Shri Dinesh Mills Ltd Directors Report.

To,

The Members,

Shri Dinesh Mills Limited.

Your Directors have pleasure in presenting their Report together with the Annual Financial Statement for the year ended 31st March, 2021

1. PERFORMANCE OF THE COMPANY

(Rs. In Lakhs)
PARTICULARS 2020–2021 2019–2020
Revenue from Operations 4912 4681
Profit before Depreciation, Interest & Tax (PBDIT) 1424 676
Net Profit 881 173

2. DIVIDEND

Your Directors have recommended for your consideration Dividend of Rs. 5.00 per Equity share (50%) (Previous year Rs.3.00 per Equity share i.e. 30%) on 56,00,582 equity shares of Rs.10/- each amounting to Rs. 2,80,02,910/- plus applicable Dividend Distribution Tax thereon subject to approval of shareholders of the Company at their ensuing 86th Annual General Meeting.

3. TRANSFER TO RESERVES

The Company has not transferred any amount to General Reserve.

4. TRANSFER OF UNCLAIMED DIVIDEND & EQUITY SHARES TO INVESTOR EDUCTION AND PROTECTION FUND AUTHORITY (IEPF AUTHORITY)

The Company has transferred unclaimed dividend for the financial year 2012–2013 and also transferred 12,350 equity shares of Rs.10/- each to the IEPF Authority.

5. CHANGES IN THE NATURE OF BUSINESS

There is no change in the nature of business during the year under review.

6. MANAGEMENT DISCUSSION AND ANALYSIS

A. OVERALL REVIEW OF OPERATIONS

During the year under review, the Company could achieve the Revenue from its Operations of Rs. 4912 Lakhs as compared to Rs. 4681 Lakhs of the corresponding period of the previous year despite disruption due to COVID-19 pandemic especially due to concentrated marketing efforts. The net profit of the Company has been substantially increased from Rs.173 Lakhs to Rs.881 Lakhs mainly due to discontinuation of Woolen & Worsted fabrics business and also controlling various costs.

The Company manufactures Felts (i.e. Technical Textiles) which is Capital & Labour intensive. The quality of the product is well established in the markets and our

Company is a debt free company with no pledge of shareholding of Promoters Group and having sufficient liquidity, we expect to contain adverse impact due to second wave of COVID pandemic to some extent.

B. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL

PERFORMANCE (Rs. In Lakhs)

Sr. No. Particulars 2020 – 2021 2019 – 2020
1 Revenue from Operations 4912 4681
2 Operating profit (PBDIT) 1424 676
3 Depreciation 423 543
4 Interest 20 21
5 Profit before Tax 981 112
6 Provision for Taxation 100 (61)
7 Net Profit 881 173

C. OVERALL OUTLOOK

Considering uncertain nature of COVID-19, its continuity over the globe, shortage of vaccines and also looking to the unexpected swing in the domestic & international markets, the turnover and profitability of our Company may be affected during the current financial year but it is very difficult to judge accurately the impact due to second wave of COVID pandemic at this stage.

The Company assumes no responsibility in respect of forward looking statements made herein above which may substantially change based on subsequent developments, events, change in the Government policies, exchange rate and improvement in present economic scenario etc. over the globe.

D. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Internal Audit Department conducts audit of all departments of the Company and places Audit reports/plans before the Audit Committee which reviews adequacy of internal audit functions, audit procedures and its coverage periodically. The minutes of the Audit Committee meetings are placed at the meetings of the Board of Directors from time to time. The Company has adopted the concept of pre-audit and therefore, the mistakes, if any are rectified before the transactions are finally booked in the Books of Accounts of the Company.

E. INDUSTRIAL RELATIONS

During the year under review, the industrial relations both at Baroda and Ankleshwar units have remained cordial. There were 324 employees in the Company as at 31st March, 2021.

7. MATERIAL CHANGES AND COMMITMENT, IF ANY

There are no material changes and commitments affecting the financial position of the Company occurred from 1st April, 2021 to the date of this Report.

8. SIGNIFICANT AND MATERIAL ORDERS, IF ANY

During the year under review, no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of the Company.

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

The information pertaining to conservation of energy, technology absorption, Foreign exchange Earnings and outgo as required under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished in Annexure – "A" attached to this Report.

10.RISK MANAGEMENT

The Company has been taking appropriate actions pursuant to Risk Management Policy from time to time to mitigate adverse impact of various Risks which may adversely affect the performance of the Company and may threaten the very existence of the Company. The provisions relating to Risk Management Committee is not applicable to the Company.

11. THE CORPORATE SOCIAL RESPONSIBILITY

As the net profit of the Company was less than Rs.5 Crores during F.Y. 2019–2020, provisions relating to the Corporate Social Responsibility (CSR) as prescribed u/s. 135 of the Companies Act, 2013 along with Rules made thereunder were not applicable to our Company and therefore, neither the CSR Committee nor the CSR Policy was framed by the Company. However, net profit of the Company exceeds Rs.5 Crores during the F.Y. 2020 – 2021, the Board of Directors of the Company at their meeting held on 31st May, 2021 framed the CSR Policy.

12. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

During the year under review, the Company has not given any loans, guarantees pursuant to Section 186 of the Companies Act, 2013 except the investment made in 3,50,000, 0.01% Optionally Convertible Non-Cumulative Preference Shares of Rs.10/-each in the Right Issue of Wholly Owned Subsidiary company viz. Fernway Textiles Limited amounting to Rs.35/- Lakhs.

13. AUDITORS REPORTS

The Auditors Report issued by M/s. Dhirubhai Shah & Co. LLP on the Accounts is self-explanatory and therefore, does not call for any explanation. There were no qualifications, reservations or adverse remarks made by the above referred Statutory Auditors.

The Secretarial Audit Report issued by the Secretarial Auditor, M/s. Kashyap Shah & Co., Practicing Company Secretaries, Vadodara is self-explanatory and therefore, do not call for any explanation. The copy of the Secretarial Audit Report is attached as

Annexure – "B".

During the year under review, no fraud has been reported to the Audit Committee of the Company by the above referred Statutory Auditors and Secretarial Auditor.

14. COMPANYS POLICY RELATING TO DIRECTORS APPOINTMENT, PAYMENT OF

REMUNERATION AND DISCHARGE OF THEIR DUTIES

The appointment of Directors, Key Managerial Personnel (KMP), payment of remuneration and discharge of their duties are as per the Remuneration Policy framed by the Company pursuant to Section 178(3) of the Companies Act, 2013. The Remuneration Policy can be viewed at Companys website www.dineshmills.com in "Investors" Section

15. SEXUAL HARRASSMENT OF WOMAN EMPLOYEES

The Company has constituted "Internal Complaints Committee" pursuant to the provisions of the Sexual Harassment of Woman at work place (prevention, prohibition & redressal) Act, 2013 and no complaint has been received by the Committee during the financial year 2020 – 2021.

16. ANNUAL RETURN

The extracts of Annual Return pursuant to Rule 12 of the Companies (Management and Administration) Rules, 2014 is furnished in Annexure – "C" attached to this Report.

17. COMPLIANCE OF SECRETARIAL STANDARDS

The Company has complied with the Secretarial Standard 1 (SS-1) relating to the meetings of the Board of Directors and Secretarial Standard 2 (SS-2) relating to the General meetings issued by the Institute of Company Secretarial of India and approved by the Central Government.

18. THE MEETINGS OF THE BOARD OF DIRECTORS

During the year under review, five meetings of Board of Directors of the Company were held on 30/06/2020, 14/08/2020, 11/11/2020, 12/02/2021 and 15/03/2021.

19. KEY MANAGERIAL PERSONNEL (KMP) AND REMUNERATION

During the year under review, Shri Bharatbhai Patel, Chairman & Managing Director, Shri J B Sojitra, Company Secretary and Shri Apurva Shah, Chief Financial Officer were the KMP of the Company pursuant to Section 203 of the Companies Act, 2013 and the Rules made thereunder.

REMUNERATION ETC. PURSUANT TO SECTION 197(12) AND THE RULES MADE THEREUNDER ARE AS UNDER: a) The ratio of the Remuneration of each Director to the median employees remuneration for the financial year and such other details are given hereunder: (1) Name : Shri Bharatbhai Patel (Chairman & Managing Director) Ratio: 65:1 (2) Name: Shri Nimishbhai Patel (Managing Director) Ratio: 65:1 b) The percentage increase in Remuneration of each Director, Chief Financial Officer, Company Secretary during the financial year: (1) Shri Bharatbhai Patel – Chairman & Managing Director : NIL

(2) Shri Nimishbhai Patel – Managing Director : NIL

(3) Shri Apurva Shah (Upto 04/02/2021) – Chief Financial Officer: NIL (4) Shri J. B. Sojitra – Company Secretary : NIL

c) The percentage increase in the median remuneration of employees in the financial year: 4% d) There are 324 permanent employees on the Roll of the Company.

e) The explanation on the relationship between average increases in Remuneration and Company performance: The Company has given normal increments to the employees for the year ended 31st March, 2021. f) Comparison of the Remuneration of the Key Managerial Personnel (KMP) against the performance of the company: Considering the performance of the Company, and also considering the qualifications, experience, long association, untiring efforts and their contribution to the Company, the remuneration paid to KMP is quite reasonable.

20. CORPORATE GOVERNANCE

The Report on Corporate Governance pursuant to the provisions of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 along with the certificate of M/s. Dhirubhai Shah & Co. LLP, Chartered Accountants, Auditors of the Company are attached herewith as Annexure – "D" and Annexure – "E" respectively.

21. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

Dinesh Remedies Ltd., a subsidiary of the Company is engaged in manufacturing of Empty hard Gelatin Capsules Shells at Village Mahuvad, Haranmal Road, Padra –Jambusar Highway, Taluka Padra, District Vadodara – 391 440.

Fernway Technologies Ltd. and Fernway Textiles Ltd. are wholly owned subsidiary companies. However, these subsidiary companies have yet to start the business.

The financial statements of the above referred subsidiary companies are consolidated and the separate statement containing the salient features of the financial statement of these subsidiary companies has also been attached to the financial statement of the Company pursuant to the provisions of the Companies Act, 2013 read with the Companies (Indian Accounting Standards) Rules, 2015 (i.e. Ind AS).

22. DEPOSITS

The Company has neither accepted nor renewed any deposits pursuant to Section 73 and 76 of the Companies Act, 2013 and Rules made thereunder during the financial year 2020 – 2021.

23. DIRECTORS

Pursuant to Section 149 and 152 of the Companies Act, 2013 read with the Companies (Appointment and Qualification of Directors) Rules, 2014, Independent Directors are not liable to retire by rotation whereas other Directors are liable to retire by rotation and accordingly, Shri Nimishbhai Patel, Managing Director of the Company would retire by rotation and being eligible, offer himself for re-appointment.

During the year under review, Ms. Reshma S. Patel was appointed as an Independent (Woman) Director of the Company for a period of five years w.e.f. 15th March, 2021 and therefore, the Board recommends her appointment as Independent (Woman) Director of the Company in the ensuing 86th Annual General Meeting (AGM) of the Company.

During the year under review, Mrs. Tarunaben Patel had resigned as an Independent Director w.e.f. 8th June, 2020 and thereafter, she was appointed as Non-Executive Director w.e.f. 30th June, 2020. The information as required under Regulation 36(3) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 relating to Shri Nimishbhai Patel and Ms. Reshma S. Patel are given in the Notice of ensuing 86th AGM of the Company.

24. DECLARATION BY INDEPENDENT DIRECTORS

The Independent Directors have given the declaration that, they meet the criteria of independence as provided in Section 149(6) of the Companies Act, 2013 read with Rules made thereunder and Clause (6) of sub-regulation (i) of Regulation 16 of SEBI (LODR) Regulation 2015.

25. CERTIFICATE OF NON DISQUALIFICATION OF DIRECTORS

The Certificate of Non Disqualification of Directors issued by Ms. Nilesh Savaliya & Associates, Practicing Company Secretaries pursuant to SEBI (Listing Obligations & Disclosures Requirements) Regulations, 2015 is attached as Annexure – "F".

26. PERFORMANCE EVALUATION

The performance evaluation of all the Directors including Independent Directors and the Board as a whole which includes the Committees thereof was done on 12th February, 2021 considering various criteria and also seeking inputs from all the Directors as per the Performance Evaluation Policy of the Company.

A separate meeting of Independent Directors was also held on 12th February, 2021 and reviewed the performance of Non Independent Directors, performance of the Board as whole and performance of the Chairperson of the Company taking into account the views of Executive and Non- Executive Directors pursuant to the Performance Evaluation Policy of the Company.

27. STATUTORY AUDITORS

The Statutory Auditors, M/s. Dhirubhai Shah & Co. LLP would hold the Office till the conclusion of 86th AGM pursuant to the provisions of Section 139 of the Companies Act, 2013 read with Rules made thereunder and therefore, M/s. R. K. Doshi & Co. LLP having Firm Registration No. 102745W/W100242 is appointed as Statutory Auditors for a term of five years from F.Y. 2021–2022 to F.Y. 2025–2026 for auditing the Accounts of the Company subject to approval of shareholders of the Company.

28. COMPOSITION OF AUDIT COMMITTEE AND VIGIL MECHANISM

The Audit Committee consists of three Independent Directors viz. Shri Rakesh Agrawal, Shri T. M. Patel and Shri Sanjiv Shah and one Non-Executive Director Mrs. Tarunaben Patel.

The Board of Directors of the Company had established the Vigil Mechanism pursuant to Section 177(9) of the Companies Act, 2013 and Rules made for Directors and Employees to report their genuine concerns. However, there were no instances reported to the Chairman of the Audit Committee during the year under review. The Whistle Blower Policy can be viewed at Companys website www.dineshmills.com in "Investors" Section.

29. SHARES:

(a) BUY BACK OF SECURITIES: The Company has not bought back any of its securities during the year under review.

(b) SWEAT EQUITY: The Company has not issued any Sweat Equity Shares during the year under review.

(c) BONUS SHARES: No Bonus Shares were issued during the year under review. (d) EMPLOYEES STOCK OPTION PLAN (ESOP): The disclosure required pursuant Regulation 14 of SEBI (Share Based Employee Benefits), Regulations, 2014 is attached as Annexure – "G".

(e) PREFERENTIAL ALLOTMENT: The Company had allotted 5,00,000 Convertible Warrants of Rs.10/- each with a premium of Rs.140/- each to the Promoter Group on preferential basis on 20th February, 2019 which is convertible at the option of the warrant holders at any time within 18 months from the date of allotment, in one or more tranche(s) and accordingly, the balance 3,00,000 warrants have been converted into 3,00,000 equity shares of Rs.10/- each with a premium of Rs.140/- each during the year under review and no convertible warrants are outstanding as at 31st March, 2021.

The funds received under the preferential allotment are utilized for existing business purpose as stated in the Notice of Extra Ordinary General Meeting held on 7th February, 2019.

30. EMPLOYEES REMUNERATION:

The details of the remuneration paid to the employees during the year under review are given in the Annexure – "H" to this Report pursuant Section 197(12) of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014. A statement showing remuneration paid to top 10 employees of the Company are available at the Company and the same will be provided to the members upon request for the same.

31. INSURANCE:

All the properties of the Company including buildings, plant & machinery and stocks have been insured.

32. CONTRACTS / ARRANGEMENT WITH THE RELATED PARTIES

During the year under review, no contracts / arrangements are entered with the Related Parties pursuant to Section 188 of the Companies Act, 2013. However, the transactions with Related Parties are given in Note No. 38 attached to the Annual Financial Statement as Good Corporate Governance practice and also disclosed in Form AOC – 2 attached as Annexure – "I" to this Report.

33. DIRECTORS RESPONSIBILITY STATEMENT:

Your Directors confirm that:

(a) in the preparation of the Annual Accounts for the financial year 2020–2021, the applicable Accounting Standards had been followed along with the proper explanation relating to material departures;

(b) 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) the Directors had 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) the Directors had prepared the Annual Accounts on a going concern basis;

(e) 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) 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.

34. ACKNOWLEDGEMENTS

Your Board of Directors thanks all the stakeholders viz. shareholders, customers, suppliers, bankers, employees for their support during the year under review.

FOR AND ON BEHALF OF THE BOARD OF DIRECTORS,

Sd/-
Place: Vadodara BHARAT PATEL
Date: 31st May, 2021 CHAIRMAN
DIN: 00039543