Dharmaj Crop Guard Ltd

To

The Members,

Your directors have pleasure in presenting the 10th (Tenth) Annual Report on the business and operations of the Company together with the audited financial statements for the financial year ended March 31, 2024.

FINANCIAL RESULTS

The financial results of the Company for the year ended March 31, 2024 are summarized below:

( in Millions)

RESERVES

No amount has been transferred to reserves during the financial year.

DIVIDEND

In order to conserve the resources, your Board of Directors has not recommended dividend during the year.

FINANCIAL PERFORMANCE & PROFITABILITY

The Company achieved robust financial performance in FY24 despite headwinds in the agrochemical industry. Revenue from Operations reached a record high of 6,541 Millions, representing a 25% year-on-year increase from 5,243 Millions in FY23.

Profitability margins improved significantly, with Gross Margins rising from 18% in FY23 to 21% in FY24. Consequently, EBITDA margins also increased from 8% to 10% during the same period. The last quarter saw an increase in Finance Cost and Depreciation & Amortisation due to the commissioning of the Saykha plant in Q4; these expenses are expected to fully rebase in the coming financial year. For FY24, Net Profits stood at 444 Millions, marking a substantial 65% growth from the previous year's 269 Millions.

IMPACT OF THE RESTATEMENT FOR FY 2022-23

During the closing of the year company has done the Restatement of the Financial's for the Year 2022-23, for correction of the errors

and the detail impact on the financial is mentioned in detail in Note No. 39 of the Financial Statement Report

FUTURE OUTLOOK

As we enter FY25, we are optimistic about our Company's prospects. The upcoming year appears promising for the domestic agrochemical markets, supported by a favourable rainfall forecast and expectations of a good sowing season, which augurs well for our formulations business.

Our enhanced pan-India presence across 24 states, along with a network of over 5,000 dealers and distributors, positions us well to drive growth in our branded formulations vertical. In the Institutional Formulations vertical, we continue to perform strongly, with the expansion of our product portfolio and clientele serving as key growth drivers. We are seeing good traction in the small formulators category and have also achieved some breakthroughs with large agrochemical majors.

Our efforts are focused on ramping up operations at Saykha, which will be a critical determinant of our performance in the coming years. While such a large-scale investment may have some initial challenges and a gestation period to reach its full potential, we are fully prepared to capitalize on its capabilities. We anticipate optimal utilization of Sayakha's capacity within the next three years. Dharmaj is well-prepared to achieve its growth ambitions, driven primarily by the expanding formulations business, complemented by the initial contributions from the newly launched Active Ingredients vertical.

CHANGE IN NATURE OF BUSINESS

We are pleased to confirm that there has been no change in the nature of the business of the Company during the fiscal year ended March 31, 2024. Our core business activities remain focused on Agrochemical's manufacturing. This continuity underscores our commitment to stability and consistency in delivering high-quality agricultural chemicals to our customers, stakeholders, and the broader community.

As we continue to uphold our core competencies in Agrochemical's manufacturing, we remain vigilant in exploring opportunities for growth and operational excellence within our established business framework.

CREDIT RATING

Company's bank loan facilities totalling 155.05 Crores have been domestically rated by CRISIL Ratings Limited. As of February 16, 2024, CRISIL has upgraded our long-term rating to 'CRISIL BBB+/stable' from 'CRISIL BBB/Stable'. Additionally, our short-term rating has been upgraded to 'CRISIL A2' from 'CRISIL A3+'. These upgraded ratings reflect our strengthened financial profile, improved operational performance, and robust creditworthiness in the market.

MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY, HAVING OCCURRED SINCE THE END OF THE YEAR AND TILL THE DATE OF THE REPORT

There were no material changes affecting the financial position of the Company, occurred between the end of financial year to which the statement relates and the date of Directors' Report.

CHANGE IN CAPITAL STRUCTURE

During the year, there were no changes in the Company's capital structure. The Company had obtained shareholder approval via Postal Ballot dated December 05, 2023, to launch an Employee Stock Option Plan (ESOP) for the issuance of up to Three Lakhs ESOPs. However, no ESOPs were issued during the year.

INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

There was no amount which were required to be transferred to the Investor Education and Protection Fund by the Company.

DIRECTORS & KEY MANAGERIAL PERSONNEL'S COMPOSITIONS

The Board currently consists of 6 (Six) Directors. The details of the composition of the Board is mentioned in the Corporate Governance Report forming part of this Annual Report. There is no change since last year.

The term of Mr. Rameshbhai Ravajibhai Talavia (DIN: 01619743) as Chairman and Managing Director is set to conclude in March 2025. The Company proposes his reappointment for the next term of five years, subject to shareholders approval, as detailed in the attached notice.

Additionally, the first term of Mr. Dipak Bachubhai Kanparia (DIN: 06860678), as an Independent Director of the Company, shall expire on September 30, 2024. He has expressed his intention to be considered for reappointment for the next five-year term. Necessary resolutions have been set out in notice of AGM for the approval of shareholders.

DIRECTORS LIABLE TO RETIRE BY ROTATION

Pursuant to the provisions of Section 152(6)(c) of the Companies Act, 2013, Mr. Jamankumar Hansarajbhai Talavia (DIN: 01525356) retires by rotation and being eligible, offers himself for re-appointment. The resolution proposing the re-appointment of the Director are set out in the notice convening Annual General Meeting for approval of members. The Board recommends for approval of the same.

DECLARATIONS & DISCLOSURES

On the basis of the written representations received from the directors taken on record by the Board of Directors, none of the directors is disqualify as on March 31, 2024 from being appointed as a director in terms of Section 164(2) of the Act.

The Independent Directors have individually declared to the Board that they meet the criteria of independence as provided in Section 149(6) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and there is no change in the circumstances as on the date of this report which may affect their status as an Independent Director.

They have also confirmed that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgment and without any external influence. The Company keeps informed Independent Directors about changes in the Companies Act, 2013 and rules and other related laws from time to time and their role, duties and responsibilities.

BOARD MEETINGS

During the financial year under review, 07 (Seven) meetings of the Board of Directors were held on 15/05/2023, 27/06/2023, 11/07/2023, 31/07/2023, 26/09/2023, 03/11/2023 and 05/02/2024. The details of attendance in the Board Meetings are mentioned in the Corporate Governance Report forming part of this Annual report. The intervening gap between two board meetings did not exceed prescribed period as per the Companies Act, 2013.

REMUNERATION

The details of the remuneration of the Directors have been provided in the notes to the Accounts under related party transaction.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and Rules made thereunder, Schedule - IV of the Act and SEBI (LODR) Regulations, 2015, the Board has carried the evaluation of its own performance, individual directors, its committees and Key Managerial Personnel, on the basis of attendance, contribution and various criteria as recommended by the Nomination and Remuneration Committee of the Company.

The performance of Non-Independent Directors (including the chairperson) and the Board as whole was also evaluated by the Independent Directors at the separate meeting of Independent Directors of the Company. The Directors expressed their satisfaction with the evaluation process.

Policy on Directors appointment and remuneration the policy on Nomination and Remuneration is attached separately as an Annexure III to this Report.

FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS

The Directors are regularly informed during meetings of the Board and Committees on the business strategy, business activities, manufacturing operations, regulatory updates etc. The Directors when they are appointed are given a detailed orientation on the Company, industry, regulatory matters, business & financial matters, human resource matters and corporate social responsibility. The details of Familiarization programmes provided to the Independent Directors of the Company are available on the Company's website https://www.dharmajcrop.com/ investors-disclosures-under-regulation-46-and-62-of-sebi-lodr-regulations-2015/ Key policies.

REMUNERATION RECEIVED BY MANAGING/ WHOLE-TIME DIRECTOR FROM HOLDING OR SUBSIDIARY COMPANY

The Company do not have any holding or subsidiary Company.

Hence, no remuneration was received by the directors of the Company from the Holding or Subsidiary Company.

DIRECTORS' RESPONSIBILITY STATEMENT

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, audits conducted by the Internal, Statutory, Cost and Secretarial Auditors, including audit of the internal financial controls over financial reporting by the Statutory Auditors and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company's internal financial controls were adequate and operating effectively during FY 2023-24. Accordingly, pursuant to Sections 134(3)(c) and 134(5) of the Act, the Directors, to the best of their knowledge and ability, confirm that for the year ended March 31, 2024: (i) in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures;

(ii) they have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year viz., March 31, 2024 and of the profit of the Company for that period;

(iii) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) they have prepared the annual accounts on a going concern basis;

(v) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

(vi) they have devised proper systems to ensure compliance the provisions of all applicable laws and that such systems are adequate and operating effectively.

INTERNAL FINANCIAL CONTROL

The Company's internal financial control framework is aligned with the regulatory requirements of its industry and is commensurate with the size and nature of its business. However, Dharmaj is in the process of formalizing & implementing well-defined processes, systems and policies to safeguard its assets and ensure business continuity. The Company is also working towards defining & documenting all internal financial controls, which will further improve internal control systems. The Company has already implemented ERP systems towards automating control transactions. The Internal Audit function undertakes the responsibility of determining the efficacy of controls on a regular basis. All reports are submitted to the Audit Committee for further actions.

FRAUD REPORT

The Auditors of the Company have not reported any fraud as specific under Section 143(12) of the Companies Act, 2013.

DETAILS OF SUBSIDIARY, JOINT VENTURE OR ASSOCIATE COMPANIES

During the year under review, no Company have become or ceased to be the subsidiaries, joint ventures or associate companies of the Company.

PUBLIC DEPOSITS

Your Company has not invited any deposits from public/ shareholders under Section 73 and 74 of the Companies Act, 2013.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

The Company has not taken any loans or provided any guarantees under Section 186(1) of the Companies Act, 2013. Details of investments covered u/s 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

During the year there were no material related party transaction with promoters, the directors or the management, their relatives etc. that may have a potential conflict with the interests of the Company.

The details of related parties and transaction as per Accounting Standard issued by ICAI have been provided in Note No. 31 of the Financial Statements for the year ended March 31, 2024.

All related party transactions were placed before the Audit Committee and also the Board for approval. The Company has framed a policy on RPTs for the purpose of identification, approval and monitoring of such transactions. The policy on Related Party Transactions is hosted on the Company's website at https://www. dharmajcrop.com/investors-disclosures-under-regulation-46-and-62-of-sebi-lodr-regulations-2015/ key policies.

Statutory Auditors

M/s MSKA & Associates, Chartered Accountants (Firm Registration No.: 105047W) as the Statutory Auditors of the Company in the 9th Annual General Meeting of the Company for the term of 5 years till the conclusion of the 14th Annual General Meeting of the Company.

Qualification, Reservation or Adverse Remark

The report given by the auditors on the financial statements of the Company is part of the Annual Report. There is no qualification, reservation or adverse remark made by the statutory auditors in their report.

Maintenance of Cost Records and Cost Auditors

Your Company is required to maintain cost records as specified under Section 148(1) of the Companies Act, 2013, and accordingly, such accounts and records are made and maintained in the prescribed manner.

Asper provision of the Companies Act your directors have, appointed M/s. Dalwadi & Associates, Cost Accountants, Ahmedabad (having Firm's Registration No. 000338) to conduct the audit of the Cost Accounts of the Company.

A Resolution seeking rati_cation of remuneration payable to M/s. Dalwadi & Associates, Cost Accountants, for the Financial Year 2024-25 is included in the Notice convening the Annual General Meeting.

Secretarial Auditor

In terms of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the Board had appointed M/s. Parikh Dave & Associates, Practicing Companies Secretaries, as the Secretarial Auditor for the financial year 2024-25.

The secretarial audit report received from Parikh Dave & Associates is attached herewith as Annexure I. The same does not contain any qualification, reservation or adverse remarks for financial year ended on March 31, 2024.

Internal Auditor

The Company has appointed M/s. Mukesh M Shah & Associates as Internal Auditors on July 11, 2023, to conduct the internal audit for FY 2023-24. They were subsequently reappointed for FY 2024-25 during the meeting held on May 30, 2024. Mr. Darshan Hiranandani continues to serve as the Internal Auditor on the Company's payroll, ensuring the maintenance of proper and adequate internal financial controls throughout the year.

COMPLIANCE WITH SECRETARIAL STANDARDS

The Institute of Company Secretaries of India (ICSI) has mandated that the Secretarial Standards on Meetings of the Board of Directors ("SS-1") and Secretarial Standards on General Meetings ("SS-2"), and as approved by the Central Government are mandatory in nature. The Company has complied with the Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meetings and General Meetings.

The Board hereby confirm that the Company has duly complied as applicable to the Secretarial Standards issued by the ICSI on Board Meetings, General Meetings and also, the Act as well the Listing Regulations on the Meeting of the Board of Directors and General Meetings.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The provisions of the Corporate Social Responsibility as contained under Section 135 of the Companies Act, 2013 are applicable on the Company for this financial year.

Dharmaj Foundation, a trust, has been incorporated primarily with an objective of undertaking/channelizing the CSR activities of the Company. The Company's CSR Policy statement and annual report on the CSR activities undertaken during the financial year ended March 31, 2024, in accordance with Section 135 of the Companies Act, 2013 and Companies (Corporate Social Responsibility Policy) Rules, 2014 are annexed to this report as Annexure II.

Audit Committee

The Company has constituted Audit Committee in terms of the requirements of the Act and rules framed thereunder and applicable listing regulations. For details, please refer Corporate Governance Report attached as a separate Annexure VII.

Nomination and Remuneration Committee (NRC)

The Company is required to constitute a Nomination and Remuneration Committee as mentioned under Section 178 of the Companies Act, 2013 during the year under review.

The Company's Nomination & Remuneration Policy statement, in accordance with Section 178 of the Companies Act, 2013 and Rules, thereto are annexed to this report as Annexure III.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO

The information relating to conservation of energy, technology absorption and foreign exchange earnings and outgo, as per Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of Companies (Accounts) Rules, 2014, is set out in the annexure forming part of the Annual Report as Annexure IV.

RISK MANAGEMENT POLICY

As per the requirement of Section 134(3)(n), the Company has adopted a Risk Management Policy wherein all material risks faced by the Company are identified and assessed.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The management discussion and analysis report as required under Regulation 34(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of this annual report.

CORPORATE GOVERNANCE

Your Company has complied with the requirements of corporate governance as prescribed under Schedule V of the SEBI (LODR)

Regulations, 2015. A separate report on corporate governance forms the part of the annual report as Annexure VII. A certificate from the Practicing Company Secretary M/s. Parikh Dave & Associates regarding compliance of conditions of corporate governance also forms the part of this report.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS, COURTS AND TRIBUNALS

During the year under review, no such order which may impact the going concern status and Company's operation in future, was passed by the regulator, courts or tribunal.

WEB LINK OF ANNUAL RETURN

In line with the requirement of the Companies (Amendment) Act, 2017, effective from July 31, 2018, the extract of annual return is no longer required to be part of the Board Report. However, in Compliance to the provisions of Section 92 and Section 134 of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the extract of the Annual Return of the Company for the financial year ended March 31, 2024 and other policies of the Company is placed on the Company's website www.dharmajcrop.com/investors-disclosures-under-regulation-46-and-62-of-sebi-lodr-regulations-2015/ Annual Return of the Company.

DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company is dedicated to creating a safe and healthy working environment where employees can work without fear of sexual harassment.

In accordance with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 (‘POSH Act') and Rules thereunder, our Company has established Internal Committees (IC) and has developed a Policy for Prevention, Prohibition, and Redressal of Sexual Harassment at Workplace.

SUMMARY OF SEXUAL HARASSMENT COMPLAINTS

During the year under review, the Company received and handled the following sexual harassment complaints: Number of Complaints received: Nil

Number of Complaints Disposed of: Nil

This reflects our ongoing commitment to maintaining a workplace free from sexual harassment through proactive measures and effective grievance redressal mechanisms.

PARTICULARS OF EMPLOYEES

The Company does not have any employee drawing Remuneration as prescribed in terms of sub-section 12 of Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules.

VIGIL MECHANISM

The Company has implemented Vigil Mechanism. For details, please refer Corporate Governance Report attached as a separate

Annexure VII.

HUMAN RESOURCE & INDUSTRIAL RELATIONS

Your directors believe that the key to the success of any Company are its employees. Industrial Relations were harmonious throughout the year. The Board wishes to place on record their sincere appreciation to the co-operation extended by all employees in maintaining cordial relations and their commitment towards the growth of the Company.

MANAGERIAL REMUNERATION AND EMPLOYEES

Details required pursuant to Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are enclosed separate as an Annexure V.

Details of employees required pursuant to Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as a separate Annexure, however it is not being sent along with this annual report to the members of the Company in line with the provisions of Section 136 of the Companies Act, 2013 and rules made there under. Members who are interested in obtaining these particulars may write to the Company Secretary at the Registered Office of the Company. The aforesaid Annexure is also available for inspection by members at the Registered Office of the Company, 21 days before and up to the date of the ensuing Annual General Meeting during the business hours on working days.

EMPLOYEE STOCK OPTION PLAN ("ESOP")

The Board of Directors believes that Equity-based compensation schemes are effective tools to attract, retain, motivate, and reward the critical talents working exclusively with the Company. With the objective to motivate key employees for their contribution to the corporate growth on sustained basis, to create an employee ownership culture, to retain the best talent in the competitive environment and to encourage them in aligning individual goals with that of the Company's objectives and based on the recommendation of Nomination and Remuneration Committee (‘NRC'), the Board of Directors at their meeting held on November 03, 2023 approved the introduction and implementation of "Dharmaj Employee Stock Option Plan 2023" ("ESOP 2023"/"Plan") by issue of fresh/ primary shares by the Company in pari passu with the existing shares proposed to be settled and administered in accordance with the Securities and Exchange Board of India (Share Based Employee Benefit and Sweat Equity) Regulations, 2021 and other applicable laws. The Shareholders had approved the said plan through postal ballot on December 05, 2023 for issuance of the Three Lakhs ESOP of 10/- each in one or more trench. Till date no option has been granted.

The Nomination and Remuneration Committee plays the role of the Compensation Committee under the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 ("SEBI SBEB Regulations").

All permanent employees and Directors (hereinafter referred to as "Employees") of the Company shall be eligible subject to determination or selection by the Committee. Following classes of employees/Directors are eligible being: • an employee as designated by the Company who has been working in India or outside India;

• a director of the Company, whether a Whole-Time Director or not including a Non-Executive Director but excluding an Independent Director.

but does not include:

• an employee who is a Promoter or belongs to the Promoter Group; and

• a director who either by himself or through his relatives or through anybody corporate, directly or indirectly holds more than 10% of the outstanding equity shares of the Company.

Disclosure required under regulation 14 of the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 are set out in Annexure VI to this report and are available on the Company's website at www.dharmajcrop.com.

Company has not sanctioned loan to any of its employees for purchase of Company's shares under any scheme.

ACKNOWLEDGMENT

Your directors take this opportunity to thanks to all Government Authorities, Bankers, Shareholders, Registrar & Transfer Agents, Investors and other stakeholders for their assistance and cooperation to the Company. Your director express their deep sense of appreciation and gratitude towards all employees and staff of the Company and wish the management all the best for further growth and prosperity.