(an iso 9001:2008 company) 25 - bombay stock exchange · 2010. 10. 25. · (an iso 9001:2008...

(AN ISO 9001:2008 COMPANY)

COMPANY PROFILE

Mr. R. G. Agarwal Chairman

Mr. M. K. DhanukaManaging Director

Mr. Arun Kumar DhanukaDirector

Mr. K. B. KejariwalDirector

Mr. Rahul DhanukaDirector

Mr. Priya BratDirector

Mr. Vinod JainDirector

Mr. Shrikrishna KhetanDirector

Mr. I. NarainDirector

Mr. Subhash LakhotiaDirector

Mr. Mukesh KumarCompany Secretary

Dr. O. P. SinghPresident R & D

Mr. V. K. BansalChief Financial Officer

Mr. G. D. GuptaHead - General Administration

Mr. C. M. GuptaHead-Procurement

Mr. Mridul DhanukaHead - Production

Mr. J. K. Agarwal Vice President - Seeds

Mr. Harsh DhanukaSenior General Manager - Seeds

Mr. Rajesh SahniSenior General Manager - Legal

Mr. Vijay KumarSenior General Manager - Quality Control

Mr. Y. K. GoelSenior General Manager - Production

Mr. Kamal Kumar Senior General Manager - Recruitment & Training

Mr. A. M. MathurGeneral Manager - Coordination

Dr. P. C. Rai General Manager - Marketing

Mr. P. K. Mishra General Manager - Business Development

Mr. H. M. Raval General Manager - Marketing

Dr. Rajesh Mishra General Manager - R & D Seed Division

MANAGEMENT TEAMContents Page No.

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Notice to the Members

Directors' Report

Management Discussion and Analysis Report

Report on Corporate Governance

CEO & CFO Certificate

CEO/Auditors' Certificate under clause 49

Auditors' Report

Balance Sheet

Profit & Loss Account

Schedules Forming Part to The Balance Sheet

Schedules Forming Part to The Profit and Loss Account

Notes on Accounts

Balance Sheet Abstract

Cash Flow Statement

th25 Annual Report 2009-10

BOARD OF DIRECTORS

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27

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29

32

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34

39

41

48

49

BANKERS

M/s Dinesh Mehta & Co.Chartered Accountants21, Daya Nand Road,Darya Ganj, New Delhi-110002

AUDITORS

M/s S.Chander & AssociatesCost Accountants,212, IInd Floor, Sarai Pipal Thala,G.T. Karnal Road, Azadpur,Delhi-110033

COST AUDITORS

REGISTERED OFFICE:

"Dhanuka House" 861-862, Joshi Road, Karol Bagh, New Delhi-110005Phone Nos.: (011)30511500/83/67Fax No. : (011) 32907373E-mail : [email protected] [email protected] us at : www.dhanuka.com

WORKS

Village Atta,

Sohna Mandkola Road, Sohna,

Distt. Mewat - 122103 (Haryana)

E-mail : [email protected]

Daulatabad Road,

Gurgaon - 122001 (Haryana)

Ph.Nos. : (0124) 2469138 / 139 / 140

Fax No. : (0124) 2469144


D/1/A-D/1/B, Ajanta Indl.Estate,

Near Sarika Paints, Viramgaon Road,

at Vasna lyava, Sanand, Dist.

Ahmedabad-382170 (Gujarat)

Ph. Nos. : (02717) 284567/68

Fax Nos. : (02717) 284567


Plot No.1, IID Centre,

SAICOP Industrial Estate,

Battal Balian, Udhampur (J&K)

Ph. Nos. : (01992) 250156/57

Fax Nos. : (01992) 250156


Ahmedabad, Akola, Bangalore, Cuttack,

Ghaziabad, Guntur, Hissar, Hyderabad,

Indore, Jaipur, Jabalpur, Kichha, Kolkata,

Kurnool, Lucknow, Ludhiana, Nellore, Patna,

Pune, Rai, Raipur, Ranchi, Ravulapalem,

Salem, Sriganganagar, Thrissur and

Vijayawada .

SALES OFFICES/GODOWNS:

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REGISTRAR AND TRANSFER AGENTS

M/s Abhipra Capital LimitedGround Floor, Abhipra Complex, Dilkhush Industrial Area, A-387,G.T. Karnal Road, Azadpur, Delhi-33Phone Nos.: 011-42390909E-mail : [email protected]

[email protected] : www.abhipra.com

ANNUAL GENERAL MEETING

Hongkong & Shanghai Banking Corporation Limited

State Bank of Patiala

HDFC Bank Limited

State Bank of India

Date : 4th day of August,2010Time : 10:30 AMVenue : Shri Purushottam Hindi Bhawan, 11, Vishnu Digambar Marg (Rouse Avenue), New Delhi -110 002

NOTICE TO THE MEMBERS

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Notice is hereby given that the 25th Annual General Meeting of the Company will be held at Shri Purushottam Hindi Bhawan, 11, Vishnu Digambar Marg (Rouse Avenue), New Delhi- 110002 on Wednesday, the 4th day of August, 2010 at 10:30 a.m. to transact the following businesses:

ORDINARY BUSINESS

1. To receive, consider and adopt the Audited Balance Sheet of the Company as at 31st March, 2010 and the Profit and Loss Account for the year ended on that date together with the Reports of the Auditors and Directors thereon;

2. To declare a Dividend for the year ended on 31st March, 2010;

3. To appoint a Director in place of Shri Arun Kumar Dhanuka, who retires by rotation and being eligible, offers himself for re-appointment;

4. To appoint a Director in place of Shri Shrikrishna Khetan, who retires by rotation and being eligible, offers himself for re-appointment;

5. To appoint Auditors, to hold office from the conclusion of this meeting until the conclusion of the next Annual General Meeting of the Company and to fix their remuneration.

SPECIAL BUSINESS

6. To consider and if thought fit, to pass with or without modification(s) the following Resolution as an Ordinary Resolution:

"Resolved that in accordance with the provisions of Section 198, 269, 309 & 310 read with Schedule XIII of the Companies Act, 1956 or any modification or re-enactment thereof, the approval of the Company be and is hereby accorded to increase the remuneration payable to Shri Ram Gopal Agarwal, Chairman of the Company, from Rs. 1,75,000/- p.m. to Rs. 2,50,000/- p.m. w.e.f. 1.06.2010 for the remaining tenure of his appointment upto 31.10.2012, alongwith perquisites, allowances, commission and other things which shall remain same as mentioned in the main Agreement dated 1st November, 2007."

"Resolved further that the Board of Directors of the Company be and is hereby authorized to vary or increase the salary of Sh. R. G. Agarwal by executing a Supplemental Agreement to the Main Agreement dated 01.11.2007 between the Company and Sh. R. G. Agarwal as per the above Resolution to give effect to such variation or increase, as the case may be."


"Resolved that in accordance with the provisions of Section 198, 269, 309 & 310 read with Schedule XIII of the Companies Act, 1956 or any modification or re-enactment thereof, the approval of the Company be and is hereby accorded to increase the remuneration payable to Shri Mahendra Kumar Dhanuka, Managing Director of the Company, from Rs. 1,50,000/- p.m. to Rs. 2,25,000/- p.m. w.e.f. 1.06.2010 for the remaining tenure of his appointment upto 13.08.2014, alongwith

perquisites, allowances, commission and other things which shall remain same as mentioned in the main Agreement dated 14th August, 2009."

"Resolved further that the Board of Directors of the Company be and is hereby authorized to vary or increase the salary of Sh. Mahendra Kumar Dhanuka by executing a Supplemental Agreement to the Main Agreement dated 14.08.2009 between the Company and Sh. Mahendra Kumar Dhanuka as per the above Resolution to give effect to such variation or increase, as the case may be."


"Resolved that in accordance with the provisions of Section 198, 269, 309 & 310 read with Schedule XIII of the Companies Act, 1956 or any modification or re-enactment thereof, the approval of the Company be and is hereby accorded to increase the remuneration payable to Shri Arun Kumar Dhanuka, Whole Time Director of the Company, from Rs. 1,00,000/- p.m. to Rs. 1,50,000/- p.m. w.e.f. 1.06.2010 for the remaining tenure of his appointment upto 31.07.2013, alongwith perquisites, allowances, commission and other things which shall remain same as mentioned in the main Agreement dated 1st August, 2008."

"Resolved further that the Board of Directors of the Company be and is hereby authorized to vary or increase the salary of Sh. Arun Kumar Dhanuka by executing a Supplemental Agreement to the Main Agreement dated 1st August, 2008 between the Company and Sh. Arun Kumar Dhanuka as per the above Resolution to give effect to such variation or increase, as the case may be."


"Resolved that in accordance with the provisions of Section 198, 269, 309 & 310 read with Schedule XIII of the Companies Act, 1956 or any modification or re-enactment thereof, the approval of the Company be and is hereby accorded to increase the remuneration payable to Shri K. B. Kejariwal, Whole Time Director of the Company, from Rs. 1,00,000/- p.m. to Rs. 1,50,000/- p.m. w.e.f. 1.06.2010 for the remaining tenure of his appointment upto 31.08.2012, alongwith perquisites, allowances, commission and other things which shall remain same as mentioned in the main Agreement dated 1st September, 2007."

"Resolved further that the Board of Directors of the Company be and is hereby authorized to vary or increase the salary of Sh. K. B. Kejariwal by executing a Supplemental Agreement to the Main Agreement dated 1st September, 2007 between the Company and Sh. K. B. Kejariwal as per the above Resolution to give effect to such variation or increase, as the case may be."


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NOTICE TO THE MEMBERS Cont.

"Resolved that in accordance with the provisions of Section 198, 269, 309 & 310 read with Schedule XIII of the Companies Act, 1956 or any modification or re-enactment thereof, the approval of the Company be and is hereby accorded to increase the remuneration payable to Shri Rahul Dhanuka, Whole Time Director of the Company, from Rs. 90,000/- p.m. to Rs. 1,50,000/- p.m. w.e.f. 1.06.2010 for the remaining tenure of his appointment upto 30.04.2012, alongwith perquisites, allowances, commission and other things which shall remain same as mentioned in the main Agreement dated 1st May, 2007."

"Resolved further that the Board of Directors of the Company be and is hereby authorized to vary or increase the salary of Sh. Rahul Dhanuka by executing a Supplemental Agreement to the Main Agreement dated 1st May, 2007 between the Company and Sh. Rahul Dhanuka as per the above Resolution to give effect to such variation or increase, as the case may be."

BY ORDER OF THE BOARDFor DHANUKA AGRITECH LIMITED

Sd/- Mukesh Kumar

Company Secretary

Regd. Office :'DHANUKA HOUSE',861-862, Joshi Road, Karol Bagh, New Delhi - 110005.

Place : New DelhiDated: 29th May, 2010

NOTES: -

1. A member entitled to attend and vote at the meeting is also entitled to appoint a proxy to attend and vote on a poll instead of himself and such proxy need not be a member of the Company. Proxies in order to be effective must be received by the Company at its registered office at least 48 hours before the time fixed for the meeting.

2. The Register of Members and the Share Transfer Books will remain closed from 29th July, 2010 to 4th August, 2010 (both days inclusive).

3. Payment of Dividend @ 70% (Rs.7/- per equity share of Rs. 10/- each) for the Financial Year ended on 31.03.2010, as recommended by the Board, if approved at the ensuing Annual General Meeting, will be made only to those members whose names are registered in the Register of Members of the Company as on the date of book closure or to their mandates, as the case may be. In respect of shares in electronic form, the Dividend will be paid on the basis of beneficial ownership as on record date as per details furnished by the National Securities Depository Ltd. (NSDL) and Central Depositories Services (India) Ltd. (CDSIL) for this purpose.

It may also be noted that your Directors have proposed

to subdivide the equity share Capital of the Company to the consequential effect that each equity share of nominal value of Rs. 10/- each shall be subdivided into 5 equity shares of Rs. 2/- each. In case if the Resolution proposed is approved by the requisite majority, the Dividend shall be paid in the same proportion (i.e. Rs. 1.40 for each equity share of Rs. 2 each).

4. Members are requested to notify any change in their address to their Depository Participants (DPs) in respect of shares held in electronic form and to the Transfer Agents of the Company in respect of shares held in physical form.

5. Members holding shares in electronic form may please note that their Bank details as furnished by the respective Depositories to the Company will be printed on their dividend warrants as per the applicable regulations of the Depository and the Company will not entertain any direct request from such members for deletion or change in such bank details. Further, instructions if any, already given by them in respect of shares held in physical form will not be automatically applicable to the dividend paid on shares in electronic form. Members may, therefore, give instructions regarding bank accounts in which they wish to receive dividend, directly to their Depositories Participants.

6. Shareholders/Proxies are requested to produce at the entrance the attached admission slip, duly completed and signed in accordance with the specimen signatures registered with the Company, for admission to the meeting hall.

7. Corporate members intending to send their authorized representatives are requested to send a duly certified copy of the Board Resolution authorizing their representatives to attend and vote at the meeting.

8. Members are requested to bring their copy of the Annual Report, as no copy will be distributed at the venue of the Annual General Meeting.

9. Members desirous of getting any information about the accounts under reference and operations of the Company are required to address their query to the Company Secretary so that the same may reach him at least seven days before the date of the meeting to enable the management to keep the information ready.

10. In view of the provisions of Section 205A of the Companies Act, 1956, unclaimed / unpaid dividend for the Financial Year 2002-03 shall be transferred to Investor Education and Protection Fund (IEPF) in the month of September, 2010. Members who have not yet encashed their dividend warrant(s) for the Financial Year ended 31st March, 2003 or any subsequent financial year(s), are requested to lodge their claims with the Company. No claims shall lie against the Company or the Fund once the unclaimed dividend is transferred to IEPF.

11. Explanatory Statement pursuant to Section 173(2) of the Companies Act, 1956 in respect of item nos. 6-10 of the Notice (in respect of Special Business to be transacted at the meeting) is annexed hereto.

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EXPLANATORY STATEMENT PURSUANT TO SECTION 173(2) OF THE COMPANIES ACT, 1956

The following explanatory statement sets out all the material facts, relevant to the items of the Special Business contained in the notice.

ITEM NO. 6

Shri Ram Gopal Agarwal, s/o Late Sh. C.L. Dhanuka, aged about 61 years, is a Commerce Graduate. He promoted Dhanuka Group in the year 1980, by acquisition of a sick unit, namely, Northern Minerals (P) Limited (now merged into M/s Dhanuka Agritech Limited) in Gurgaon. At that time the unit was suffering losses and was at the verge of closure. Under his able leadership, that unit started to earn profits from very first year of acquisition. In 1985, he promoted Dhanuka Agritech Limited (Formerly known as Dhanuka Pesticides Limited). He has a vast experience in Agrochemical Industry. He has been working for the last 40 years and has contributed immensely for the growth of the Company. He looks after the overall supervision of Company's affairs. He has been instrumental to the success of Dhanuka.

In view of his ability to manage the affairs of the Company and brilliance to produce high profits for the Company, Sh. Ram Gopal Agarwal, has been an eminent personality in the field of Agrochemicals. The Remuneration Committee of the Board in its meeting dated 29th May, 2010, recommended to increase the salary of Sh. R.G. Agarwal from Rs. 1,75,000/- p.m. to Rs. 2,50,000/- p.m. The material terms and conditions proposed in the said agreement are mentioned hereinbelow for consideration of members:

A. Salary : Rs.2,50,000/- (Rupees Two Lacs Fifty Thousand only) per month.

B. Commission: 1.5% of the Net profits of the Company computed under Section 349 and 350 of the Companies Act, 1956.

C. Perquisites:

Category 'A':

i) Reimbursement of medical expenses for self and family, actually incurred, subject to the limit that the total cost to the Company shall not exceed one month's salary in a year or three months' salary in a block of three years excluding perquisites and subject to the scheme framed by the Company;

ii) Leave travel concession for self and family not exceeding Rs.75,000/- once in a year. The perquisite shall be taxed in accordance with the provisions of the Income-Tax Rules;

iii) Membership fee of not more than two clubs provided no life membership fee or admission fee shall be paid by the Company;

iv) Personal accident insurance, subject to the condition that the annual premium shall not exceed Rs. 4,000/- per annum.

Category 'B':

i) Company's contribution towards provident fund subject to the ceiling of 12% of the salary with a maximum of Rs.15,000/- per month as prescribed under the PF Act;

ii) Company's contr ibut ion towards pension/ superannuation fund, such contribution together with contribution to the provident fund shall not exceed 27% of the salary as laid down in the Income-Tax Rules, 1962; and

iii) Gratuity payable in accordance with an approved Gratuity Fund ,which shall not exceed one half month's salary for each completed year of service or part thereof in excess of six months, subject to a ceiling of Rs. 3,50,000/- or as laid down in the Income Tax Rules, 1962, whichever is lower.

Category 'C':

i) Provision of car for use of Company's work subject to the condition that personal use of car shall be billed by the Company to the Chairman as per the Company's Rules; and

ii) Provision of telephone at residence for use of Company's work, subject to the condition that personal STD calls shall be billed by the Company to the Chairman.

MINIMUM REMUNERATION:

Notwithstanding anything to the contrary contained herein, where in any financial year, during the currency of tenure of Sh. R. G. Agarwal, the Company has no profits or its profit are inadequate, the Company will pay remuneration by way of salary and perquisites as may be approved by the Remuneration Committee of the Board of Directors and subject to the limits prescribed in Schedule XIII to the Companies Act, 1956.

The copy of the draft Supplementary Agreement referred to in the resolution is available for inspection to the members at the registered office of the Company on any working day during business hours and shall also be available for inspection throughout the continuance of the Annual General Meeting.

Except Shri Ram Gopal Agarwal (Chairman), Shri Mahendra Kumar Dhanuka (Managing Director) and Shri Rahul Dhanuka (Whole time Director), no other Director is concerned or interested in the aforesaid resolution.

This shall also be treated as an abstract of the terms of the contract/agreement and the memorandum as to the nature of concern or interest of the Directors pursuant to Section 302 of the said Act.

The aforesaid terms & conditions governing increase in remuneration of Shri R. G. Agarwal fall within the parameters as prescribed in Schedule XIII to the Companies Act, 1956 as amended upto date; hence approval of shareholders is only required and no approval of the Central Government is necessary in this case.

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ITEM No. 7:

Sh. Mahendra Kumar Dhanuka, S/o Late Sh. C. L. Dhanuka, 56 years of age, holds Bachelor's Degree in Commerce from Delhi University. He has been working as Managing Director and has a vast and enriched experience in the agrochemical industry. His vast experience adds much needed expertise in those areas which are necessary for the functioning of the board and the committees.

Sh. M. K. Dhanuka was reappointed as the Managing Director of your Company in the last Annual General Meeting held on 22nd September, 2009. He has been managing the overall affairs of the Company and has been a key contributor to the success of Dhanuka. His foresightedness and business acumen facilitated your Company in achieving a turnover of Rs. 445 crore mark.

In view of the fruitful results achieved by your Company by use of his sheer skills and potential, the Remuneration Committee of the Board recommended to increase the salary of Sh. M.K. Dhanuka from Rs. 1,50,000 p.m. to Rs. 2,25,000 p.m. The material terms and conditions proposed in the said agreement are mentioned hereinbelow for consideration of members:

A. Salary : Rs.2,25,000/- (Rupees Two Lacs Twenty Five Thousand only) per month.

B. Commission: 1.5% of the Net profits of the Company computed under Section 349 and 350 of the Companies Act, 1956.

C. Perquisites:

Category 'A':





Category 'B':




Category 'C':

i) Provision of car for use of Company's work subject to the condition that personal use of car shall be billed by the Company to the Managing Director as per the Company's Rules; and

ii) Provision of telephone at residence for use of Company's work, subject to the condition that personal STD calls shall be billed by the Company to the Managing Director.


Notwithstanding anything to the contrary contained herein, where in any financial year, during the currency of tenure of Managing Director, the Company has no profits or its profit are inadequate, the Company will pay remuneration by way of salary and perquisites as may be approved by the Remuneration Committee of the Board of Directors and subject to the limits prescribed in Schedule XIII to the Companies Act, 1956.


Except Shri Mahendra Kumar Dhanuka and Shri Ram Gopal Agarwal (Chairman), no other Director is concerned or interested in the aforesaid resolution.


The aforesaid terms & conditions governing increase in remuneration of Shri Mahendra Kumar Dhanuka fall within the parameters as prescribed in Schedule XIII to the Companies Act, 1956 as amended upto date; hence approval of shareholders is only required and no approval of the Central Government is necessary in this case.

Item No. 8:

Shri Arun Kumar Dhanuka, son of late Sh. Govind Lal Dhanuka is a B. Com. Graduate from University of Delhi of 1978 batch. Immediately after completion of his graduation, he started to look after the business with Shri R. G. Agrawal. When Shri R. G. Agarwal, the founder of the Dhanuka Group took over the reins of M/s. Northern Minerals Pvt. Limited, a sick unit, in 1980, Shri Arun Kumar Dhanuka was also entrusted with the responsibility to run the unit under his leadership. Shri Arun Kumar Dhanuka, with his sincere efforts, innovative skills and able leadership took the

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company to new heights of success.

At present, Shri Arun Kumar Dhanuka supervises the working of two units of the Company, namely, Gurgaon and Udhampur units.

Recognizing the capabilities, innovative skills and hard work of Sh. Arun Kumar Dhanuka in achievement of the increasing Sales of the Company to a score of Rs. 445 crores, the Remuneration Committee of your Board in its meeting dated 29th May, 2010, recommended to increase the salary of Sh. Arun Kumar Dhanuka from Rs. 1,00,000 p.m. to Rs. 1,50,000 p.m. The material terms and conditions proposed in the said agreement are mentioned hereinbelow for consideration of members:

A. Salary : Rs.1,50,000/- (Rupees One Lac Fifty Thousand only) per month.

B. Commission: 1 % of the Net profits of the Company computed under Section 349 and 350 of the Companies Act, 1956.

C. Perquisites:

Category 'A':





Category 'B':




Category 'C':

i) Provision of car for use of Company's work subject to the condition that personal use of car shall be billed by

the Company to the Whole Time Director as per the Company's Rules; and

ii) Provision of telephone at residence for use of Company's work, subject to the condition that personal STD calls shall be billed by the Company to the Whole Time Director


Notwithstanding anything to the contrary contained herein, where in any financial year, during the currency of tenure of Sh. Arun Kumar Dhanuka, the Company has no profits or its profit are inadequate, the Company will pay remuneration by way of salary and perquisites as may be approved by the Remuneration Committee of the Board of Directors and subject to the limits prescribed in Schedule XIII to the Companies Act, 1956.


Except Shri Arun Kumar Dhanuka (Whole time Director) himself, no other Director is concerned or interested in the aforesaid resolution.


The aforesaid terms & conditions governing increase in remuneration of Shri Arun Kumar Dhanuka fall within the parameters as prescribed in Schedule XIII to the Companies Act, 1956 as amended upto date; hence approval of shareholders is only required and no approval of the Central Government is necessary in this case.

Item No. 9:

Sh. K. B. Kejariwal, son of Shri Baijnath Kejariwal, is the Director of Dhanuka Agritech Limited since 1992. He is B. Tech Engineer and has a total experience of 37 years. He took the charge of Sohna Unit in Haryana. In fact, the Company manufactured speciality molecules in Sohna unit for which it required some qualified person having a rich experience behind him and having technical qualification. With all the required qualities and practical experience behind him of running units successfully during his service period, Sh. K. B. Kejariwal took the charge of running Sohna unit. After taking the charge, Sh. K. B. Kejariwal set up CALDAN PLANT in Sohna unit which was a very special Product and boosted the turnover of the Company.

Looking at his qualities and zeal to take the organisation to new heights, the Management decided to set up one more unit in Udhampur, J & K and again Sh. K. B. Kejariwal was given the challenging responsibility to set up manufacturing unit at Udhampur. By crossing all the obstacles and difficulties,

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he was successful to set up the plant in Udhampur which has started commercial production in the month of November, 2008. Presently, all the major products are being shifted to Udhampur Unit gradually.

Sh. K. B. Kejariwal also has the excellent capability to manage the workers efficiently. Under his leadership, there has never been labour trouble in the Company and all the workers put their efforts to their best under the motivational guidance of Sh. K. B. Kejariwal.

In view of the true and dedicated efforts alongwith the innovative skills put in by Sh. K. B. Kejariwal, the Remuneration Committee of your Board in its meeting dated 29th May, 2010, recommended to increase the salary of Sh. K.B. Kejariwal from Rs. 1,00,000 p.m. to Rs. 1,50,000 p.m. The material terms and conditions proposed in the said agreement are mentioned hereinbelow for consideration of members:


B. Commission: 1 % of the Net profits of the Company computed under Section 349 and 350 of the Companies Act, 1956.

C. Perquisites:

Category 'A':





Category 'B':




Category 'C':

i) Provision of car for use of Company's work subject to the condition that personal use of car shall be billed by the Company to the Whole Time Director as per the Company's Rules; and

ii) Provision of telephone at residence for use of Company's work, subject to the condition that personal STD calls shall be billed by the Company to the Whole Time Director.


Notwithstanding anything to the contrary contained herein, where in any financial year, during the currency of tenure of Sh. K.B. Kejariwal, the Company has no profits or its profit are inadequate, the Company will pay remuneration by way of salary and perquisites as may be approved by the Remuneration Committee of the Board of Directors and subject to the limits prescribed in Schedule XIII to the Companies Act, 1956.

The copy of the draft Supplemental Agreement referred to in the resolution is available for inspection to the members at the registered office of the Company on any working day during business hours and shall also be available for inspection throughout the continuance of the Annual General Meeting.

Except Shri Sh. K.B. Kejariwal (Whole time Director) himself, no other Director is concerned or interested in the aforesaid resolution.


The aforesaid terms & conditions governing increase in remuneration of Sh. K.B. Kejariwal fall within the parameters as prescribed in Schedule XIII to the Companies Act, 1956 as amended upto date; hence approval of shareholders is only required and no approval of the Central Government is necessary in this case.

ITEM No. 10:

Sh. Rahul Dhanuka, son of Sh. R. G. Agarwal , aged 35 years, holds an MBA degree from S P Jain Institute of Management & Research, Mumbai. He has proven his worth within a short span of time with his dynamic leadership and has been appointed as Whole time Director w.e.f. 01/05/2007 for a period of five years. He has an experience of 12 years in the industry of Agrochemicals.

With the help of his tactical skills and wittiness, Dhanuka's marketing network has grown at a massive pace. Today, big Multinationals in the Agribusiness takes the assistance of Dhanuka for marketing its products. Widespread marketing network of Dhanuka has helped in reaching the very consumer base i.e. farmers.

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In view of the performance of Sh. Rahul Dhanuka in marketing the products and introducing the new brands successfully to the farmers which has contributed in crossing the Sales and marketing targets, the Remuneration Committee of your Board in its meeting dated 29th May, 2010, recommended to increase the salary of Sh. Rahul Dhanuka from Rs. 90,000 p.m. to Rs. 1,50,000 p.m. The material terms and conditions proposed in the said agreement are mentioned hereinbelow for consideration of members:


B. Commission: 1% of the Net profits of the Company computed under Section 349 and 350 of the Companies Act, 1956.

C. Perquisites:

Category 'A':





Category 'B':




Category 'C':

i) Provision of car for use of Company's work subject to the condition that personal use of car shall be billed by the Company to the Whole Time Director as per the Company's Rules; and

ii) Provision of telephone at residence for use of Company's work, subject to the condition that personal

STD calls shall be billed by the Company to the Whole Time Director.


Notwithstanding anything to the contrary contained herein, where in any financial year, during the currency of tenure of Sh. Rahul Dhanuka, the Company has no profits or its profit are inadequate, the Company will pay remuneration by way of salary and perquisites as may be approved by the Remuneration Committee of the Board of Directors and subject to the limits prescribed in Schedule XIII to the Companies Act, 1956.

The copy of the draft Supplemental Agreement referred to in the resolution is available for inspection to the members at the registered office of the Company on any working day during business hours and shall also be available for inspection throughout the continuance of the Annual General Meeting.

Except Shri Rahul Dhanuka (Whole time Director) and Shri Ram Gopal Agarwal (Chairman), no other Director is concerned or interested in the aforesaid resolution.


The aforesaid terms & conditions governing increase in remuneration of Shri Rahul Dhanuka fall within the parameters as prescribed in Schedule XIII to the Companies Act, 1956 as amended upto date; hence approval of shareholders is only required and no approval of the Central Government is necessary in this case.

BY ORDER OF THE BOARD

For DHANUKA AGRITECH LIMITED

Mukesh Kumar

Company Secretary

Regd. Office : 'DHANUKA HOUSE',

861-862, Joshi Road,

Karol Bagh, New Delhi – 110005.

Place : New DelhistDated: 29 May, 2010

Sd/-

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DIRECTORS' REPORT

Dear Members,

Your Directors have the pleasure in presenting before you ththe 25 Annual Report on the business and operations of

the Company along with the Audited Accounts of the Company for the financial year ended 31st March, 2010.

DIVIDEND

Your Directors are pleased to recommend a Dividend @ st70% for the year ended 31 March, 2010. Dividend, if

approved by the members at ensuing Annual General Meeting, will absorb Rs.6.43 crores and tax on dividend will absorb Rs.1.07 crores. Your Directors have also proposed to sub-divide the equity share capital of the Company to the consequential effect that each equity share of the nominal value of Rs. 10/- will be sub-divided into 5 equity shares of Rs. 2/- each. In case the Resolution proposed is approved by the requisite majority of members, the dividend will be paid in the same proportion i.e. Rs. 1.40 for an equity share of Rs. 2/- each.

BUSINESS OPERATIONS:

The country witnessed a weak monsoon during the year with overall rainfall being less than 23% of the normal, particularly in northern and western parts, witnessing less than 36% of the normal rains resulting in fall in cultivable land of major crops, particularly paddy. However, the industry recovered in the later part of the year due to restoration of normal rainfall.

The performance of pesticide industry remains highly dependent on weather which can affect the presence of disease and pest infestations in the short term on a regional basis. Accordingly, it may negatively affect the demand for crop protection products and the mix of products used.

Our strategy of creating sustainable and meaningful linkages across the entire farmer community over the country is helping us to create an inclusive agri-business.

Also, sales of agrochemicals in the domestic retail market are highly seasonal due to monsoons, with a majority of sales materializing between June and October every year. Floods, droughts and other extreme seasonal and cyclical factors create uncertainty of demand. Owing to the experience of promoters and directors and their strategic management interventions, your Company has been able to attain a growth of nearly 17% in gross turnover and over 56% in PAT during the year as compared to last year. The gross turnover of the Company has increased to Rs.445.55 crores during the fiscal year 2009-10 from Rs.380.87 crores of the previous year, while PAT improved to Rs.37.02 crores from Rs.23.20 crores on YoY basis. On the other hand, Pesticides Industry as a whole recorded a lower turnover growth of 7%.

To become sustainable in the long-term, your Company procures some of the major raw materials from its

foreign collaborators. This ensures stable long-term input price, agreed quality and on-demand quantity. Your Company is also planning to enter into more such tie-up collaborations with the foreign suppliers to ensure further growth of business.

In order to make our growth strategy sustainable, we set our sights on the achievement of both short and long-term goals through dedicated leadership, commitment and value enhancement at different levels of management. We have made global tie-ups for creating agri-assets, capacity expansion, R&D, innovation, brand building and diversification in different arenas to ensure long term growth and leadership position in the Indian market place. Our aim is to adopt a model which can cater to the needs of billions of people in India which is one of the world's most potential and under-exploited markets.

To serve the country and farming community with increasingly safer and eco-friendly molecules, the Company has launched various new products during the year, namely Dhawa Gold, Areva, Apple, D-era and Nabood. Market has shown encouraging response to these products. Dhanzyme Gold is the product in pipeline and will be introduced shortly.

FINANCIAL HIGHLIGHTS

ParticularsFor the F.Y.

ended 31.3.2010

(Rs. in crores)

For the F.Y.ended

31.3.2009

Gross Turnover 445.55 380.87Profit before depreciation & taxation (PBDT) 52.13 38.25

Deductions:

• Depreciation 3.11 2.71 • Provision for Taxation 12.68 12.37

Profit after Tax (PAT) 36.34 23.20

Additions:

• Balance of Profit & Loss Account of previous year 51.36 36.92 Amount Available for Appropriations 87.70 60.12

Appropriations:• Transfer to General Reserve 3.63 2.32• Proposed Dividend 6.43 5.51• Dividend Tax 1.07 0.93• Surplus carried to B/S 76.57 51.36

87.70 60.12

FUTURE PROSPECTS:

The Company has passed Resolutions by way of Postal Ballot for carrying out the business of Wind Mill Power Project. The project has been launched in Rajasthan in association with M/s Suzlon Energy Limited, which is a pioneer in the unconventional power industry and

stbecame functional from 31 December, 2009. The project

11

DIRECTORS' REPORT Cont.

has been running successfully and has started generating revenue. More such Wind Mill Power projects are expected to be installed in the near future. In addition, the Company is entering into Agri Retail Business based on the concept of Franchiser-franchisee for which purpose, your Company has already opened 7 retail outlets under the trade name of “Dhanuka Suvidha” within the State of U.P. for the marketing of agri-products and services.

Further, the Company has plans to incur capital expenditure for expansion of its existing units R&D, innovation of new molecules and products and brand building to ensure long term growth and to achieve leadership position in the Indian market. Besides, the Company will continue with its efforts in strengthening the marketing setup in the country. The Company has opened 7 new depots during the year to strengthen its market penetration and to save on transportation cost.

Rising concerns over crop losses and declining yields have given rise to the need to use more crop protection measures to feed the burgeoning population. The low per hectare consumption of pesticides in India and increased levels of awareness among the farming community about the use of pesticides are expected to augur well for the domestic pesticide industry. Higher farm output prices are giving pesticide manufacturers enough leverage to pass on any rise in raw material costs to the farmers. On the whole, the pesticide industry appears set to grow both in value and volume terms.

In order to improve liquidity of its shares, the Company has sought approval to get its shares listed on the National Stock Exchange and is proceeding with splitting of shares.

MEASURES FOR ENERGY CONSERVATION, R&D AND TECHNOLOGY ABSORPTION AND DETAILS OF FOREIGN EXCHANGE EARNINGS AND OUTGO:

Information as required u/s 217(1)(e) of the Companies Act, 1956, read with Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988 is given in Annexure ̀ A' forming part of this report.

DIRECTORS:

During the year, there has been no change in the Board of Directors of the Company.

In accordance with the provisions of the Companies Act, 1956 and Articles of Association of the Company, Shri Arun Kumar Dhanuka and Shri Shrikrishna Khetan will retire by rotation at the ensuing Annual General Meeting, and being eligible, offer themselves for reappointment.

DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to the provisions of Section 217(2AA) of the Companies Act, 1956 with respect to Directors' Responsibility Statement, it is hereby confirmed:

1. that in preparation of the Annual Accounts, the applicable Accounting Standards have been followed

along with proper explanations relating to material departures;

2. that 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 financial year and of Profit or Loss of the Company for that period.

3. that the Directors have taken proper and sufficient care in the maintenance of adequate accounting records in accordance with provisions of this Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; and

4. that the Directors have prepared the Annual Accounts on ongoing concern basis.

CORPORATE GOVERNANCE:

The 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.

As required by clause 49 of the listing agreement, a separate report on corporate governance forms part of the Annual Report. A report from the statutory auditors of the Company regarding compliance with conditions of corporate governance forms a part of this report.

STATUTORY AUDITORS:

M/s Dinesh Mehta & Co. Chartered Accountants, New Delhi were appointed Auditors of the Company to hold office until the conclusion of the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment. The Board recommends their reappointment.

COST AUDITORS:

The Board of Directors, in pursuance of the order issued by the Central Government under section 233B of the Companies Act, 1956, have appointed M/s S. Chander & Associates, Cost Accountants, New Delhi, as Cost Auditors of the Company to conduct audit of the cost accounts maintained by the Company in respect of its

stPesticides Business for the year ended 31 March, 2010.

STATUS OF LISTING FEES:

The Company has been regularly paying listing fees to the Bombay Stock Exchange Limited, Mumbai where its shares are listed.

12


Name & Age

Sh. R.G. Agarwal(61 years)

Sh. Rahul Dhanuka (35 years)

Sh. A.K. Dhanuka (53 Years)

Designation/ Nature of Duties

Sh. M.K. Dhanuka(56 years)

Managing Director (Overall supervision of company's affairs)

Chairman(Overall supervision of company's affairs)

Director (Marketing) All India Marketing Head

Director (Works) Supervision of production unit at Gurgaon

Remuneration (Rs.)

96.08 lacs

93.08 lacs

62.21 lacs

61.08 lacs

Qualification

B.Com (Hons)

B.Com (Hons)

B. Com

M.B.A

Experience(Years)

40

34

31

12

Date of Joining

SinceIncorporation

Sh. K.B. Kejariwal

(59 years)

Director (Works) Supervision of production units at Sohna &Udhampur

62.28 lacs B.Tech 37 31.08.1992

01.02.2002

Note : Remuneration includes basic salary, medical allowance, commission, ex-gratia & Company's contribution to Provident Fund.

SinceIncorporation

23.05.2007

PARTICULARS OF EMPLOYEES:

The information as required, under section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, is given below:

ACKNOWLEDGMENT:

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, Director of Agriculture, Haryana, other Government Agencies, its bankers , Shareholders, Dealers & Distributors 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 continuing support by investors, cordial industrial relations maintained by the workmen and also for devoted and dedicated efforts put in by the staff of the Company, for its continuous growth and success.

For and on behalf of the Board

R.G. AgarwalChairman

Place: New DelhiDated: 29th May, 2010

ANNEXURE `A'

(A) CONSERVATION OF ENERGY

a&b) Wherever possible, energy conservation measures have already been implemented. However, efforts to conserve and optimize the use of energy through improved operational methods and other means are being continued on an on-going basis.

c) The energy consumption and the cost of production are being kept under control.

d) Wastage of energy has been minimized to a negligible level by closing the electronic equipments when not in use.

e) Requisite data in respect of energy conservation is given below:

I. Power and Fuel consumption:

Electricity (KWH)2009-10 2008-09

a) Purchased Units 10,34,626 6,57,447Total Amount (Rs.) 50,13,849 35,72,305Rate per Unit (Rs.) 4.85 5.43

b) Own Generation through Diesel (Generator) Units 492145 817041

Unit/Lit. of diesel oil 2.83 3.42

Cost/Unit (Rs.) 12.16 9.22

(Incl. overhead)

13


II. Consumption per unit of production:Focused drives at all units contributed to sustain the energy consumption per unit of production, compared to that of the previous year. However, increase in cost was observed because of steep increase in fuel costs.

(B) RESEARCH & DEVELOPMENT

i) Specific areas in which Research & Development carried out by the Company:

(a) R&D Department has generated data on specialty herbicide, Targa Super 5 EC on cotton and ground nut crops and submitted to CIB/RC for approval. R&D Department is educating increasing number of farmers for right and safe use of pesticides to increase food production.

(b) It has introduced a concept of “Dhanuka Rapid Action Force” (DRAF) through which the Development Officers / Managers based at different states and at GHO are given training for 2-3 days and deputed in one particular state for promotion of a specialized molecule. This activity has helped in successfully establishing specialty molecules on different crops in different states.

(c) It has also generated data on Targa Super 5% EC for label expansion on Cotton, Groundnut, Onion and Black gram. Data generation of Vitavax Power on Groundnut has been carried out for inclusion in Package of Practices of Rajasthan Agriculture University, Rajasthan and Vitavax Power on Wheat for inclusion in Package of Practices of Punjab Agriculture University, Ludhiana, Punjab and Haryana Agricultural University, Hissar, Haryana.

(d) Submission of file for registration u/s 9(3) of Lustre 37.5 SE, a new versatile fungicide for Rice crop.

ii) Benefits derived as a result of R&D Activities:

(a) R&D activities enhance corporate image with the Agricultural Universities, Agricultural Research Institutes, Central and State Government Agricultural Department, as scientists of Dhanuka Agritech Limited actively participate in different programmes like conferences, symposiums, seminars, field activities, farmer meetings, etc. organized by these bodies.

(b) The collaboration with Krishi Vigyan Kendra, Chomu, Rajasthan has enhanced the corporate image and sale of our specialty pesticides on vegetables in Rajasthan.

(c) The Research and Development Department is also constantly involved in educating the Marketing staff, farmers and dealers/

distributors on the new crop/pest segments and new molecules being introduced by the Company.

iii) Future Plan of Action:R&D Department is generating data on different existing molecules for label expansion on new crops/pests and also registration of new molecules for marketing in Indian market in collaboration with foreign companies for the benefit of Indian farmers.

iv) Expenditure on R&D:

a) Capital -b) Recurring (Rs.) 50,70,450c) Total (Rs.) 50,70,450d) Total R&D expenditure as a

percentage of total turnover 0.114%

(C) Technology, absorption, Adaptation and Innovation

1. Process improvements in existing products resulted in better productivity, efficiency and quality.

2. Product improvements will continue to result in improved productivity and cost reduction and this will result in improving the profitability of the Company.

3. Special focus has been given to develop controlled release formulations, non-solvent based formulations instead of solvent based formulations and formulations for seed treatments.

4. There has been no import of technology in the last 5 years

5. Recommendation obtained from Punjab Agriculture University, Ludhiana for Caldan 4G (Cartap Hydrochloride) product on rice and sugercane crop.

(D) FOREIGN EXCHANGE EARNINGS AND OUTGO

During the year, Company has imported materials worth Rs. 77,15,07,132/- (CIF) and incurred Rs. 3,50,316/- on account of foreign travel. Company has received Rs. 8,61,985/- in foreign currency on account of Insurance claim and Foreign Tours.

For and on behalf of the Board

R.G. AgarwalChairman

Place: New DelhiDated: 29th May, 2010

INDUSTRY STRUCTURE & DEVELOPMENT

Due to global economic slowdown, the Agro Chemical

Industry has grown by 10-15% during the year under

review as against an excellent 21% growth in the year

2008-09. During the year under review, the Kharif

season was severely hit due to poor monsoon adversely

impacting the paddy yield. Cotton was relatively pest

free. Rabi season was characterized by low pest and

disease infestation in key crops, especially paddy.

The average per hectare consumption of agrochemicals

in India is comparatively lower than consumption in

USA, JAPAN and other developed countries. Due to this,

Pesticides industry in India has a lot of potential to grow.

One more reason supporting this growth is industry's

capability to supply agrochemicals of good quality at

economical prices. Rapid growth in acreage of Bt Cotton

hybrids resulting in improvement in yield of cotton crop

is opening new opportunities for more consumption of

pesticides for the control of sucking pests and plant

growth nutrients.

India being a tropical country, the consumption pattern

of pesticides is tilted towards insecticides, accounting for

around 58-60% of the crop protection chemical market.

It is followed by herbicides and fungicides at 20% and

18% respectively. Globally, herbicides command around

50% market share, while insecticides and fungicides

around 24% and 22% share respectively.

Future of Pesticides Industry looks to be very bright with

increasing area being covered under usage of pesticides

every year. For the year 2010-11, Company is optimistic

of recording higher growth in comparison to previous

years.

DHANUKA'S OVERALL PERFORMANCE

2009-10 was an impressive year for your Company

which has been making continuous efforts for the

introduction of new molecules and formulating them in

the most scientific manner so as to serve the Indian

Farmers. Our endeavour is to make Indian Economy self

sufficient and self-reliant in terms of availability of food

grains. The Company has achieved a gross turnover of

Rs.445.55 Crores and further cemented its strategy of

creating an integrated, sustainable growth by further

strengthening the marketing network so as to achieve

deeper penetration into urban and rural India through a

retail distribution network.

REVIEW OF OPERATIONS

Since the promoters of Dhanuka Agritech Limited are

immensely experienced in the field of pesticide business,

the Company has managed to maintain its market share

of around 6% during the year under review despite stiff

competition from both domestic and international

players. The Company expects to maintain its hold over

existing territories due to its well entrenched distribution

network.

Dhanuka has achieved the sales and profitability targets

during the year by a threefold strategy of increasing

sales, penetrating newer markets and reducing costs.

Its prominent brands Targa Super and Caldan have

performed exceptionally well among the consumer class

in some states.

Dhanuka's dealers are spreaded in most of the farming

states across India. Its products command a decent

brand recall due to its large product portfolio and

innovative marketing campaigns. Dhanuka has opened

7 new depots in order to reach targeted customers in an

efficient manner. Foreign collaborations and tie-ups with

established MNC players have ensured superior quality

products and access to specialty molecules. The

molecules are then formulated in the most efficient and

effective manner for the purpose of consumption.

The consumption of pesticides in India is very low as

compared to other countries due to lack of awareness

regarding proper use of pesticides. But the need of the

hour is to use effective pesticides and judicious mix

thereof in the Indian farms for better yield and

productivity. Your Company aims at enhancing customer

relationships and thus has taken several initiatives to

strengthen farmer contact programmes. In this regards,

Dhanuka Doctors have been appointed by the Company,

who are entrusted with the task of giving practical

demonstrations on the fields to depict the true

implication of judicious use of pesticides. Innovative

techniques like multimedia and projectors are used for

this purpose.

With the objective of achieving sustainable growth, the

Company is planning to add some new products and

molecules in its range for addressing the growing

demand for improving plant health and quality of

produce. The Company launched various new products

during the year, namely Dhawa Gold, Areva, Apple, D-

era, Nabood, Dhanzyme Gold and Ad-Fyre. The

Company's efforts are directed towards providing

effective pesticides at reasonable prices.

In addition to Pesticides, the Company has also started

two Seed Research Farms, one at Noida and second at

Hyderabad. The income from Seeds business of your

Company has also shown a growth of over 58% in

comparison to last year. The Company is in the process

of introduction of new varieties / hybrids of vegetables

and crops developed at our research stations.

KEY OPPORTUNITIES, CHALLENGES & THREATS

FOR THE INDUSTRY

Dhanuka is dependent on the sales of formulated

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

14

products in the domestic market because it does not

have presence in technicals, unlike most of the

established players. The Company has identified sales

through its own retail outlets and is embarking on real

estate development which is however a challenging area

of growth. Also the turnover of the Company is

dependent on monsoon, its timing and usual distribution

largely.

Rising costs and uncertainty in availability of some key

raw materials continue to be a challenge. The exchange

rate fluctuations between Dollar and Rupee also impact

the raw material prices.

Farmers' affordability is also an important factor in view

of the rising prices and inflation. However, strong

produce prices and better availability of credit would

mitigate some of the pressure on the farming

community.

Moreover, scientific research has come up with seeds

that have self-immunity towards natural adversaries.

This can be a potential threat to the business of

agrochemicals. Best example of such an introduction in

the Indian market is "Bt Cotton", which resulted in

decline in the consumption of agrochemicals on cotton

crop. However, late there have been few reports of Bt

Cotton unable to develop immunity towards new type of

pests.

Indian agrochemical industry has a great potential to

grow. Although input cost of agrochemicals has

increased in India, still overall cost of production of

agrochemicals is much lower in comparison to Western

countries. With the advancement of Indian Technology,

involvement of young generation in the industry and

policies of government, many Indian companies are

playing significant role in the industry.

But on the other side of the coin, India is a large market

for pesticides. Even today, the consumption of pesticides

in India is very low in proportion to the area covered

under agriculture. There is a large scope for innovating

new products and exploration of new markets and

governing of revenues from the still to be discovered

avenues. Your Directors are taking appropriate

measures to build recognition in the Indian Corporate

world in order to exhibit the strength and capabilities of

the Company.

SEGMENT-WISE PERFORMANCE OR PRODUCT-

WISE PERFORMANCE

Dhanuka has a pan-India distribution and retail network

both in cities and in the interiors through a combination

of C&F agents, distributors, depots and local retailers

(franchisee). The Company continues to strengthen its

position in areas of sourcing raw materials, capturing

value in supply chain and logistics, expanding

manufacturing capabilities and widening its marketing

network.

The Company is operating in pesticides formulations and

seeds business. Volume of seeds business is, however,

quite low as compared to total business volume.

Also, the project of Wind mill established by the

Company in association with M/s Suzlon Energy Limited

has proved to be quite beneficial and is expected to reap

profits in the future.

The Company's focus on sustainable and long-term

business vision has helped in impressive growth of its

profitably.

OUTLOOK

Global Agrochemical industry has grown at an average

7.1% over Years 2001-08 to US $41.7 billion. For the

year 2008, the industry registered outstanding growth

of 25% on the back of volume growth and increase in

price.

The fundamentals of the Agriculture sector continue to

be robust and will drive growth in the years to come.

With the economy showing signs of recovery, demand

for food, fodder and fuel will further go up and should

lead to robust growth in agriculture. The encouraging

prices of agricultural commodities are expected to

continue and will lead to increased investment by the

farmers to protect his crop as well as to improve his

productivity.

The yield per hectare in India is among the lowest in the

world - 2.9 mn tonnes per hectare against the US' 7.8,

Japan's 6.2 and world average of 4.0 mn tonnes per

hectare. India produces approximately 16% of the

world's total food grain production and uses only around

2% of pesticides. Avoidable crop losses are at 10-30% of

domestic crop production. Rising population, coupled

with declining rate in crop production across the world, is

expected to cause continued thrust on arresting crop

losses and, therefore, on increasing usage of pesticides.

The reason for low consumption can be attributed to

fragmented land holdings, low level of irrigation, high

dependence on monsoons and low awareness among

farmers about the benefits of using pesticides. This does

not compare well with other countries that have less

arable land under coverage.

In the light of foregoing, the future prospects of the

agrochemicals industry appear promising on account of

the increasing need to protect farm produce from pests,

higher farmer affordability and lucrative farm produce

prices.

Further, the growing varieties of various pests, diseases,

and their growing resistance to various pesticides will

keep the demand for new products upbeat. The

MANAGEMENT DISCUSSION AND ANALYSIS REPORT Cont.

15

agrochemical space offers enough scope for growth for

both innovators as well as generic players.

Despite rise in raw material costs for pesticide players,

corresponding increase in farm output prices has made

use of pesticides more affordable to farmers. The

industry is expected to attain an impressive CAGR of 9%

in value terms in the next five years.

With initiatives taken by the Company to properly

educate and train the farmers, consumption of

agrochemicals is expected to increase. Training and

counseling are imparted to farmers to make them aware

of the latest technology of farming, judicious use of

pesticides & fertilizers so that they may get better yield

from their land.

RISKS & CONCERNS

Changes in regulations for the pesticide industry,

adverse crop conditions due to weather, lack of

innovation in the domestic pesticide industry, which

make players dependent on generics, threat from

biotech seeds, dependence of farmers on the mercy of

Lord Indra for their crops and uneven weather conditions

are some of the risks which are being faced by the agro

chemical industry in India.

An agrochemical Company has to comply with stricter

pollution laws to run the plant. The pesticides Company

has to ensure minimum waste generation and by-

products and its disposal has to ensure no negative

impact on environment. Apart from this, at the time of

introduction of any new molecule, the Company has to

undergo many rounds of field trials; process of data

generation is quite lengthy and cumbersome. Farmers

affordability, realization of dues from customers and

rising costs of inputs are other risks involved.

The Company has to take product liability insurance for

sale of all products. Imports of technicals and raw

materials face the risk of foreign exchange fluctuation.

INTERNAL CONTROL SYSTEMS

The Company has an adequate internal audit control

system commensurate with the size and nature of its

business. The management continuously reviews the

internal control system and procedures to ensure

orderly and efficient conduct of business, to safeguard

properties of the Company and compliance with policies

and statutes.

The Company has appointed Manoj Ritu and Associates,

Chartered Accountants for conducting the internal audit

or its various allied activities in order to monitor the

performance of the Company on a continuous basis and

to suggest not only remedial but improved measures for

operating the business. The Company adheres to its

written corporate policies with respect to all

transactions, financial reporting and budgeting. The

management regularly conducts Internal Audits through

Internal Audit Department to monitor small the

effectiveness of internal controls in the organization. The

Audit Committee of the Board reviews the significant

observations of the internal & statutory auditors on

financial and control concerns, which has further

strengthened the overall control on the business.

HUMAN RESOURCES

The Company has a team of well-qualified and dedicated

marketing, production, research and back office staff. As

the pesticides is a seasonal industry, the Company

employs qualified technical people called DHANUKA

DOCTORS during the season who alongwith the

marketing staff impart training to farmers about the safe

and judicious use of pesticides.

All employees of the Company are covered under various

schemes including the Group Insurance Scheme, the

premium on which is borne by the Company, to help the

family in case some mishappening occurs to the

employee. The Company also has various incentive

schemes for its marketing staff. Chairman's Trophy is

being awarded to the best branch and employee by the

Group Chairman every year. Besides, a Star Performer

award is given every month in every branch to the staff

who achieves highest sales volume with highest

collection during the month. In addition, Dhanuka

organizes a get together of employees including new

employees on auspicious occasions which creates a

congenial atmosphere in the organization and

constructs a strong bond among the employees of

Dhanuka.

CAUTIONARY STATEMENT

The projections made in this report may be a forward-

looking statement within the meaning of applicable

securities laws and regulations. Actual results may differ

from those expressed in this report due to the influence

of external and internal factors, out of the control of the

Company. The factors affecting the performance are

excess or very low rainfall, updation of technologies,

govt. policies and tariff rates, delay in registrations and

availability of spurious items in market.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT Cont.

16

REPORT ON CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement with the Bombay Stock Exchange Limited in India, compliance with the requirements of Corporate Governance Clause are set out hereinbelow:

COMPANY'S PHILOSOPHY ON CODE OF GOVERNANCE:

The fundamental concern of corporate governance is to ensure the conditions whereby a Company's Directors and Key Managerial Personnel act in the interests of the Company and its various stakeholders. Your company has always been guided by a strong conviction of adhering to transparency, accountability and integrity. Your Company strongly believes in maintaining a simple and transparent corporate structure driven solely by business needs. Shareholders' interests are utmost and the management is watchful for utilizing the funds of the Company in the most profitable avenues. Your Company believes that the management is the trustee of all investors' capital and is obligated to maximize stakeholders' value over the long term, while preserving the interests of all its stakeholders, such as employees, customers, business partners / vendors and the society at large. It is committed to high levels of ethics and integrity in all its business dealings that avoid all conflicts of interest. In order to conduct business with these principles, Dhanuka creates simple corporate structure based on business needs and maintains a high degree of transparency through regular disclosures and a focus on adequate control systems.

The Company's core philosophy on the code of Corporate Governance is to ensure:• Fair and transparent business practices;

• Compliance of applicable statute;

• Transparent and timely disclosure of financial and management information;

• Effective management control and monitoring of executive performance by the Board;

• Adequate representation of promoters, executive and independent directors on the Board.

Your Company continues to follow procedures and practices in conformity with the Code of Corporate Governance under Clause 49 of the Listing Agreement with the Bombay Stock Exchange (BSE). Following disclosures set out the approach of the Company towards Corporate Governance:

1. BOARD OF DIRECTORS:

Composition and category of Directors:The present Board of Directors ("Board") comprises ten Directors, represented by five executive Directors and five non-executive Directors. The Board has executive Chairman and the five Independent Directors comprise one-half of the Board.

The composition and the category of Directors, their attendance at the Board Meetings held during the year and at the last Annual General Meeting are given as under:

Sl.No.

Director CategoryNo. of Board

Meetings attendedduring 2009-10

Attendance atlast AGM

22.09.2009

1. 4 Present

2. 5 Present

3. 5

Absent4. 3

5. 5 Present

6. 5 Present

Shri Ram Gopal Agarwal (Chairman)

Shri Mahendra Kumar Dhanuka, Managing Director

Shri Arun Kumar Dhanuka

Shri Rahul Dhanuka

Shri Krishnakumar Baijnath Kejariwal

Shri Priya Brat

Executive (Promoter)Non- Independent




Executive Non- Independent

Non- Executive Independent

Present

7. 5 Absent

8. 3 Absent

9. 3 Present

10. 5 Present

Shri Vinod Jain

Shri Shrikrishna Khetan

Shri Indresh Narain

Shri Subhash Lakhotia





None of the Directors on the Board is a member on more than 10 Committees (Committees being Audit Committee, Remuneration Committee and Shareholders'/ Investors' Grievance Redressal Committee) and Chairman of more than 5 Committees across all the companies in which he is a Director. None of the Directors hold Directorships in more than 15 companies.

17

REPORT ON CORPORATE GOVERNANCE Cont.

Directorships:

The total number of directorships and memberships in

the committees (which includes Audit Committee,

Remuneration Committee and Share-holder's/ Investor's

Grievance Redressal Committee) held by the Directors as

on March 31st, 2010 are as under:

Sl.No.

1.

2.

4.

5.

6.

Committee Membership(including Chairmanship)

Committee Chairmanship

Shri Ram Gopal Agarwal 4

0

0

Shri Mahendra Kumar Dhanuka 5

1

0

Shri Rahul Dhanuka 6

0

0

Shri Krishnakumar Baijnath Kejariwal 2

0

0

Shri Priya Brat 4

8

3

Shri Vinod Jain 2

1

0

Shri Shrikrishna Khetan 3 2

0

Shri Indresh Narain 4 5

3

3. Shri Arun Kumar Dhanuka 4 0 0

Shri Subhash Lakhotia 2

2 0

Name of Director Directorship

7.

8.

9.

10.

Board Meetings held from 1st April, 2009 to 31st March, 2010:

During the year, 6 board meetings were held and the time gap between any of the two meetings was not more than four months. The dates on which the Board meetings were held are: 16th June 2009, 31st July 2009, 19th August, 2009, 30th October 2009 , 29th January 2010 and 31st March 2010 (the meeting on 31.03.2010 was adjourned to 14.04.2010 due to certain reasons).

The Company does not have any pecuniary relationship or transactions with Non-Executive Directors during the year. Only sitting fees amounting to Rs. 5000/- is paid to the non-executive Directors for attending Board/ Committee Meetings.

Re-appointment of Directors:

Brief resume of the Directors being reappointed, nature of their expertise in specific functional areas and name of Companies in which they hold directorship and the membership of the committees of the Board are furnished hereunder:

Shri Arun Kumar Dhanuka:

Shri Arun Kumar Dhanuka, son of late Sh. Govind Lal Dhanuka is a B. Com. Graduate from University of Delhi of 1978 batch. Immediately after completion of his graduation, he started to look after the business with Shri R. G. Agrawal. When Shri R. G. Agarwal, the founder of the Dhanuka Group took over the reins of M/s. Northern Minerals Pvt. Limited, a sick unit, in 1980, Shri Arun Kumar Dhanuka was also entrusted with the responsibility to run the unit under his leadership. Shri Arun Kumar Dhanuka, with his sincere efforts, innovative

skills and able leadership took the company to new heights of success.

Shri Arun Kumar Dhanuka is also a Director of M/s Dhanuka Laboratories Limited (established in the year 1993). The Company was engaged in the business of manufacturing Bulk Drugs used in formulation of human pharma products. Due to his capabilities, the Company was able to cross annual turnover of Rs. 125 Crores in the Financial Year 2008-09 itself. Due to his dedicated efforts, the Company has shown continuous progress. Under his guidance this Company has bagged customers like Cipla, Ranbaxy, Aurbindo FPC and many other famous Pharmaceutical Companies in India and also exports its products to many countries.

At present, Shri Arun Kumar Dhanuka supervises the working of two units of the Company, namely, Gurgaon and Udhampur units. He is also a Director in two other Private Companies namely M/s Growth Advertising and Marketing Pvt. Ltd. and M/s Duke Impex Pvt. Ltd. He is also the member of Banking Committee of the Board of your Company.

Shri Shrikrishna Khetan:

Shri ShriKrishna Khetan, Son of Sh. Jagannath Prasad Khetan aged 52 years is also the Director of M/s Asian Dynasties Grace Industries Limited and M/s Kanchanaburi Properties & Real Estate Development Private Limited. He has rich experience as an industrialist. He joined the Company's Board as an independent Director on May 23rd, 2007 and is also a member of the Audit Committee and Remuneration Committee of the Board.

18


Shri ShriKrishna Khetan has been running a concern "Om International" in Noida engaged in export of Handloom Products which was awarded certificate by "The Handloom Export Promotion Council" in the Years 1991-92, 1995-96, 1996-97, 2000-01 and allotted 'Three Stars' by the Directorate of Industries.

2. Code of Conduct:

The Board has laid down a code of conduct for all Board members and senior management of the Company. The code of conduct is available on the website of the Company.

3. Audit Committee:

Composition, name of the members and Chairman and attendance during the year:

In Compliance with Clause 49 of the Listing Agreement and Section 292A of the Companies Act, 1956, the Board has an Audit Committee comprising the Independent Directors. The composition of the Audit Committee and the details of meetings attended by the Directors are given herein below:

1. Shri Priya Brat, Chairman Independent Non-Executive 5

2. Shri Vinod Jain Independent Non-Executive 5

3. Shri Shrikrishna Khetan Independent Non-Executive 3

S.No. Name of the Director CategoryNo. of Meetings

Attended during 2009-10

The Statutory Auditors, Internal Auditors, Chief Financial Officer are invited to attend the Audit Committee meetings and Shri Mukesh Kumar, the Company Secretary acts as the Secretary of the Committee.

During the Financial year 2009-10, Five Audit Committee Meetings were held on 28th May 2009, 16th June 2009, 31st July 2009, 30th October 2009, 29th January 2010 and gap between two meetings did not exceed four months.

The Chairman of the Audit Committee, Shri Priya Brat was present at the last Annual General Meeting of the Company.

Terms of Reference:

The Audit Committee functions in accordance with Clause 49 of the Listing Agreement and Section 292A of the Companies Act, 1956. The terms of reference of the Audit Committee are as under:

• To oversee the Company's financial reporting process and disclosure of its financial information;

• To review the quarterly, half-yearly and annual financial statements before submitting to the Board of Directors.

• To recommend to the Board the appointment/ reappointment of Statutory Auditors and fixation of their fees;

• To review the performance of the Statutory and Internal Auditors and to discuss with them about internal control systems;

• To determine the scope of Audit including the observations of the Auditors;

• To ensure adequacy of the internal audit system, major accounting policies, practices and transactions, compliances with accounting

standards and listing agreements entered into with the stock exchange/s and other legal requirements concerning financial statements and related party transactions, if any;

• To review the Company's financial and risk management policies and discuss with the Internal Auditors any significant findings for follow-up thereon and reviewing the findings of any internal investigations, if any conducted by the Internal Auditor;

• To look into the reasons for substantial defaults, if any, in the payment to the depositors, shareholders (in case of non payment of declared dividends) and creditors.

• To approve the appointment of CFO and assessing the qualifications, experience & background, etc. of the candidate.

4. Remuneration Committee:

The Remuneration Committee considers and recommends to the Board the remuneration payable to the Executive Directors and their relatives, if any. Composition, name of the members and Chairman:

1. Shri Priya Brat, Independent Chairman (Non Executive)

2. Shri ShriKrishna Khetan, IndependentMember (Non Executive)

3. Shri Subhash Lakhotia, IndependentMember (Non Executive)

S. No. Name of Member

During the year 2009-10, Remuneration Committee Meeting was held on 31st July, 2009.

Category

19


Remuneration policy: (Terms of Reference)

The remuneration of the executive directors comprises fixed salary payable each month and commission payable to them as fixed percentage on net profits of the Company. The remuneration is determined on the basis of prevailing trend in the industry and the performance of the Company. The remuneration of the executive directors is periodically reviewed and suitable revision is recommended to the Board.

The executive directors are not paid any sitting fees for any Board/Committee meetings attended by them.

Details of remuneration to all the Directors:

The Remuneration paid to the executive Directors during the year 2009-10 is given hereunder:

Name of Director

Designation (Nature of Duties) Remuneration

(Rs. In Lacs)

Shri Ram Gopal Agarwal Chairman (Overall supervision of Company’s affairs) 96.08

Shri M K Dhanuka Managing Director (Overall supervision of Company’s affairs) 93.08

Shri Arun Kumar Dhanuka

Director (works) Supervision of production unit at Gurgaon, Haryana 62.21

Shri K B Kejariwal Director (Works) Supervision of production units at Sohna and Udhampur

62.28

Shri Rahul Dhanuka Director (Marketing) All India Marketing Head 61.08

The bifurcation of the remuneration per annum paid to the Whole Time Directors of the Company is as follows:

Name of

Director

Salary

(Rs.)

Medical

Allowance

(Rs.)

Perks

(Rs.)

Provident

Fund

(Rs.)

Commission

(Rs.)

Total

Remuneration

(Rs.in lacs)

Shri R.G.Agarwal

2100000 7500

Shri A.K.Dhanuka

1200000 7500

Shri M.K.Dhanuka

1800000

7500

Shri K.B.Kejariwal

1200000 7500

39600

32400

39600

39600

21600

21600

21600

21600

7439576

4959717

7439576

4959717

96.08

Shri Rahul Dhanuka 1080000 7500 39600 21600 4959717 61.08

62.21

93.08

62.28

1

2

3

4

5

The Company is not paying any remuneration to non- executive Directors except payment of sitting fees for attending Board/ Committee Meetings. The sitting fees paid to the Non-Executive Directors during the year 2009-10 is Rs. 5000/- per meeting without any variation. No payment is made to any of the Directors for attending meetings of Internal Committee.

The Company does not have any stock option plan or

performance linked incentive for the Executive Directors.

The appointments of Executive Director are made for a period of five years on the terms and conditions contained in the respective agreements approved by the shareholders in the General Meeting.

None of the Non-Executive Directors are holding any equity shares of the Company.

S. No. Name of Director CategoryNo. of meetings during the year

attended

1. Shri Indresh Narain, Chairman 2

2. Shri Subhash Lakhotia 3

3. Shri Mahendra Kumar Dhanuka 3

Independent (Non-Executive)

Independent (Non-Executive)

Non-Independent (Executive)

5. Shareholders/Investors' Grievance Redressal Committee:

Composition, brief terms of reference and details of the meetings attended by the Directors are as follows:

20


The Meetings of abovesaid Committee during the FY 2009-10 were held on 16th June, 2009, 30th October, 2009 and 29th January, 2010. The Shareholders/ Investors' Grievance Redressal Committee takes note of the minutes of Share Transfer/Transmission Sub-Committee. It also takes note of all the correspondence / complaints received from the shareholders like non-receipt of annual reports/ dividends, change in address, issuance of Duplicate Share Certificates etc. The Committee also oversees the performance of M/s Abhipra Capital Limited, the Registrar and Transfer agents of the Company and recommends measures for overall improvement in the quality of investor services. Name and designation of Compliance OfficerShri Mukesh Kumar, Company Secretary

Email address for Investor Grievances:[email protected]/ [email protected]. Number of Shareholders complaints received so far:During the Financial year 2009-10, the Company has received 55 correspondence and resolved all of them. All the complaints are resolved within 30 days of receipt and there is no complaint pending till 31.03.2010.

6. GENERAL BODY MEETINGS: The details of date, location and time of the last three Annual General Meetings, Extra-ordinary General meetings held and Special Resolutions passed are as under:

nd22

2007-08 10.30 AM

2006-07 11.00 AM

2006-07 10.00 AM

AGM No.Financial year

Date Venue TimeSpecialResolutions

rd24 2008-09 Shri PurushottamHindi Bhawan,11, Vishnu Digambar Marg(Rouse Avenue), New Delhi-110002

10.30 AM

2007-08 Shri PurushottamHindi Bhawan,11, Vishnu Digambar Marg(Rouse Avenue), New Delhi-110002

11.00 AM

Shri PurushottamHindi Bhawan,11, Vishnu Digambar Marg(Rouse Avenue), New Delhi-110002


rd23

EGM

EGM

2nd22 September, 2009

th4 September, 2008

th7 March, 2008

th26 September, 2007

th11 November, 2006


No special resolutions were passed

To authorize the Board for FPO under Section 81(1A) was passed

Appointment of Shri Mridul Dhanuka under Section 314 of the Companies Act, 1956.

Name change of the Company; Change in Clause I of MoA;Change in Clause I(a) of AoA;To commence the new business

1. To increase the remuneration of Shri Mridul Dhanuka, DGM (Technical) holding office of place of profit

2. To increase the remuneration of Shri Harsh Dhanuka, SGM (Seeds) holding office of place of profit.

21


During the year 2009-10, the following matters have been passed on 26th December, 2009 through Postal Ballot by way of passing of Special Resolutions:

1. Alteration in the Object Clause of the Memorandum of Association of the Company pursuant to Section 17, and other applicable provisions of the Companies Act, 1956 (the Act), by inserting a new sub-clause in the 'Other Objects' as detailed below:

37A To carry on the activity and / or business of power generation by undertaking projects/ installation of windmills, wind turbine generators, solar energy generators or any other power generation systems using resources - natural or otherwise; distribution, transmission, sale, purchase, barter and / or deal in power / electricity; and to purchase, acquire, lease, hire or procure in any manner whatsoever land, plant & machinery, equipments, transmission systems, sub-stations or the like to undertake any of the above activities and/ or to associate with other parties for carrying on the above business and/ or to raise loan/ borrow money in respect of abovesaid activities .

2. To carry on the business activity of Wind Mill

Power Project under Section 149(2A).

The following resolutions were passed on 11th June, 2010 by way of Postal Ballot through Ordinary/ Special Resolution:

Special Resolutions:

1. To issue, offer and allot further Equity Share Capital upto the value of Rs.100 crores (Rupees One Hundred crores) (with/without premium as may be decided by the Board of Directors) through Follow-on Public offer, to any person, whether a member of Company or not in accordance with the provisions of Section 81(1A) of the Companies Act, 1956;

2. To Sub divide the equity shares of nominal value of Rs.10/- each of the Company into 5 (Five) Equity Shares of nominal value of Rs.2/-each commonly known as "Stock Split" and make further consequential alterations in the existing Clause V being Capital Clause of the Memorandum of Association and Article 3 of the Articles of Association of the Company.

Ordinary Reolutions:

1. To borrow moneys (apart from temporary loans obtained from Bankers/Financial Institution of

the Company in ordinary course of business) in excess of the aggregate paid-up capital and its free reserves, upto an amount not exceeding Rs. 200 crores (Rupees Two Hundred crores) under Section 293(1)(d) of the Companies Act 1956; and

2. To create charge on assets including all or any moveable and/or immovable property of the Company in favour of Bankers/Financial Institution for borrowing money(s) under Section 293(1)(a) of the Companies Act, 1956.

7. Disclosures:

a.) Disclosures on materially significant related party transactions that may have potential conflict with the interest of the Company at large:

The disclosures with regard to transactions with related parties are given in the Notes to the Accounts of the audited financial statements for the financial year ended 31st March 2010. These transactions are not in conflict with the interests of the Company.

b.) Details of non-compliance by the Company, penalties and strictures imposed on the Company by the Stock Exchanges or Securities and Exchange Board of India (SEBI) or any other statutory authority on any matter related to the Capital Markets during the last three years:

Dhanuka suo moto filed an application for compounding the non-compliance of Regulation 6(2) for the year 1998 and 8(3) for the year 2006, under SEBI (Substantial Acquisition of Shares & Takeovers) Regulations. SEBI has compounded the abovesaid default vide its order dated 3rd Feb, 2010. The Company has been strictly adhering to the applicable Rules and Regulations made by SEBI.

The shareholding of promoter and promoter group after the merger of Northern Minerals Limited into Dhanuka Agritech Limited, reached 89.91 % which is more than the minimum prescribed limit under Clause 40 A of the Listing Agreement. The Company is taking suitable measures to dilute the abovesaid shareholding.

No other penalties or strictures were imposed

22


on the Company by the BSE or SEBI or any statutory authority, on any matter related to the capital markets during last three years.

c.) Disclosure of Accounting Treatment:In the preparation of financial statements, the Company has followed the accounting standards issued by the Institute of Chartered Accountants of India. The significant accounting policies, which are consistently applied, have been set out in the Notes to the Accounts of the audited financial statements for the financial year ended March 31, 2010.

d.) Whistle Blower policy:

Though the Company does not have Whistle Blower policy, no person is denied access to the top management, Board of Directors and their different Committees.

e) CEO / CFO Certification:The CEO / CFO certification on the financial statements and internal controls is separately annexed to the Corporate Governance Report.

f) Details of compliance with mandatory requirements and adoption of the non mandatory requirements of this clause:

The Company has complied with all the mandatory requirements of the Clause 49 of the Listing Agreement. Remuneration Committee requirements have been adopted from non mandatory provisions.

8. Means of communication:

a) The quarterly financial results of the Company are approved and taken on record by the Board of Directors of the Company within 45 days/60 days from the end of quarter. The approved results are also published within 48 hours in one English language and one Hindi Language newspaper having wide circulation. The results are displayed on the Company's website, www.dhanuka.com.

b) The Company publishes the audited annual results within the stipulated period of three months (now 60 days) from the close of the Financial Year as required by the Listing Agreement and hence the unaudited results of the last quarter of the Financial Year ended 31st March, 2010 are not published. The audited annual results are displayed on the Company's website, www.dhanuka.com.

c) The Quarterly Unaudited Financial Results as well as Annual Audited Financial Results are also communicated to the BSE where the Company's Shares are listed.

d) Management Discussion and Analysis (MDA) Report: The report on MDA forms part of the Annual Report.

10.General Shareholder Information

a) No. of Annual General Meeting : 25th Annual General Meeting

Date : 4th August, 2010

Time : 10.30 A.M.

Venue : Shri Purushottam Hindi Bhawan, 11, Vishnu Digamber Marg (Rouse Avenue), New Delhi - 110002

b) Financial Calendar : 1st April to 31st March.

c) Date of Book Closure : 29th July 2010 to 4th August 2010

d) Dividend Payment Date : Within 30 days from the date of AGM

e) Listing on Stock Exchanges:Name and Address of the Stock Exchange : Bombay Stock Exchange Limited, Phiroze Jeejeebhoy Towers,

Dalal street, Mumbai-400 001.

Scrip Code: : 507717

The listing fees for the year 2010-11, amounting to Rs. 15000 have been paid to the above stock exchange.

23


f) Market Price Data: High, low, Number and value of shares traded during each month in the last Financial Year:

Months High Price Low Price Close PriceNo. of Shares

No. of Trades

Total Turnover (Rs.)

April 2009

May 2009

June 2009

July 2009

August 2009

September 2009

October 2009

November 2009

December 2009

January 2010

February 2010

March 2010

160.00

187.70

210.00

206.90

194.90

187.90

206.00

201.90

254.90

267.00

278.00

274.95

140.00

131.20

154.75

165.25

167.50

168.10

161.05

175.25

190.10

217.00

222.35

235.00

150.50

162.90

187.60

186.80

176.95

182.85

185.10

192.00

232.75

227.30

257.10

256.90

22,734

8,504

56,715

11,653

5,883

19,540

32,959

25,798

1,20,978

2,16,487

5,06,094

4,98,618

290

197

637

251

173

306

639

412

1,397

2,492

2,290

2,002

34,81,233.00

13,46,806.00

1,09,36,009.00

21,34,840.00

10,54,101.00

34,36,838.00

65,20,706.00

49,32,473.00

2,74,35,383.00

5,12,57,552.00

12,62,02,534.00

12,74,05,482.00

24


SHAREHOLDERS' INFORMATION

REGISTERED OFFICE

: "Dhanuka House", 861-862, Joshi Road, Karol Bagh, New Delhi-110005Ph. Nos. (011)30511500/83/64 Fax No. (011) 23518981e-mail [email protected] www.dhanuka.com

WORKS

: Village Atta, Sohna Mandkola Road, Sohna,Distt. Mewat - 122103 (Haryana)e-mail [email protected]

: Daulatabad Road,Gurgaon - 122001 (Haryana)Ph.(Nos. 95124) 2469138-139-140Fax No. (0124) 2469144e-mail [email protected]

: D/1/A-D/1/B, Ajanta Indl.Estate, Near Sarika Paints,Viramgaon Road, at Vasna lyava, Sanand, Dist. Ahmedabad-382170(Gujarat)Ph. Nos. (02717) 284567/68Fax Nos. (02717) 284567Email ID : [email protected]

: Plot No.1, IID Centre,SICOP Industrial Estate,Battal Balian, Udhampur (J&K)Ph. Nos. (01992) 250156/57Fax No. (01992) 250156Email ID: [email protected]

SALES OFFICES/GODOWNS :Ahmedabad, Akola, Bangalore, Cuttack, Ghaziabad, Guntur, Hissar, Hyderabad, Indore, Jaipur, Jabalpur, Kichha, Kolkata, Kurnool, Lucknow, Ludhiana, Nellore, Patna, Pune, Ranchi, Rai, Raipur, Ravulapalem, Salem, Sriganganagar, Thrissur and Vijaywada.

REGISTRAR AND TRANSFER AGENTS

M/s Abhipra Capital LimitedGround Floor, Abhipra Complex,Dilkhush Industrial Area,A-387,G.T.Karnal Road,Azadpur, Delhi-110033Phone Nos.: 011-42390909Fax No. : +91 11 27215530Website: www.abhipra.comE-mail: [email protected], [email protected]

SHARE TRANSFER SYSTEM:

Abhipra Capital Limited are the Registrar and Share Transfer Agent (RTA) of the Company and they carry out the process of share transfer in physical form and also dematerialization of the shares of the Company. Shares received by the Company in physical form for transfers are registered and sent to the RTA, who carries out the transfer on fortnightly basis. The duly transferred shares are then sent by RTA to the company. A meeting of the Share Transfer/ Transmission Sub Committee is then held to approve the transfers as transferred by the RTA. The shares are then sent to the RTA for onward dispatch to the shareholders after proper endorsement and signature. Sometimes, the shares are directly sent to the RTA by some shareholders for which same procedure, as described above, is followed. Share Transfer/ Transmission Sub Committee reports the status of transfers/ transmissions to the Shareholders'/Investors' Grievance Redressal Committee on quarterly basis.

Shares are also received by the RTA for dematerialization through the depository participants of the shareholders. Such shares are dematerialized by RTA within prescribed time and a Demat Statement is sent every month to the Company.

INVESTORS' CORRESPONDENCE:

All enquiries relating to share transfer/transmission, change of address, loss of share Certificate etc., should be addressed to:

THE REGISTRAR AND TRANSFER AGENTS

M/s Abhipra Capital LimitedGround Floor, Abhipra Complex,Dilkhush Industrial Area,A-387,G.T.Karnal Road,Azadpur, Delhi-110033Phone Nos.: 011-42390909Fax No. : +91 11 27215530Website: www.abhipra.comE-mail: [email protected], [email protected]

The queries relating to non receipt of dividend and in respect of Annual Reports etc, should be addressed to the Company Secretary at the Registered Office of the Company situated at:

Dhanuka Agritech Ltd."Dhanuka House",861-862, Joshi Road,Karol Bagh, New Delhi-110005E-ma i l : i nves to rg r i evance@dhanuka . com/ [email protected]

25


CLASS OF INVESTORS No. OF SHARES HELD %AGE TO PAID-UP CAPITAL

Promoters & Associates

Non -Resident Indians

Corporate Bodies

Indian Public

8252435

30408

265189

630868

89.91%

0.33%

2.89%

6.87%

TOTAL 9178900 100.00

stDISTRIBUTION OF SHAREHOLDING AS ON 31 March, 2010

RANGE SHAREHOLDERS VALUE

NUMBERS %AGE RS. %AGE

Upto 2,500 80.26

2,501 - 5,000 12.28

5,001 - 10,000 3.22

10,001 - 20,000 1.37

20,001 - 30,000 0.41

30,001 - 40,000 0.17

40,001 - 50,000 0.34

50,001 1,00,000 0.27

1,00,001 & Above 1.68

TOTAL

2346

359

94

40

12

5

10

8

49

2923 100.00

2262930

1404880

723810

613040

301680

186000

459520

559530

85277610

91789000

2.47

1.53

0.79

0.67

0.33

0.20

0.50

0.61

92.90

100.00

SHAREHOLDERS INITIATIVE:

The Shareholder is treated like customer in Dhanuka.

The Company continues to improve the quality of information by increasing the transparency and investor friendly approach in its Annual Report. The sensitive information is made public as soon as possible so as to avoid any insider trading. Queries and grievances are addressed with utmost urgency and promptitude.

-

-

DEMATERIALIZATION OF SHARES AND LIQUIDITY:

As on 31st March, 2010, 2335917 equity shares of the Company were held in dematerialized form. The equity shares of the Company are actively traded on The Bombay Stock Exchange Limited in Demat form only. All the requests for nomination, change of address, change of bank mandate/bank particulars and rematerialisation of shares etc are to be made only to the Depository Participant with whom the shareholders have opened their Demat Account.

stSHAREHOLDING PATTERN OF THE COMPANY AS ON 31 March, 2010

26

27

CEO AND CFO CERTIFICATE

Dear Members,

We, M.K.Dhanu

ka, Managing Director and V.K.Bansal, Chief Financial Officer of Dhanuka Agritech Limited, to the best of our knowledge and belief hereby certify that:

a) We have reviewed financial statements and the cash flow statement for the Financial year ended March, 31, 2010 and that to the best of our knowledge and belief:

i) These statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading;

ii) These statements together present a true and fair view of the Company's affairs and are in compliance with existing accounting standards, applicable laws and regulations.

b) There are, to the best of our knowledge and belief, no transactions entered into by the Company during the year which are fraudulent, illegal or violative of the Company's code of conduct.

c) We accept responsibility for establishing and maintaining internal controls for financial reporting and that we have evaluated the effectiveness of internal control systems of the company pertaining to financial reporting and we have disclosed to the Auditors and the Audit Committee, deficiencies in the design or operation of such internal controls, if any, of which we are aware and the steps we have taken or propose to take to rectify these deficiencies.

d) We have indicated to the Auditors and the Audit Committee that there are no:

i) Significant changes in internal control over financial reporting during the year;

ii) Significant changes in accounting policies during the year and that the same have been disclosed in the notes to the financial statements; and

iii) Instances of significant fraud of which we have become aware and the involvement therein, if any, of the management or an employee having significant role in the company's internal control system over financial reporting.

For Dhanuka Agritech Limited

M.K. Dhanuka V.K. BANSAL Managing Director Chief Financial Officer

Place: New DelhiDate : 29.05.2010

Sd/- Sd/-

28

To,

The Members

We have examined the compliance of conditions of Corporate Governance by Dhanuka Agritech

Limited, for the year ended 31st March, 2010, as stipulated in Clause 49 of the Listing Agreement of

the said Company with Stock Exchanges.

The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination has been limited to a review of the procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of the Corporate Governance as stipulated in the said Clause.

In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in Clause 49 of the above mentioned Listing Agreement.

For Dinesh Mehta & Co.

Chartered Accountants

Deepak Malhotra

Partner

Membership No. 502386

Place : New Delhi

Dated : 29.05.2010

Sd/-

CEO/AUDITORS' CERTIFICATE UNDER CLAUSE 49

DECLARATION BY THE MANAGING DIRECTOR UNDER CLAUSE 49 OF THE LISTING AGREEMENT

Dear Members,

I, M.K.Dhanuka, Managing Director of M/s Dhanuka Agritech Limited hereby declare that all the members of the Board of Directors and Managerial Personnel (Manager and above) have affirmed compliance with

stthe Code of Conduct, as applicable to them, for the year ended 31 March, 2010.

For DHANUKA AGRITECH LIMITED

M.K. DhanukaManaging Director

Place: New DelhiDate : 29.05.2010

Sd/-

CEO CERTIFICATE

AUDITORS' CERTIFICATE

AUDITORS' REPORT

29

business.

(c) The company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

3. (a) The company has granted unsecured loan to one company covered in the register maintained under section 301 of the Act and the balance outstanding as at the year end was Rs 1,53,987/- (Maximum balance outstanding during the year was Rs 5.60 crs)

(b) In our opinion, the rate of interest and other terms and conditions of unsecured loans given by the Company are not, prima facie prejudicial to the interest of the company.

(c &d) There is no overdue amount of the principal repayable at the year end.

(e) According to the information and explanations given to us, the unsecured loan taken by the Company from Companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956 is by way of:

(i) Inter Corporate Deposits taken from 10 companies covered in the register maintained under section 301 of the Act and the balance outstanding as at the year end was Rs 8.13 Crs (Maximum balance outstanding during the year was Rs. 9.27 Crs).

(ii) Fixed deposit taken from 18 persons and the balance outstanding as at the year end was Rs.9.83 lacs (Maximum balance outstanding during the year was Rs 25.61 lacs).

(f) In our opinion, the rate of interest and other terms and conditions of unsecured loans taken by the Company are not, prima facie prejudicial to the interest of the company.

(g) There is no overdue amount of the principal repayable at the year end.

4. In our opinion and according to the information and explanation given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal controls.

5. (a) According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

Dear Members,

We have audited the attached Balance Sheet of stDhanuka Agritech Limited as at 31 March, 2010 and

also the Profit and Loss Account for the year ended on that date and the Cash Flow Statement for the year ended on that date; both annexed thereto. These financial statements are the responsibility of the Company's Management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

As required by the Companies (Auditor's Report) Order 2003 (the Order) issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956, and in terms of information and explanations given to us and also on the basis of such checks as we considered appropriate, we state that :-

1. (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

(b) The fixed assets were physically verified by the management at reasonable interval, no material discrepancies were noticed on such verification.

(c) No substantial part of the fixed assets have been disposed off during the year affecting the going concern status of the Company.

2. (a) The inventory of the company (including stocks with third parties) has been physically verified by the management during the year according to a phased programmed normally so designed that each material item is physically verified at least once in a year and at more frequent intervals in appropriate cases. In respect of inventory lying with the third parties, these have substantially been confirmed by them. In our opinion the frequency of verification is reasonable.

(b) In our opinion and according to the information and explanation given to us, the procedures of physical verification of inventories followed by management are reasonable and adequate in relation to size of the company and nature of its

30

AUDITORS' REPORT Cont.

b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered into register maintained under Section 301 of the Act have been made at prices which are generally reasonable considering the strategic relationship and having regard to the prevailing market prices at the relevant time.

6. In our opinion and according to the information and explanations given to us, during the year the Company has not accepted any new deposits from the public within the purview of Sections 58A, 58AA or any other relevant provisions of the Act read with the Companies (Acceptance of Deposits) Rules, 1975. The deposits unpaid as at the year end are those deposits which got transferred from Northern Minerals Limited (the transferee Company) due to merger and have not become due for payment. As per the information and explanations given to us, no order under aforesaid Sections has been passed by the Company Law Board or National Company Law Tribunal or the Reserve Bank of India or any court or any other Tribunal in this respect on the Company.

7. As per the information and explanations given to us by the management, the Company has appointed M/s Manoj Ritu & Associates, Chartered Accountants to review internal controls procedures together with the internal checks during the year which can be considered as an internal audit commensurate with the size and nature of its business.

8. The company, in our opinion and according to the information and explanations given to us, has made and maintained accounts and records pursuant to the rules made by the Central Government for maintenance of cost records under Section 209(1)(d) of the Companies Act, 1956, in respect of pesticides. We have, however not made a detailed examination of such records with a view to ascertain whether these are complete and accurate.

9.(a) According to the records of the company, undisputed statutory dues including provident fund, investor education and protection fund, employees' state insurance, income-tax, wealth-tax, sales tax, customs duty, excise duty, cess and other material statutory dues applicable to it have generally been regularly deposited with the appropriate authorities.

b) There are no material outstanding undisputed statutory dues as at the last day of the financial year ended on 31-03-2010 for a period of more than six months from the date they become payable.

c). According to the information and explanation given to us, the following dues of Income Tax, sales Tax , Excise Duty and Cess have not been deposited on account of some dispute :

10. There are no accumulated losses of the Company. The company has neither incurred cash losses during the financial year covered by our audit nor in the immediately preceding financial year.

11. According to the information and explanations given to us, the company has not defaulted in the repayment of dues to the Banks. Further, there are no debenture holders.

12. According to the information and explanations given to us, the company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The company is not a chit fund or a nidhi / mutual benefit fund/ society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor's Report) Order, 2003 (hereinafter referred to as the said Order) are not applicable to the company.

14. The company is not dealing in or trading in shares, securities, debentures and other

Name of the Statute

Authority where dispute pending

Amount Involved (Rs. In Lacs) /Nature of Dues

Central Excise Act 1944.

Income Tax Act 1961

Central Sales Tax Act, 1956

Custom Excise & Service Tax Appellate Tribunal, New Delhi


Commissioner of Income Tax(Appeals)

Dy. Commissioner, Officer, Bhopal

9.41(Year 1996)(Excise Duty

Related To Fire)

46.51(Year 2001-02-03)(Excise Duty onReturned Goods)


Commissioner of Income Tax(Appeals)

48.21(Year 1999-2000)(Excise Duty onReturned Goods)

6.93(Year 2005-2006)

8.93(Year 2006-2007)

1.88( 2000-2001)Year

0.75( 2002-2003)Year

5.44( 2007-2008)Year

Commissionerof Income Tax (Appeals)

31

AUDITORS' REPORT Cont.

investments. Accordingly, the provisions of clause 4(xiv) of the said Order are not applicable to the company.

15. According to the information and explanations given to us, the company has not given any guarantees for loans taken by others from banks or financial institutions.

16. In our opinion, and according to the information and explanations given to us on an overall basis, the term loans taken by the company have been applied for the purpose for which they were obtained.

17. According to the information and explanations given to us and on an overall examination of the balance sheet of the company in our opinion the funds raised on short-term basis have not been used for long-term investments and vice-versa.

18. The company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the question of reporting on whether the price at which such shares have been issued is prejudicial to the interest of the company does not arise.

19. The company has not issued any debentures. Accordingly, the question of creating a security for debentures does not arise.

20. The company has not raised any money by public issues during the year. Accordingly, the question of disclosure of end use of such monies does not arise.

21. According to the information and explanations given to us, some employees of the company has allegedly done some unauthorized foreign exchange transactions with the bank and the same was reported with the law enforcing agencies for investigation and initiating appropriate action under the law. The company has terminated services of two employees and suspended one employee, while pending completion of enquiry. Refer note no. 11 of Notes to Accounts.

Further to the above, we report that:

a) we have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit;

b) in our opinion, proper books of account as required by the Companies Act, 1956 (as amended) have been kept by the Company so far as appears from our examination of these books;

c) The Balance Sheet, the Profit & Loss Account and the Cash Flow Statement referred to in this report are in agreement with the books of account.

d) in our opinion, the Balance Sheet, the Profit & Loss Account and the Cash Flow Statement referred to in this report complied with the Accounting Standards as referred to in Section 211(3C) of the Companies Act, 1956;

e) on the basis of written representations received from the directors and taken on record by the Board of Directors, we report that none of the directors of the company is disqualified from being appointed as director under clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956; and

f) in our opinion and to the best of our information and according to the explanations given to us, the said Accounts, read with other notes thereon, given in the schedule 'T' forming part of the accounts, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view:

i) in the case of Balance sheet, of the state of affairs of the Company as at 31st March, 2010;

ii) in the case of Profit & Loss Account, of the profit of the Company for the year ended on that date; and

iii) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

For Dinesh Mehta & Co.Chartered Accountants

Firm Registration No.-000220-N

Sd/-Deepak Malhotra

PartnerMembership No.502386

Place: New Delhi

Date : 29.05.2010

Particulars Schedule As at

31.03.09

Shareholders' Fund

Share Capital A 91,789,000

Reserves & Surplus B 590,987,207

Loan Funds

Secured Loans C 247,989,576

Unsecured Loans D 267,448,376

Deferred Tax Liabilities 4,285,752

1,202,499,911

Fixed Assets E

Gross Block 430,130,494

Depreciation 186,250,383

Net Block 243,880,111

Capital Work in Progress 5,651,259

249,531,370

F 4,000

Inventories G 936,017,229

Sundry Debtors H 746,809,911

Cash & Bank Balances I 33,771,484

Loans & Advances J 413,770,839

2,130,369,463

Current Liabilities K 835,982,545

Provisions L 341,635,847

Net Current Assets 952,751,071

M 213,470

(To the extent not written off or adjusted) 1,202,499,911

T

The Schedules referred to herein form

an integral part of the Balance Sheet.

As at

31.03.10

SOURCES OF FUNDS

91,789,000

879,438,636

269,049,215

307,980,556

16,515,640

1,564,773,047

APPLICATION OF FUNDS

590,025,412

207,741,987

382,283,425

4,086,332

386,369,757

Investments 104,000

Current Assets, Loans & Advances

1,113,028,823

955,821,134

20,327,217

483,997,671

2,573,174,845 Less: Current Liabilities & Provisions

988,277,637

406,704,654

1,178,192,554

Miscellaneous Expenditure 106,736

1,564,773,047

NOTES ON ACCOUNTS -

32

BALANCE SHEET

BALANCE SHEET AS AT 31ST MARCH, 2010 Amount (In Rs.)

As per our report of even date attached

For DINESH MEHTA & CO. For and on behalf of the Board of Directors

Chartered AccountantsFirm Registration No:000220-N

DEEPAK MALHOTRA MUKESH KUMAR M.K. DHANUKA R.G.AGARWAL Partner Company Secretary Managing Director DirectorMembership No : 502386Place : New DelhiDated : 29th May,2010.

Sd/- Sd/- Sd/-Sd/-

PROFIT & LOSS ACCOUNT

33

PROFIT & LOSS A/C FOR THE YEAR ENDED 31ST MARCH, 2010

Particulars Schedule For the year

ended 31.03.09

Audited

Sales 3,808,744,296

Increase/(Decrease) in Stocks N 96,217,708

Govt. Subsidy Received -

Job Work Receipts 2,012,530

Interest Received 5,412,018

TDS Rs.2,92,303/- (Previous Year Rs.4,74,192/-)

Miscellaneous Receipts 398,630

Profit/(Loss) on sale of Fixed Assets 78,805

3,912,863,987

Purchases (Finished) 159,384,730

Raw Material Consumed O 1,872,844,772

Manufacturing Expenses P 412,103,758

Interest & Finance Charges Q 102,791,053

Administrative Expenses R 324,364,313

Marketing & Selling Expenses S 215,672,851

Excise Duty & Education Cess 442,447,323

Depreciation 27,087,099

Deffered Revenue Expenses Written off 106,734

3,556,802,634

356,061,353

Add: (Short) / Excess Provision for Income Tax of earlier year (471,965)

Add: Liabilities no longer required written back 133,725

355,723,113

Less: Provision for Current Tax 117,095,806

Less: Provision for Fringe Benefit Tax 6,629,150

Add: Deferred Tax Assets/(Liabilities) 7,935

232,006,092

Balance Brought Forward from Last Year 369,232,009

Amount Available for Appropriations 601,238,101

Transfer to General Reserve 23,200,609

Proposed Dividend 55,073,400

Tax on Dividend 9,359,724

Surplus carried to Balance sheet 513,604,367

601,238,101

Basic and Diluted Earnings per share Rs.(Refere note

no 7 in schedule 'T') 25.28

Face Value of Equity share Rs. 10.00

T

The schedules reffered to herein form an integral part

of the Profit & Loss A/c

For the year

ended 31.03.10

INCOME Audited

4,455,490,782

96,164,224

6,095,050

-

2,207,114

3,201,602

445,912

4,563,604,684

EXPENDITURE

180,781,732

2,278,477,190

495,880,273

67,760,512

357,152,851

282,172,437

380,224,138

31,077,053

106,734

4,073,632,920

Profit Before Tax 489,971,764

227,923

-

490,199,687

114,594,567

-

(12,229,888)

Profit After Tax 363,375,232

513,604,368

876,979,600

APPROPRIATIONS

36,337,523

64,252,300

10,671,504

765,718,273

876,979,600

39.59

10.00

NOTES ON ACCOUNTS

Amount (In Rs.)

As per our report of even date attached

For DINESH MEHTA & CO. For and on behalf of the Board of Directors

Chartered AccountantsFirm Registration No:000220-N

DEEPAK MALHOTRA MUKESH KUMAR M.K. DHANUKA R.G.AGARWAL Partner Company Secretary Managing Director DirectorMembership No : 502386Place : New DelhiDated : 29th May,2010.

Sd/- Sd/- Sd/-Sd/-

34

SCHEDULES - FORMING PART TO THE BALANCE SHEET

Amount (In Rs.)

Particulars As at

31.03.09

Authorised: 1,40,00,000 Equity Shares of Rs. 10/- each 140,000,000

( Previous year 1,40,00,000 Equity Shares of Rs.10/- each)

Issued, Subscribed & Paid-up:

91,78,900 Equity Share of Rs.10/- each fully paid up 91,789,000

for cash at par.

( Previous year 91,78,900 Equity Shares of Rs.10/- each

fully paid up) 91,789,000

(A) Capital Reserve :

i. As per last Balance Sheet 851,528

ii. Addition During the year 1,138,996

1,990,524

(B) General Reserve :

i. As per last Balance Sheet 51,939,737

ii. Transfer from Profit & Loss Account 23,200,609

75,140,346

( C ) Profit & Loss Account

i. Investment Allowance (Utilised) Reserve 251,970

ii. Transfer from Profit & Loss Account 513,604,367

513,856,337

590,987,207

As at

31.03.10

SCHEDULE 'A'

SHARE CAPITAL

140,000,000

91,789,000

91,789,000

SCHEDULE 'B'

RESERVES & SURPLUS

1,990,524

-

1,990,524

75,140,346

36,337,523

111,477,869

251,970

765,718,273

765,970,243

879,438,636

35

SCHEDULES - FORMING PART TO THE BALANCE SHEET Cont.

Amount (In Rs.)

Particulars As at31.03.09

Loans & advances from Banks

1. Working Capital Loans

A. Hongkong & Shanghai Banking Corporation Ltd.i) Cash Credit 22,219,373

B. State Bank of Patialai) Cash Credit - New Delhi 944,162 ii) Cash Credit - Udhampur -

C. CITI Banki) Cash Credit 1,121,996

D. HDFC Bank Ltd.i) Cash Credit 8,466,319 ii) Demand Loan 86,900,000

E. IndusInd Bank Ltd.i) Cash Credit (7,366,937)ii) Demand Loan 60,000,000

F. Standard chartered Bank i) Cash Credit (3,844)

G. Axis Bank Ltd.i) Cash Credit -

H. ICICI Bank Ltd.i) Demand Loan -

2. Overdraft against pledge of FDRsi) The Kalupur Commercial Co-op. Bank Ltd. 165,039

3. Buyers' Credit availed from Banks 73,695,482

4. Term Loan (Vehicle Purchase) 1,847,987

5. Term Loan from HDFC Bank -

247,989,576

Notes:1. Working Capital loans are secured by hypothecation of stocks of raw materials, goods in process, finished goods, stores, book

debts and other movable assets on pari-passu basis and by joint and several guarantees of the directors of the company and also by way of first charges over immovable properties of the company; as collateral security.

a) From Body Corporates 254,918,344 b) Fixed Deposits 12,530,032

267,448,376

As at31.03.10

SCHEDULE 'C'SECURED LOANS

24,081

520,086 592,442

-

(19,489,442) 170,000,000

21,961 -

-

(1,775)

50,000,000

376,750

-

869,387

66,135,725

269,049,215

SCHEDULE 'D'

UNSECURED LOANS

305,169,893 2,810,663

307,980,556

36


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174,

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493

186,

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37


Amount (In Rs.)

Particulars As at

31.03.09

Unquoted Shares

i. 40 Eq.Shares of Rs.100 each of 4,000

M/s Maha Shakti Association ,Ahmedabad

ii. UTI- Treasury Advantage Fund - Mutual Fund -

4,000

CURRENT ASSETS, LOANS & ADVANCES

(As taken, valued and certified by the management)

i) Raw Material incl. Transit 394,123,988

ii) Packing Material incl.Transit 78,353,300

iii) Finished Goods incl. Transit 425,480,271

iv) Finished Goods Unpacked 27,704,386

v) DEPB Licence in stock 9,477,456

vi) Stores & Spares etc. 877,828

936,017,229

(Unsecured and considered good)

i) Debts outstanding for a period exceeding six months 22,546,811

ii) Other Debts 724,263,100

746,809,911

Cash & Bank Balances:

i) Cash in hand 1,694,592

ii) DD/Cheques in hand 14,831,011

iii) Balance with Scheduled Banks:

a) In Current Accounts 4,173,663

b) In Equity Dividend Accounts 1,372,242

iv) Fixed deposits with scheduled banks

a) Indusind Bank Ltd. 5,114,000

b) Kalupur Commercial Co-op Bank Ltd. 500,000

c) State Bank of Patiala 5,521,000

d) Interest Accrued but not due on FDR's (Receivable) 564,977

33,771,484

As at

31.03.10

SCHEDULE 'F'

Investments:

4,000

100,000

104,000

SCHEDULE 'G'

Inventories:

461,179,657

82,886,276

531,852,157

17,496,724

19,034,244

579,765

1,113,028,823

SCHEDULE 'H'

Sundry Debtors

9,567,066

946,254,068

955,821,134

SCHEDULE 'I'

1,615,895

13,154,804

2,924,095

1,839,394

-

500,000

22,411

270,618

20,327,217

38


Amount (In Rs.)

Particulars As at

31.03.09

(Unsecured and considered good unless stated otherwise)

i) Advance recoverable in cash or in kind or

for value to be received 144,707,725

ii) Security Deposits 5,272,961

iii) Advance Payment of Income Tax & Wealth Tax 250,872,554

iv) Advance Payment of Fringe Benefit Tax 12,917,599

413,770,839

i) Sundry Creditors 377,665,439

ii) Deposit from Customers 79,839,653

iii) Advance from Customers 69,536,613

iv) Other Liabilities 307,578,652

vi) Unclaimed Dividend 1,362,188

835,982,545

i) Provision for Income Tax 261,424,370

ii) Provision for Wealth Tax 495,414

iii) Provision for Fringe Benefit Tax 15,282,938

iv) Proposed Dividend 55,073,400

v) Tax on Proposed Dividend 9,359,724

341,635,847

(To the extent not written off)

Deferred Revenue Expenses 213,470

213,470

As at

31.03.10

SCHEDULE 'J'

Loans & Advances:

150,738,406

7,014,821

315,453,924

10,790,520

483,997,671

CURRENT LIABILITIES & PROVISIONS

SCHEDULE 'K'

Current Liabilities:

409,274,054

89,104,448

79,376,318

408,693,259

1,829,558

988,277,637

SCHEDULE 'L'

Provisions:

319,972,470

386,515

11,421,865

64,252,300

10,671,504

406,704,654

SCHEDULE 'M'

MISCELLANEOUS EXPENDITURE

106,736

106,736

39

SCHEDULES - FORMING PART TO THE PROFIT & LOSS ACCOUNT

Particulars As at

31.03.09

Finished Goods incl. Transit 330,788,911

Unpacked Finished Goods 26,178,039

356,966,950

Finished Goods incl. Transit 425,480,271

Unpacked Finished Goods 27,704,386

453,184,657

96,217,708

Opening Stock 283,736,215

Add: Purchases 1,983,232,546

2,266,968,761

Less: Closing stock 394,123,988

Raw Material Consumed 1,872,844,772

Wages, Bonus & Allowances 44,993,391

Contribution to PF & ESI etc. 4,749,469

Power, Fuel, Electricity & Water Charges 11,992,775

Packing Material Consumed 326,843,048

Consumable Stores 2,052,211

Manufacturing Exp (Seeds) 5,859,913

Repairs & Maintenance (Factory) 8,527,213

Security Charges 1,566,859

Laboratory Expenses 2,107,558

ISI Marking Fees 1,672,797

R&D Expenses 1,738,525

412,103,758

Interest on others 28,559,043

Bank Interest & Other Financial Charges 74,232,010

102,791,053

As at

31.03.10

SCHEDULE 'N'

INCREASE/(DECREASE)IN STOCK

Opening Stock:

425,480,271

27,704,386

453,184,657

Closing Stock:

531,852,157

17,496,724

549,348,881

Increase/(Decrease) in Stock 96,164,224

SCHEDULE 'O'

RAW MATERIAL CONSUMED

394,123,988

2,345,532,859

2,739,656,847

461,179,657

2,278,477,190

SCHEDULE 'P'

MANUFACTURING EXPENSES

48,015,484

5,234,214

12,065,493

409,573,999

2,516,169

1,601,203

6,404,689

1,849,920

2,309,944

1,238,708

5,070,450

495,880,273

SCHEDULE 'Q'

INTEREST & FINANCE CHARGES

30,958,098

36,802,414

67,760,512

Amount (In Rs.)

40

SCHEDULES - FORMING PART TO THE PROFIT & LOSS A/C Cont.

Particulars As at

31.03.09

Salaries, Bonus ,Allowances & Commission. 162,561,572

Contribution to PF & ESI etc. 7,667,069

Gratuity 5,110,134

Staff Welfare & Medical Expenses 14,384,807

Travelling & Conveyance 35,594,701

Communication Expenses 7,594,825

Postage & Telegram 2,228,162

Printing & Stationery 3,398,198

Office & Godown Rent 7,443,665

Rates & Taxes 1,607,521

Insurance Charges 19,741,455

Legal & Professional Charges 2,603,369

Repairs & Maintenance (Others) 5,793,094

Electricity & Water Charges 2,040,873

Books & Periodicals 113,850

Subscription & Membership 618,944

Charity & Donation 796,001

Miscellaneous Expenses 931,982

Auditors' Remuneration 200,000

Cost Auditors' Remuneration 45,000

Vehicle Maintenance 43,889,090

324,364,313

Education & Seminar 14,445,100

Advertisement & Publicity 25,965,955

Business Promotion Expenses 4,330,013

Bad Debts 13,812,695

Freight & Cartage on Stock Transfer & Sales 91,640,523

Expenses for Field Assistants 65,478,565

215,672,851

As at

31.03.10

SCHEDULE 'R'

ADMINISTRATIVE EXPENSES

185,317,439

8,866,272

3,269,559

16,029,957

41,120,187

8,146,222

2,341,579

3,337,229

11,702,236

1,197,114

6,122,998

4,899,285

7,571,546

3,163,668

143,913

838,592

229,354

1,202,384

250,000

60,000

51,343,317

357,152,851

SCHEDULE 'S'

MARKETING & SELLING EXPENSES

22,958,985

36,736,630

1,811,664

23,233,841

122,904,715

74,526,602

282,172,437

Amount (In Rs.)

41

SCHEDULE 'T'NOTES ON ACCOUNTS

1. SIGINIFICANT ACCOUNTING POLICIES

a) Basis of Accounting:

The financial statements have been prepared and presented under the historical cost convention on the accrual basis of accounting with the accounting principles generally accepted in India ('GAAP') and comply with the mandatory Accounting standards ('AS') issued by the Institute of Chartered Accountants of India to the extent applicable and with the relevant provisions of the Companies Act, 1956.

b) Fixed Assets:

Fixed Assets are stated at cost of acquisition (net of CENVAT, wherever applicable), less accumulated depreciation till the end of Financial Year. Cost is inclusive of freight, duties, levies, installation expenses and any directly attributable cost of bringing the assets to their working condition for intended use which are capitalized till the assets are ready to be put to use.

c) Depreciation:

Depreciation on fixed assets is provided on written down value method (WDV) at the rate and in the manner prescribed in schedule XIV to the Companies Act,1956 .On the addition of the assets depreciation have been provided from the day on which the asset was actually put to use. Depreciation in case of disposal/sale of assets is provided upto the date of disposal/sale of assets on pro rata basis.

d) Revenue Recognition:

Revenue from sales of goods is recognized when risk and rewards in respect of ownership of goods are transferred to the customers. Revenue from sales of products is stated exclusive of returns, Sales Tax/VAT, and applicable rebates & discounts as per policy of the Company. Insurance claims are booked on the basis of best estimates/loss as surveyed/ assessed.

e) Inventories :

Inventories of raw materials, packing materials and work in progress (WIP) are valued at the lower of cost (net of CENVAT) and net realizable value on First in First out basis.

Finished Goods are valued at the lower of cost (including overheads and excise duty) or net realizable value.

Costs are generally calculated at standards adjusted to actual in case of raw materials, packing materials; in the case of manufactured inventories , WIP's valued at cost .Finished goods cost includes cost of conversion and other cost incurred in bringing the inventories to their present location and condition.

Excise duty in respect of closing inventory of finished goods is included as a part of inventory.

?

?

?

?

?CENVAT credits in respect of raw materials consumed and packing materials used for manufacture of Goods is deducted from the cost of raw materials and packing materials consumed in the production of finished goods.

f) Foreign Currency Transactions:

(i) Initial Recognition :

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

(ii) Conversion :

At the year end, monetary items denominated in the foreign currencies are converted into equivalent rupee value by applying prevalent exchange rates at the year end.

(iii) Exchange Differences:

All the exchange differences arising on settlement / reinstatement of foreign currency transactions are adjusted in the Profit and Loss Account, except in cases where they relate to the acquisition of fixed assets acquired from outside India, in which case they are adjusted in the cost of the corresponding assets.

(iv) Forward Exchange Contracts not intended for trading or speculation purposes

The Company's derivative instruments comprises of forward exchange contracts which are intended for trade or speculat ion purposes. In respect of Derivatives contracts, provision for losses on restatement and gains/losses on settlement are recognized along with the underlying transaction and charged to Profit and Loss Account.

g) Investments :

Unquoted Shares are valued at cost.

h) Retirement Benefits :

The Company has floated various Schemes of retirement benefits for the welfare of employees, which comprise payments under approved Provident Fund Plans, Leave Encashment and Gratuity to eligible employees. Payments under approved Provident Funds plans are charged to revenue. Liability in respect of Leave Encashment is provided as per the policy of the Company on accrual basis. The gratuity liability is provided and charged off as revenue expenditure based on actuarial valuation.

(i) Taxes on Income:

Provision for Income Tax comprises of current tax, deferred tax charge or release. Current Income Tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act, 1961.

NOTES ON ACCOUNTS

42

2. CONTINGENT LIABILITIES NOT PROVIDED FOR:

Particulars As on 31.03.2009

a) Bank Guarantees 2,00,000

b) Letter of Credit 22,43,12,121

c) Sales Tax pending in appeals 4,32,625

d) Income Tax cases pending in appeals 15,85,693

e) Excise Disputes pending 1,04,13,000

f) Claims against the company not acknowledged as debt 77,663

As on 31.03.2010

Nil

11,42,27,475

2,63,000

21,29,460

1,04,13,000

77,663

3. Remuneration paid/provided to Directors :


i) Salary 73,80,000

ii) Commission 2,22,90,000

iii) Provident Fund 1,08,000

iv) Value of perquisites 37,500

As on 31.03.2010

73,80,000

2,97,58,236

1,08,000

2,28,300

4. Computation of Net Profit for determination of Managerial Remuneration in accordance with section

349 read with Sec 198 of the Companies Act, 1956:

(Amount in Rs.)

(Amount in Rs.)

Particulars Year ended 31st March 2010

Profit before Tax and after Extraordinary Item as per Profit and Loss account 4899.71

Add: Depreciation as per books of account 310.77

Remuneration to Directors 77.16

Sitting Fees

Less : Profit on Sale of Fixed Assets 4.46

Depreciation as per Section 350 of the Companies Act, 1956 310.77

Net Profit in accordance with Section 349 of Companies Act, 1956 4972.41

Maximum Managerial Remuneration permissible 503.24

Total Remuneration restricted to 297.58

(Amount in Lakhs)

5. Remuneration paid/provided to Auditors (Excluding Service Tax) :


i) Audit Fees & Tax Audit Fees 2,00,000

ii) As advisor or in any other capacity Nil

iii) In any other manner 64,000

Total: 2,64,000

As on 31.03.2010

2,50,000

Nil

1,75,000

4,25,000

(Amount in Rs.)

NOTES ON ACCOUNTS Cont.

Deferred Tax is recognized, subject to consideration of prudence, on timing differences, being difference between taxable and accounting income and expenditure that originate in one period and are capable of reversal in one or more subsequent period(s). Deferred tax assets are not recognized unless there is “virtual certainty” that sufficient future taxable income will be available against which such deferred tax assets will be realized.

(j) Provisions and Contingencies:

Contingent liabilities are estimated on the basis of available information and are disclosed by way of notes on accounts. These are reviewed at each Balance Sheet date and adjusted to reflect the current Management estimates.

k) Earnings Per Share (EPS)

The earnings considered in ascertaining the Company's EPS comprises the net profit after tax. The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the year.

Dilutive potential equity shares are deemed to be converted as of the beginning of the year, unless they have been issued at a later date. The number of shares used for computing the diluted EPS is the weighted average number of shares outstanding during the year after considering the dilutive potential equity shares.

l) Deferred Revenue Expenditure:

Revenue expenditure where benefit is expected to accrue over a longer period is amortized equally over a period of 5 years.

43


6. Defined-Benefits Plans : (Accounting Standards AS-15)

The Company offers its employees defined-benefit plans in the form of a gratuity scheme. Benefits under the defined-benefit plans are typically based either on years of service and the employee's compensation (generally immediately before retirement). The gratuity scheme covers substantially all regular employees. For the gratuity scheme, the Company contributes funds to Gratuity Trust.

The actuarial valuation is done based on “Projected Unit Credit” method.

Defined Benefit commitments : As on 31.03.2010

Present value of obligation at the beginning of the Year 184.99

Interest Cost 14.80

Current Service Cost 20.86

Benefit Paid (17.44)

Actuarial (Gain)/Loss on Obligations 15.13

Present Value of Obligation at the end of the Year 218.35

Fair Value of Plan Assets :

Fair value of Plan Assets at the beginning of the Year 146.30

Expected return on Plan Assets 11.70

Contributions 172.20

Benefit Paid (17.44)

Actuarial Gain/(loss) on Plan Assets 71.79

Fair value of plan Assets at the end of the year 384.55

Return on Plan Assets :

Gratuity Expected return on plan Assets 11.70

Actuarial Gain/(Loss) on assets for the period 71.79

Actual return on plan assets 83.49

Expenses on defined benefit Plan:

Current service Cost 20.86

Interest Cost 14.80

(Expected return on Plan Assets) (11.70)

Actuarial (Gain)/Loss (56.65)

Expenses charged to the Profit & Loss account 32.70

The actuarial calculations used to estimate defined commitments and expenses are based on the following assumption which if charged ,would affect the defined commitment's size, funding requirements :

Rate of discounting liabilities 8%

Rate of return on plan assets 8%

Expected salary increase rate 5%

Attrition Rate 2%

( Rs. In Lacs)

44

7 Related Party Disclosure(Accounting Standard AS-18):

a) Key Managerial Personnel & Relatives

• Mr. Ram Gopal Agarwal, Director

• Mr. Mahendra Kumar Dhanuka, Managing Director

• Mr. Arun Kumar Dhanuka, Director

• Mr. Rahul Dhanuka, Director

• Mr. Krishnakumar Baijnath Kejariwal, Director

Relatives of Mr. Ram Gopal Agarwal

• Mr. Satya Narain Agarwal, Brother

• Mrs. Urmila Dhanuka, Wife

• Mrs. Reema Khowala, Daughter

• Mrs. Rashmi Gupta, Daughter

Relatives of Mr. Mahendra Kumar Dhanuka

• Mr.Satya Narain Agarwal, Brother

• Mrs. Uma Dhanuka, Wife

• Mr. Mridul Dhanuka, Son

• Mr. Harsh Dhanuka, Son

Relatives of Mr. Arun Kumar Dhanuka

• Mrs. Pushpa Dhanuka, Mother

• Mr. Manish Dhanuka, Brother

• Mrs. Mamta Dhanuka, Wife

Relatives of Mr. Rahul Dhanuka

• Mrs. Madhuri Dhanuka, Wife

• Ms. Shailja Dhanuka, Daughter

• Mst. Shashwat Dhanuka, Son

Relatives of Mr. Krishnakumar Baijnath Kejariwal

• Mr. Shriyas Kejariwal, Son

• Ms. Arti Kejariwal, Daughter• Mrs. Manju Kejariwal, Wife

Companies / Firm in which key management personnel & their relatives have significant influence

b) Nature and Volume of Transactions Salary to Mr Harsh Dhanuka Rs. 3,77,100/-

Salary to Mr. Mridul Dhanuka Rs. 6,34,800/-

Lease Rent of Noida Farm Land :

Mr. Ram Gopal Agarwal Rs. 6,05,000/-

Mr. Mahendra Kumar Dhanuka Rs. 6,05,000/-

Mr. Rahul Dhanuka Rs. 1,99,650/-

Mr. Harsh Dhanuka Rs. 1,99,650/-

Lease Rent of Hyderabad Farm Land :Mr. Satya Narain Agarwal Rs. 175,000/-

?Cosmo Components Private Limited?Duke Impex Private Limited?Exclusive Leasing and Finance Limited?Golden Overseas Limited?Growth Advertising and Marketing Private Limited?Hindon Mercantile Limited?Liberty Sales Private Limited?Zoom Leasing and Finance Company Limited?Sikkim Agro Industries Limited?Dhanuka Laboratories Limited?Dhanuka Infotech (P) Ltd.?M.D.Buildtech (P) Ltd.?H.D.Realtors (P) Ltd.?Dhanuka Pvt. Ltd.?Madhuri Design –N- Export (P) Ltd.?Balaji Builders ?S.P.Enterprises?Investors Associates?Eight Reit?Shree Ram Enterprises?Passion Alliance?Tempex Enterprises?Key ideas Infotech P.Ltd.


c) Details of FDRs and interest paid there on during the year from key management personnel and their relatives.

Sl. Name of the

No. Depositor Balance the year the year 31.03.10

1 K.B.Kejariwal 524,600 11,530 536,130 12,855 -

2 Manish Dhanuka 15,823 1,634 17,457 1,634 -

3 Mridul Dhanuka 73,443 6,930 6,908 7,700 73,465

4 Pushpa Dhanuka 199,348 14,240 119,133 15,822 94,455

5 Urmila Dhanuka 115,412 7,805 70,742 8,682 52,475

6 Uma Dhanuka 251,809 20,731 167,590 23,034 104,950

7 Mamta Dhanuka 115,411 7,424 122,835 8,249 -

8 Madhuri Dhanuka 278,037 24,071 223,396 26,747 78,712

10 Arti Kejariwal 314,760 29,424 55,572 32,160 288,612

11 Shashwat Dhanuka 104,920 9,900 114,820 11,000 -

12 Shailja Dhanuka 152,134 14,354 166,488 15,950 -

13 Reema Khowala 220,329 34,650 254,979 34,650 -

14 Shreyas K.Kejariwal 1,049,200 44,801 1,094,001 49,802 -

15 Rashmi Gupta 356,726 30,338 276,867 32,747 110,197

16 Manju Kejariwal 104,920 9,900 9,870 11,000 104,950

Total 3,876,872 2,67,732 3,236,788 292,032 907,816

Opening Received during Paid during Interest paid Balance as on

45

Sl. Name of the Opening Recd. during Paid during

No. Depositor Balance the year the year paid as on 31.03.10

1 Exclusive Leasing & Finance Ltd. 5,812,863 24,790,724 12,490,476 878,582 18,113,111

2 Golden Overseas Ltd. 6,473,213 9,589,994 11,331,254 544,438 4,731,953

3 Growth Advertising & Mkt. P.Ltd. 1,185,258 102,600 96,558 116,192 1,191,300

4 Sikkim Agro Industries Ltd. 15,097,954 2,303,470 3,578,025 3,578,025 1,38,23,399

5 Zoom Leasing & Finance Co.Ltd. 4,233,368 15,978,673 9,594,563 754,081 10,617,478

6 Dhanuka P. Ltd. 6,500,000 11,417,629 3,917,629 951,686 14,000,000

7 Duke Impex P. Ltd. 800,569 69,300 65,219 77,000 804,650

8 Cosmo Components P.Ltd. 545,842 47,250 44,467 52,500 548,625

9 Liberty Sales P.Ltd. 1,065,692 92,250 86,817 102,500 1,071,125

10 Hindon Mercantile Ltd. 6,560,507 10,639,248 10,200,320 599,165 6,999,435

Total 48,275,266 75,031,138 51,405,328 7,654,169 59,404,944

Interest Balance

e) Details of Interest Received from companies where Directors and their relatives are substantially interested:

M/s Dhanuka Laboratories Ltd. Rs. 449,681/-

8. (i) Earning per share

Particulars Year Ended31.03.2009

Net Profit / (Loss) for the year (Rs.) 232,00,06,092

No. of shares 91,78,900

Basic & Diluted EPS (Rs.) 25.28

Year Ended 31.03.20010

36,33,75,232

91,78,900

39.59

ii) Accounting for Tax on Income :

In accordance with the requirements under the Accounting Standard AS-22 "Accounting for Taxes on income", the company has provided Rs. 122.30 lakhs during the year as deferred tax liablities.

Deferred Tax Assets & Liabilities as on 31st March, 2010 are as under:-

Particulars Year Ended31.03.2009

Deferred Tax Assets/(Liability)

Accumulated Depreciation (42.86)

Net Deferred Tax Assets/(Liability) (42.86)

Year Ended 31.03.2010

(165.15)

(165.15)

Rs. in Lakhs

d) Details of unsecured loans received and interest paid there on from Companies where directors and their relative are substantially interested :

M/s Golden Overseas Ltd. Rs. 6,000/-

M/s Zoom Leasing & Finance Co. Ltd. Rs. 6,000/-

M/s Sikkim Agro Industries Ltd. Rs. 6,000/-

M/s Exclusive Leasing & Finance Ltd. Rs. 6,000/-

M/s Hindon Mercantile Ltd. Rs. 6,000/-

M/s Dhanuka Laboratories Ltd. Rs. 12,000/-

f) Details of rent received from Companies in which directors and their relatives are substantially interested :

The Deferred Tax Liability / Assets has arisen on account of the time difference between the depreciation admissible under the Income Tax Act, 1961 and the depreciation adjusted in the accounts.

(iii) The Company has setup a Wind Mill Electricity Generation Unit having installed capacity 1.5 MW in the Village Rattan Kabans Distt. Jodhpur, Rajasthan in association with Suzlon Energy Ltd. The total Capital investment on this project is Rs. 892 Lacs Approx. The project started functioning w.e.f 31st December 2009 and during the financial year 2009-10 the total revenue generation was Rs.17.86 lacs.


S.No. Name ofthe Supplier

Amount(Rs. in lakhs)

1 ANNAPURNA PRINTERS 1442652 NATIONAL PRINT ̀ N` PACK 8824103 PRINTCO (PROP) 3006964 AASTHA ENTERPRISES 80005 MODERN SCIENTIFIC TRADERS 19116 NUCON ENGINEERS 480577 RAKESH SCIENTIFIC CENTRE 864138 STAR SPECIAL AIR GASES (P) LTD. 19469 PHARMALAB INDIA PVT.LTD. 6591210 BHARAT EXTRUSION 635457211 AVC PACKER'S 69539112 ANKITA PLASTICS 75591413 BAJAJ HOLOGRAPHICS INDIA PVT.LTD. 3380014 BHARAT PET LTD. 123534415 BHARAT PRODUCT LTD. 32785116 BULLION FLEXI PACK P.LTD. 4566817 D.P. ENTERPRISES 116596418 DECORATIVE SLEEVES PVT. LTD. 101003219 DELHI EXTRUSION PVT. LTD. 187125920 ESS KAY ENTERPRISES (PROP) 144638521 GALAXY PACKAGING SOLUTIONS 328568

22 GANESH ENTERPRISES (PROP) 18926623 GENESIS PRINT & PACK 94623324 GLOBE ENTERPRISES (INDIA) 2350725 KUMAR PACKAGING 19950126 MANOHAR PACKAGING INDUSTRIES 15203827 P.S.PACKERS ( FIRM) 8510328 PLASTO FILMS (PROP) 52848929 R.R. ENTERPRISES 145916730 S.S. PACKERS 26382231 SEPL POLY FLEX 7690932 SHARAN ENTERPRISES (P) LTD. 22763233 KAMLA PACKAGING PRODUCTS (P) LTD. 50600334 K.A.ENTERPRISES BHAVNAGAR 61205135 CENTURY PACKAGING 21701836 BHARAT PACKAGING INDUSTRIES - SAMBA 273031337 POOJA PACKAGING 58199738 VENUS SAFETY & HEALTH (P) LTD. 139459539 PON PURE CHEM (P) LTD. 1019761940 MIPAK POLYMERS LTD (SILVASSA) 4471434

41673055

SNo.

Name ofthe Supplier

Amount(Rs. in lakhs)

46

For DINESH MEHTA & COChartered AccountantsFirm Registration No : 000220-N

Deepak Malhotra Mukesh Kumar M.K. DHANUKA R.G Agarwal Partner Company Secretary Managing Director DirectorMembership No : 502386Place : New Delhi

thDated : 29 May 2010

Sd/- Sd/- Sd/- Sd/-


(iv) On 14th Aug 2009 a fire broke out at Gurgaon plant situated at Daulatabad Road, Gurgoan. The claim for the same was filed with Insurance company. The accounting effect for claim has been given on the basis of provisional assessment of the surveyor . The claim has not yet been received by the Company.

(v) On 3rd August, 2009, it was noticed by the Company, that some unauthorized foreign exchange transactions have been allegedly entered into by some of the employees of the Company with Banks. In order to safeguard the interests of the Company, the matter was reported to the Law Enforcing Agencies for investigation and initiating appropriate action under the law. Three employees were involved out of which services of two were terminated and one employee has been suspended pending completion of enquiry. The matter has been settled with the concerned Banks and all business dealings with them have been discontinued.

(vi) In terms of Accounting Standard (AS 28) on “impairment of Asset” issued by Institute of Chartered Accountant of India (ICAI), the Company during the year carried out an exercise of identifying the assets that may have been impaired in accordance with the said accounting standard. The Company has identified that no asset of the Company has been impaired during the year.

(vii) Segment information

The Company is engaged in the business of manufacturing and reselling of various types of pesticides. The entire operations are governed by same set of risk and returns, hence the same has been considered as representing a single primary segment. The said treatment is in accordance with the guiding principles enunciated in the Accounting Standard – 17 on segment reporting.

The company sells its products within India, hence, it is considered to be operating in single geographical segment.

(viii) Amount due to Small and Medium Enterprises and outstanding for more than 30 days is Rs.416.73 lakhs. The names of such Small and Medium Enterprises for the period ended 31st March 2010 is given below:

9. Sundry debtors/Customers are shown net of trade discounts and rate differences.

10. Previous year's figures have been regrouped and rearranged wherever considered necessary.

11. All the figures have been shown to the nearest rupee.

For DINESH MEHTA & CO For and on behalf of the Board of DirectorsChartered Accountants

DEEPAK MALHOTRA MUKESH KUMAR M.K. DHANUKA R.G. Agarwal Partner Company Secretary Managing Director Director

SCHEDULES FORMING PART TO ACCOUNT

47

15. The information by para 3 & 4 of part A of Schedule VI of the Companies Act, 1956 is as under :

Sd/- Sd/- Sd/- Sd/-

A) Capacity Licenced InstalledUnit Year Capacity Capacity Production

Pesticides FormulationsLiquid K.L.

2008-2009 5,675 5,675 5,973.10Powder,Dust & Granules M.T.

2008-2009 40,280 40,280 19,681.62 Seed Processed M.T.

2008-2009 - - 3056.90

B) Details of Opening & Closing Stock of Finished Goods & Sales

2008-2009Unit Qty. Value (Rs.)

Opening Stock i) Pesticides Formulations

- Liquid K.L. 736.97 208,592,967 - Powder ,Dust & Granules M.T. 2,250.26 114,477,510 -Seeds M.T. 152.62 7,718,434 Closing Stock

ii) Pesticides Formulations- Liquid K.L. 1,041.80 267,303,182 - Powder, Dust & Granules M.T. 2,274.29 152,831,414 - Seeds M.T. 179.17 5,345,675 Purchase

iii) Pesticides Formulations - Liquid K.L. 38.76 71,556,058 - Powder, Dust & Granules M.T. 16.41 87,828,672 - Seeds M.T. - - Sales

iii) Pesticides Formulations- Liquid K.L. 5,707.03 2,260,860,538 - Powder ,Dust & Granules M.T. 19,674.00 1,476,964,000 - Seeds M.T. 3,030.35 70,103,355

iv) Others - 816,403

C) Raw Materials Consumed Technical Grade Raw materials M.T. 5,375.93 1,570,369,570 Others ingredients - 302,475,202

1,872,844,772 D) C.I.F. Value for Imports

* Raw Materials 771,507,132 716,047,418

E) Earnings & Expenditure in Foreign CurrencyInsurance Claim 861,985 - Reimbursement of Maket devlopment expenses - 4,247,634 Foreign Travelling Expenses 350,316 348,028

F) Value of Imports & Indigenous Raw Materials, Stores & Spare Parts Consumed and percentage of each to totalconsumption 2008-2009

Value (Rs.) (%) i) Raw Materials

* Imported 646,870,975 34.54 * Indigenous 1,225,973,797 65.46

1,872,844,772 100.00 ii) Packing Material

* Imported 11,358,933 3.48 * Indigenous 315,484,115 96.52

326,843,048 100.00

Note : Previous year's figures have been regrouped and rearranged wherever considered necessary.

2009-2010 8,675 8,675 7,018.79

2009-2010 113,040 113,040 23,694.96

2009-2010 - - 4,688.18

2009-2010 Qty. Value (Rs.)

1,041.80 267,303,182 2,274.29 152,831,414

179.17 5,345,675

1,527.08 357,896,857 2,319.58 168,793,057

221.84 5,162,243

54.30 94,212,077 14.78 86,569,655

- -

6,587.81 2,506,625,119 23,664.45 1,732,148,672 4,645.51 116,668,649

- 100,048,342

6,221.07 1,806,343,087 - 472,134,103

2,278,477,190

2009-2010Value (Rs.) (%)

973,030,928 42.71 1,305,446,262 57.29

2,278,477,190 100.00

- - 409,573,999 100.00

409,573,999 100.00

Membership No : 502386Place : New Delhi


48

BALANCE SHEET ABSTRACT & COMPANY'S GENERAL BUSINESS PROFILE

Place : New DelhithDated : 29 May 2010

MUKESH KUMAR M.K. DHANUKA R.G.Agarwal Company Secretary Managing Director Director

For and on behalf of the Board of Directors

Sd/- Sd/- Sd/-

1. Registration Details

2. Capital Raised during the year (Amount in Rs. '000)

3. Position of Mobilisation and Deployment of Funds (Amount in Rs. '000)

Sources of Funds

Application of Funds

4. Performance of Company (Amount in Rs. '000)

5. General Names of three Principal Products/Services of Company (as per monetary terms)

Registration No. : 20126 State Code : 55

Balance Sheet Date : 31.03.2010

Public Issue : Nil Rights Issue : Nil

Bonus Issue : Nil Private Placement : Nil

Total Liabilities : 1564773 Total Assets : 1564773

Paid-up Capital : 91789 Reserves & Surplus : 879439

Secured Loans : 269049 Unsecured Loans : 307981

Net Fixed Assets : 386370 Investments : 104

Net Current Assets : 1178193 Misc.Expenditure : 107

Accumulated Losses : Nil

Turnover : 4467440 Total Expenditure : 3977469

Profit before Tax : 489972 Profit after Tax : 363375

Earning per share in Rs. : 39.59 Dividend Rate : 70%

Item Code No. (ITC Code) : 380893.90 Product Description : QUIZALOFOP ETHYL

Item Code No. (ITC Code) : 380891.99 Product Description : CARTAP HYDROCHLORIDE

Item Code No. (ITC Code) : 380891.99 Product Description : PROPERGITE

49

CASH FLOW STATEMENT PURSUANT TO CLAUSE 32 OF THE LISTING AGREEMENT

Amount (in Rs.)FOR THE YEAR ENDED 31ST MARCH, 2010

For DINESH MEHTA & CO.Chartered AccountantsFirm Registration No:000220-N

DEEPAK MALHOTRAPartnerMembership No. 502386Place : New Delhi


AUDITORS' REPORTWe have examined the attached Cash Flow Statement of M/s Dhanuka Agritech Limited for the year ended 31.3.2010. The statement has been prepared by the Company in accordance with the requirements of Listing Agreement Clause-32 with Bombay Stock Exchange Ltd. and is based on and in agreement with the corresponding Profit & Loass Account and Balance Sheet of the company covered by our report on 29th May,2010 to the members of the company.The figures have been shown to the nearest rupee.

MUKESH KUMAR M.K. DHANUKA R.G.Agarwal Company Secretary Managing Director Director

For and on behalf of the Board of Directors

Sd/- Sd/- Sd/-

2009-2010 2008-2009

A. CASH FLOW FROM OPERATING ACTIVITIES:Net Profit/(Loss) before tax and extra-ordinary items 356,061,353

Adjustments for: Depreciation 27,087,099 (Profit)/Loss on sale of Fixed Assets (78,805)Interest 97,379,035 Preliminary Expenses written off 106,734

Operating Profit before working capital changes 480,555,416 Adjustments for: Trade & other receivables a) Sundry Debtors (118,523,122)b) Loans & Advances (121,020,085)c) Inventories (239,011,727)d) Trade Payables 223,110,233

Cash generated from operations 225,110,715 Interest paid (97,379,035)Direct taxes paid (50,082,726)

Cash flow before extra-ordinary items 77,648,954 Extra-ordinary items: Excess Tax Provisions / Liability of last year w.back (471,965)Increase in Deffered revenue expenditure 1,138,996

Net cash from Operating Activities 78,315,985 B. CASH FLOW FROM INVESTING ACTIVITIES:

Purchases of Fixed Assets (42,415,294)Sale of Fixed Assets 1,173,736 Investment in Mutual Fund - Change in Long Term Fixed Deposit 9,779,104 Net cash from Investing Activities (31,462,454)

C. CASH FLOW FROM FINANCING ACTIVITIES: Proceeds from Short Term Borrowings from Bank 10,007,712 Dividend & Tax on Dividend (53,694,270)Net Cash used in Financing Activities (43,686,558)

Net increase in Cash and Cash Equivalent (A+B+C) 3,166,972 CASH AND CASH EQUIVALENT - OPENING BALANCE Cash/DD in hand & balance in current accounts 18,904,535

18,904,535 CASH EQUIVALENT - CLOSING BALANCE Cash/DD in hand & balance in current accounts 22,071,507

22,071,507

489,971,764

31,077,053 (445,912)

65,553,398 106,734

586,263,037

(209,011,223) (70,226,832)

(177,011,594) 152,295,092 282,308,480 (65,553,398) (60,016,439)

156,738,643

227,923

156,966,566

(169,032,698) 1,563,170 (100,000)

10,906,948 (156,662,580)

61,591,819 (64,433,124) (2,841,305)(2,537,319)

22,071,507 19,534,188

19,534,188 19,534,188

I/We_____________________________________ of _____________________________________

in the district of _____________________________ being a member/members of Dhanuka Agritech

Limited, hereby appoint ___________________________of _______________________________ in

of _________________________ in the district of _____________________________ or failing him

_________________________ of _______________________________________ in the district of

________________________________ as my/our proxy to attend and vote for me/us and on my/ourthbehalf at the 25 Annual General Meeting of the Company to be held on Wednesday the

th 4 August 2010 at 10.30 a.m. at Shri Purshottam Hindi Bhawan, 11, Vishnu Digambar Marg

(Rouse Avenue), New Delhi - 110 002 and at any adjournment thereof

ATTENDANCE SLIP

Regd. Office : 'DHANUKA HOUSE', 861-862, Joshi Road, Karol Bagh, New Delhi-110 005

ATTENDANCE SLIP

Name and Address of the Registered Shareholder

I certify that I am a registered shareholder / proxy of the Company, I hereby record my presence at th ndthe 25 Annual General meeting of the Company to be held on Wednesday the 4 August, 2010 at

10.30 a.m. at Shri Purshottam Hindi Bhawan, 11, Vishnu Digambar Marg (Rouse Avenue),

New Delhi - 110 002

Member's/Proxy's Signature

Note : Please fill this attendance slip and hand it over at the entrance of the hall

PROXY FORM

Signed this _________________ day of ______________________ 2010

DP ID*

Client ID*

Regd. Folio No.

Affix aRevenue

StampRs. 1/-

Signature of Proxy Signature of Registered holder (s)

Note : This form in order to be effective should be duly stamped, completed and signed and must be deposited at the Registered Office of the Company, not less than 48 hours before the meeting.

Regd. Office : 'DHANUKA HOUSE', 861-862, Joshi Road, Karol Bagh, New Delhi-110 005

* Applicable if shared are held in electronic form

DP ID*

Client ID*

Regd. Folio No.

* Applicable if shared are held in electronic form

(an iso 9001:2008 company) 25 - bombay stock exchange · 2010. 10. 25. · (an iso 9001:2008...

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