companys policy on materiality of Related Party Transactions read with SEBI (Listing Obligations and Disclosure 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 of Directors in their Meeting held on 13th February, 2020 and is available on the website of the 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 Companys Management and we recogniz the fact that the Companys ability to pro-actively identify, assess and minimize risk is critical in achieving its corporate objectives. The Board of Directors of the Company has approved a Risk Identification, Assessment and Mitigation Report to ensure appropriate and timely Risk Management, in compliance with the provisions of the Companies Act, 2013 and Listing Regulations. The Companys Internal Control systems are commensurate with 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 Board Meeting held on 10th June, 2020, Mr. Rahul Dhanuka as a Chairperson and Mr. Harsh Dhanuka and Mr. VK Bansal as members of the Committee, to identify the elements of risk in different areas of operations and to develop a policy for actions associated to mitigate the risks as well as identify new and emergent risks. This Committee will inform the Board, on a timely basis, about risk assessment and minimization procedures which in the opinion of the Committee may threaten the existence of the Company, if any. A Risk Management Policy has also been adopted in the Board Meeting held on 10th June, 2020 which is 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 and complexity of its operations. The Company has appointed M/s. Manoj Ritu and Associates, Chartered Accountants as Internal Auditors and along with them there is in house Internal Audit team functioning as well. The Audit Committee defines the scope and area of Internal Audit and periodically reviews the Internal Audit Plans and Internal Audit Reports. Based on 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 was observed. There are adequate Internal Financial controls with reference to the financial systems. The same are periodically reviewed by the in-house Internal Auditors and Statutory Auditors 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 Annual General Meeting held on 10th August, 2018 has appointed M/s. S.S. Kothari Mehta & Co., Chartered Accountants (FRN - 000756N), having their Registered Office at Plot No. 68, First Floor, Phase-3, Okhla Industrial Area, New Delhi-110 020, as the Statutory Auditors of the Company for 5 (Five) Years.

The Audit Report given by M/s. S.S. Kothari Mehta & Co., Chartered Accountants on the Financial Statements of the Company (on Standalone and Consolidated basis) for the Financial Year 2019-20 forms part of the Annual Report. There has been no qualification, reservation or adverse remark or disclaimer in their Report. During the year under review, the Auditors have not reported any matter under Section 143(12) of the Companies 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 Sub-section (12) of Section 143 of Companies Act, 2013.

• Secretarial Auditors

The Secretarial Audit was carried out by M/s. R&D, Company Secretaries, Practicing Company Secretaries (PCS) for the Financial Year 2019-20. The Report given by the Secretarial Auditors is annexed as Annexure "F" and forms an integral part of this Boards Report. Further, in terms of Regulation 24A of SEBI (Listing Obligations and Disclosure Requirements) (Amended) Regulations, 2018, Annual Report on Compliance 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 their Report. During the year under review, the Secretarial Auditors have not reported any matter under Section 143(12) of the Companies Act, 2013 and therefore no detail is required to be disclosed under Section 134(3) of the Act. In terms of Section 204 of the Act, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and in terms of Regulation 24A of Listing Regulations, the Audit Committee recommended 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-110 091, as the Secretarial Auditors of the Company for the Financial Year 2020-21. The Company has received their written consent stating that the appointment is 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, 2013 maintenance of Cost Records is required by the Company and accordingly such accounts and records are made and maintained.

The Board of Directors, in compliance with the provisions of the Companies Act, 2013, Rules and Notifications issued thereunder, have appointed M/s. S. Chander & Associates, Cost Accountants, having their Registered Office at 212, 2nd Floor, Sarai Pipal Thala, G.T Karnal Road, Adarsh Nagar, Delhi- 110 033, as Cost Auditors to conduct Audit 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, where Companys shares are Listed.

• Material Orders passed by Regulators, Courts or Tribunal

There were no significant or material orders passed by the Regulators, Courts or Tribunal which impact the going concern status of the Company and the Companys operations in future.

• Particulars of Employees

The Statement of Disclosure of Remuneration under Section 197 of the Companies Act, 2013 and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial 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 this Report. However, as per First proviso to Section 136(1) of the Companies Act, 2013 and Second proviso to Rule 5(2) of the Rules, the Report and Financial Statements are being sent to the Members of the Company 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 Company Secretary at the Registered Office of the Company.

• Acknowledgement:

Your Directors take this opportunity to record their deep sense of gratitude for the valuable support and co-operation extended to the Company by the Central Insecticides Board, Directorates of Agriculture and other Government Agencies, Bankers, Shareholders, Dealers, Distributors, Vendors, U.S. & Japanese MNCs and the Farming Community who have reposed their trust and confidence in the Company.

Your Directors wish to place on record their appreciation for the cordial industrial relations maintained by workmen and dedicated efforts put in by staff, towards Companys continuous 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