Deepak Spinners Ltd Directors Report

Dear Shareholders,

The Board of Directors of your Company (Board) is pleased to present their 43rd Annual Report and the Audited Financial Statements for the Financial year ended 31st March 2025.

1. Financial Results

(Rs.in Lakhs)

	31st March 2025	31st March 2024
Profit before Depreciation & Tax	358.14	2095.74
Less: Depreciation	1755.06	1890.79
Tax Expense
-Current year	(40.05)	115.00
-Deferred Tax	(337.86)	(40.39)
Add: Other Comprehensive Income	22.37	39.09
Total Comprehensive Income for the year	(996.64)	169.43
Transfers and appropriations:
Dividend for 2023-24 paid during the year	35.95	179.73
Proposed dividend	-	-
Balance carried forward to Reserves and Surplus	(1032.59)	(10.30)

The above figures are extracted from the audited financial statements as per Indian Accounting Standards (Ind AS). There has been no change in the nature of the business activities of the Company during the year.

2. Dividend

The Board of Directors has decided not to recommend any dividend for the financial year ended on 31st March 2025, after careful consideration of the Companys financial position and future growth plans.

3. General Review

The past year has presented significant challenges, marked by global geopolitical tensions and economic uncertainties that have impacted market dynamics. Imports of fabrics from China remain a matter of concern; however, proactive steps have been undertaken to strengthen domestic competitiveness through strategic quality improvements and enhanced market positioning.

Export demand witnessed slight improvements compared to the previous year, driven by renewed interest in specialized yarn segments. However, the domestic market continued to face an oversupply situation, exerting pressure on pricing. Despite these challenges, the Company undertook strategic pricing adjustments and strengthened its demand forecasting mechanisms, which helped mitigate the adverse impact on yarn pricing.

Investment in modernization and upgradation continues to be a cornerstone of the Companys long -term strategy. During the year, the 4 MW solar power plant at the Guna unit was completed and commissioned, contributing meaningfully to energy efficiency and cost savings. However, a substantial increase in power tariffs by the Himachal Pradesh Government led to a rise in energy costs at the Baddi plant, resulting in steep increase in additional expenditure as compared to FY 2023-24. The Company remains steadfast in its commitment to manufacturing excellence, embracing new technologies and optimizing production efficiency. Modernization initiatives undertaken during the year have started to yield tangible cost savings. The benefits of these initiatives are expected to further strengthen the Companys cost competitiveness anc contribute positively to profitability in the coming financial year.

4. Credit Rating

The Company has got the following credit rating from M/s. ICRA Limited on 22nd August 2024.

Facility	Amount (Rs. Crore)	Rating / Outlook
On Long Term Scale
Fund Based - Cash Credit	60.00	[ICRA]A- (Negative)
Non-Fund Based - Bank Guarantee	3.00
Total	63.00
On Short Term Scale
Fund Based - Export Packing Credit Interchangeable^	(15.00)	[ICRA]A2+
Fund Based - Bill Discounting (Interchangeable^	(15.00)
Non-Fund Based - Letter of Credit	2.00
Non-Fund Based - Capex Letter ofCredit	10.00
Non-Fund Based - Credit Exposure Limit	1.00
Total	13.00
AWithin the overall fund based working capital limit

5. Internal Financial Control Systems

The Internal Control Systems are aligned with the nature of the business and the scale and complexity of the business of the Company. These are designed to ensure adherence to Company policies, safeguarding of assets, prevention and detection of fraud, accuracy and completeness of accounting records. These internal control systems provide, among other things, a reasonable assurance that transactions are executed with management authorization and that they are recorded in all material respects to permit the timely preparation of financial statements in conformity with established accounting principles. During the year under review, the Company has not come across any incidence of fraud.

An independent audit function is an important element of the Companys internal control system. Internal Audit is conducted by independent Chartered Accountants every quarter. Significant audit observations and subsequent actions are regularly reported to the Audit Committee. To uphold audit independence, internal auditors report directly to the Audit Committee.

6. Statutory Auditors

As per Section 139 of the Companies Act, 2013, read with the Companies (Audit and Auditors) Rules, 2014, the members of the Company in 40th AGM had approved the appointment of M/s. Salarpuria & Partners, Chartered Accountants (ICAI Registration No. (302113E) ("M/s. S&P") as the Statutory Auditors of the Company for a term of five consecutive years, that is, from conclusion of 40th AGM of the Company till the conclusion of the 45th AGM of the Company.

7. Auditors Report

The Auditors Report to the Shareholders given by M/s. Salarpuria & Partners, Chartered Accountants, on Financial Statements of the Company for the Financial Year 2024-25 is part of the Annual Report. The Auditors Report does not contain any reservations, qualifications or adverse remarks. During the year under review, the Auditors have not reported any matter under Section 143(12) of the Companies Act, 2013, therefore, no detail is required to be disclosed under Section 134(3) (ca) of the Act.

8. Secretarial Audit

Pursuant to Section 204 of the Companies Act 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Secretarial Audit was carried out by M/s A. Arora & Co., Company Secretaries (PCS Registration No. 993) for the financial year 2024-25. The Secretarial Audit Report is annexed as Annexure - II, and forms an integral part of this Report.

The Secretarial Report is self-explanatory and does not call for any further comments. The Secretarial Audit Report have reported about delay of 2 days in submitting quarterly statement of shareholders complaints with BSE Limited, delay in appointment of woman director, and due to consecutive resignations and retirement of the independent directors, there were consequent delays in the reconstitution of the Audit Committee, Nomination and Remuneration Committee and the Stakeholders Relationship Committee, for which BSE Limited also levied fine.

The Company currently has a properly constituted Board of Directors and its Committees, in accordance with applicable laws and regulations.

During the year under review, the Auditors have not reported any matter under Section 143(12) of the Companies Act, 2013; therefore, no details are required to be disclosed under Section 134(3) (ca) of the Act.

In terms of the SEBI (Listing Obligations and Disclosure Requirements) (Third Amendment) Regulation, 2024, the Board has recommended appointment of M/s A. Arora & Co., Company Secretaries (PCS Registration No. 993) as the Secretarial Auditors of the Company for a term of five consecutive financial years commencing from 1st April 2025 till 31st March 2030. The appointment will be subject to the approval of the shareholders at the ensuing AGM.

The Company has received their written consent that the appointment is under the applicable provisions of the Act and rules framed thereunder. The Secretarial Auditors have confirmed that they are not disqualified from being appointed as the Secretarial Auditors of the Company.

9. Cost Audit

Pursuant to Section 148 of the Companies Act, 2013, read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the Company is required to make and maintain cost records in respect of its manufacturing activities and get them audited by a qualified Cost Accountant

The Board of Directors have, on the recommendation of the Audit Committee, appointed M/s Shakti K. & Associates, Cost Accountants (ICWAI Registration no. 11338), as Cost Auditors of the Company, to carry out cost audit of the products manufactured by the Company for the Financial Year 2025-26. The Company has received their written consent that the appointment is under the applicable provisions of the Companies Act, 2013 and rules framed thereunder. They have also confirmed that they are not disqualified to be appointed as Cost Auditors of the Company for the Financial Year 2025-26.

The remuneration of the Cost Auditor has been approved by the Board of Directors on the recommendation of the Audit Committee. As required under the Companies Act, 2013, In terms of the provisions of Section 148(3) of the Companies Act, 2013 read with Rule 14(a)(ii) of the Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditor is required to be placed before the members in a general meeting for their ratification. Accordingly, the necessary resolution is proposed for ratification for the remuneration payable to M/s. Shakti K. & Associates, Cost Auditors in the Notice convening the 43rd AGM.

10. Directors and Key Managerial Personnel (KMP)

(a) (i) Smt. Asha Devi Daga (DIN - 00048885), Non-Executive Non-Independent Director of the Company ceased to hold the directorship with effect from 30th August 2024, as the resolution pertaining to her re-appointment as Director pursuant to her retirement by rotation could not be passed due to want of requisite majority.

(ii) Shri Vivek Chiraniya (DIN - 00166690), Non-Executive Independent Director, resigned from his directorship on 31st August 2024. He was unable to continue as the Independent Director of the Company due to other important professional commitments, and

(iii) Shri Anand Prasad Agarwalla (DIN - 00312652), Non-Executive Independent Director resigned from his directorship on 5th September 2024. He could not continue as an Independent Director due to personal reasons.

(iv) Shri Sharad Agarwal (DIN - 06490590), Non-Executive Independent Director, resigned from his directorship on 15th November 2024. He resigned due to reason of paucity of time and other professional commitments

The aforesaid directors, who have resigned, have confirmed that there are no other material reasons other than those provided by them. Your Directors wish to place on record their appreciation for the contribution made by the outgoing Directors towards the progress and working of the Company and in maintaining the efficiency of corporate governance practices.

(v) Shri Sanjiv Banerji (DIN - 07575727) was appointed as Non-Executive Independent Director with effect from 13th November 2024 for a period of five consecutive years till 12th November 2029.

(vi) Shri Shounak Mitra (DIN - 07762047) was appointed as Non-Executive Independent Director with effect from 13th November 2024 for a period of five consecutive years till 12th November 2029.

(vii) Shri Satya Prakash Sarda (DIN - 01089614) was appointed as Non-Executive Independent Director with effect from 30th December 2024 for a period of five consecutive years till 29th December 2029.

(viii) Shri Hussan Lal (DIN - 02286226), was appointed as Non-Executive Independent Director with effect from 6th January 2025 for a period of three consecutive years till 5th January 2028.

(xi) Ms. Sonu Jain (DIN - 07267279) was appointed as Non-Executive Independent Director with effect from 6th January 2025 for a period of three consecutive years till 5th January 2028.

The aforesaid appointments were duly approved by shareholders vide Postal Ballot, which concluded on 10th February 2025.

(x) Pursuant to Section 152 of the Companies Act, 2013 and Articles of Association of the Company, Shri Shantanu Daga (DIN - 08757724), Non-Executive Non-Independent Director, retires by rotation at the forthcoming AGM and, being eligible, offers himself for re-appointment. The Board recommends his re-appointment. The brief resume and other details as required under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), read with the Secretarial Standard 2, are provided in the Notice of the 43rd AGM.

(xi) By the provisions of the Companies Act, 2013 and the Articles of Association of the Company, and based on the recommendation of the Nomination and Remuneration Committee and the approval of the Audit Committee, the Board of Directors has appointed Shri Raja Ram Kankani (DIN: 09188079), President of the Company, as Whole-Time Director, designated as President and Whole-Time Director, for three years with effect from 22nd May 2025 to 21st May 2028. This appointment follows his induction as an Additional Director at the same Board meeting and is subject to the approval of shareholders at the forthcoming Annual General Meeting. Appropriate resolutions in this regard are included in the Notice convening the 43rd AGM for members approval. A brief resume of Shri Kankani and other details, as required under the Listing Regulations, are provided in the said Notice.

(xii) Shri Punam Chand Sharma, Chief Financial Officer, resigned from his post with effect from 31st January 2025.

(xiii) Shri Gajendra Singh Rathore was appointed Chief Financial Officer in place of Shri Punam Chand Sharma with effect from 1st February 2025.

There were no other changes in the Directors and Key Managerial Personnel of the Company.

(b) Statement on declarations given by Independent Directors

All the Independent Directors of your Company have submitted the declarations confirming that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act 2013 and Regulation 25 read with Regulation 16 of the Listing Regulations and are eligible to continue as Independent Directors.

All the Independent Directors of the Company have confirmed compliance of the relevant provisions of Rule 6 of the Companies (Appointment and Qualifications of Directors) Rules, 2014.

The Board believes that the Independent Directors of the Company possess requisite qualifications, experience and expertise and hold the highest standards of integrity.

(c) Meetings of the Board of Directors

During the year, Nine Board Meetings were convened and held, the details of which are given in the Corporate Governance Report. The intervening gap between any two consecutive meetings did not exceed the gap prescribed by the Companies Act, 2013 and the Listing Regulations.

(d) Committees of the Board

The Board of Directors of the Company has the following four Committees -

a) The Audit Committee,

b) The Corporate Social Responsibility Committee,

c) The Nomination and Remuneration Committee and

d) The Stakeholders Relationship Committee.

During the year, all recommendations made by the Committees were approved and accepted by the Board. A detailed note on the composition of the Board and its Committees is provided in the Corporate Governance Report.

(e) Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and Listing Regulations, an annual evaluation was conducted for all Board Members as well as for the working of the Board and its Committees. A structured questionnaire for evaluation of the Board and its various Committees and individual Directors was prepared and recommended to the Board by the Nomination & Remuneration Committee with a specific focus on performance and effective functioning of the Board. The Board evaluation was conducted through a questionnaire designed with qualitative parameters and feedback based on ratings.

The performance evaluation of the Chairman and Non-Independent Directors was carried out by the Independent Directors at their meeting held on 24th March 2025. The Directors expressed their satisfaction with the evaluation process.

11. Directors Responsibility Statement

The Board of Directors acknowledge the responsibility for ensuring compliance with the provisions of Section 134(3) (c) read with Section 134(5) of the Companies Act, 2013 in the preparation of the annual accounts for the year ended on 31st March 2025 and confirm as under -

a) That in the preparation of the annual accounts, the applicable accounting standards had been followed along with a proper explanation relating to material departures;

b) That the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period;

c) That the Directors had taken proper and sufficient care for the 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) That the Directors had prepared the annual accounts on a going concern basis; and

e) That the Directors, had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

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

12. Corporate Social Responsibility

In accordance with the requirements of Section 135 of the Companies Act, 2013, the Company has a Corporate Social Responsibility Committee, the terms of reference and other details of which are provided in the Corporate Governance Report. The CSR Policy has been framed and posted on the website of the Company, www.dsl-india.com .

As required by Section 134(3)(o) of the Companies Act, 2013 and Rule 9 of the Companies (Corporate Social Responsibility) Rules, 2014, Annual Report on CSR activities is annexed as Annexure - II and forms integral part of this report.

13. Vigil Mechanism

Pursuant to Section 177(9) of the Companies Act, 2013, read with Rule 7 of the Companies (Meetings of board and its Powers) Rules, 2014 and Regulation 22 of Listing Regulations, the Company has in place a Policy for Vigil Mechanism for reporting of concerns of any wrongful conduct concerning the Company or its business or affairs.

The policy provides a framework for raising concerns by its employees and directors against any kind of malpractices, fraud, violation of the Companys policies or rules, and other matters on account of which the interest of the Company is affected or is likely to be affected. The policy provides that all protected disclosures can be addressed to the Vigil Officer or the Chairman, of the Audit Committee in certain cases.

Adequate safeguards are provided against the victimization of those who avail of the mechanism. Complaints received, if any, by Vigil Officer are investigated by the Vigil Officer and a report thereon is submitted to the Audit Committee.

It is affirmed that no personnel were denied access to the Vigil Officer and the Audit Committee, and no complaints were received during the Financial Year 2024-25.

The Policy on Vigil Mechanism is also posted on the Companys website www.dsl-india.com . (weblink: http://www.dsl-india.com/policies-code-of-conduct )

14. Risk Management Policy

The Companys risk management framework, which is formalised in its Risk Management Policy, ensures periodic assessment, mitigation and monitoring of risk pertaining to its business. The Audit Committee has been delegated the responsibility for monitoring and reviewing risk management, assessment and minimisation procedures. The risk management procedures are reviewed by the Audit Committee and the Board of Directors every quarter.

15. Nomination and Remuneration Policy

The Board has on the recommendations of the Nomination and Remuneration Committee, adopted a policy for selection and appointment of Directors, KMP and Senior Management and their remuneration. The extract of the Companys Remuneration Policy is attached as Annexure-NI and forms part of this report of the Board of Directors. The web link of the said Policy on the Companys website is (http://www.dsl- india.com/policies-code-of-conduct)

16. Related Party Transactions

All contracts / arrangements / transactions with Related Parties during the Financial Year 2024-25 were on an arms length pricing basis and were in the ordinary course of business and did not attract the provisions of Section 188 of the Companies Act, 2013.

There were no materially significant transactions with related parties during the financial year which conflicted with the interest of the Company and hence, enclosing of Form AOC 2 is not required. Suitable disclosures as required by the Accounting Standard Ind AS - 24 have been made in the notes to the Financial Statements.

All related party transactions are placed before the Audit Committee and also before the Board for approval. Prior omnibus approval of the Audit Committee is obtained on a yearly basis for transactions which could be foreseen and are of a repetitive nature for a period of one year. All transactions entered into under the omnibus approval are placed before the Audit Committee every quarter.

The Policy on Related Party Transactions, as approved by the Board is uploaded on the Companys website. None of the Directors has any pecuniary relationship or transaction vis-a-vis the Company.

Pursuant to Regulation 23(9) of the Listing Regulations, your Company has filed the reports on related party transactions with the Stock Exchange.

17. Disclosures regarding Employees

a) The Statement of Details of Remuneration as required under Section 197 and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached as Annexure - IV and forms a part of this Boards Report.

b) The information required under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and forming part of this report, is given in a separate annexure to this Report.

c) The said annexure is not being sent along with this Report to the Members of the Company in line with the provisions of Section 136 of the Companies Act, 2013. Any member interested in obtaining a copy of the said statement may write to the Company Secretary at the Registered Office of the Company. The aforesaid annexure is also available for inspection by the Members at the Registered office of the Company, twenty-one days before the 43rd AGM and up to the date of the said AGM during business hours on working days.

d) No employee, except Shri Yashwant Kumar Daga, Chairman and Managing Director, by himself or along with his relatives holds 2% or more of the equity shares of the Company.

e) The Company has not received any complaint under The Sexual Harassment of Women at Workplace (Prohibition, Prevention and Redressal) Act, 2013, during the year. The Company is compliant with all the provisions relating to the constitution of an Internal Complaint Committee under the said Act and rules thereunder.

18. Public Deposits

During the year, the Company has neither accepted nor renewed any deposits from the public and as such, there are no outstanding deposits in terms of Chapter V of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.

19. Loans, Guarantees and Investments

The Company has not given loans, directly or indirectly, to any person or other body corporate or given a guarantee or provided any security in connection with a loan to any other body corporate or person. The Company has also not made any investments as per the provisions of Section 186 of the Companies Act, 2013.

20. Management Discussion and Analysis Report

A report for the year under review as required under Regulation 34 and as stipulated under Part B of Schedule

V of Listing Regulations, is annexed herewith and forms part of this report.

21. Corporate Governance

A report on Corporate Governance as required under Regulation 34 and as stipulated in Part C of Schedule

V of Listing Regulations is annexed herewith and forms part of this report. A Compliance Certificate issued by Statutory Auditors of the Company, regarding compliance with Corporate Governance, is also annexed therewith.

22. Annual Return

In terms of Section 92(3) of the Companies Act, 2013 and Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return (Form MGT- 7) of the Company is available on the website of the Company at the weblink http://www.dsl-india.com/annual-return.

23. Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo.

As required by Section 134(3)(m) of the Companies Act, 2013 and Rule 8(3) of the Companies (Accounts) Rules, 2014, information with regard to Conservation of energy, technology absorption and foreign exchange earnings and outgo are annexed as Annexure - V to form part of this report.

24. Significant and Material Orders Passed by the Regulators or Courts

There is no significant material orders passed by the regulators / courts which would impact the going concern status of the Company and its future operations.

25. Material Changes and Commitments

There are no material changes and commitments affecting the financial position of the Company which occurred between the end of the financial year of the Company to which the financial statements are related and the date of this report.

26. Compliance with Secretarial Standards

The Company has complied with applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

27. Acknowledgement

We thank our customers, vendors, Bankers, stakeholders, business associates, Central and State Governments and district-level authorities for their continued splendid support. We are pleased to thank all employees and workmen for their dedication and excellence displayed in conducting the operations of the Company.

	On behalf of the Board of Directors
	Yashwant Kumar Daga
	Chairman and Managing Director
	(DIN - 00040632)
Place: Kolkata
Date: 22.05.2025