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, 2022

1. PERFORMANCE OF THE COMPANY

(Rs. In Lakhs)

PARTICULARS 2021 2022 2020 2021
Revenue from Operations 5511 4912
Profit before Depreciation, Interest & Tax (PBDIT) 3397 1424
Net Profit 2651 881

2. DIVIDEND

Your Directors have recommended for your consideration Dividend of Rs. 7.50 per Equity share (75%) (Previous year Rs.5.00 per Equity share i.e. 50%) on 56,00,582 equity shares of Rs.10/- each amounting to Rs. 4,20,04,365/- subject to approval of shareholders of the Company at their ensuing 87th Annual General Meeting.

3. TRANSFER TO GENERAL RESERVE

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 2013 2014 and also transferred 4700 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

(A) During the year under review, Revenue from Operations of the Company has been increased from 4912 Lakhs to 5511 Lakhs and the net profit has also been increased from Rs. 881 Lakhs to Rs. 2651 Lakhs as compared to the previous year mainly due to sale of surplus immovable properties and various concentrated efforts made by the Marketing & Production Team under the leadership of Mr. Aditya Patel.

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 and therefore, there was no adverse impact of second wave of COVID pandemic.

B. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

(Rs. In Lakhs)

Sr. No. Particulars 2021 2022 2020 2021
1 Revenue from Operations 5511 4912
2 Operating profit (PBDIT) 3397 1424
3 Depreciation 341 423
4 Interest 12 20
5 Profit before Tax 3043 981
6 Provision for Taxation 392 100
7 Net Profit 2651 881

The various ratio analysis is given in Note No. 40 attached to the Annual Financial Statement for the year ended 31st March, 2022.

C. OVERALL OUTLOOK

Looking to the current trend, the sales turnover of the Felts (i.e. Technical Textiles) is likely to be increased but due to very high inflation, the net profit of the Company would likely to be under pressure. However, the Company will make every effort to contain the adverse impact on the performance of the Company.

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, inflation and 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 have remained cordial. There were 307 employees in the Company as at 31st March, 2022.

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, 2022 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 (CSR)

Pursuant to the CSR policy and in compliance with requirements of Section 135 of the Act, the Company has spent Rs.4,00,000/- during the year under review as per the details given in the format prescribed under the Companies (Corporate Social Responsibility Policy) Rules, 2014 attached as Annexure “B”. The CSR Policy, Annual Action Plan and the Annual Report on CSR in the prescribed format can be viewed at Companys website www.dineshmills.com in “Investors” Section

12. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

During the year under review, the Company has not given any loans, guarantees and investments pursuant to Section 186 of the Companies Act, 2013. However, the Company has made investment in 55,00,000, 0.01% Optionally Convertible Non-Cumulative Preference Shares of Rs.10/- each in the Right Issue of Wholly Owned Subsidiary company viz. Stellent Chemicals Industries Limited (Formerly known as Fernway Textiles Limited) amounting to Rs.550/- Lakhs and 20,96,876 4% Optionally Convertible Cumulative Preference Shares (“OCCPS”) of Rs. 10/- (Rupees Ten) each in the Right issue of Subsidiary Company viz. Dinesh Remedies Limited.

13. AUDITORS REPORTS

The Auditors Report issued by M/s. R. K. Doshi & 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. M/s. Kashyap Shah & Co., Secretarial Auditor has made the following observations in their Secretarial Audit Report: “the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards etc. except (a) The Company could not file prescribed forms under IEPF to Investor Education Protection Fund authority, as clarified by the management pendency is due to technical problems being faced while filing the forms with the Ministry of Corporate Affairs. (b) Disclosure of appointment of auditors in the Explanatory Statements to the notice of AGM as per the Regulation 36(5) of the Listing Regulations were not available.” The explanation /comments by the Board viz. (a) the Company has filed the IEPF form 2 but the same are pending due to technical problems i.e. uploading the excel sheet with the MCA. (b) The Company has given the details of the Statutory Auditors and their remuneration in the Ordinary Resolution passed by the members of the Company at their 86th AGM held on 28th August, 2021. As the appointment of the Statutory Auditors is an ordinary business, the explanatory statement pursuant to Section 102 of the Companies Act, 2013 is not required and therefore, the same was not given. However, in terms of Regulation 36(5) of SEBI (LODR) Regulations, 2015, disclosures are to be given as part of the explanatory statement but through oversight the same was not given in the Explanatory statements to the Notice of 86th AGM which is being given in the explanatory statements to the Notice of the ensuing 87th AGM. The copy of the Secretarial Audit Report is attached as Annexure “C”. 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 the status of the complaint during the financial year 2021 2022 is as under:

Details of Complaints Status
No. of complaints as at 1st April, 2021 Nil
Received during the year Nil
Resolved during the year Nil
No. of complaints as at 31stp> March, 2022 Nil

16. ANNUAL RETURN

The extracts of Annual Return pursuant to Rule 12 of the Companies (Management and Administration) Rules, 2014 is furnished in Annexure “D” 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, four meetings of Board of Directors of the Company were held on 31/05/2021, 05/08/2021, 08/11/2021 and 03/02/2022.

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 Mohan Akalkotkar, 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: 71:1 (2) Name: Shri Nimishbhai Patel (Managing Director) Ratio: 71:1

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 Mohan Akalkotkar (w.e.f. 31/05/2021) Chief Financial Officer: 8% (4) Shri J. B. Sojitra Company Secretary: 9% c) The percentage increase in the median remuneration of employees in the financial year: 4% d) There are 307 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 during the year ended 31st March, 2022. 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 Company believes in good Corporate Governance and the Report on the Corporate Governance as stipulated under SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 which forms an integral part of the Annual Report and the Auditors certificate regarding compliance of conditions of Corporate Governance is attached to the Corporate Governance Report.

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 Stellent Chemicals Industries Ltd. are wholly owned subsidiary companies and the financial statements of the above referred subsidiary companies are consolidated. Stellent Chemicals Industries Ltd. holds 26% equity shares of Chem-Verse Consultants (India) Pvt. Ltd. (CVC) and therefore, CVC has become Associate Company and the separate statement containing the salient features of the financial statement of these subsidiary & Associate 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 2021 2022.

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 J B Sojitra, Executive Director (Corporate Affairs) of the Company would retire by rotation and being eligible, offer himself for re-appointment.

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 “E”.

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 3rd February, 2022 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 3rd February, 2022 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 Company had appointed M/s. R. K. Doshi & Co. LLP having Firm Registration No. 102745W/W100242 as Statutory Auditors for the term of five years from financial year 2021 2022 to 2025 2026, in the 86th Annual General Meeting of the Company held on 28th August, 2021 on a remuneration of Rs. 6,63,000/- p.a. plus applicable GST and reimbursement of out of pocket expenses based on the recommendation of Nomination & Remuneration Committee, Audit Committee and Board of Directors of the Company.

28. COMPOSITION OF AUDIT COMMITTEE AND VIGIL MECHANISM

The Audit Committee consists of four Independent Directors viz. Shri Rakesh Agrawal, Shri T. M. Patel and Shri Sanjiv Shah and Ms. Reshma 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): “Shri Dinesh Mills Limited ESOP 2016” scheme has been expired pursuant to the terms & conditions of the above referred scheme and during the year review, no ESOPs were granted by the Nomination, Remuneration & Compensation Committee.

30. EMPLOYEES REMUNERATION

The details of the remuneration paid to the employees during the year under review are given in the Annexure “F” 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. There is no other employee except shown in Annexure F, drawing remuneration in excess of the limit prescribed under Rule 5 of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014.

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 the Related parties in the ordinary course of business and on Arms Length basis which have been approved by the Audit Committee and Board of Directors of the Company are given in Note No.37 attached to the Annual Financial Statement and also disclosed in Form AOC 2 attached as Annexure “G”.

33. COST RECORDS & COST AUDIT

Maintenance of Cost Records & Audit as specified by the Central Government u/s. 148 of the Companies Act, 2013 read with Companies (Cost Records & Audit) Rules, 2014 are not applicable to the Company.

34. DIRECTORS RESPONSIBILITY STATEMENT

Your Directors confirm that:

(a) in the preparation of the Annual Accounts for the financial year 2021 2022, 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.

35. 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: 23rd May, 2022 CHAIRMAN
DIN: 00039543