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 31^st March, 2026.

1. PERFORMANCE OF THE COMPANY

		(Rs. In Lakhs)
Sr. Particulars	2025-2026	2024-2025
1 Revenue from Operations	6733	6630
2 Other Income	1110	1290
3 Finance Cost	71	77
4 Depreciation	283	302
5 Profit Before Exceptional Items & Tax	1100	1726
6 Exceptional Items (net)	(120)	(289)
7 Profit After Exceptional Items & Tax	877	1050
8 Total Comprehensive Income for the year	850	971

2. DIVIDEND

Your Directors have recommended for your consideration final Dividend of Rs. 1.50 per Equity Share (Previous year Rs.2/- per Equity Share) on 56,00,582 equity shares of Rs.10/- each amounting to Rs. 84,00,873/- subject to approval of shareholders of the Company at their ensuing 91^st 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 2017-2018 and No Equity Shares were required to be transferred 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

Indian Paper Industry Scenario during F. Y. 2025-2026

(i) Industry Overview

The Indian paper industry in the financial year 2025-2026, continues to show steady growth, supported mainly by packaging paper, paperboard, kraft paper, and tissue segments. India’s paper production is estimated at around 22-23 million tons annually, while per capita consumption remains low at approximately 16-18 kgs compared to the global average of 57 kgs, indicating strong long-term growth potential.

(ii) Growth Drivers

Government initiatives discouraging single-use plastics and increasing focus on sustainable packaging are driving higher demand for paper-based products. Growth in e-commerce, FMCG, food delivery, pharmaceuticals, and organized retail is further supporting demand for packaging grades. Tissue paper continues to witness strong growth due to rising hygiene awareness and lifestyle changes.

(iii) Challenges

The industry faces challenges from rising raw material and energy costs, foreign exchange fluctuations, environmental compliance requirements, and increasing imports from ASEAN countries and China, leading to pricing pressure on domestic manufacturers.

SWOT Analysis - Company Perspective

(i) Strengths

With over five decades of experience in manufacturing paper maker’s felts, we are recognized as a reliable supplier for high-speed paper machines in India and select export markets. Our consistent product quality, technical expertise, and competitive pricing have helped establish strong customer relationships. Recent successes in critical high-speed applications in India, Russia, and Brazil have further strengthened our market position.

(ii) Weaknesses

Further improvements are required in manufacturing automation, process optimization, and operational scalability to enhance productivity and margins. Dependence on imported specialty raw materials, rising energy costs, and limited global brand visibility in certain premium applications remain key concerns.

(iii) Opportunities

Growing demand in packaging, tissue, and specialty paper segments presents significant opportunities for advanced machine clothing products. Expansion of high-speed paper machines, increasing demand for seamed felts, and global supply chain diversification are expected to create strong growth potential in both domestic and export markets.

(iv) Threats

Intense competition from domestic and overseas suppliers, especially in price- sensitive segments, continues to exert pressure on margins. Volatility in raw material prices, logistics costs, exchange rates, and rapid technological advancements by multinational competitors remain major industry challenges.

A. OVERALL REVIEW OF OPERATIONS

During the year under review, Revenue from Operations has been marginally increased from 6630/- Lakhs to 6733/- Lakhs but the net profit after tax & exceptional items has been decreased from Rs. 1050/- Lakhs to Rs. 871/- Lakhs as compared to the corresponding period of the previous year mainly due to increase in the overhead expenses.

B. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

(Rs. In Lakhs)

Sr. No. Particulars	2025-2026	2024-2025
1 Revenue from Operations	6733	6630
2 Depreciation	283	302
3 Interest	71	77
4 Net Profit before Tax & Exceptional Items	1093	1726
5 Less: Provision for Taxation	102	387
6 Add: Exceptional Items	(120)	(289)
7 Net Profit after Tax & Exceptional Items	871	1050

The various ratio analysis is given in Note No.41 attached to the Annual Financial Statement for the year ended 31^st March, 2026.

C. OVERALL OUTLOOK

Looking to the current trend, the sales turnover of the Felts (i.e. Technical Textiles) is likely to be increased but the net profit of the Company may remain under pressure due to Global disruption during the current financial year. However, the Management would strive to mitigate the adverse impact to the extent possible.

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 247 employees in the Company as at 31^st March, 2026.

7. MATERIAL CHANGES AND COMMITMENT, IF ANY

There are no material changes and commitments affecting the financial position of the Company occurred from 1^st April, 2026 to the date of this Report except the Company has disclosed to BSE Ltd. on April 29, 2026, pursuant to Regulations 30 and 30A of the LODR Regulations read with clause 5A of Part A of Schedule III, that the promoter has given disclosure regarding execution of the Family Settlement Agreement (FSA) on April 29, 2026 between Shri Bharatbhai Patel & Shri Aditya Patel (BUP Family) and Shri Nimishbhai Patel & Shri Nishank Patel (NUP Family). The Company was not a party to the FSA, but the Board noted the disclosure and granted in-principle approval for demerger of the Company’s FELT business into a separate Legal entity, subject to NCLT and other approvals and until the proposed demerger, the Board approved segregation of the FELT and Residual Businesses and assigned directors for separate oversight of each vertical.

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. 17,24,000/- 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 Company’s 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 except the Company has made investment in 7,07,200, 0.01% Optionally Convertible Non-Cumulative Preference Shares of Rs. 10/- each for cash at par on Rights Basis issued by Wholly Owned Subsidiary company viz. Fernway Technologies Ltd.

13. STATUTORY AUDITORS

The Auditors’ Report issued by M/s. R. K. Doshi & Co. LLP on the Accounts is selfexplanatory and therefore, does not call for any explanation. There were no qualifications, reservations or adverse remarks made by the above referred Statutory Auditors.

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

The term of M/s. R. K. Doshi & Co. LLP is expired on 31^st March, 2026 and therefore, the Board of Directors of the Company has proposed appointment of M/s. Dhirubhai Shah & Co. LLP, Chartered Accountants Firm Registration No. 102511W/W100298 as

Statutory Auditors for the first term of five years from F.Y. 2026-2027 to 2030-2031 subject to approval of the shareholders of the Company.

14. SECRETARIAL AUDITOR

Secretarial Auditor CS Heena Patel, Practicing Company Secretary Vadodara has issued Secretarial Audit Report is self-explanatory and the same does not contain any qualification, reservation and adverse remark. The copy of the Secretarial Audit Report is attached as Annexure - “C”.

15. COMPANY’S 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 Company’s website www.dineshmills.com in “Investors” Section

16. 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 20252026 is as under:

Details of Complaints	Status
No. of complaints as at 1st April, 2025	Nil
Received during the year	Nil
Resolved during the year	Nil
No. of complaints as at 31st March, 2026	Nil

During the year under review, the Company has complied with Provisions relating to the constitutions of Internal complaints committee under the Sexual Harassment of Women at work place (prevention, prohibition & redressal) Act, 2013.

17. ANNUAL RETURN

In accordance with the provisions of Section 92(3) of the Companies Act, 2013 read with Rules made thereunder, Annual Return of the Company can be accessed at the Company’s website at https://felts.dineshmills.com/bod.php?p=8

18. 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 Secretaries of India and approved by the Central Government.

19. THE MEETINGS OF THE BOARD OF DIRECTORS

During the year under review, five meetings of Board of Directors of the Company were held on 30/05/2025, 05/08/2025, 05/11/2025, 03/02/2026 and 27/03/2026.

20. KEY MANAGERIAL PERSONNEL (KMP) AND REMUNERATION

During the year under review, Shri Bharatbhai Patel, Chairman & Managing Director, Shri Nimishbhai Patel, Managing Director, Shri Aditya Patel & Shri Nishank Patel, Executive Directors, 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 employee’s remuneration for the financial year and such other details are given hereunder:

(1) Name: Shri Bharatbhai Patel (Chairman & Managing Director)

Ratio: 96: 1

(2) Name: Shri Nimishbhai Patel (Managing Director)

Ratio: 96:1

(3) Name: Shri Aditya Patel (Executive Director)

Ratio: 18:1

(4) Name: Shri Nishank Patel (Executive Director)

Ratio: 18:1

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: 12.5 %

(2) Shri Nimishbhai Patel - Managing Director: 12.5 %

(3) Shri Aditya Patel - Executive Director: NIL

(4) Shri Nishank Patel - Executive Director: NIL

(5) Shri Mohan Akalkotkar - Chief Financial Officer: 3.42 %

(6) Shri J. B. Sojitra - Company Secretary: 9.67 %

c) The percentage increase in the median remuneration of employees in the financial year: 6.25 %

d) There are 247 permanent employees on the Roll of the Company.

e) The Company has given normal increments to the employees during the year ended 31^st March, 2026.

The remuneration is paid as per the Remuneration Policy of the Company.

f) The Company has paid only Sitting fees to Independent Directors for attending Board meetings and Committee meetings.

21. 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.

22. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

During the financial year 2025-2026, the Company had divested its entire shareholding in Dinesh Remedies Ltd. i.e. 1,30,98,095 (i.e. 55.52%) equity shares of Rs. 10/- each and 20,96,876 4% Optionally Convertible Cumulative Preference Shares of Rs. 10/- each on 3^rd September, 2025 and as a result thereof, Dinesh Remedies Limited has ceased as material Unlisted Subsidiary Company w.e.f. 3^rd September, 2025.

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.

During the year under review, the Company has invested Rs.70,72,000/- in 0.01%, 7,07,200 Optionally Convertible Non-Cumulative Preference Shares (OCPS) of Rs.10/- each on Rights basis in wholly owned subsidiary company viz. Fernway Technologies Ltd.

Stellent Chemicals Industries Ltd. holds 26% equity shares of McGean India Chemicals Pvt. Ltd. and therefore, McGean is an Associate Company and the separate statement containing the salient features of the financial statement of these Subsidiary & Associate Companies has also been given in form AOC-I attached to the fin.ancial statement of the Company in pursuant to the provisions of the Companies Act, 2013 read with the Companies (Indian Accounting Standards) Rules, 2015 (i.e. Ind AS).

23. 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 2025 - 2026.

24. 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 Aditya Patel (DIN: 03292506) and Shri Nishank Patel (DIN: 05170801), Executive Directors of the Company would retire by rotation and being eligible, offer themselves for reappointment.

During the year under review, the tenure of Shri Sanjiv Shah (DlN: 00065796) for maximum two terms of five years each as an Independent Director has been completed on 28^th March, 2026 and therefore, he was ceased to be an Independent Director.

During the year under review, Ms. Reshma Patel (DIN: 00165162) was reappointed as Non - Executive Independent Director for her second term of five years with effect from 15^th March, 2026, Mrs. Tejal Rahul Amin (DIN: 00169860) was appointed as NonExecutive Independent Director of the Company for a period of 5 (five) years from 28^th March, 2026 to 27^th March, 2031.

25. 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.

26. CERTIFICATE OF NON DISQUALIFICATION OF DIRECTORS

The Certificate of Non Disqualification of Directors issued by Mrs. Heena Patel, Practicing Company Secretary pursuant to SEBI (Listing Obligations & Disclosures Requirements) Regulations, 2015 is attached as Annexure - “D”.

27. 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 27^th March, 2026 considering various criteria and also seeking inputs from the Directors as per the Performance Evaluation Policy of the Company.

A separate meeting of Independent Directors was also held on 27^th March, 2026 and reviewed the performance of Non Independent Directors, performance of the Board as whole including Committees thereof 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.

28. COMPOSITION OF AUDIT COMMITTEE AND VIGIL MECHANISM

The Audit Committee presently comprises of the Independent Directors viz Shri Shivinder Singh Chawla, Shri Sameer Khera, Ms. Reshma Patel and Mrs. Tejal Amin.

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 Company’s 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 Company has not provided any Stock Option Scheme to the employees.

30. EMPLOYEES’ REMUNERATION

The details of the remuneration paid to the employees during the year under review are given in the Annexure - “E” 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 - E, 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, the transactions with the Related parties entered 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 and the details of the same are given in Note No.38 attached to the Annual Financial Statement and also disclosed in Form AOC-2 attached as Annexure - “F”.

33. COST RECORDS & COST AUDIT

The Companies (Cost Records & Audit) Rules, 2014 specified by the Central Government pursuant to Section 148 of the Companies Act, 2013 are not applicable to the Company as the product manufactured by the Company is not falling under the Custom Tariff Heading given pursuant to above referred Rules.

34. DIRECTORS RESPONSIBILITY STATEMENT

Your Directors confirm that:

(a) In the preparation of the Annual Accounts for the financial year 2025-2026, 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: 27th May, 2026	CHAIRMAN
	DIN: 00039543