Deccan Gold Mines Ltd Directors Report.

To

The members,

Deccan gold mines limited

The directors of deccan gold mines limited (‘the company) have pleasure in submitting their 35th annual report to the members of the company together with the audited standalone and consolidated statement of accounts for the year ended march 31, 2019. The financial statements have been presented based on ind as requirements.

1. Financial statements & results:

A. Financial results

Financial results for the year ended march 31, 2019 are as under: (rs in ‘000)

Particular For the financial year ended For the financial year ended
March 31, 2019 March 31, 2018
Other income 2,465 3,350
Total expenses 26,513 27,315
Profit or loss before exceptional and extraordinary items and tax (24,047) (24,094)
Less: exceptional items - -
Extraordinary items - (23,965)
Profit or loss before tax (24,047) (24,094)
Less: current tax
Deferred tax -
Profit or loss after tax (24,047) (24,094)
Other comprehensive income (283) 129
Balance transferred to balance sheet (24,330) (23,965)

B. Operations:

Details on the operations of the company during the period under review are given under the head "report on exploration activities" and the segment titled "status of mineral concession applications" and in "management discussion & analysis" which forms part of this report.

More details about the companys projects and operations as well as market announcements made from time to time can be accessed at (www.deccangoldmines.com). There was no change in nature of the business of the company, during the year under review.

C. Report on performance of subsidiary:

The company holds 100% shares in deccan exploration services private limited (despl) and in view of the provisions of the companies act, 2013 (‘the act), despl is a subsidiary company. Pursuant to the provisions of section 129 of the act, despls accounts have been consolidated into the companys accounts. The performance and financial position of despl, subsidiary company for the year ended march 31, 2019 is attached as annexure 1 (form aoc-1) to this report.

D. Dividend:

In view of the fact that the company is yet to commence its commercial operations, your directors express their inability to recommend dividend for the financial year under review.

E. Transfer to reserves:

In view of losses incurred during the year under review, the board of directors has not recommended transfer of any amount to reserves.

F. Declaration with regard to financial statements:

Financial statements for the year ended march 31, 2019 are in accordance with the indian accounting standards (ind-as) notified by the ministry of corporate affairs, government of india which have already become applicable to the company from the accounting period beginning on april 1, 2017.

The company has not carried out any revision in its financial statements in any of the three preceding financial years as per the requirement under section 131 of the act.

G. Deposits:

The company has not accepted or renewed any amount falling within the purview of provisions of section 73 of the companies act 2013 ("the act") read with the companies (acceptance of deposit) rules, 2014 during the year under review. Hence, the requirement for furnishing of details of deposits which are not in compliance with chapter v of the act is not applicable.

H. Disclosures under section 134(3)(l) of the companies act, 2013:

Except as disclosed elsewhere in this report, no material changes and commitments which could affect the companys financial position have occurred between the end of the financial period of the company and date of this report.

I. Disclosure with regard to internal financial controls:

The internal financial controls with reference to financial statements as designed and implemented by the company are adequate considering the nature of its business and the scale of operations. During the year under review, no material or serious observation has been made by the statutory auditors and the internal auditors of the company regarding inefficiency or inadequacy of such controls. Wherever suggested by the auditors, the control measures have been further strengthened and implemented.

J. Disclosure with regard to orders passed by regulators / courts / tribunals:

No adverse orders have been passed by any regulator or court or tribunal which can have impact on the companys status as a going concern and on its future operations.

K. Particulars of contract or arrangement with related parties:

All contracts / arrangements / transactions entered into by the company during the financial year with its wholly owned subsidiaries were in the ordinary course of business and at an arms length basis. During the year, the company had not entered into any contract / arrangement / transaction with related parties which could be considered as material related party transaction in accordance with the policy of the company on related party transactions read with sebi (listing obligations and disclosure requirement) regulations, 2015. The policy on related party transactions as approved by the board may be accessed on the companys website www.deccangoldmines.com. Your directors draw attention of the members to note no. 20 of standalone financial statements which sets out disclosures on related parties and transactions entered into with the said parties.

L. Particulars of loans, guarantees, investments and securities:

During the year under review, the company did not provide any loan or give any guarantees. The company does not have any investments except 100% shareholding in despl, its subsidiary company.

M. Disclosure under section 43(a)(ii) of the companies act, 2013:

The company has not issued any shares with differential rights and hence no information is required to be furnished in terms of provisions of section 43(a)(ii) of the act read with rule 4(4) of the companies (share capital and debenture) rules, 2014.

N. Disclosure under section 54(1)(d) of the companies act, 2013:

The company has not issued any sweat equity shares during the year under review and hence the provisions of section 54(1)(d) of the act read with rule 8(13) of the companies (share capital and debenture) rules, 2014 are not applicable.

O. Disclosure under section 62(1)(b) of the companies act, 2013:

All the stock options issued under the dgml esop 2014 and dgml esop 2014 (amended 2016) have since been exercised during the financial year 2017-18 and the company does not have any scheme of esop in force during the year under review and hence no disclosure is required to be furnished.

P. Disclosure under section 67(3) of the companies act, 2013:

During the year under review, there were no instances of non-exercising of voting rights in respect of shares purchased directly by employees under a scheme pursuant to section 67(3) of the companies act, 2013 read with rule 16(4) of companies (share capital and debenture) rules, 2014. Hence disclosures pursuant to section 67 (3) of the companies act, 2013 are not required to be furnished.

2. Outlook and opportunities:

Details on the industry outlook, opportunities, risks and concerns have been provided under ‘management discussion and analysis forming part of this annual report.

3. Matters related to directors and key managerial personnel:

a) board of directors and key management personnel:

Mr k r krishnamurthy (din: 00556641) ceased to be a director and chairman of the board of directors consequent upon his resignation with effect from april 30, 2019. Further, prof vinod kumar gaur (din: 00611175) and mr kaushik mukherjee (din:02315835) resigned as directors with effect from may 21, 2019 and july 1, 2019 respectively. The board of directors place on record their appreciation of the services rendered by mr k r krishnamurthy, prof vinod kumar and mr kaushik mukherjee during their tenure of directorship on the board of the company. Ms pratima ram (din: 03518633), an independent non-executive director was appointed as chairman of the board of directors with effect from may 1, 2019.

Dr hanuma prasad modali, director (din:01817724) retires by rotation at the ensuing annual general meeting and being eligible, offers himself for reappointment.

Further, mr natesan chinnapan (din: 08415969) and mr kailasam sundaram (din:07197319) were appointed as additional directors (independent non-executive) with effect from april 12, 2019 and august 8, 2019 respectively for a continuous period of two years, subject to approval of members at the ensuing annual general meeting (agm). Necessary notices under section 160 of the act proposing the candidature of mr natesan chinnapan, mr kailasam sundaram and dr hanuma prasad modali for the office of director have been received from shareholder (s). Accordingly, appropriate resolutions have been included in the notice convening the ensuing 35th agm and your directors recommend their appointment.

The tenure of mr sandeep lakhwara (din: 01049978) as managing director of the company ended on april 30, 2019. The companys board of directors in the meeting held on april 12, 2019 approved re-appointment of mr sandeep lakhwara for a period of one year from may 1, 2019 to april 30, 2020 subject to approval by the shareholders in the forthcoming agm. Your board of directors recommend the re-appointment of mr sandeep lakhwara as managing director of the company from may 1, 2019 to april 30, 2020.

B) declaration by independent directors:

The company has received declaration from all the independent directors under section 149(6) of the companies act, 2013 as further amended by the companies amendment act, 2017 and regulation 16(1)(b) of the sebi (listing obligations & disclosure requirements) regulations, 2015 confirming their independence company and its management. There has been no change in the circumstances which may affect their status as independent director (s) during the year under review.

The independent directors have also confirmed that they are not aware of any circumstances 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.

C) companys policy on directors appointment and remuneration:

The board has as per the recommendation of the nomination and remuneration committee, framed a policy on selection and appointment of directors and senior managerial personnel and their remuneration which was further amended by the board vide their resolution dated march 31, 2019 in terms of the sebi (listing obligations and disclosure requirements) amendment regulations, 2018 . The details of said policy are given in the corporate governance report which forms part of this annual report.

4. Disclosures related to board, committees and policies:

a) board meetings:

The board of directors met four (4) times during the year ended march 31, 2019 in accordance with the provisions of the companies act, 2013 and rules made there under. Detailed information on the board meetings is provided in the corporate governance report which forms part of this annual report. B) directors responsibility statement:

In terms of section 134(5) of the companies act, 2013, in relation to the audited financial statements of the company for the year ended march 31, 2019 the board of directors hereby confirm that: a. In preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures; b. Such accounting policies have been selected and applied consistently and the directors 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 as at march 31, 2019 and of the loss of the company for that year; c. Proper and sufficientcare was taken for maintenance of adequate accounting records in accordance with the provisions of this act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; d. The annual accounts of the company have been prepared on a going concern basis; e. Internal financial controls have been laid down by the company and that such internal financial controls are adequate and operating effectively; f. Proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively; c) board committees:

There are three (3) committees of the board of directors of the company viz. Audit committee, nomination and remuneration committee and stakeholders relationship committee. Detailed information on all the above board committees is provided in the corporate governance report forming part of this annual report along with the details of extract from nomination and remuneration policy of the company with respect to remuneration of executive directors, key managerial personnel and other senior employees of the company. Policies framed by the committees / board pursuant to the applicable provisions of the companies act, 2013 and the sebi (listing obligations and disclosure requirements) regulations, 2015 are available on the companys website (www.deccangoldmines.com).

Disclosure in respect of composition, meeting held, attendance of members, terms of reference and other related matters in respect of the above board committees are furnished in the corporate governance report forming part of this annual report.

D) policies and procedures (mechanism):

Vigil mechanism policy for directors / employees:

The board of directors of the company have pursuant to the provisions of section 178(9) of the companies act, 2013 read with rule 7 of the companies (meetings of board and its powers) rules, 2014, framed a "vigil mechanism policy" for directors and employees of the company to provide a mechanism which ensures adequate safeguards to employees and directors from any victimization on raising of concerns of any violations of legal or regulatory requirements, incorrect or misrepresentation of any, financial statements and reports, etc. The employees of the company have the right to report their concern/grievance to the chairman of the audit

Committee.

The company is committed to adhere to the highest standards of ethical, moral and legal conduct of business operations. Risk management policy:

The board of directors of the company has designed risk management policy and guidelines to avoid events, situations or circumstances which may lead to negative consequences on the companys businesses, and define a structured approach to manage uncertainty and to make use of these in their decision making pertaining to all business divisions and corporate functions. Key business risks and their mitigation are considered in the annual/ strategic business plans and in periodic management reviews.

Corporate social responsibility:

The provisions of section 135 of the act read with companies (corporate social responsibility policy) rules, 2014 are not applicable to the company.

E) annual evaluation of directors, board committees and board:

A statement indicating the manner for evaluation of performance of the board and its committees and individual directors is attached to this report as annexure ii.

F) internal control systems:

Adequate internal control systems commensurate with the nature of the companys business, size and complexity of its operations are in place and have been operating satisfactorily. Internal control systems comprising of policies and timely feedback on proceduresaredesigned to ensurereliability of financial achievement of operational and strategic goals, compliance with policies, procedure, applicable laws and regulations and that all assets and resources are acquired economically, used efficiently and adequately . Protected

g) disclosure under section 197(12) of the companies act, 2013 and other disclosures as per rule 5 of companies (appointment & remuneration) rules, 2014:

The information required pursuant to section 197 read with rules 5(1) and 5(2) of the companies (appointment & remuneration of managerial personnel) rules, 2014 have been attached as annexure iii to this report.

H) payment of remuneration / commission to managerial personnel from subsidiary company:

The managing director of the company is not in receipt of remuneration / commission from the subsidiary company. Apart from the managing director, the company does not have any managerial personnel.

5. Auditors and reports:

The matters related to auditors and their reports for the year ended march 31, 2019 are as under:

a) report of the statutory auditors on financial statements for the year ended march 31, 2019:

The report furnished by the statutory auditors on the financialstatements of the company for the year ended march 31, 2019 is free from any observations / qualifications.

B) secretarial audit report:

Provisions of section 204 read with section 134(3) of the companies act, 2013, mandates to obtain secretarial audit report in form mr-3 from a practising company secretary. M/s. Rathi and associates, practising company secretaries, mumbai had been appointed as secretarial auditors to issue secretarial audit report for the financial year 2018-19. The secretarial audit report issued in form mr-3 by m/s. Rathi associates is attached and forms part to this report. The said report does not contain any observation or qualification requiring explanation or comments from the board under section 134(3) of the companies act, 2013.

C) ratification of appointment of statutory auditors:

Pursuant to the provisions of section 139 of the companies act, 2013 and the companies (audit and auditors) rules, 2014, m/s p r agarwal & awasthi, chartered accountants, mumbai (firm regn no. 117940w) were appointed as the statutory auditors of the company for a consecutive term of five (5) years at the annual general meeting held on november 27, 2017 subject to ratification of their appointment by the members at every annual general meeting. However, the ministry of corporate affairs vide notification dated g.s.r. 432(e)-part dated may 7, 2018 withdrawn the requirement of ratification of appointment of auditors. Accordingly, no approval of shareholders will be required for ratification of appointment of statutory auditors at the ensuing annual general meeting.

D) cost auditors:

Presently, the company is not engaged in any manufacturing activities and hence requirement of appointment of cost auditors pursuant to section 148 of the companies act, 2013 is not applicable to the company.

6. Disclosures under section 134 of companies act, 2013:

Other disclosures as per provisions of section 134 of the act read with companies (accounts) rules, 2014 are furnished as under:

51 a) extract of annual return:

Pursuant to the provisions of section 134(3)(a) of the companies act, 2013, extract of annual return in the prescribed format for the financial year ended march 31, 2019 is uploaded on the website of the company and the link for the same is http://deccangoldmines.com/wp-content/uploads/2019/08/extract-of-annual-return-2019.pdf. Further, the annual return for the year ended 31 march 31, 2018 in schedule-v which was filed with the registrar of the companies is also uploaded on the website of the company and the link for the same is http://deccangoldmines.com/wp-content/uploads/2019/08/dgml_form_mgt-7_31.12.2018_11.01.2019__1_.pdf.

B) conservation of energy, technology absorption and foreign exchange earnings and outgo:

The particulars as required under the provisions of section 134(3) (m) of the companies act, 2013 read with rule 8 of the companies (accounts) rules, 2014 have not been furnished considering the fact that the company is yet to commence its manufacturing operations.

There was no foreign exchange earnings or outgo during the year under review. C) remuneration payable by companies having no profit or inadequate profit (in terms of section ii of

Schedule v to the companies act, 2013):

The company is paying remuneration to its managing director as per the limits laid down in section ii of schedule v to the companies act, 2013.

D) change in share capital:

No equity shares were issued by the company during the year under review and as such there was no change in capital structure of the company. E) disclosure under sexual harassment of women at workplace (prevention, prohibition and redressal) act, 2013:

The company has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace and has also established an internal complaints committee, as stipulated by the sexual harassment of women at workplace (prevention, prohibition and redressal) act, 2013 and rules thereunder. During the year under review, no complaints in relation to such harassment at workplace have been reported. F) fraud reporting:

During the year under review, there were no instances of material or serious fraud falling under rule 13(1) of the companies (audit and auditors) rules, 2014, by officers of the company during the course of the audit.

7. Acknowledgment and appreciation:

Your directors take this opportunity to express their gratitude to all the business associates and to the investors / shareholders for the confidence reposed in the company and its management. The directors also convey their appreciation to the employees at all levels for their enormous personal efforts as well as collective contribution. For and on behalf of the board,

Ms pratima ram
Chairman
Din: 03518633
Date: august 8, 2019
Place: bengaluru
Cin: l51900mh1984plc034662
Registered office:
Parinee crescenzo, 803, 8th floor, opp. Mca,
C38-c39, g block, bandra kurla complex, bandra (east),
Mumbai 400 051
Tel .no.:022-33040797 fax no.: 022-26532440
Email: info@deccangoldmines.com
Website: www.deccangoldmines.com