Divyashakti Ltd Directors Report

During the financial year under review, the Company achieved Revenue from Operations of 3,475.62 lakhs as against 6,387.22 lakhs in the previous year. The decline in revenue was primarily attributable to the slowdown in export demand arising from tariffmeasures and trade-related uncertainties in the United States market, which adversely affected order inflows and sales volumes during the year. The stone industry, particularly export-oriented manufacturers, faced significant challenges due to evolving global trade policies, geopolitical uncertainties, and volatile market conditions.

The Companys Gross Operating Profit before Depreciation, Finance Cost and Taxes stood at 377.14 lakhs compared to 596.52 lakhs in the previous year. Profit Before Tax was 139.81 lakhs as against 338.96 lakhs in the previous year. Profit After Tax forthe year amounted to 104.96 lakhs compared to 253.59 lakhs in the previous year.

Despite the challenging business environment and the impact of United States tariff uncertainty, the Company continued to focus on operational efficiency, cost optimization, product quality enhancement, customer relationship management, and market diversification initiatives. The Company also undertook measures to improve productivity, strengthen operational controls, and optimize resource utilization to mitigate the adverse effects of reduced demand and preserve profitability.

The management remains confident of the long-term growth prospects of the Quartz Product and is committed to strengthening the Companys competitive position by expanding its customer base, exploring new export markets, enhancing operational efficiencies, adopting innovative business strategies, and pursuing sustainable growth opportunities the coming years. The Company continues to monitor global market developments closely and remains well-positioned to capitalize on emerging opportunities as market conditions improve.

The Board of Directors have recommended a dividend of a final dividend amounting to Rs. 1.00 per share (10% on the face value of Rs. 10/-) for FY 25-26, aggregating an amount of Rs. 102.69 Lakhs.

The said dividend, subject to approval of members at the ensuing Annual General Meeting (‘the

AGM), will be paid to those Members whose names appear on the register of Members of the Company.

In terms of the provisions of Regulation 43A of the SEBI (Listing Obligations and Disclosure

Requirements) Regulations, 2015, as amended ("the Listing Regulations"), the Company has formulated a Dividend Distribution Policy. The recommended dividend is in line with our Companys dividend policy, which is available on the Companys Website https://www.divyashakti.com/policies/

The Board of Directors has decided not to transfer any amount to the General Reserve during the financial year under review, and the entire profit has been retained in the Statement of Profit and Loss.

Cash and cash equivalents as at 31^st March, 2026, were Rs. 32.24 Lakhs and Rs. 106.64 Lakhs in the previous year. The Company continues to focus on judicious management of its working capital, receivables, inventories, and other working capital parameters, and they were kept under strict check through continuous monitoring.

During FY 2025 26, the Company exported polished granite and quartz slabs aggregating to 3,451.04 Lakhs to the United States.

As of the close of the financial year, the Company had export orders on hand valued at 300 Lakhs, unchanged from 300 Lakhs in the previous year. The order position has held steady despite subdued global demand conditions, reflecting the Companys continued competitive positioning.

The Company did not undergo any change in the nature of its business during the financial year 2025 26.

There have been no material changes and commitments, which affect the financial position of the Company, that have occurred between the end of the financial year to which the financial statements relate and the date of this report.

There were no significant or material orders passed by the Regulators, Courts, or Tribunals impacting the going concern status of the Company or its future operations.

The Company has established adequate internal financial controls with reference to the Financial Statements, commensurate with the size, nature and complexity of its business. These controls are designed to ensure orderly and efficient conduct of business, safeguarding of assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records and timely preparation of reliable financial information. The Internal Auditors periodically review the adequacy and effectiveness of such controls and their reports are reviewed by the Audit Committee.

The Company does not have any Subsidiaries or Joint-Ventures, or Associate Companies.

The Company has not accepted or renewed any fixed deposits from the public, and no amount towards principal or interest was outstanding as on the Balance Sheet date during the year. Accordingly, disclosing the details of deposits which are not in compliance with the requirements of Chapter V of the Act is not applicable.

M/s. Pavuluri & Co., Chartered Accountants, Hyderabad (Firm Registration No. 012194S), were appointed as the Statutory Auditors of the Company for a period of five consecutive years, commencing from the conclusion of the 31st Annual General Meeting held on 18th August 2022 until the conclusion of the 36th Annual General Meeting to be held in the year 2027. Their appointment was made in accordance with the provisions of Section 139 of the Companies Act, 2013, read with the Companies (Audit and Auditors) Rules, 2014. As per the Companies (Amendment) Act, 2017, ratification of auditors appointment at every Annual General Meeting is no longer required.

The Audit Report issued by the Statutory Auditors for the financial year ended 31st March, 2026, does not contain any qualifications, reservations, adverse remarks, or disclaimers. Accordingly, no explanation or comment by the Board is required under Section 134(3)(f) of the Companies Act, 2013.

During the year under review, the Members approved the appointment of M/s. Puttaparthi Jagannatham & Co., a peer-reviewed firm of Company Secretaries based in Hyderabad, as the Secretarial Auditors of the Company for a term of five (5) consecutive financial years commencing from FY 2025 26 to FY 2029 30.

The Secretarial Audit Report for the financial year ended 31st March, 2026, issued by M/s.

Puttaparthi Jagannatham & Co., is annexed as Annexure I to the Boards Report and forms an integral part of this Integrated Annual Report. The Report confirms that there were no qualifications, reservations, observations, or adverse remarks during the year under review.

Pursuant to Section 134(3)(a) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return of the Company is available on the website of the Company at: DSG_Annual_Return_Extracts_2025_26.pdf

The paid-up share capital of the Company is Rs. 10,26,88,700/-, and there was no change in the same during the year under review.

During the year, the Company did not undertake any of the following activities, and accordingly, disclosure requirements in this regard are not applicable:

A) Issue of shares with differential rights B) Issue of sweat equity shares C) Issue of employee stock options

D)Provision of money by the company for the purchase of its own shares by employees or trustees for the benefit of employees

The Company continues to accord high priority to energy conservation and has undertaken various initiatives to optimize energy consumption across its operations.

a) Awareness programs were conducted for employees to promote efficient use of energy and reduce wastage. b) The Company also continued to utilize solar energy for meeting a portion of its energy requirements, thereby reducing dependence on conventional energy sources and supporting sustainable operations. c) Company ensures that the manufacturing operations are conducted in the manner whereby optimum utilization and maximum possible savings of energy is achieved. d) In addition, the Company undertook tree plantation activities within and around its operational premises to promote a greener environment, enhance ecological balance, and contribute to sustainable development. e) No specific Capital investment has been made on reduction in energy consumption during the current financial year. f) Although the Company has undertaken several measures towards energy conservation and optimal utilization, the cost benefits arising therefrom are not readily quantifiable. g) Details of electricity consumption are as under:

The Company does not use any outside technology for its manufacturing activities; therefore, no technology absorption is required. The Company continuously strives to maintain and improve the quality of its products, and all research and development activities are directed towards achieving this objective.

(C) Foreign exchange earnings and outgo:

Pursuant to the provisions of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Company has a duly constituted Corporate Social Responsibility ("CSR") Committee.

During the financial year ended 31st March, 2026, one meeting of the CSR Committee was held on 29th January, 2026.

Based on the financial position of the Company during the financial year under review and the criteria prescribed under Section 135 of the Companies Act, 2013, the Company was not required to incur any expenditure towards Corporate Social Responsibility activities for FY 2025 26.

Accordingly, no CSR amount was required to be spent during the year. The Annual Report on CSR Activities is annexed to this Report as Annexure II.

i. As per the provisions of the Act and the Articles of Association of the Company, Ms. Anuradha

Anne (DIN: 02802437), Director of the Company, is liable to retire by rotation at the ensuing Annual General Meeting ("AGM") and, being eligible, offers herselffor re-appointment.

The Board of Directors of the Company, based on the recommendation of the Nomination and Remuneration Committee, has recommended her re-appointment.

During the year under review, there were no change in the KMPs of the Company.

The Company has received declarations from all Independent Directors confirming compliance with the criteria of independence prescribed under Section 149(6) read with Section 149(7) of the Companies Act, 2013 and Regulationligations and Disclosure Requirements) Regulations, 2015. The Independent Directors have also confirmed their registration in the Independent Directors Databank as required under applicable law.

The Board has taken the aforesaid declarations on record that the Independent Directors continue to meet the prescribed criteria of independence. There has been no change in the circumstances affecting their independence during the year.

Pursuant to the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has formulated a policy for the evaluation of its own performance, as well as that of the Board, its committees, and individual Directors. Accordingly, the performance evaluation has been carried out during the year in this manner.

During the financial year 2025 26, the Board of Directors met four (4) times. A calendar of meetings is prepared and circulated in advance to all Directors to facilitate their participation and ensure the effective conduct of Board meetings.

Details in this regard form part of the Report on Corporate Governance annexed to this Report.

A separate meeting of the Independent Directors of the Company was held on 06 February 2026, in accordance with Schedule IV to the Companies Act, 2013 (Code for Independent Directors) and Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. At the meeting, the Independent Directors reviewed the performance of Non-Independent Directors and the Board as a whole.

F) Familiarization program for independent directors

Pursuant to Regulation 25(7) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has adopted a Familiarisation Programme for Independent

The Board of Directors of the Company constituted the Audit Committee consisting of the following Directors, with the roles and responsibilities duly defined in accordance with the applicable statutory and other requirements. During the year, four (4) meetings of the Committee took place.

The Board has accepted all the recommendations of the Audit Committee.

The Company conducts its affairs in a fair and transparent manner, adhering to the highest standards of professionalism, integrity, honesty, and ethical behaviour. The oversight of the vigil mechanism is vested with the Audit Committee.

The Company has also adopted a Whistle Blower Policy in accordance with the applicable provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Policy is available on the Companys website under the Investors section at: https://www.divyashakti.com/policies/

The Board of Directors has approved a comprehensive Code of Business Conduct applicable to all Directors and employees in the conduct of the Companys business operations. The Code sets out the standards of ethical conduct expected in workplace practices, business dealings, and interactions with stakeholders, and expressly prohibits bribery, corruption, and any form of unethical behaviour.

All Directors and Senior Management Personnel have affirmed compliance with the said Code. Further, appropriate training on the provisions of the Code has been imparted to the relevant management personnel. The Code forms part of this Report as an annexure, and requisite compliance declarations have been obtained.

The Code of Conduct for the Board of Directors and Senior Management Personnel is available on the Companys website under the Investors section.

The Company has adopted a Code of Conduct for regulating, monitoring and reporting trading by Designated Persons and their Immediate Relatives in accordance with the SEBI (Prohibition of Insider Trading) Regulations, 2015. The Company has also adopted a Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information (UPSI) and maintains a Structured Digital Database as required under the said Regulations. During the financial year under review, the Company has complied with the requirements of the SEBI (Prohibition of Insider Trading) Regulations, 2015.

The Board of Directors has constituted a Nomination and Remuneration Committee in compliance with the applicable statutory provisions. The Committee comprises the following members. The roles and responsibilities of the Committee have been duly defined and are carried out in accordance with applicable laws, rules, and regulations.

The Board has formulated a policy, in consultation with the Nomination and Remuneration Committee, for the selection and appointment of Directors and Senior Management personnel, as well as for the fixation of their remuneration, in accordance with the provisions of Section 178 of the Companies Act, 2013. The Committee also plays an active role in evaluating the Board and reviewing remuneration policies.

The Nomination and Remuneration Policy is available on the Companys website at: https://www.divyashakti.com/policies/

During the financial year under review, the Nomination and Remuneration Committee met once, i.e., on 29^th January, 2026.

All transactions entered into with related parties during the year under review were conducted on an arms length basis. The particulars of every contract or arrangement entered into by the

Company with related parties, as referred to in sub-section (1) of Section 188 of the Companies

Act, 2013, including certain arms length transactions under the third proviso thereto, are disclosed in Form No. AOC-2, which is annexed as Annexure-III to this Report.

Pursuant to the requirements of the Companies Act, 2013 and the SEBI Listing Regulations, the Company has formulated a Policy on Related Party Transactions, which is available on the Companys website under the Investors section at Policies: https://www.divyashakti.com/policies/

None of the related party transactions entered into during the year were in conflict with the interests of the Company. Appropriate disclosures as required under the applicable Accounting Standards have been made in Note 30 to the Notes to the Financial Statements.

Details of the ratio of the remuneration of each Director to the median employees remuneration and other details as required pursuant to Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

a)

b) The ratio of the remuneration of each Director to the Company for the financial year 2025 26: Sri N. Hari Hara Prasad, Managing Director: [62.59:1 verify] Smt. Anuradha Anne, Chief Financial Officer: [5.88:1 verify]

c) The percentage increase in remuneration of each Director, Chief Financial Officer and Company Secretary during the financial year: [insert for each; "Nil" where applicable].

d) The percentage increase in the median remuneration of employees during the financial year: [insert].

e) The number of permanent employees on the rolls of the Company as on 31st March, 2026: 107.

f) No Director is in receipt of any commission from the company, and the Managing Director and Whole-time Director of the Company have not received any remuneration or other Company subject to its disclosure by the Company in the Boards Report.

g) Average percentile increase in salaries of employees other than managerial personnel, compared with the percentile increase in managerial remuneration, and justification thereof:[insert].

h) It is affirmed that the remuneration paid during the year is as per the Remuneration Company.

The Directors reaffirm their commitment to maintaining high standards of Corporate Governance. During the year under review, the Company has complied with the requirements relating to Corporate Governance as stipulated under Regulation 27 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

A report on Corporate Governance, along with the Auditors Certificate confirming compliance with the conditions of Corporate Governance as prescribed under the Listing Regulations, is attached as Annexure-IV to this Report.

Further, the Managing Director and the Chief Financial Officer of the Company have furnished the requisite certificate pursuant to Regulation 17(8) of the Listing Regulations, 2015, which forms part of this Report.

The Company has established a structured risk management framework for identification, assessment, monitoring and mitigation of strategic, operational, financial and regulatory risks. The framework is reviewed periodically by the Board to ensure that key business risks are effectively managed. The Company also maintains adequate insurance coverage for its assets against various business risks, including fire, earthquake and other insurable risks.

Pursuant to Section 134 (5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that

(a) In the preparation of the annual accounts for the financial year ended on 31 March 2026, the applicable accounting standards have been followed, and there are no material departures;

(b) They have 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 as at 31 March 2026 and of the profit and loss of the Company for the financial year ended 31 March 2026;

(c) They 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) They have prepared the annual accounts for the financial year ended on 31 March 2026 on a going concern basis;

(e) They have laid down internal financial controls to be followed by the Company, and that, to the best of their knowledge, examination and analysis, such internal financial controls have been adequate and were operating effectively; and

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

The equity shares of the Company are presently listed on the Bombay Stock Exchange, Mumbai. The Company confirms that it has paid the Annual Listing Fees due to the Bombay Stock Exchange for the financial year 2026 27.

As the Members are aware, the Companys equity shares are compulsorily tradable in electronic form, and the Company has established connectivity with both National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). In view of the various advantages offered by the depository system, members are requested to avail the facility of dematerialisation of the Companys shares through NSDL and CDSL.

The ISIN allotted to the Companys equity shares is INE410G01010. The Company continues to pursue shareholders holding shares in physical form to convert their holdings into dematerialised form.

There are no loans, guarantees or investments made under section 186 of the Companies Act, 2013.

The Company has devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India, and that such systems are adequate and operating effectively.

As per SEBI Listing Regulation, the Management Discussion and Analysis forms part of this report as Annexure-V.

The Company has a zero-tolerance policy towards sexual harassment at the workplace. It has adopted a comprehensive policy on the Prevention, Prohibition, and Redressal of Sexual Harassment at Workplace, in accordance with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, and the Rules framed thereunder.

The Internal Complaints Committee constituted in accordance with Section 4(1) of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, comprises the following members:

During the year under review, no complaints of sexual harassment at the workplace were received by the Committee.

The Company is compliant with the applicable provisions of the Maternity Benefit Act, 1961 and has policies, systems and processes in place to ensure ongoing compliance.

No proceedings are initiated/pending against the Company under the Insolvency and Bankruptcy Code, 2016.

Your Directors place on record their appreciation for the financial assistance and support extended by HDFC Bank and the State Bank of India. The Directors also express their sincere gratitude to the shareholders for their continued confidence and trust in the Company. The Board further appreciates and acknowledges the dedicated and sincere services rendered by all categories of employees of the Company.