dhar textile mills ltd Directors report

To,

The Members,

THE DHAR TEXTILE MILLS LIMITED Indore

Your Board of Directors has immense pleasure in presenting the 33^rd Annual Report of your Company along with the Audited Financial Statements for the Financial Year ended on 31^st March, 2017. Further, in compliance with the Companies Act, 2013 the Company has made requisite disclosures in this Boards Report with the objective of accountability and transparency in its operations to make you aware about its performance and future perspective of the Company.

1.1 FINANCIAL RESULTS (STANDALONE) AND STATE OF COMPANYS AFFAIR AND CHANGE IN THE NATURE OF BUSINESS:

The Boards Report is prepared based on the stand alone financial statements of the company for the year ended March 31, 2017 is summarized below:

(Rs. In Lacs)

	Year ended 31/03/2017	Year ended 31/03/2016
Income from operation	414.35	2496.84
Profit/loss before providing Depreciation and Interest	(2.79)	(335.42)
Less: Depreciation	3.43	3.43
Interest	0.00	157.48
Profit/loss Before Exceptional & Extraordinary Items	(6.22)	(496.33)
Less: Exceptional Items	0.00	0.00
Profit/loss Before Taxation	(6.22)	(496.33)
Less: Current Tax	0.00	0.00
Deferred Tax Liability	0.00	0.00
Profit /Loss after Taxation	(6.22)	(496.33)

The Company had started its journey as a Private Limited Company in the year 1984, subsequently converted in Public Company and further, infused capital through an IPO and got listed in capital market. The company is engaged in Textile Sector and currently having Yarn Spinning Unit (Yarn Division) and Fabric Weaving and Processing Unit (Fabric Division). Companys Yarn Division is located in Industrial Area, Pithampur (MP) and its Fabric Division is located in Industrial area, Indore (MP). Both the Divisions and all the products, including performance and business environment thereof have been covered in detail in the Management Discussion and Analysis Report separately, which is annexed as ANNEXURE II with this report and shall form part of the Boards report.

1.2 WORKING PERFORMANCE REVIEW:

During the financial year incomes of the company is decreased from Rs. 2496.84 Lacs to Rs. 414.35 Lacs and resulting in loss of Rs. 6.22 Lacs against the loss of Rs. 496.33 Lacs in the previous year.

Being a Sick Company, your Directors are continuously trying hard to revive it by increase the profitability during the current financial year with dedicated efforts of the management and with improving ability to source raw materials required from multiple sources in a timely and cost effective manner, with reduced dependence on third parties.

During the year all the revenues were generated by Yarn Division only. The Fabric Division of the Company was not in operation throughout the year. Further, the detailed performance covered in the Management Discussion and Analysis Report separately which is annexed as ANNEXURE II with this report and shall form part of the Boards report.

1.3 CHANGES IN NATURE OF BUSINESS:

There is no change in the nature of business of the Company during the financial year 2016-17.

1.4 SHARE CAPITAL:

The paid up equity capital as on March 31, 2017 was Rs. 630.8753 Lacs. During the year under review, the Company has not issued shares to its shareholders. Further that none of the directors were holding convertible instruments as on date. Apart from that Company is also having Preference Share Capital of Rs. 350.00 Lacs, which are due for redemption.

1.5 REVISION IN FINANCIAL STATEMENTS:

In terms of section 131 of the Companies Act, 2013, the Financial Statements and Boards Report are in compliance with the provisions of section 129 or section 134 of the act and that no revision has been made during any of the three preceding financial years.

1.6 SICK INDUSTRIAL COMPANY:

The Company is a Sick Company, as its net worth was completely eroded due to heavy accumulated losses. BIFR has restored the reference of the Company in earlier year to its original number. BIFR has also directed to the Company to prepare a Draft Rehabilitation Scheme and submit the same to Operating Agency and the same is under process. Debt of the Company has been taken over by the Asset Reconstruction Company (India) Limited (ARCIL) from the Bankers.

2. RESERVES:

There is no transfer of any amount to reserves.

3. DIVIDEND:

Due to loss in the year under review, the Board is unable to recommend any dividend for the year.

4. DEPOSITS:

The Company has neither accepted nor invited any deposit from the public and hence directives issued by Reserve Bank of India and the provisions of Chapter V (Acceptance of deposits by Companies) of the Companies Act, 2013 and rules framed there under are not applicable for the year.

5. MATERIAL CHANGES AND COMMITMENTS AFTER THE END OF FINANCIAL YEAR UPTO THE DATE OF THIS REPORT:

No material changes and commitments affecting the financial position of the company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of this report.

6. PERFORMANCE AND FINANCIAL POSITION OF ASSOCIATE COMPANIES:

As per the Companies Act, 2013 and as on date the company is neither having any Subsidiary Company u/s 2(87) nor any Associate Company u/s 2(6) and hence, do not call for any disclosure under this head.

7. EXTRACT OF THE ANNUAL RETURN:

In compliance with section 92(3), section 134 (3) (a) and rule 11 of the Companies (Management and Administration) Rules, 2014 the extract of the annual return in Form No. MGT-9 which is annexed as ANNEXURE I with this report and shall form part of the Boards report.

8. COMPOSITION AND NUMBER OF MEETINGS OF THE BOARD AND COMMITTEES THEREOF:

During the year under review various meetings of the Board of Directors and their Committees were held for various purposes which were in compliance with the provisions of The Companies Act, 2013, rules made there under and all applicable provisions of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Further, below are the Compositions of the Board and its Committees alongwith the details of their meetings held during the year and attendance thereon:

Board Composition:

Name	Category	Designation
Mr. Pankaj Jajoo	Executive/ Non Independent	Managing Director
Mr. Manish Jajoo	Non Executive/ Non Independent	Director
Mr. Pankaj Singhal*	Non Executive/ Independent	Director
Mr. Sunil Choudhary	Non Executive/ Independent	Director
Mr. Vijay Bakliwal	Non Executive/ Independent	Director

*Resigned w.e.f. 05/11/2016.

Board Meetings and Attendance:

Particulars I 30.05.2016 13.08.2016 07.09.2016 11.11.2016 21.11.2016 02.12.2016 14.02.2017

Mr. Pankaj Attended Attended Attended Attended Attended Attended Attended

Jajoo

Mr. Manish Attended Attended Attended Attended Attended Attended Attended

Jajoo

Mr. Pankaj Attended Attended Attended NA NA NA NA

Singhal*

Mr. Sunil Attended Attended Attended Attended Attended Attended Attended

Choudhary

Mr. Vijay Attended Attended Attended Attended Attended Attended Attended

Bakliwal

*Resigned w.e.f. 05/11/2016.

Audit Committee Composition:

The Audit Committee was reconstituted by the Board. The Audit Committee comprises of 3 members of which two, including the Chairman of the Committee, are Independent Directors. Member Directors of the Audit Committee presently are as under:-

Name	Designation
Mr. Sunil Choudhary	Chairman
Mr. Pankaj Singhal*	Member
Mr. Vijay Bakliwal	Member
Mr. Manish Jajoo	Member

*Resigned w.e.f. 05/11/2016.

Audit Committee Meetings and Attendance:

Particulars	30.05.2016	13.08.2016	11.11.2016	14.02.2017
Mr. Sunil Choudhary	Attended	Attended	Attended	Attended
Mr. Pankaj Singhal*	Attended	Attended	NA	NA
Mr. Vijay Bakliwal	Attended	Attended	Attended	Attended
Mr. Manish Jajoo	Attended	Attended	Attended	Attended

*Resigned w.e.f. 05/11/2016.

The Board has considered all recommendations of the Audit Committee as and when provided during the year under review and hence, do not call for any disclosure under Section 177(8) of the Companies Act, 2013.

Nomination and Remuneration Committee Composition:

The Nomination and Remuneration Committee was reconstituted by the Board. The Nomination and Remuneration Committee comprises of 4 members of which two, including the Chairman of the Committee, are Independent Directors. Member Directors of the Nomination and Remuneration Committee presently are as under

Name	Designation
Mr. Sunil Choudhary	Chairman
Mr. Pankaj Singhal*	Member
Mr. Vijay Bakliwal	Member
Mr. Manish Jajoo	Member

*Resigned w.e.f. 05/11/2016.

Nomination and Remuneration Committee Meetings and Attendance:

Particulars	30.05.2016	13.08.2016	11.11.2016	14.02.2017
Mr. Sunil Choudhary	Attended	Attended	Attended	Attended
Mr. Pankaj Singhal*	Attended	Attended	NA	NA
Mr. Vijay Bakliwal	Attended	Attended	Attended	Attended
Mr. Manish Jajoo	Attended	Attended	Attended	Attended

*Resigned w.e.f. 05/11/2016.

Stakeholders Relationship Committee Composition:

The Stakeholders Relationship Committee was reconstituted by the Board. The Stakeholders Relationship Committee comprises of 4 members of which two, including the Chairman of the Committee, are Independent Directors. Member Directors of the Stakeholders Relationship Committee presently are as under :-

Name	Designation
Mr. Sunil Choudhary	Chairman
Mr. Pankaj Singhal*	Member
Mr. Vijay Bakliwal	Member
Mr. Manish Jajoo	Member

*Resigned w.e.f. 05/11/2016.

Stakeholders Relationship Committee Meetings and Attendance:

Particulars	30.05.2016	13.08.2016	11.11.2016	14.02.2017
Mr. Sunil Choudhary	Attended	Attended	Attended	Attended
Mr. Pankaj Singhal*	Attended	Attended	NA	NA
Mr. Vijay Bakliwal	Attended	Attended	Attended	Attended
Mr. Manish Jajoo	Attended	Attended	Attended	Attended

*Resigned w.e.f. 05/11/2016.

9. DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to Section 134(3)(c) read with Section 134(5) of the Companies Act, 2013, the Directors, based on representation received from the operating management and after due enquiry, confirm in respect of the audited financial accounts for the year ended March 31^st, 2017:

a) That in preparation of the annual accounts, the applicable accounting standards had been followed and that there were no material departures;

b) That the Directors had, in consultation with the Statutory Auditors, 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 for the year ended March 31^st, 2017 and the profit and loss Account of the Company for that period;

c) That the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) That the Directors had prepared the annual accounts on a going concern basis;

e) That the directors have laid down internal financial controls to be followed by the company and such internal financial controls are adequate and were operating effectively; and

f) That the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems were adequate and operating effectively.

10.1 CHANGES IN DIRECTORS AND KEY MANAGERIAL PERSONNEL:

During the year under report Mr. Manish Jajoo, the Director of the Company would be retiring by rotation at the forthcoming Annual General Meeting of the Company. Proposals for their re-appointment have been included in the Notice of Annual General Meeting for your approval.

Shri Pankaj Singhal, Independent Director of the company has resigned w.e.f. 05/11/2016.

All the intimations pertaining to the appointments and resignations, if any, made during the year has been given to Stock Exchange where the shares of the Company are listed and also the relevant records are duly updated with the Registrar of Companies, Gwalior (M.P.), wherever required.

10.2 DECLARATION OF DIRECTORS:

As per the declaration received in Form ‘DIR-8 pursuant to section 164(2) of the Companies Act, 2013 and Rule 14(1) of Companies (Appointment and Qualification of Directors) Rules, 2014, none of the Directors of the Company is disqualified from being appointment as Directors.

11.1 APPOINTMENT/RE-APPOINTMENT OF INDEPENDENT DIRECTORS:

All the Independent Directors are well appointed in the Board of the Company in compliance with the Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 entered into by the Company with Stock Exchange. Further that all independent directors shall hold office for a term up to five consecutive years on the Board of a Company, but shall be eligible for reappointment for next five years on passing of a special resolution by the Company and disclosure of such appointment in the Boards report.

11.2 DECLARATION BY INDEPENDENT DIRECTORS:

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence under sub-section (6) of section 149 of the Act and of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 entered into by the Company with the Stock Exchanges.

11.3 FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS:

The directors will be introduced to all the Board members and the senior management personnel such as Chief Financial Officer and Various Department heads individually to know their roles in the organization and to understand the information which they may seek from them while performing their duties as a Director. And meeting may be arranged for Independent Directors with aforesaid officials to better understand the business and operation of the Company. As part of continuous updating and familiarization with the Company, every Independent Director will be taken for visits to the factory or manufacturing units and other branch of the company where officials of various departments apprise them of the operational and sustainability aspects of the plants to enable them to have full understanding on the activities of the Company and initiatives taken on safety, quality etc. The Company may also circulate news and articles related to the industry from time to time and may provide specific regulatory updates. The details of such familiarization programmes for Independent Directors are posted on the website of the Company and can be accessed at http:// www.dhartextile.com/ . The detail of Familiarization Programme held on 02.01.2017 is given below.

Director		No. of Programme		No. of Hours
	Held	Attended		Duration of Time Spent
		During the Year	Cumulative Basis	During the Year	Cumulative Basis
Shri Sunil Choudhary	01	01	01	01	01
Shri Vijay Bakliwal	01	01	01	01	01

11.4 SEPARATE MEETING OF INDEPENDENT DIRECTORS:

As mandated by Clause VII of Schedule IV of the Companies Act, 2013, a separate meeting of Independent Directors was held on 02.01.2017.

11.5 EVALUATION BY INDEPENDENT DIRECTORS:

The Independent Directors in their meeting has reviewed the performance of Non-Independent directors and Board as a whole including reviewing the performance of the Chairperson of the company taken into account the views of Executive Directors and Non-Executive Directors. The policy on evaluation including above said criteria for the evaluation of the Board, individual directors including independent directors and the committee of the board has been laid down under point no. 12 below.

12. DISCLOSURE IN TERMS OF NOMINATION AND REMUNERATION POLICY:

NOMINATION, REMUNERATION AND EVALUATION POLICY PREFACE

The Remuneration Committee of THE DHAR TEXTILE MILLS LIMITED ("the Company") has been formed to review and make recommendations on annual salaries, performance commission, perquisites and other employment conditions of the Executive Directors, Key Managerial Personnel and other employees. In order to align with the provisions of the Companies Act, 2013 and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board changed the nomenclature of "Remuneration Committee" as "Nomination and Remuneration Committee".

OBJECTIVE

The Nomination and Remuneration Committee and this Policy are in compliance with Section 178 of the Companies Act, 2013 read along with the applicable rules thereto and under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The Key Objectives of the Committee would be:

- To guide the Board in relation to appointment and removal of Directors, Key Managerial Personnel and Senior Management.

- To evaluate the performance of the members of the Board and provide necessary report to the Board for further evaluation of the Board.

- To recommend to the Board on Remuneration payable to the Directors, Key Managerial Personnel and Senior Management.

DEFINITIONS

The definitions of some of the key terms used in this Policy are given below.

Terms not defined in the policy shall have the meaning as per the Companies Act, 2013.

"Key Managerial Personnel" means -

Chief Executive Officer or the Managing Director or the Manager;

Company Secretary,

Whole-time Director;

Chief Financial Officer; and

Such other officer as may be prescribed.

"Senior Management" means Senior Management means personnel of the company who are members of its core management team excluding the Board of Directors. This would also include all members of management one level below the executive directors including all functional heads.

ROLE OF COMMITTEE:

The role of the Committee inter alia will be the following:

To formulate a criteria for determining qualifications, positive attributes and independence of a Director;

To recommend to the Board the appointment and removal of Senior Management;

To carry out evaluation of Directors performance and recommend to the Board appointment / removal based on his / her performance;

To recommend to the Board on (i) policy relating to remuneration for Directors, Key Managerial Personnel and Senior Management and (ii) Executive Directors remuneration and incentive;

a) To make recommendations to the Board concerning any matters relating to the continuation in office of any Director at any time including the suspension or termination of service of an Executive Director as an employee of the Company subject to the provision of the law and their service contract;

b) Ensure that level and composition of remuneration is reasonable and sufficient, relationship of remuneration to performance is clear and meets appropriate performance benchmarks;

c) To devise a policy on Board diversity;

d) To develop a succession plan for the Board and to regularly review the plan.

MEMBERSHIP:

a) The Committee shall consist of a minimum 3 non-executive directors, majority of them being independent.

b) Minimum two (2) members shall constitute a quorum for the Committee meeting.

c) Membership of the Committee shall be disclosed in the Annual Report.

d) Term of the Committee shall be continued unless terminated by the Board of Directors.

CHAIRMAN:

a) Chairman of the Committee shall be an Independent Director.

b) Chairperson of the Company may be appointed as a member of the Committee but shall not be a Chairman of the Committee.

c) In the absence of the Chairman, the members of the Committee present at the meeting shall choose one amongst them to act as Chairman.

d) Chairman of the Nomination and Remuneration Committee meeting could be present at the Annual General Meeting or may nominate some other member to answer the shareholders queries.

FREQUENCY OF MEETINGS:

The meeting of the Committee shall be held at such regular intervals as may be required.

COMMITTEE MEMBERS INTERESTS:

A member of the Committee is not entitled to be present when his or her own remuneration is discussed at a meeting or when his or her performance is being evaluated.

The Committee may invite such executives, as it considers appropriate, to be present at the meetings of the Committee.

SECRETARY:

The Company Secretary of the Company shall act as Secretary of the Committee.

VOTING:

a) Matters arising for determination at Committee meetings shall be decided by a majority of votes of Members present and voting and any such decision shall for all purposes be deemed a decision of the Committee.

b) In the case of equality of votes, the Chairman of the meeting will have a casting vote.

NOMINATION DUTIES:

The duties of the Committee in relation to nomination matters include:

Ensuring that there is an appropriate induction & training programme in place for new Directors and members of Senior Management and reviewing its effectiveness;

Ensuring that on appointment to the Board, Non-Executive Directors receive a formal letter of appointment in accordance with the Guidelines provided under the Companies Act, 2013;

Identifying and recommending Directors who are to be put forward for retirement by rotation.

Determining the appropriate size, diversity and composition of the Board;

Setting a formal and transparent procedure for selecting new Directors for appointment to the Board;

Developing a succession plan for the Board and Senior Management and regularly reviewing the plan;

Evaluating the performance of the Board members and Senior Management in the context of the Companys performance from business and compliance perspective;

Making recommendations to the Board concerning any matters relating to the continuation in office of any Director at any time including the suspension or termination of service of an Executive Director as an employee of the Company subject to the provision of the law and their service contract.

Delegating any of its powers to one or more of its members or the Secretary of the Committee;

Recommend any necessary changes to the Board.

Considering any other matters as may be requested by the Board; and

POLICY FOR APPOINTMENT AND REMOVAL OF DIRECTOR, KMP AND SENIOR MANAGEMENT:

1. Appointment Criteria and Qualifications

a) The Committee shall identify and ascertain the integrity, qualification, expertise and experience of the person for appointment as Director, KMP or at Senior Management level and recommend to the Board his / her appointment.

b) A person should possess adequate qualification, expertise and experience for the position he / she is considered for appointment. The Committee has discretion to decide whether qualification, expertise and experience possessed by a person is sufficient / satisfactory for the concerned position.

c) The Company shall not appoint or continue the employment of any person as Whole-time Director who has attained the age of seventy years. Provided that the term of the person holding this position may be extended beyond the age of seventy years with the approval of shareholders by passing a special resolution based on the explanatory statement annexed to the notice for such motion indicating the justification for extension of appointment beyond seventy years.

2. Term / Tenure

Managing Director/Whole-time Director:

The Company shall appoint or re-appoint any person as its Executive Chairman, Managing Director or Executive Director for a term not exceeding five years at a time. No re-appointment shall be made earlier than one year before the expiry of term.

Independent Director:

An Independent Director shall hold office for a term up to five consecutive years on the Board of the Company and will be eligible for re-appointment on passing of a special resolution by the Company and disclosure of such appointment in the Boards report.

- No Independent Director shall hold office for more than two consecutive terms of upto maximum of 5 years each, but such Independent Director shall be eligible for appointment after expiry of three years of ceasing to become an Independent Director. Provided that an Independent Director shall not, during the said period of three years, be appointed in or be associated with the Company in any other capacity, either directly or indirectly.

- At the time of appointment of Independent Director it should be ensured that number of Boards on which such Independent Director serves is restricted to seven listed companies as an Independent Director and three listed companies as an Independent Director in case such person is serving as a Whole-time Director of a listed company or such other number as may be prescribed under the Act.

3. Evaluation

The Committee shall carry out evaluation of performance of every Director, KMP and Senior Management Personnel at regular interval (yearly).

4. Removal

Due to reasons for any disqualification mentioned in the Act or under any other applicable Act, rules and regulations there under, the Committee may recommend, to the Board with reasons recorded in writing, removal

of a Director, KMP or Senior Management Personnel subject to the provisions and compliance of the said Act, rules and regulations.

5. Retirement

The Director, KMP and Senior Management Personnel shall retire as per the applicable provisions of the Act and the prevailing policy of the Company. The Board will have the discretion to retain the Director, KMP, Senior Management Personnel in the same position/ remuneration or otherwise even after attaining the retirement age, for the benefit of the Company.

REMUNERATION DUTIES:

The duties of the Committee in relation to remuneration matters include:

To consider and determine the Remuneration Policy, based on the performance and also bearing in mind that the remuneration is reasonable and sufficient to attract retain and motivate members of the Board and such other factors as the Committee shall deem appropriate all elements of the remuneration of the members of the Board.

To approve the remuneration of the Senior Management including key managerial personnel of the Company maintaining a balance between fixed and incentive pay reflecting short and long term performance objectives appropriate to the working of the Company.

To delegate any of its powers to one or more of its members or the Secretary of the Committee.

To consider any other matters as may be requested by the Board;

Professional indemnity and liability insurance for Directors and senior management.

POLICY FOR REMUNERATION TO DIRECTORS/KMP/SENIOR MANAGEMENT PERSONNEL:

1. Remuneration to Managing/Whole-time / Executive / Managing Director, KMP and Senior Management Personnel:

The Remuneration/ Compensation/ Commission etc., if any to be paid to Director / Managing Director etc. shall be governed as per provisions of the Companies Act, 2013 and rules made there under or any other enactment for the time being in force. However no remuneration has been paid for the FY 2016-17 to any director.

2. Remuneration to Non- Executive / Independent Director:

The Non-Executive Independent Director may receive remuneration / compensation / commission as per the provisions of Companies Act, 2013. The amount of sitting fees shall be subject to ceiling/ limits as provided under Companies Act, 2013 and rules made there under or any other enactment for the time being in force. However no remuneration has been paid for the FY 2016-17 to any director.

EVALUATION POLICY:

The following parameters for the purpose of evaluating the performance of the Board and that of Committees and Individual Directors:

Rating Scale

RATING	DESCRIPTION
1	Does not meet evaluation parameter
2	Meets evaluation parameter
3	Exceeds evaluation parameter
N/A	Not Applicable

Evaluation of Board

Some of the specific issues and questions that should be considered in a performance evaluation of the entire Board by the Independent Directors are set out below:

Assessment Criteria

Is the composition of the board appropriate with the right mix of knowledge and skills required to drive organizational performance in the light of future strategy?

Members of the board meet all applicable independence requirements.

The Board of Directors is effective in establishing a corporate environment that promotes timely and effective disclosure, fiscal accountability, high ethical standards and compliance with applicable laws and regulations.

The Board of Directors is effective in developing a corporate governance structure that allows and encourages the Board to fulfill its responsibilities.

5 The Companys systems of control are effective for identifying material risks and reporting material violations of policies and law and The Board is provided with sufficient information about material risks and problems that affects the Companys business and prospects.

6 The Board receives regular financial updates and takes all necessary steps to ensure the operations of the organization are sound and reviews the organizations performance in carrying out the stated mission on a regular basis.

7 Are sufficient numbers of board meetings, of appropriate length, being held to enable proper consideration of issues?

8 The information provided to directors prior to Board meetings meets expectations in terms of length and level of detail and Board members come prepared to meetings and ask appropriate questions of management and address issues that might present a conflict of interest.

9 Board meetings are conducted in a manner that encourages open communication, meaningful participation, and timely resolution of issues.

10 The Chairman of the Board effectively and appropriately leads and facilitates the Board meetings and the policy and governance work of the Board.

11 Nomination and appointment of Board members and their Remuneration follow clearly established procedures using known criteria as laid down by the Nomination and Remuneration Committee.

12 The Board oversees the role of the independent auditor from selection to termination and has an effective process to evaluate the independent auditors qualifications and performance (through its Audit Committee).

13 Company has a system for Corporate Social Responsibility, Stakeholder Relationships and for prohibition of insider trading

14 Company has necessary Committees which are required and these Committees are working effectively

15 Adherence to Internal Policies and Procedures.

Based on the above criteria Board has to be assessed by giving a rating according to the Rating Scale. The total number of the ratings awarded will be averaged over the number of persons who have awarded the ratings.

The process of evaluation shall be done by Independent Directors only. Assistance in the process will be provided by a person so authorized by the Board, and for this purpose the person will report to the Board.

Evaluation of Committees

Some of the specific issues and questions that should be considered in a performance evaluation of the Committees of the Board are set out below:

Assessment Criteria

Compliance with Articles of Association, Companies Act and Other applicable laws.

Compliance with Code of Conduct of the Company.

Committees accomplishments w.r.t. performance objectives.

Adherence to Articles of Association, Companies Act and Other applicable laws.

Redressal of Complaints and Grievances.

Coordination with other committees and with Board of Directors.

Fulfillment of Roles and Responsibilities in accordance to Companies Act and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Adherence to Internal Policies and Procedures.

Based on the above criteria Committees has to be assessed by giving a rating according to the Rating Scale. The total number of the ratings awarded will be averaged over the number of persons who have awarded the ratings. The process of evaluation shall be done all the Directors of the Company. Assistance in the process will be provided by a person so authorized by the Board, and for this purpose the person will report to the Board.

Evaluation of Individual Directors (Independent Directors)

Some of the specific issues and questions that should be considered in the performance evaluation of an Independent Director, (the exercise in which the concerned director being evaluated shall not be included) are set out below:

Assessment Criteria

Attendance and participations in the Meetings and timely inputs on the minutes of the meetings

Adherence to code of conduct of Company and disclosure of non - independence, as and when it exists and disclosure of interest

Raising of valid concerns to the Board and constructive contribution to resolution of issues at meetings

Interpersonal relations with other directors and management

Objective evaluation of Boards performance, rendering independent, unbiased opinion

Understanding of the Company and the external environment in which it operates and contribution to strategic direction.

Safeguarding interest of whistle-blowers under vigil mechanism and Safeguard of confidential information

Adherence to Internal Policies and Procedures.

Based on the above criteria each of the Independent Directors has to be assessed by giving a rating according to the Rating Scale. The total number of the ratings awarded will be averaged over the number of persons who have awarded the ratings.

The process of evaluation shall be done by the other directors (including other Independent Directors). Assistance in the process will be provided by a person so authorized by the Board, and for this purpose the person will report to the Board.

Evaluation of Individual Directors (NON - INDEPENDENT DIRECTORS / CMD / WTD)

Some of the specific issues and questions that should be considered in the performance evaluation of a NonIndependent Director /WTD/ CMD, (the exercise in which the concerned director being evaluated shall not be included) are set out below:

Assessment Criteria

Attendance, participations in the Meetings and timely inputs on the minutes of the meetings

Contribution towards growth of the Company including actual vis-a-vis budgeted performance.

Leadership initiative, like new ideas and planning towards growth of the Company and steps initiated towards Branding of the Company

Adherence to code of conduct of Company

Team work attributes and supervising & training of staff members

Compliance with policies, Reporting of frauds, violation etc. and disclosure of interest

Safeguarding of interest of whistle blowers under vigil mechanism and Safeguard of confidential information

Adherence to Internal Policies and Procedures.

Based on the above criteria each of the Non - Independent Directors / CMD / WTD has to be assessed by giving a rating according to the Rating Scale. The total number of the ratings awarded will be averaged over the number of persons who have awarded the ratings.

The process of evaluation shall be done by the other directors (including other Non - Independent Directors / CMD / WTD). Assistance in the process will be provided by a person so authorized by the Board, and for this purpose the person will report to the Board.

MINUTES OF COMMITTEE MEETING:

Proceedings of all meetings must be recorded in minutes and signed by the Chairman of the Committee at the subsequent meeting. Minutes of the Committee meetings will be tabled at the subsequent Board and Committee meeting.

REVIEW AND AMENDMENT

The Nomination and Remuneration Committee or the Board may review the Policy as and when it deems necessary.

The Nomination and Remuneration Committee may issue the guidelines, procedures, formats, reporting mechanism and manual in supplement and better implementation to this Policy, if it thinks necessary.

This Policy may be amended or substituted by the Nomination and Remuneration Committee or by the Board as and when required and also by the Compliance Officer where there is any statutory changes necessitating the change in the policy.

Note: Nomination and Remuneration Policy of the Company is also available on the website of the Company

i.e. www.dhartextile. com

13.1 AUDITORS:

(i) Statutory Auditors:

The appointment of M/s B. Bansal & Co., Chartered Accountants, as auditors of the Company was approved by the shareholders in the Annual General Meeting held on 30.09.2015 upto the conclusion of the Annual General Meeting for the Financial Year 2016-17. Further, the proposals for appointment of M/s. Airen & Saluja., Chartered Accountants, (ICAI Firm Registration No.: 0004588C) for Five Financial Year (From F.Y. 2017-18 to 2021-22) have been included in the Notice of Annual General Meeting for approval by Shareholder in the ensuing Annual General Meeting and the Company has received a certificate from the auditors to the effect that if they are appointed, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013.

(ii) Cost Auditors:

Financial Year 2016-17:

The company does not falls within the provisions of Section 148 of Companys Act, 2013 read with the Companies (Cost records & Audit) Rules, 2014, therefore no such records required to be maintained

(iii) Secretarial Auditor:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Ms. Shiwali Jhanwar Company Secretary in Practice to undertake the Secretarial Audit of the Company. The report of the Secretarial Auditor in Form MR-3 is enclosed as Annexure-IV with this report and shall form part of the Boards report.

(iv) Internal Auditor:

The Company has appointed M/s. JRAM & Co., Chartered Accountants, Indore as the Internal Auditor of the company to do the Internal Audit function.

13.2 AUDITORS REPORT/ SECRETARIAL AUDIT REPORT:

Auditors Report:

The Auditors, in their report have referred to the Notes forming part of the Final Account, considering the principle of the materiality; the notes are self explanatory and do not need any further comments under section 134 of Companies Act, 2013.

Explanations for remark in Secretarial Auditors Report:

Point No.2 (a) Due to heavy losses and sick Company status it is difficult to bear extra cost, however company has placed all the information and results at BSE and its own website and has started publishing the same in newspaper also.

Point No.2 (b) Company has already applied and trying for revocation of suspension.

Point No.2 (c) The other regional stock exchanges are closed or in the process of closing as per SEBI order, hence company has not circulating the information to them, as the shares of the Company are listed at BSE, which is having national wide approach.

Point No.2 (d & e) As the Company is sick company and defaulted in the payment of its secured debts and having negative CIBIL, nobody is interested to become Director or Company Secretary, however Company is trying to comply with the requirements.

Point No.2 (f) Due to continue losses, Company has become sick company. Looking into financial condition, Company is not in position to redeem Preference Shares as per terms of the issue and pay the dividend accrued thereon. A detailed note is also provided in Notes to the Account annexed with Balance Sheet of the Company.

Point No.2 (g) Amount will be transferred at the earliest.

Point No.2 (h) Company is trying to purchase Hank Yarn Obligation, to fulfill the requirement, which will be done at the earliest.

14. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186:

During the year under review your Company has not provided loans/guarantees and made investments in terms of section 186 of the Companies Act, 2013, if any.

The details regarding such transactions are given in the notes to the financial Statements

15. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

During the year, the Company has not entered into any material transactions with related parties and hence, as there are no such material transactions inconsistent with sub-section (1) of section 188 of the Companies Act, 2013, so no AOC-2 is required to be given in this report. Suitable disclosure as required by the Accounting Standard (AS 18) has been made in the notes to the Financial Statements. The company has adopted a Policy on Related Party Transaction which is available on the website of the Company i.e. http:// www.dhartextile.com/ . Further, for all the related party transactions entered into by the company during the year under review kindly refer notes to Financial Statements.

16. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

(A) Conservation of energy-

(i) Company ensures that the manufacturing operations are conducted in the manner whereby optimum utilization and maximum possible savings of energy is achieved.

(ii) No specific investment has been made in reduction in energy consumption.

(iii) As the impact of measures taken for conservation and optimum utilization of energy are not quantitative, its impact on cost cannot be stated accurately.

(B) Technology absorption-

(i) Companys products are manufactured mostly by using indigenous technology and no outside technology is being used for manufacturing activities.

(ii) The company has no specific research & development expenditure during the year;

(iii) No imported technology is installed by the company.

(C) Foreign exchange earnings and Outgo-

During the year the Company has no foreign exchange earnings and expenses.

17. BUSINESS RISK MANAGEMENT:

Your Directors have adopted a Risk Management Policy for the Company. The Audit Committee and the Board of Directors of the Company reviewed the risks, if any, involved in the Company from time to time, and took appropriate measures to minimize the same. The Audit Committee ensures that the Policy for Risk Management is adopted across the Company in an inclusive manner.

18. CORPORATE SOCIAL RESPONSIBILITY (CSR):

In terms of the threshold limits provided under Section 135 of the Companies Act, 2013 and Rule 3 of the Companies (Corporate Social Responsibility Policy) Rules, 2014, your Company has not falls in the ambit of the said section and accordingly the provisions of the section is not applicable to the Company.

19. FORMAL ANNUAL EVALUATION:

Pursuant to section 134 (3) (p) of the Companies Act, 2013 and Rule 8(4) of Companies (Accounts) Rules, 2014 and pursuant to Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has Carried out an evaluation of its own performance, the directors individually as well as the evaluation of its Committees as per the criteria laid down in the Nomination, Remuneration and Evaluation policy. The said policy including above said criteria for the evaluation of the Board, individual directors including independent directors and the committee of the board has been laid down at point no. 13 above.

20. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:

During the year there are no significant material orders passed by the Regulators / Courts/ Tribunals impacting the going concern status of the Company and its future operations.

21. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has a proper internal control system, which provides adequate safeguards and effective monitoring of the transactions and ensures that all assets are safeguarded and protected against loss from unauthorized use or disposition.

The Company has an internal audit system from an outside agency, which ensures that the Companys control mechanism is properly followed and all statutory requirements are duly complied with.

Moreover, the audit committee of the Company comprising of all independent directors regularly reviews the audit plans, adequacy of internal control as well as compliance of accounting standards.

Also the CFO has the responsibility for establishing and maintaining internal controls for financial reporting and that they also have the overall responsibility to evaluate the effectiveness of internal control systems of the company pertaining to financial reporting and they have to disclose to the auditors and the Audit Committee, deficiencies in the design or operation of such internal controls, if any, of which they are aware and the steps they have taken or propose to take to rectify the deficiencies.

22. DISCLOSURE IN TERMS OF VIGIL MECHANISM:

The Company believes in the conduct of its affairs in a fair and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behavior. The Company is committed to develop a culture in which every employee feels free to raise concerns about any poor or unacceptable practice and misconduct. In order to maintain the standards has adopted lays down this Whistle Blower Policy to provide a framework to promote responsible and secure whistle blowing.

The Board of Directors of your Company has adopted the Vigil Mechanism and Whistle Blower Policy in compliance of Companies Act, 2013. The said policy has been uploaded on the website of the company i.e., http:// www.dhartextile.com/ .

23. POLICIES

We seek to promote and follow the highest level of ethical standards in all our business transactions guided by our value system. The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Companies Act, 2013 has mandated the formulation of certain policies for all listed companies. All our corporate governance polices are available on our website as mentioned below .The policies are reviewed periodically by the board and updated on need and new compliance requirement.

Name of the Policy	Brief Description	Web Link
Nomination Remuneration and Evaluation Policy	This policy formulates the criteria for determining qualifications, positive attributes, independence of the Directors and recommends to the Board a Policy, relating to the remuneration for the Directors, Key Managerial Personnel and other employees	www.dhartextile.c om/policy
Policy for determining materiality of event	The policy applies for disclosures of material events affecting company and its associates.	www.dhartextile.c om/policy
Policy on document preservation	The policy outlines that the Company intends to safeguard significant documents and preserve them to ensure durability of documents including documents in electronic form.	www.dhartextile.c om/policy
Related Party Transactions Policy	The policy regulates all transactions between the Company and its related parties.	www.dhartextile.c om/policy
Whistle Blower and Vigil Mechanism Policy	The policy outlines the whistleblower mechanism for directors and employees to report concerns about unethical behavior, actual or suspected fraud or violation of the Companys code of conduct and ethics.	www.dhartextile.c om/policy
Policy on prevention of sexual harassment at workplace	The policy that the Company provides an equal employment opportunity and is committed to creating a healthy working environment that enables employees to work without fear of prejudice, gender bias and sexual harassment.	www.dhartextile.c om/policy
Risk Management Policy	The policy that builds a strong risk management culture to better understand a risk profile and to better manage the uncertainties.	www.dhartextile.c om/policy

24. COMMISSION RECEIVED BY DIRECTORS FROM HOLDING AND SUBSIDIARY:

During the year under review neither the Managing Director nor Whole-time Director is in receipt of commission from the company and also has not received any remuneration or commission from any holding or subsidiary company of company u/s 197(14).

25. MANAGERIAL REMUNERATION:

Disclosures Pursuant to Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

1. The ratio of the remuneration of each director to the median remuneration of the employees of the company for the financial year;

No salary has been provided to any of the Directors during the year under review.

2. The percentage increase in remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year;

Name	Designation	Remuneration 2015-	Remuneration	Change
		16	2016-17	Percentage
Mrs. Indu Batni	CFO	312000	NIL	(100%)

#No salary has been provided to any of the Directors and Key Managerial Person during the year under review.

3. The percentage increase in the median remuneration of employees in the financial year is 13.69

4. The number of permanent employees on the rolls of company as on 31.03.2017 are 110

5. Average Percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof;

Remuneration paid to employees (Excl. Managerial Personnel) 2015-	Remuneration paid to employees (Excl. Managerial Personnel) 2016-	% Change	Remunerati on paid to Managerial Personnel	Remuneration paid to Managerial Personnel	% Change
16	17		2015-16	2016-17
13141519	1800000	13.69	312000	NIL	100%

6. It is hereby affirmed that the remuneration paid by the Company to its Employees during the year under review is as per the Nomination, Remuneration & Evaluation Policy of the company.

26. EQUITY SHARES WITH DIFFERENTIAL VOTING RIGHTS:

The company has not issued any shares with differential voting rights and accordingly the provisions of Section 43 read with Rule 4(4) of the Companies (Share Capital and Debentures) Rules, 2014 of the Companies Act, 2013 and rules framed there under are not applicable for the year.

27. DETAILS OF SWEAT EQUITY SHARES:

The company has not issued any sweat equity shares and accordingly the provisions of Section 54 read with Rule 8(13) of the Companies (Share Capital and Debentures) Rules, 2014 of the Companies Act, 2013 and rules framed there under are not applicable for the year.

28. DETAILS OF EMPLOYEES STOCK OPTION SCHEME:

The company has not granted stock options and accordingly the provisions of Section 62(1)(b) read with Rule 12(9) of the Companies (Share Capital and Debentures) Rules, 2014 of the Companies Act, 2013 and rules framed there under are not applicable for the year.

29. DISCLOSURE OF VOTING RIGHTS NOT EXCERCISED:

The company has not made any provision of money for the purchase of, or subscription for, shares in the company or its holding company, if the purchase of, or the subscription for, the shares by trustees is for the shares to be held by or for the benefit of the employees of the company and accordingly the provisions of Chapter IV (Share Capital and Debentures) of the Companies Act, 2013 and rules framed there under are not applicable for the year.

30. EMPLOYEES:

Employees relation continued to be cordial throughout the year. Your Directors wish to place on record their sincere appreciation for the excellent spirit with which the entire team of the Company worked at factory and office premises in such hard time of the Company.

During the year under review, none of the employee has received remuneration of Rs. 8.50 Lacs per month or Rs. 1.20 Crores per year or at a rate which, in the aggregate, is in excess of that drawn by the managing director or whole-time director or manager and holds by himself or along with his spouse and dependent children, not less than two percent of the equity shares of the company pursuant to Section 197 (12) of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and hence, do not call for any further details referred to in Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

31. CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORT:

As per Regulation 15(2)(a) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the compliance with the Corporate Governance provisions as specified in Regulations 17 to 27 and clauses (b) to (i) of sub-regulation (2) of regulation 46 and para C , D and E of Schedule V of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, are not applicable to the company because the paid up equity share capital of the company is not exceeding rupees ten crore and the net worth of the company is not exceeding rupees twenty five crore, as on the last day of the previous financial year.

Management Discussion and Analysis Report, in terms of Regulation 34 (2)(e) Securities And Exchange Board Of India (Listing Obligations And Disclosure Requirements) Regulations, 2015 is annexed as ANNEXURE - II, with this report and shall form part of the Boards report.

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

The Company has formed an Internal Complaints Committee where employees can register their complaints against sexual harassment. This is supported by the Sexual Harassment Policy which ensures a free and fair enquiry process with clear timelines. Further During the year under review, the Company has not received any complaint under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

33. PAYMENT OF LISTING FEES:

Annual listing fee for the year 2017-18 has been not paid by the Company to BSE.

34. PAYMENT OF DEPOSITORY FEES:

Annual Custody/Issuer fee for the year 2017-18 has been not paid by the Company to NSDL and CDSL.

35. DEMAT STATUS:

The companys shares are presently held in both electronic and physical modes.

36. DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES:

The Company neither has any Subsidiary Company as defined u/s 2(87) nor any Associate Company as defined u/s 2(6) of Companies Act 2013 nor any Joint Ventures as on date of this report and further that, none of such companies became or ceased to be as such during the year under review.

37. TRANSFER TO INVESTORS EDUCATION & PROTECTION FUND:

As per the provisions of section 125 of the Companies Act, 2013 and as per rule 3 of the Investor Education and Protection Fund (Awareness and Protection of Investors) Rules, 2001, the Unclaimed Dividend is required to be transferred to the said Investor Education and Protection Fund Account, which will be deposited shortly.

38. CODE OF FAIR DISCLOSURE OF UNPUBLISHED PRICE SENSITIVE INFORMATION AND CODE OF CONDUCT UNDER SEBI (PROHIBITION OF INSIDER TRADING) REGULATIONS, 2015

Pursuant to Regulation 8 of Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 the Board of Directors has formulated and adopted the "Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information" (Code of Fair Disclosure) of the Company.

The Board has also formulated and adopted "Code of Conduct for Prohibition of Insider Trading" (Code of Conduct) of the Company as prescribed under Regulation 9 of the said Regulations.

39. DISCLOSURE OF FRAUDS IN THE BOARDS REPORT U/S 143 OF THE COMPANIES ACT, 2013

During the year under review, your Directors do not observe any contract, arrangement and transaction which could result in a fraud; your Directors hereby take responsibility to ensure you that the Company has not been encountered with any fraud or fraudulent activity during the Financial Year 2016-17.

40. ACKNOWLEDGEMENTS:

Your Directors wish to place on record their appreciation for and gratitude to the Bank, Asset Reconstruction Company (India) Ltd. (ARCIL) and ARSEC (India) Ltd. for their valuable support and co-operation.

Your directors also wish to place on record their appreciation of the wholehearted and continued support extended by the shareholders, investors, employees and workers of the company which had always been a source of strength for the Company.

	For and on Behalf of the Board,
	The Dhar Textile Mills Limited
	Sd/-
Place: Indore	Pankaj Jajoo
Date: 30.11.2017	Chairperson & Managing Director
	DIN: 00017748