Dhanlaxmi Fabrics Ltd Directors Report.

Dear Members,

Your Directors have pleasure in presenting their Twenty Seventh Annual Report on the business operations and activities of the Company together with the Audited Accounts for the Financial Year ended 31st March, 2019.

FINANCIAL RESULTS:

Summary of the Companys financial performance for F.Y. 2018-2019 as compared to the previous financial year is given below:

(Rs.in lacs)

Particulars

F.Y. 2018 – 2019

F.Y. 2017 – 2018

Standalone Consolidated Standalone Consolidated
Revenue from Operation 7414.94 8158.42 7027.63 7802.10
Revenue from other Income 189.18 208.37 274.21 299.62
Total Revenue 7604.12 8366.79 7301.85 8101.73
Profit before Dep. & Int. 742.69 811.21 923.76 969.22
Depreciation 404.15 415.06 406.84 409.34
Interest 217.19 232.29 279.02 286.09
Profit after Depreciation & Interest and before Tax 608.31 650.82 234.16 270.05
Provision for Taxation 212.75 228.52 125.00 133.83
Provision for Tax (deferred) (221.47) (221.35) 46.90
47.20
Provision for Taxation for earlier year - - -
-
Profit/ Loss after Tax 617.03 643.95 156.05 183.43

HIGHLIGHTS:

Your Companys main activity is cornered in to dealers and manufacturing and Processing of Textile and allied products /services and Power Generation. As it can be clearly seen from the highlights that the company the total revenue generated in current year were increased and profit for the year of the Company is Rs.617.03 Lakhs as compared to 156.05 Lakhs in previous year.

The management of the Company hereby very optimistic regarding performance of the Company in future and taking every steps and making every efforts to turn the Company in to profitable organization

DIVIDEND:

During the year, your directors have not recommended any dividend on Equity Shares for the year under review.

AMOUNTS TO BE TRANSFERRED TO RESERVES

No fund was transferred to General Reserve.

BOARD OF DIRECTORS:

The Composition of the Board during the year was as per the provisions of Regulation 17 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 read with the Companies Act, 2013..

During the year Pursuant to Section 152 of the Companies Act, 2013 Mr. Mahesh Jhawar, Director, retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment. Your Board has recommended his re-appointment.

The first term of the Independent Directors viz. Mr. Durgesh Kabra,& Mrs. Jayashree Iyer, expires at the forthcoming annual general meeting. As per Companies Act, 2013, the Independent Directors are eligible for re-appointments for a second term except Mrs. Jayashree Iyer due to Health issue & other personal Commitment.

The Board has approved the re-appointment of Mr. Durgesh Kabra, the Independent Directors for a second term of five years with effect from September 19, 2019 till September 18, 2024. Their re-appointment for a second term of five (5) years is placed for approval of the members in the Notice of the 27th Annual General Meeting.

Upon the recommendation of Nomination and Remuneration Committee, your Board inducted Ms. Ayushi Gilra (DIN – 08511294), as an Additional Directors of the Company in the category of Independent Director subject to approval of members at the ensuing Annual General Meeting with effect from 06/08/2019 to 05/08/2024 in order to comply with the requirement of Section 149(1) of the Companies Act, 2013.

In terms of Section 161 of the Companies Act, 2013 she will hold office up to the date of the ensuing Annual General Meeting. The Company has received a notice in writing along with deposit pursuant to Section 160 of Companies Act, 2013, proposing the appointment of Ms. Ayushi Gilra (DIN – 08511294),Directors of the Company. Your Board has recommended the appointment of Ms. Ayushi Gilra (DIN – 08511294), as an Independent Directors of the Company for a period of five consecutive years up to the 32nd consecutive Annual General Meeting of the Company, not liable to retire by rotation.

Upon the recommendation of Nomination and Remuneration Committee Mr. Mukul Jhawar has been appointed as an additional director designated as Executive Director by the Board at its meeting dated 06-08-2019 for a term of 5 years with effect from 06-08-2019. His appointment is placed for approval of the members in the Notice of the Annual General Meeting

Mr. Durgesh Kabra, Mr. Gopal Mohta & Mrs. Niyati Ketan Shah , Independent director have given declarations that they continues to meet the criteria of independence as laid down under Section 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations.

During the year Mrs. Jayashree Iyer Non-Executive-Independent Director had resigned from the post of Directorship w.e.f. 31st July, 2019. The Board places on record its deep appreciation for the contribution rendered by Mrs. Jayashree Iyer, during their tenure as an Independent Director of the company.

Mr. Mahesh Jhawar, Chief Financial Officer of the company as tendered his resignation letter with effect from 07--06-2019 and Mr. Purushottam Randad appointed as a Chief Financial Officer of the Company with immediate effect 06-08-2019"

None of the Directors are disqualified for appointment/ re-appointment under Section 164 of the Act. As required by law, this position is also reflected in the Auditors Report.

As required under Regulation 36(3) of the listing Regulations with the stock exchanges, the information on the particulars of Directors proposed for appointment/re–appointment has been given in the notice of annual general meeting.

DEPOSITS:

Your Company has not accepted any deposits within the meaning of Section 73 (1) and 74 of the Companies Act, 2013 read together with the companies (Acceptance of Deposits) Rules,2014.

DIRECTORS RESPONSIBILITY STATEMENT:

In accordance with the provisions of Section 134 (3) (c) of the Companies Act, 2013, and based on the information provided by management, your Directors state that:

a) In the preparation of the annual accounts for the financial year ended 31st March, 2019 the applicable accounting standards have been followed.

b) Accounting policies selected were applied consistently. Reasonable and prudent judgments and estimates were made so as to give a true and fair view of the State of affairs of the corporation as at the end of March 31, 2019 and of the profit of the Company for the year ended on that date.

c) Proper and sufficient care to the best of their knowledge and ability 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) The Annual Accounts of the Company have been prepared on the ongoing concern basis.

e) That they have laid down internal financial controls commensurate with the size of the Company and that such financial controls were adequate and were operating effectively.

f) That system to ensure compliance with the provisions of all applicable laws was in place and was adequate and operating effectively.

DECLARATION OF INDEPENDENCE BY DIRECTORS:

The Independent Non-executive Directors of the Company, viz. Mr. Durgesh Kabra, Mr. Gopal Mohta, Mrs. Jayashree Iyer & Ms. Ayusi Gilra has affirmed that they continue to meet all the requirements specified under Regulation 16(1)(b) of the LODR Regulation, 2015 in respect of their position as an "Independent Director" of Dhanlaxmi Fabrics Limited.

POLICIES ON DIRECTORS APPOINTMENT AND REMUNERATION:

The policies of the Company on Directors appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided under sub-section (3) of Section 178 of the Act is available on the website on this link: http://www.dfl.net.in/company-profile.html

EVALUATION OF BOARD OF DIRECTORS:

Pursuant to the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the performance evaluation of the Independent Directors was completed.

The performance evaluation of the Chairman and the Non-Independent Directors was carried out by the Independent Directors. The Board of Directors expressed their satisfaction with the evaluation process.

The Board as a whole was evaluated on various parameters like Board Composition & Quality, Board Meetings and Procedures, adherence to the Code of Conduct etc. Based on each of the parameter, the Board of Directors formed an opinion that performance of Board as a whole has been outstanding.

MANNER IN WHICH FORMAL ANNUAL EVALUATION HAS BEEN MADE BY THE BOARD OF ITS OWN PERFORMANCE AND THAT OF ITS COMMITTEES AND INDIVIDUAL DIRECTORS:

Pursuant to the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the performance evaluation of the Independent Directors was completed.

The evaluation framework for assessing the performance of directors of your company comprises of contribution at meetings, strategies perspective or inputs regarding the growth and performance of your company among others.

The performance evaluation of the Chairman and the Non-Independent Directors was carried out by the Independent Directors. The Board of Directors expressed their satisfaction with the evaluation process.

Details of program for familiarization of Independent directors of the company are accessible on yours company website at http://www.dfl.net.in/fam_prg.html

MEETING OF INDEPENDENT DIRECTORS:

Pursuant of the provision of Section 149 (8) of the Companies Act, 2013 read with Schedule IV and Regulation 25 of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015, the Independent Directors of the Company held their meeting on 28th March, 2019 reviewed the performance of non- independent directors and the Board as a whole including the Chairperson of the Company, views expressed by the executive directors and non- executive directors at various level, and quantified the quality, quantity and timeliness of flow of information between the Company, management and the Board and expressed satisfaction.

DISCLOSURE FROM INDEPENDENT DIRECTORS:

Pursuant to the provisions of Section 134 of the Companies Act, 2013 with respect to the declaration given by the Independent Director of the Company under Section 149(6) of the Companies Act, 2013, the Board hereby confirms that all the Independent Directors have given declarations and further confirms that they meet the criteria of Independence as per the provisions of Section 149(6) read with SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.

STATUTORY AUDITORS:

M/s. R. Soni & Co., Chartered Accountants, Mumbai (FRN: No130349W ) vide their letter dated 07.08.2019 have resigned from the position of Statutory Auditors of the Company resulting into a casual vacancy in the office of Statutory Auditors of the Company as envisaged by section 139(8) of the Companies Act, 2013.

The Board of Directors at its meeting held on 16th August, 2019 as per the recommendation of the Audit Committee, and pursuant to the provisions of Section 139(8) of the Companies Act, 2013, have appointed M/s. Dinesh Bangar & Co., Chartered Accountants, Mumbai (Firm Registration Number: 102588W), to hold office as the Statutory Auditors of the Company till the conclusion of 27th AGM and to fill the casual vacancy caused by the resignation of M/s. R. Soni & Co., Chartered Accountants Mumbai (Firm Registration Number: No130349W)subject to the approval by the members in ensuring Meeting of the Company, at Rs. 1,00,000/- remuneration decided by the Board of Directors of the Company and the Statutory Auditors.

Further, pursuant to recommendation of Audit Committee, Board also approved appointment of M/s. Dinesh Bangar & Co., as Statutory Auditors of the Company to hold office for a period of five consecutive years, from the conclusion of the 27th AGM, till the conclusion of the 32nd AGM to be held in year 2024. Accordingly, your board of directors also recommend passing of resolution for appointment of M/s. Dinesh Bangar & Co., for a period of 5 consecutive years.

The Company has also received consent and eligibility certificate from M/s. Dinesh Bangar & Co Chartered Accountants, Accountants, Mumbai (Firm Registration Number: 102588W) to act as Statutory Auditors of the Company along with a confirmation that, their appointment, if made, would be within the limits prescribed under the Companies Act, 2013.

AUDITORS REPORT:

Observations made in the Auditors Report are self-explanatory and therefore do not call for any further comments under Section 134 (1) of the Companies Act, 2013.

COST AUDIT AND AUDITOR:

The central govt. has prescribed the maintenance of Cost records under Section 148 and all other applicable provisions, if any, of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014for the year ended 31st March 2019. The Audit Committee and Board has be recommended the reappointment of Mr. Dilip Murlidhar Bathija., Cost Accountant, Mumbai at their respective meetings for conducting cost Audit for F.Y. 2019-2020 and also recommended for members approval at item no.5 of the Notice.

SECRETARIAL AUDIT:

The Audit Committee recommended the name of M/s. Pankaj Trivedi & Co., Company Secretary in Practice, for conducting Secretarial Audit for F.Y. 2018-2019 pursuant to the requirements of Section 204(1) of the Act, and Rule 9 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

The Secretarial Audit Report as received is appended to this Report as Annexure I.

COMMENTS ON REMARKS/OBSERVATION/QUALIFICATION MADE BY STATUTORY AUDITORS:

M/s. Pankaj Trivedi & Co., Practicing Company Secretary, in his Independent Auditor Report for financial year 2018-19 have drawn the attention of the management on some matters in connection with the same management herewith give the explanation for the same as follows: The Promoters of the Company hold 500 shares in physical form; however, the same is under process of dematerialization.

The Company is very much regular and compliance in terms of making timely disclosures and filing with concerned regulatory. However as far as non-submission of newspaper publication made by the company to the exchange during the year under review as required under regulation 47(1) of SEBI (LODR) Regulation, 2015 is concerned, we would like to inform that all required newspaper publication has been given by the Company in papers and are also uploaded to the website of the company and are in records with the company in respective file. However the same has not been forwarded to the exchange. As the all publications are already made available to stakeholders at large on companys website

REPORTS ON CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS:

The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out by SEBI.

In compliance with Regulation 34 and Schedule V of SEBI (LODR) Regulations 2015, report on the Corporate Governance, along with a certificate from the Statutory Auditors of the Company on compliance with the provisions is annexed and forms part of the Annual Report.

SUBSIDIARY, JOINT VENTURE OR ASSOCIATE COMPANIES:

Pursuant to the provisions of Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014, a statement containing salient features of the financial statements of the subsidiary companies in Form AOC-1 is Annexure II in this Boards Report.

Pursuant to the provisions of Section 136 of the Companies Act, 2013, the financial statements of the Company, consolidated financial statements together with relevant documents and separate audited accounts in respect of subsidiaries, are available on the website of the Company.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

The particulars of contracts or arrangements with related parties referred to in Section 188(1), as prescribed in Form AOC - 2 are appended as Annexure III.

EXTRACT OF ANNUAL RETURN: Pursuant to the requirements under Section 92(3) and Section 134(3) of the Act read with Rule 12 of Companies (Management and Administration) Rules, 2014, an extract of Annual Return in prescribed Form MGT-9 is given in the Report as Annexure-IV.

NUMBER OF MEETINGS OF THE BOARD:

The Board met 4 (Four) times during the financial year, the details of which are given in the Corporate Governance Report that forms part of this Annual Report. The intervening gap between any two meetings was within the period prescribed by the Companies Act, 2013.

POSTAL BALLOT:

No postal ballot was held during the year 2018-2019.

COMMITTEES OF THE BOARD:

The Board of Directors has the following Committees:

1.Audit Committee

2. Nomination and Remuneration Committee

3. Stakeholders Relationship Committee

4. Corporate Social responsibility

The details of the Committees along with their composition, number of meetings and attendance at the meetings are provided in the Corporate Governance Report.

RISK MANAGEMENT AND INTERNAL CONTROLS:

The Company has the risk management and internal control framework in place commensurate with the size of the Company. However Company is trying to strengthen the same. The details of the risks faced by the Company and the mitigation thereof are discussed in detail in the Management Discussion and Analysis report that forms part of the Annual Report.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to Financial Statements.

PARTICULARS OF EMPLOYEES AND RELATED INFORMATION:

In terms of the provisions of Section 197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement containing the disclosures pertaining to remuneration and other details as required under the Act and the above Rules are as under. The disclosures as specified under Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The percentage increase in remuneration of each Director, Chief Financial Officer and Company Secretary during the financial year 2018-2019, ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the financial year 2018-2019 and the comparison of remuneration of each Key Managerial Personnel (KMP) against the performance of the Company are as under:

Name of Director/KMP Remuneration Received 2017-18 % increase year ended 2018-19 Ratio of remuneration of each Director to median remuneration of employees
1 Mr. Ramautar S. Jhawar (Chairman & Director) Nil Nil Nil
2 Mr. Vinod S. Jhawar (Managing Director) 60,00,000 Nil 27.31
3 Mrs. Jayashree Iyer (Independent Director) Nil Nil Nil
4 Mr. Mahesh S. Jhawar (Director & Chief Financial Officer) 6,00,000 Nil 2.73
5 Mr. Durgesh Kabra (Independent Director) Nil Nil Nil
6 *Mr. Gopal Mohta (Independent Director) Nil Nil Nil
7 *Mrs. Bhaviika Jain@(Company Secretary) 6,29,400 4.9% 2.86

Note: Total 107 major employees are on role as on 31.03.2019 Median remuneration of employee is Rs. 2,19,720 /-

CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION:

Particulars as required under Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Disclosure of particulars in the Report of the Board of Directors) Rules 1988 are given is Annexed V to this report.

FOREIGN EXCHANGE:

Inflow and Outflow of Foreign Exchange are given is Annexed VI to this report.

INSURANCE OF ASSETS:

All the fixed assets, finished goods, semi-finished goods, raw material, packing material and goods of the company lying at different locations have been insured against fire and allied risks.

LISTING OF SHARES:

Equity Shares of your Company are listed on Bombay Stock Exchange only and the Company has paid the necessary Listing Fees for the Year 2019-2020. The Company has executed a New Listing Agreement with the Bombay Stock Exchange pursuant to SEBI (LODR) Regulation 2015.

VIGIL MECHANISM/WHISTLE BLOWER POLICY:

The Company has established a vigil mechanism to provide appropriate avenues to the Directors and employees to bring to the attention of the Management, the concerns about behavior of employees that raise concerns including fraud by using the mechanism provided in the Whistle Blower Policy. The details of the said Policy are included in the Report on Corporate Governance which forms part of the Annual Report. During the financial year 2018-2019, no cases under this mechanism were reported in the Company and any of its subsidiaries/ associates.

POLICY FOR PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE:

The company has framed policy in accordance with The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

During the financial year 2018-2019, no cases in the nature of sexual harassment were reported at any workplace of the Company.

CEO AND CFO CERTIFICATION:

The Chief Executive Officer and Chief Financial Officer Certification as required under Regulation 17(8) read with Part B of Schedule II of the SEBI(LODR) Regulation,2015 declaration about the Code of Conduct is Annexed to this Report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:

There are no significant and material orders passed by the Regulators/Courts that would impact the going concern status of the Company and its future operations.

MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEENTHE END OF THE FINANCIALYEAR TO WHICHTHESE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT:

No material changes and commitments affecting the financial position of the Company occurred during Financial Year 2018-2019, till the date of this report. Further there was no change in the nature of business of the Company.

ACKNOWLEDGEMENT:

The Board of Directors wishes to express sincere thanks to Bankers, Shareholders, clients, Financial Institutions, customers, sup-pliers and employees of Companies for extending support during the year

FOR &ON BEHALF OF THE BOARD

Sd/- Sd/-
Vinod S. Jhawar Ramautar S. Jhawar Place: Mumbai
(Managing Director) (Director) Date: 16-08-2019