Directors Report of Deepak Spinners Ltd.

Mar 31, 2018

Dear Shareholders,

The Directors are pleased to present their Report together with the Audited Financial Statements for the year ended 31st March 2018.

1. FINANCIAL RESULTS (Rs. in Lacs)

Profit before Depreciation & Tax	2312.92
Less : Depreciation	1645.18
Provision for Tax
- Current year	136.15
- Deferred Tax	(38.86)
Add : Other Comprehensive Income	30.17
Net Profit	600.62
Transfers and Appropriations :
Balance carried forward to	600.62
Reserves and Surplus

The Ministry of Corporate Affairs (MCA) vide its notification dated 16.2.2015 had notified the Companies (Indian Accounting Standard) Rules, 2015. In pursuance of this notification, the Company has adopted Ind AS with effect from 1st April 2017 with a transition date of 1st April 2016. Accordingly, results for the year ended 31st March 2018 have been prepared in accordance with Ind AS prescribed under Section 133 of the Companies Act 2013.

2. Dividend

The Directors have not recommended any dividend.

3. General Review

The Company has maintained its Net Profit despite adverse market conditions in domestic and export markets and lower reported sales due to change in structure of indirect taxes.

During the year, modernization and complete renovation of boiler and cooling tower of power plant at Guna was completed to improve efficiency and to reduce operational costs. Upgradation of electricity supply at Baddi Unit of the Company from 11 KV to 66 KV, which was planned to be completed during 2017-18, could not be completed due to non-receipt of approval of the appropriate authority, and is expected to be completed during the current year.

In Guna, the construction of a colony for labourers will be completed by July 2018 to meet the accommodation requirement. Modernisation and upgradation programmes continue at both the units of the Company, to maintain competitiveness and achieve better quality. Stringent cost control measures remain in place in all possible areas and are regularly reviewed. Special emphasis is being given to water and energy conservation. Subject to sufficient cash flows from operations, planned capital expenditure for modernization and upgradation will be implemented.

4. Internal Financial Control Systems

The Company has in place adequate Internal Financial Control System commensurate with the size, scale and nature of its operations. Such controls are periodically tested and no reportable material weakness in the operations has been observed. The Company has appropriate policies and procedures for ensuring orderly and efficient conduct of its business, including adherence to Company’s policies, the safeguarding of its assets, prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and timely preparation of reliable financial information. Internal Audit is conducted by independent Chartered Accountants, on quarterly basis. To maintain its objectivity and independence, the Internal Auditors report directly to the Audit Committee of the Board. Based on the reports, the corrective actions are taken and the controls strengthened.

5. Statutory Auditors

Pursuant to Section 139 of the Companies Act, 2013, read with the Companies (Audit and Auditors) Rules, 2014, the members of the Company in its 35th Annual General Meeting held on 31st August 2017 approved appointment of M/s. Jitendra K Agrawal & Associates, Chartered Accountants (ICAI Registration no. 318086E) as the Statutory Auditors of the Company for an initial term of 5 consecutive years from the conclusion of 35th Annual General Meeting till the conclusion of 40th Annual General Meeting of the Company.

The aforesaid appointment of the statutory auditors for a term of 5 years was made subject to the ratification of such appointment at every subsequent Annual General Meeting during their tenure. However, as per the notification dated 7th May 2018, issued by Ministry of Corporate Affairs, the appointment of Statutory Auditors, is no more required to be ratified by members of the Company in every Annual General Meeting.

6. Auditors’ Report

The Auditors’ Report to the Shareholders does not contain any reservation, qualification or adverse remark. During the year under review, the Auditors have not reported any matter under Section 143(12) of the Companies Act, 2013, therefore, no detail is required to be disclosed under Section 134(3)(ca) of the Act.

7. Secretarial Audit

Pursuant to Section 204 of the Companies Act 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Secretarial Audit was carried out by M/s. A. Arora & Co., Company Secretaries (PCS Registration no. 993) for the financial year 2017-18. The Secretarial Audit Report is annexed as ‘Annexure - I’, to this Report.

There has been no qualification, reservation or adverse remark or disclaimer in the report. During the year under review, the Auditors have not reported any matter under Section 143(12) of the Companies Act, 2013, therefore, no detail is required to be disclosed under Section 134(3) (ca) of the Act.

8. Cost Audit

Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the cost records maintained by the Company in respect of its manufacturing activities, are required to be audited.

The Board of Directors have, on the recommendation of the Audit Committee, appointed, M/s Shakti K. & Associates, Cost Accountants (ICWAI Registration no. 11338), as Cost Auditors of the Company, to carry out cost audit of the products manufactured by the Company for the year 2018-19. The Company has received their written consent that the appointment is in accordance with the applicable provisions of the Act and rules framed there under.

The remuneration of the Cost Auditor has been approved by the Board of Directors on the recommendation of Audit Committee. As required under the Companies Act, 2013, The remuneration payable to the Cost Auditor is required to be placed before the members in a general meeting for their ratification. Accordingly, a resolution seeking members’ ratification for the remuneration payable to M/s. Shakti K. & Associates, Cost Auditors is included in the Notice convening the 36th Annual General Meeting.

9. Directors and Key Managerial Personnel :

a) i) Pursuant to Section 152 of Companies Act, 2013 and Articles of Association of the Company, Shri Yashwant Kumar Daga (DIN 00040632), retires by rotation at the forthcoming Annual General Meeting and being eligible, offers himself for re-appointment. The Board recommends his reappointment. The brief resume and other details as required under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations) are provided in the Notice of the 36th Annual General Meeting.

(ii) There were no changes in Key Managerial Personnel of the Company.

b) Statement on declaration given by Independent Directors

Declarations have been received from all Independent Directors confirming that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act 2013 and Listing Regulations.

c) Meetings

During the year, four Board Meetings and four Audit Committee meetings were convened and held, the details of which are given in the Corporate Governance Report.

d) Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Board has carried out an annual evaluation of its own performance, the Directors individually, as well as the evaluation of the working of its various Committees. All the relevant factors that are material for evaluating the performance of the Committees and of the Board were discussed in detail by the Board of Directors.

A structured questionnaire for evaluation of the Board and its various Committees and individual Directors was prepared and recommended to the Board by the Nomination & Remuneration Committee for doing the required evaluation, after taking into consideration the inputs received from the Directors, covering various aspects of the Board’s functioning.

A separate exercise was carried out to evaluate the performance of individual Directors who were evaluated on parameters such as level of engagement and contribution, independence of judgment, safeguarding the interest of the Company and its minority shareholders, etc. The performance evaluation of the Independent Directors was carried out by the entire Board excluding the Director being evaluated. The performance evaluation of the Chairman and non-independent Directors was carried out by the Independent Directors. The Directors expressed their satisfaction with the evaluation process.

10. Directors’ Responsibility Statement

In terms of the provisions of Section 134(5) of the Companies Act, 2013, your Directors confirm as under -

a) That in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b) That 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) That the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) That the Directors had prepared the annual accounts on a going concern basis; and

e) That 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) That 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.

11. Corporate Social Responsibility -

In accordance with the requirements of Section 135 of the Companies Act, 2013, the Company has a Corporate Social Responsibility Committee, the terms of reference and other details of which are provided in the Corporate Governance Report. The CSR Policy has been framed and posted on the website of the Company, www. dsl-india.com.

As required by Section 134(3)(o) of the Companies Act, 2013 and Rule 9 of the Companies (Corporate Social Responsibility ) Rules, 2014, Annual Report on CSR activities is annexed as ‘Annexure - II’ to form part of this report.

12. Vigil Mechanism

The Company has adopted a Vigil Mechanism for Directors and employees of the Company to report concerns of any fraud, mismanagement, negligence, violations of legal or regulatory requirement on a confidential basis to the Vigil Officer or the Audit Committee as the case may be. The policy of Vigil Mechanism is an internal policy, to make protected disclosures in good faith and to raise concerns to be appropriately dealt with.

It also provides for adequate safeguards against the victimization of employees who avail of the mechanism. Complaints received by Vigil Officer are investigated by the Vigil Officer and a report thereon is submitted to the Audit Committee. It is affirmed that no person was denied access to the Vigil Officer and the Audit Committee; and no complaints were received during the financial year 2017-18. To ensure that this mechanism is adhered to and to assure that the concern will be acted upon seriously, the Company:

1. ensures that the Complainant and/ or the person processing the Protected Disclosure is not victimized for doing so;

2. ensures complete confidentiality;

3. takes disciplinary action, if any one destroys or conceals evidence of the Protected Disclosure made/to be made;

4. provides an opportunity of being heard to the persons against whom the complaint is received.

The Policy on Vigil Mechanism is also posted on the website of the Company.

13. Risk Management Policy

The Company has an efficient Risk Management framework to identify and evaluate business risks and opportunities. The Audit Committee has been delegated the responsibility for monitoring and reviewing risk management, assessment and minimization procedures. On the recommendations of Audit Committee, Board of Directors has formulated a Risk Management Policy for dealing with different kinds of risks which it faces in day to day operations of the Company. The Company has adequate internal control systems and procedures to combat risks. The risk management procedures are reviewed by the Audit Committee and the Board of Directors on a quarterly basis at the time of review of the quarterly financial results of the Company.

14. Nomination and Remuneration Policy

The Board has on the recommendations of the Nomination and Remuneration Committee framed a policy for selection and appointment of Directors, KMP and Senior Management and their remuneration. The details of Company’s Remuneration Policy are attached as ‘Annexure-III’ and forms part of this report of the Board of Directors.

15. Related Party Transactions

All related party transactions that were entered into during the financial year were on an arm’s length pricing basis and were in the ordinary course of business and do not attract the provisions of Section 188 of the Companies Act, 2013.

There were no materially significant transactions with related parties during the financial year which were in conflict with the interest of the Company and hence, enclosing of Form AOC 2 is not required. Suitable disclosures as required by the Accounting Standard (Ind AS - 24 ) has been made in the notes to the Financial Statements.

All related party transactions are placed before the Audit Committee and also before the Board for approval. Prior omnibus approval of the Audit Committee is obtained on yearly basis for transactions which are of foreseen and repetitive nature for a period of one year. The transactions entered into pursuant to the omnibus approval so granted are placed before the Audit Committee on a quarterly basis.

The Policy on Related Party Transactions, as approved by the Board is uploaded on the Company’s website. None of the Directors has any pecuniary relationship or transaction vis-a-vis the Company.

16. Disclosures regarding Employees

a) The Statement of Details of Remuneration as required under Section 197 and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached as ‘Annexure - IV’ and forms a part of this Board’s Report.

b) The information required under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and forming part of this report is given in separate annexure to this Report.

The said annexure is not being sent along with this Report to the Members of the Company in line with the provisions of Section 136 of the Companies Act, 2013. Any member interested in obtaining a copy of the said statement may write to the Company Secretary at the Registered Office of the Company. The aforesaid annexure is also available for inspection by the Members at the Registered office of the Company, twenty one days before the 36th Annual General Meeting and up to the date of the said Annual General Meeting during the business hours on working days.

c) No employee, by himself or along with his spouse and dependent children holds 2% or more of the equity shares of the Company.

d) The Company has not received any complaint under ‘The Sexual Harassment of Women at Workplace (Prohibition, Prevention and Redressal) Act, 2013, during the year.

17. Public Deposits

During the year, the Company has neither accepted nor renewed any deposits from the public and as such, there are no outstanding deposits in terms of the Companies (Acceptance of Deposits) Rules, 2014.

18. Loans, Guarantees and Investments

The Company has not given loans, directly or indirectly to any person or other body corporate or given guarantee or provided any security in connection with a loan to any other body corporate or person. The Company has also not made any investments as per the provisions of Section 186 of the Companies Act, 2013.

19. Corporate Governance

A report on Corporate Governance and Management Discussion and Analysis as required under Regulation 34 of SEBI(Listing Obligations and Disclosure Requirements)Regulations, 2015 (‘Listing Regulations’) is annexed herewith. Compliance Certificate issued by Statutory Auditors of the Company, regarding compliance of Corporate Governance is also annexed.

20. Extract of Annual Return

The extract of annual return in Form MGT-9 as per the provisions of Section 92 of the Companies Act 2013 and Rule 12 of the Companies (Management and Administration) Rules, 2014 is annexed with this report as ‘Annexure - V’.

21. Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo.

As required by Section 134(3)(m) of the Companies Act, 2013 and Rule 8(3) of the Companies (Accounts) Rules, 2014, information with regard to Conservation of energy, technology absorption and foreign exchange earnings and outgo are annexed as ‘Annexure -VI’ to form part of this report.

22. Significant and material orders passed by the regulators or courts

There are no significant material orders passed by the regulators / courts which would impact the going concern status of the Company and its future operations.

23. Compliance with Secretarial Standards on Board and General Meetings

The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meetings and General Meetings.

24. Acknowledgement

We express our sincere appreciation and thank our valued shareholders, customers, Bankers, stakeholders, business associates, Central and State Governments and district level authorities for their continued support and encouragement to the Company. We are pleased to record our appreciation of the sincere and dedicated services rendered by the employees and workmen of the Company at all levels.

YASHWANT KUMAR DAGA

(DIN:00040632)

P. K. DROLIA

(DIN:00291966)

NILU AGRAWAL Directors

P. K. DAGA (DIN: 03107052)

Place : Kolkata Chairman and Managing Director BINOD KUMAR AGRAWAL

Date : 28.05.2018 (DIN: 00040692) (DIN: 00515967)

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Mar 31, 2016

Dear Shareholders,

The Directors are pleased to present their Report together with the Audited Financial Statements for the year ended 31st March 2016.

1. FINANCIAL RESULTS (Rs. in Lacs)

Profit before Depreciation & Tax	3518.22
Less : Depreciation	1353.53
Provision for Tax
- Current year	465.00
- Deferred Tax	131.52
Net Profit	1568.17
Transfers and Appropriations :
Less : Interim Dividend and
Dividend Tax	173.06
Balance carried forward to
Reserves and Surplus	1395.11

2. Dividend

The Company had paid Interim Dividend of Rs. 2/- per equity share during the year 2015-16. The Directors have not recommended any final dividend.

3. General Review

The project of capacity expansion at Guna plant, by installing 14,112 spindles together with related machinery and accessories has been completed.

In spite of sluggish market conditions, profitability of the Company has been maintained due to better utilization of resources and efficiency in working.

The Company has planned to upgrade its electricity supply at Baddi works. The dyeing capacity is being increased by 8 MT per day at Baddi enabling the Company to increase the product mix of own dyed yarn which would offer better profit margins. These activities are expected to be completed within the current financial year and its capital expenditure will be met through internal accruals.

4. Internal Financial Control Systems

The Company has an adequate Internal Financial Control System commensurate with the size, scale and nature of its operations. Internal

Audit is conducted by independent Chartered Accountants, on quarterly basis. To maintain its objectivity and independence, the Internal Auditors report directly to the Audit Committee of the Board. Based on the report of the Internal Audits, functional heads undertake corrective action and thereby strengthening the controls in their respective areas.

5. Statutory Auditors

M/s. Singhi & Co, Chartered Accountants (ICAI Registration no. 302049E), New Delhi, who are Statutory Auditors of the Company, hold office up to the forthcoming Annual General Meeting and are recommended for re-appointment to audit the accounts of the Company for the Financial Year 2016-17.

As required under the provisions of Section 139 of the Companies Act, 2013, the Company has obtained written confirmation from M/s. Singhi & Co. that their appointment, if made, would be in conformity with the limits specified in the said Section.

The appointment proposed is within the time frame for transition under sub-section (2) of Section 139 of the Companies Act, 2013.

6. Auditors'' Report :

The Auditors'' Report to the Shareholders does not contain any reservation, qualification or adverse remark.During the year under review, the Auditors have not reported any matter under Section 143(12) of the Companies Act, 2013, therefore, no detail is required to be disclosed under Section 134(3)(ca) of the Act.

7. Secretarial Audit

Secretarial Audit was carried out by M/s.

A. Arora & Co., Company Secretaries (PCS Registration no. 993) for the financial year 2015-16. The Secretarial Audit Report is annexed as ''Annexure - I'', and forms integral part of this Report.

There has been no qualification, reservation or adverse remark or disclaimer in the report. During the year under review, the Auditors have not reported any matter under Section 143(12) of the Companies Act, 2013, therefore, no detail is required to be disclosed under Section 134(3)(ca) of the Act.

8. Cost Audit

Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014, as amended, on the recommendation of the Audit Committee, the Board of Directors had appointed, M/s Shakti K. & Associates, Cost Accountants (ICWAI Registration no. 11338), as Cost Auditors of the Company, to carry out cost audit of the products manufactured by the Company.

The Company has received their written consent that the appointment is in accordance with the applicable provisions of the Act and rules framed there under. The remuneration of Cost Auditors has been approved by the Board of Directors on the recommendation of Audit Committee and the requisite resolution for ratification of remuneration payable to Cost Auditors, by members is included in the Notice convening the ensuing Annual General Meeting of the Company.

9. Directors and Key Managerial Personnel :

a) Changes in Directors & Key Managerial Personnel

In accordance with the provisions of Companies Act, 2013 and Articles of Association of the Company, Shri Yashwant Kumar Daga, retires by rotation at the forthcoming Annual General Meeting and being eligible, offers himself for reappointment. The brief resume and other details as required under the Listing Regulations are provided in the Notice of the 34th Annual General Meeting.

There were no changes in Key Managerial Personnel of the Company.

b) Statement on declaration given by Independent Directors

All Independent Directors have given declarations confirming that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act 2013 and Listing Regulations.

c) Meetings

During the year, five Board Meetings and four Audit Committee meetings were convened and held, the details of which are given in the Corporate Governance Report.

d) Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and Listing Regulations, the Board has carried out an annual evaluation of its own performance, the Directors individually, as well as the evaluation of the working of its Committees. At the meeting of the Board, all the relevant factors that are material for evaluating the performance of the Committees and of the Board were discussed in detail.

Evaluation of the performance of individual Directors was carried out, evaluation being made on parameters such as level of engagement and contribution, independence of judgment, safeguarding the interest of the Company and its minority shareholders, etc. The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and non-independent Directors was carried out by the Independent Directors. The Directors expressed their satisfaction with the evaluation process.

10. Directors'' Responsibility Statement -

In terms of the provisions of Section 134(5) of the Companies Act, 2013, your Directors confirm as under -

a) That in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b) That 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) That the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) That the Directors had prepared the annual accounts on a going concern basis; and

e) That 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) That 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.

11. Corporate Social Responsibility -

In accordance with the requirements of Section 135 of the Companies Act, 2013, the Company has a Corporate Social Responsibility Committee, the terms of reference and other details of which are provided in the Corporate Governance Report. The CSR Policy has been framed and posted on the website of the Company, www. dsl-india.com.

As a good corporate citizen, the Company is committed to discharging its social responsibility. As required by Section 134(3)(o) of the Companies Act, 2013 and Rule 9 of the Companies (Corporate Social Responsibility ) Rules, 2014, Annual Report on CSR activities is annexed as ''Annexure - II'' to form part of this report.

12. Vigil Mechanism

The Company has a Vigil Mechanism to provide an avenue for Directors and employees to raise concerns of any fraud, mismanagement, negligence, violations of legal or regulatory requirement. The policy of Vigil Mechanism is an internal policy, to make protected disclosures in good faith and to raise concerns to be appropriately dealt by Vigil Officer or the Audit Committee as the case may be. Complaints received by Vigil Officer are investigated by the Vigil Officer and a report thereon is submitted to the Audit Committee.

Although no personnel were denied access to the Vigil Officer and the Audit Committee, no complaints were received during 2015-16.

To ensure that this mechanism is adhered to, and to assure that the concern will be acted upon seriously, the Company will:

1. Ensure that the Complainant and/or the person processing the Protected Disclosure is not victimized for doing so.

2. Ensure complete confidentiality.

3. Take disciplinary action, if any one destroys or conceals evidence of the Protected Disclosure made/to be made.

4. Provide an opportunity of being heard to the persons against whom the complaint is received.

The Policy on Vigil Mechanism is also posted on the website of the Company.

13. Risk Management Policy -

The Company has an efficient Risk Management framework to identify and evaluate business risks and opportunities. Risk Management forms an integral part of the Company''s Mid-Term Planning cycle. It defines the risk management approach across the enterprise at various levels. The Audit Committee has been delegated the responsibility for monitoring and reviewing risk management, assessment and minimization procedures.

14. Nomination and Remuneration Policy

The Board has on the recommendations of the Nomination and Remuneration Committee framed a policy for selection and appointment of Directors, KMP and Senior Management and their remuneration. The details of Company''s Remuneration Policy is attached as ''Annexure-III'' and forms part of this report of the Board of Directors.

15. Related Party Transactions

All related party transactions that were entered into during the financial year were on an arm''s length basis and were in the ordinary course of business.

There were no materially significant transactions with related parties during the financial year which were in conflict with the interest of the Company and hence, Form AOC 2 is not required.

All related party transactions are placed before the Audit Committee as also the Board for approval. Prior omnibus approval of the Audit Committee is obtained for transactions which are of foreseen and repetitive nature for a period of one year. The transactions entered into pursuant to the omnibus approval so granted are placed before the Audit Committee on a quarterly basis. Where the need for Related Party Transactions cannot be foreseen, the Audit Committee has granted omnibus approval for such transactions subject to their value not exceeding Rs. 1 crore per transaction, which is valid for a period of one year.

The Policy on Related Party Transactions, as approved by the Board is uploaded on the Company''s website.

None of the Directors has any pecuniary relationships or transactions vis-a-vis the Company.

16. Disclosures regarding Employees

a) The Statement of Details of Remuneration as required under Section 197 and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached as ''Annexure - IV'' and forms a part of this Board''s Report.

b) No employee of the Company was in receipt of remuneration in excess of limits laid down in Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Also, no employee, by himself or along with his spouse and dependent children holds 2% or more of the equity shares of the Company.

c) The Company has not received any complaint under ''The Sexual Harassment of Women at Workplace (Prohibition, Prevention and Redressal) Act, 2013, during the year.

17. Fixed Deposits :

During the year, the Company has not accepted any deposits from the public and as such, there are no outstanding deposits in terms of the Companies (Acceptance of Deposits) Rules, 2014.

18. Loans, Guarantees and Investments

The Company has not given loans, directly or indirectly to any person or other body corporate or given guarantee or provided any security in connection with a loan to any other body corporate or person. The Company has also not made any investments as per the provisions of Section 186 of the Companies Act, 2013.

19. Corporate Governance

A report on Corporate Governance and Management Discussion and Analysis as required under Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements)Regulations, 2015 (''Listing Regulations'') is annexed herewith. Compliance Certificate issued by Statutory Auditors of the Company, regarding compliance of Corporate Governance is also annexed.

20. Extract of Annual Return

The extract of annual return in Form MGT-9 is annexed herewith as ''Annexure - V''.

21. Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo.

As required by Section 134(3)(m) of the Companies Act, 2013 and Rule 8(3) of the Companies (Accounts) Rules, 2014, information with regard to Conservation of energy, technology absorption and foreign exchange earnings and outgo are annexed as ''Annexure -VI'' to form part of this report.

22. Significant and material orders passed by the regulators or courts

There are no significant material orders passed by the regulators / courts which would impact the going concern status and its future operations.

23. Acknowledgement

Your Directors place on record their deep appreciation of the co-operation extended by our Bankers, stakeholders, business associates , Central and State Governments and district level authorities for their co-operation and support and look forward to their continued support in future. They also record their appreciation of the dedicated services rendered by the executives, staff members and workers of the Company.

24. Cautionary Statement

Statements in the Board''s Report and the Management Discussion & Analysis describing the Company''s objectives, expectations or forecasts may be forward looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Company''s operations include global and domestic demand and supply conditions affecting selling prices of finished goods, input availability and prices, changes in government regulations, tax laws, economic developments within the country and other factors such as litigation and industrial relations.

YASHWANT KUMAR DAGA

Place : New Delhi P. K. DAGA P. K. DROLIA Directors

Date : 30.05.2016 Chairman and Managing Director VIKRAM PRAKASH _

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Mar 31, 2015

Dear Shareholders,

The Directors are pleased to present their Report together with the Audited Accounts for the year ended 31st March 2015.

1. FINANCIAL RESULTS (Rs in Lacs)

Profit before Depreciation & Tax 2565.74

Less : Depreciation 1599.17

Provision for Tax

- Current year 195.70

- Deferred Tax (121.47)

Net Profit 892.34

Transfers and Appropriations :

Balance carried forward to

Reserves and Surplus 892.34

2. DIVIDEND

Keeping in view the need of textile industry to continuously upgrade, and modernise, it is considered prudent to conserve funds to achieve cost effectiveness, to provide margin money for expansion and to service the increased debt. Your Directors, therefore, regret their inability to recommend any dividend this year.

3. GENERAL REVIEW

Major renovation / replacement of machinery at both plants were successfully completed at a cost of Rs. 10.00 crores financed by term loan from State Bank of India (SBI) and partly by internal accruals.

In the current year, capacity expansion at Guna plant as planned by installing 14,112 spindles together with related machinery and accessories, at a capital cost of Rs. 62.00 crores, is presently under implementation and is expected to be completed by March 2016. This is being financed by term loan of Rs. 43.00 crores from SBI, the balance being funded by internal accruals.

The sluggish off take coupled with wide fluctuations in prices of raw materials has been witnessed throughout the year. This situation continues and should hopefully improve later in the year.

4. INTERNAL FINANCIAL CONTROL SYSTEMS

The Company has an adequate Internal Control

System commensurate with the size, scale and nature of its operations. Internal Audit is conducted by independent Chartered Accountants, on quarterly basis. To maintain its objectivity and independence, the Internal Auditors report directly to the Audit Committee of the Board. Based on the report of the Internal Audits, functional heads undertake corrective action and thereby strengthening the controls in their respective areas.

5. STATUTORY AUDITORS

M/s. Singhi & Co, Chartered Accountants (Registration no. 302049E), New Delhi, who are Statutory Auditors of the Company hold office up to the forthcoming Annual General Meeting and are recommended for re- appointment to audit the accounts of the Company for the Financial Year 2015-16.

As required under the provisions of Section 139 of the Companies Act, 2013, the Company has obtained written confirmation from M/s. Singhi & Co. that their appointment, if made, would be in conformity with the limits specified in the said Section.

6. AUDITORS' REPORT

The Auditors' Report to the Shareholders does not contain any reservation, qualification or adverse remark.

7. SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed M/s. A. Arora & Co., a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed with this report as Annexure - 'I'.

8. COST AUDIT

Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014, qualified Cost Auditors, M/s Shakti K. & Associartes, Cost Accountants have been appointed to conduct cost audit relating to the products manufactured by the Company.

As required under the Companies Act, 2013, the remuneration payable to the cost auditor is required to be placed before the members

in a general meeting for their ratification. Accordingly, a resolution seeking members' ratification for remuneration payable to Cost Auditors is included in the Notice convening the ensuing Annual General Meeting of the Company.

9. DIRECTORS

a) Changes in Directors

Shri Pradip Kumar Daga was reappointed as Managing Director of the Company with effect from 16th April 2015 for a period of three years, at the Annual General Meeting held on 6th September 2014.

In accordance with the provisions of Companies Act, 2013 and Articles of Association of the Company, Shri Pradip Kumar Daga, retires by rotation at the forthcoming Annual General Meeting and being eligible, offers himself for re- appointment.

The Board of Directors had appointed Ms. Nilu Agrawal as Additional Director of the Company in the category of Independent Directors with effect from 1st April 2015 for a period of five years till 31st March 2020 subject to consent of shareholders in the ensuing Annual General Meeting. Ms. Nilu Agrawal has a rich business experience, which will be beneficial for the Company. This will also fulfill the requirement of having a woman Director on the Board of Directors under the Companies Act, 2013 and Clause 49 of the Listing Agreement.

b) Statement on declaration given by Independent Directors

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act 2013 and Clause 49 of the Listing Agreement.

c) Meetings

During the year, five Board Meetings and four Audit Committee meetings were convened and held, the details of which are given in the Corporate Governance Report.

d) Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual evaluation of its own performance, the Directors individually, as well as the

evaluation of the working of its Committees. At the meeting of the Board all the relevant factors that are material for evaluating the performance of the Committees and of the Board were discussed in detail.

Evaluation of the performance of individual Directors including the Chairman of the Board was carried out, evaluation being made on parameters such as level of engagement and contribution, independence of judgement, safeguarding the interest of the Company and its minority shareholders, etc. The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and non-independent Directors was carried out by the Independent Directors. The Directors have expressed their satisfaction with the evaluation process.

10. KEY MANAGERIAL PERSONNEL

During the year, Shri S. B. Sharda, who is already the President of the Company was appointed as the Chief Financial Officer (CFO) of the Company. Mrs. Puneeta Arora, Company Secretary was appointed as such before the Companies Act, 2013 came into force. They are Key Managerial Personnel of the Company.

11. DIRECTORS' RESPONSIBILITY STATEMENT

In terms of the provisions of Section 134(5) of the Companies Act, 2013, your Directors confirm as under -

a) That in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b) That 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) That the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) That the Directors had prepared the annual accounts on a going concern basis; and

e) That 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) That 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.

12. CORPORATE SOCIAL RESPONSIBILITY

The Company is committed to discharging its social responsibility as a good corporate citizen. The CSR Policy has been framed and posted on the website of the Company, www. dsl- india.com. As required by Section 134(3)(o) of the Companies Act, 2013 and Rule 9 of the Companies (Corporate Social Responsibility) Rules, 2014, Annual Report on CSR activities is annexed as Annexure - 'II' to form part of this report.

13. VIGIL MECHANISM

The Company has a Vigil Mechanism to provide an avenue for Directors and employees to raise concerns of any fraud, mismanagement, negligence, violations of legal or regulatory requirement. The policy of Vigil Mechanism is an internal policy, to make protected disclosures in good faith and to raise concerns to be appropriately dealt by Vigil Officer or the Audit Committee as the case may be. Complaints received by Vigil Officer are investigated by the Vigil Officer and a report thereon is submitted to the Audit Committee. Although no personnel was denied access to the Vigil Officer and the Audit Committee, no complaints were received during 2014-15.

To ensure that this mechanism is adhered to, and to assure that the concern will be acted upon seriously, the Company will:

1. Ensure that the Complainant and/or the person processing the Protected Disclo- sure is not victimized for doing so.

2. Ensure complete confidentiality.

3. Take disciplinary action, if any one destroys or conceals evidence of the Protected Disclosure made/to be made.

4. Provide an opportunity of being heard to the persons against whom the complaint is

received.

The Policy on Vigil Mechanism is also posted on the website of the Company.

14. RISK MANAGEMENT POLICY

The Company has an efficient Risk Management framework to identify and evaluate business risks and opportunities. Risk Management forms an integral part of the Company's Mid- Term Planning cycle. It defines the risk management approach across the enterprise at various levels. The Audit Committee has been delegated the responsibility for monitoring and reviewing risk management, assessment and minimization procedures.

15. NOMINATION AND REMUNERATION POLICY The Board has on the recommendations of the Nomination and Remuneration Committee framed a policy for selection and appointment of Directors, KMP and Senior Management and their remuneration. The Company's Remunera- tion Policy is attached as Annexure - 'III' and forms part of this report of the Directors.

16. RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during the financial year were on an arm's length basis and were in the ordinary course of business.

There were no materially significant transactions with related parties during the financial year which were in conflict with the interest of the Company and hence, form AOC 2 is not required. All related party transactions are placed before the Audit Committee as also the Board for approval. Prior omnibus approval of the Audit Committee is obtained for transactions which are of foreseen and repetitive nature for a period of one year. The transactions entered into pursuant to the omnibus approval so granted are placed before the Audit Committee on a quarterly basis. Where the need for Related Party Transactions cannot be foreseen , the Audit Committee has granted omnibus approval for such transactions subject to their value not exceeding Rs. 1 crore per transaction, which is valid for a period of one year.

The Policy on Related Party Transactions, as approved by the Board is uploaded on the Company's website.

None of the Directors has any pecuniary relationships or transactions vis-a-vis the Company.

17. PARTICULARS OF EMPLOYEES

a) The prescribed particulars of employees

required under Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached as Annexure - 'IV' and forms a part of this Board's Report.

b) No employee of the Company was in

receipt of remuneration in excess of limits laid down in Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Also, no employee, by himself or along with his spouse and dependent children holds 2% or more of the equity shares of the Company.

18. FIXED DEPOSITS

During the year, the Company has not accepted any deposits from the public and as such, there are no outstanding deposits in terms of the Companies (Acceptance of Deposits) Rules, 2014.

19. LOANS, GUARANTEES AND INVESTMENTS

The Company has not given loans, directly or indirectly to any person or other body corporate or given guarantee or provided any security in connection with a loan to any other body corporate or person. The Company has also not made any investments as per the provisions of Section 186 of the Companies Act, 2013.

20. CORPORATE GOVERNANCE

A report on Corporate Governance and

Management Discussion and Analysis as required under Clause 49 of the Listing Agreement is annexed herewith. Compliance certificate regarding compliance of Corporate Governance as stipulated in Clause 49 of the Listing Agreement is also annexed.

21. EXTRACT OF ANNUAL RETURN

The extract of annual return in Form MGT-9 is annexed herewith as Annexure - 'V'.

22. CASH FLOW ANALYSIS

In conformity with Clause 32 of the Listing Agreement, the Cash Flow Statement for the year ended 31.3.2015 is annexed hereto.

23. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO.

As required by Section 134(3)(m) of the Companies Act, 2013 and Rule 8(3) of the Companies (Accounts) Rules, 2014, information with regard to conservation of energy, technology absorption and foreign exchange earnings and outgo are annexed as Annexure - 'VI' to form part of this report.

24. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant material orders passed by the regulators / courts which would impact the going concern status and its future operations.

25. ACKNOWLEDGEMENT

Your Directors place on record their deep appreciation of the co-operation extended by our Bankers, financial institutions, stakeholders, business associates, Central and State Governments and district level authorities for their co-operation and support and look forward to their continued support in future. They also record their appreciation of the dedicated services rendered by the executives, staff members and workers of the Company.

26. CAUTIONARY STATEMENT

Statements in the Board's Report and the Management Discussion & Analysis describing the Company's objectives, expectations or forecasts may be forward looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Company's operations include global and domestic demand and supply conditions affecting selling prices of finished goods, input availability and prices, changes in government regulations, tax laws, economic developments within the country and other factors such as litigation and industrial relations.

P. K. DAGA VIKRAM PRAKASH P. K. DROLIA Place:New Delhi Chairman and YASHWANT KUMAR DAGA NILU AGRAWAL Date:29.05.2015 Managing Directors Director Director

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Mar 31, 2014

Dear Members,

The Directors are pleased to present their Report together with the Audited Accounts for the year ended 31st March 2014.

FINANCIAL RESULTS (Rs. in Lacs)

Profit before Depreciation & Tax 3315.51

Less : Depreciation 1060.43

Provision for Tax

* current year 475.75

* Deferred Tax 628.33

Net Profit 1151.00

DIVIDEND

Keeping in view the need of textile industry to continuously upgrade, and modernise, it is considered prudent to conserve funds to achieve cost effectiveness, to provide margin money for expansion and to service the increased debt. Your directors, therefore, regret their inability to recommend any dividend this year.

GENERAL REVIEW

The ongoing expansion cum modernisation programme taken up at both the units was fully completed during the year.

Your directors have planned further upgradation/balancing programme at both the units and expansion at Guna unit. This proposed expansion provides for installation of about 14000 spindles and a complete dye house of 25 MTs per day capacity together with the buildings and related machinery. The total cost of the project is estimated at Rs. 88.53 crores, which will be funded by a Term Loan of Rs. 63 crores and cash accruals of Rs. 25.53 crores. Major portion of the Term Loan has been tied up and efforts are on to obtain sanction of the balance amount.

Availability of labour at Baddi continues to be a matter of concern. Your management is seized of the problem and taking necessary steps. The performance of the year under review can be considered satisfactory but current year prospects have to be viewed with caution.

DIRECTORS'' REPONSIBILITY STATEMENT

In terms of the provisions of section 217 (2AA) of the Companies Act, 1956 your Directors confirm as under:

i) That in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures.

ii) That the Directors 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 at the end of the financial year and of the profit or loss of the Company for that period.

iii) That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv) That the Directors have prepared the annual accounts on a going concern basis.

DIRECTORS

Shri Vikram Prakash and Shri Pradeep Kumar Drolia are independent directors on the Board of your Company since 2006 and 2005 respectively. As per Section 149(10) of the Companies Act, 2013 and as per amended Clause 49 of the Listing Agreement, they are proposed to be appointed as Independent Directors of the Company for five consecutive years at the ensuing Annual General Meeting.

The Board of Directors consider that their continued association shall be highly beneficial to the Company. In the opinion of the Board, they fulfill the conditions specified in the Companies Act, 2013, rules made thereunder and the requirements of the scheme of Corporate Governance under listing agreement, for their appointment as Independent Directors of the Company.

Shri Yashwant Daga, Director retires by rotation at the forthcoming Annual General Meeting and being eligible, offers himself for re-appointment.

AUDITORS & AUDITORS'' REPORT

The retiring Auditors, M/s Singhi & Co. Chartered Accountants, (Registration No. 302049E) New Delhi, are eligible for re-appointment and have expressed their willingness to accept re-appointment. As per the Companies Act, 2013, M/s. Singhi & Co. having been auditors of the Company for over 10 years, are eligible to be appointed for three more years inclusive of 2014-15. Hence, M/s. Singhi & Co., are proposed to be re-appointed for three years from 2014-15 subject to ratification by Members at every AGM.

The Auditors'' Report to the shareholders does not contain any reservation, qualification or adverse remark.

COST AUDIT

Pursuant to the directives of the Central Government, qualified Cost Auditors have been appointed under Section 148 of the Companies Act, 2013, to conduct cost audit relating to the products manufactured by the Company.

ADDITIONAL INFORMATION

A report on Corporate Governance and Management Discussion and Analysis as required under clause 49 of the Listing Agreement is attached.

In conformity with Clause 32 of the Listing Agreement, the Cash Flow Statement for the year ended 31.3.2014 is annexed hereto.

Energy conservation measures, progress made in technology absorption and foreign exchange earnings and outgo as required by the Companies (Disclosure of particulars in the Report of the Board of Directors) Rules, 1988 are annexed and form part of this report.

None of the employees of the company is covered under the provisions of section 217(2A) of the Companies Act 1956 as amended to date.

ACKNOWLEDGEMENT

Your Directors place on record their deep appreciation of the co-operation extended by our Bankers, financial institutions, stakeholders, business associates , Central and State Governments and district level authorities for their co-operation and support and look forward to their continued support in future. They also record their appreciation of the dedicated services rendered by the executives, staff members and workers of the Company.

P. K. DAGA VIKRAM PRAKASH YASHWANT DAGA Place : New Delhi Chairman and Director P. K. DROLIA Date : 15th May, 2014 Managing Director Director

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Mar 31, 2013

Dear Shareholders,

The Directors are pleased to present their Report together with the Audited Accounts for the year ended 31st March 2013.

FINANCIAL RESULTS (Rs.in Lacs)

Profit before Depreciation, 2750.52

Exceptional Items and Tax

Less : Depreciation 745.91

Exceptional Item

Provision for Tax

- Tax related to current year 483.21

- Deferred Tax Debit 222.17

Net Profit 1299.23

DIVIDEND

Your Directors are of the view that the textile industry has a need for continuous upgradation and modernization. Your Company also desires to steadily expand its operations. As such, it is considered prudent for funds to be conserved in order to achieve cost effectiveness and to service the increased debt. Accordingly, your Directors regret inability to declare any dividend this year.

GENERAL REVIEW

The implementation of expansion and modernization programme at both the units has progressed satisfactorily and should be completed by June 2013. The solar power generation plant has been successfully commissioned.

Availability of labour continues to be a matter of concern. Frequent changes in the prices of man- made fibers also leads to avoidable difficulties. The operations of the year under review are satisfactory and efforts are being directed towards further improvement in performance. The current year will be devoted to consolidation and to optimization of returns on capital investments.

SUBSIDIARY COMPANY

During the year under review, your Company has divested its entire shareholding in DSL Hydrowatt Limited and, as such, this company no longer remains a subsidiary of your Company.

DIRECTORS'' REPONSIBILITY STATEMENT

In terms of the provisions of section 217 (2AA) of the Companies Act, 1956 your Directors confirm as under:

i) That in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures.

ii) That the Directors 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 at the end of the financial year and of the profit or loss of the Company for that period.

iii) That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv) That the Directors have prepared the annual accounts on a going concern basis.

DIRECTORS

The Directors regret to inform you that Shri J. N. Pathak, our seniormost Director, left for his heavenly abode in January 2013. We express our deep appreciation of the guidance and sound advice extended by Late Shri J. N. Pathak during his long association with your Company.

Shri Yashwant Daga, Director retires by rotation at the forthcoming Annual General Meeting and being eligible, offers himself for re-appointment.

AUDITORS & AUDITORS'' REPORT

M/s Singhi & Co. Chartered Accountants, (Registration No. 302049E) New Delhi retire as Auditors of the Company at the ensuing Annual General Meeting and are eligible for re-appointment. Auditors'' observations are self explanatory and suitably explained in the Notes on Accounts.

COST AUDIT

Pursuant to the directives of the Central Government under the provisions of Section 233B of the Companies Act, 1956 qualified Cost Auditors have been appointed to conduct cost audit relating to the products manufactured by the Company.

ADDITIONAL INFORMATION

A report on Corporate Governance and Management

Discussion and Analysis as required under clause 49 of the Listing Agreement is attached.

Energy conservation measures, progress made in technology absorption and foreign exchange earnings and outgo as required by the Companies (Disclosure of particulars in the Report of the Board of Directors) Rules, 1988 are annexed and form part of this report.

None of the employees of the company is covered under the provisions of Section 217(2A) of the Companies Act 1956 as amended to date.

ACKNOWLEDGEMENT

Your Directors record their appreciation of the co- operation extended by our Bankers and various authorities of the State Governments. They also record their appreciation of the dedicated services rendered by the executives, staff members and workers of the Company.

By Order of the Board

Place : New Delhi PUNEETA ARORA

Date : 17.05.2013 Company Secretary

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Mar 31, 2012

The Directors are pleased to present their Report together with the Audited Accounts for the year ended 31st March 2012.

FINANCIAL RESULTS (Rs.in Lacs)

Profit before Depreciation, 1626.07 Exceptional Items and Tax

Less : Depreciation 686.86

Exceptional Item 0.00

Provision for Tax

- Tax related to current year 213.82

- Deferred Tax Credit (35.17)

Net Profit 760.56

DIVIDEND

In view of the losses incurred in the earlier years and the need to conserve resources for upgradation and expansion, your Directors do not recommend any dividend for the year ended 31st March 2012.

GENERAL REVIEW

The market recovered during the year leading to an increase in overall demand that resulted in improved realizations. Presently, the market has become sluggish but revival in the near term is expected. Availability of labour continues to remain a matter of concern and your management has taken proactive measures to overcome the situation. At Baddi, additional labour quarters have been constructed for female workers.

Prices of all varieties of man-made fibers remained volatile during the course of the year. The recent budget increased the Excise Duty by 2%, thereby raising the overall cost of raw materials.

Expansion as well as modernisation has been undertaken at both the units at a total cost of Rs. 110 crores. This cost will be met by term loans of Rs. 73 crore which has already been sanctioned by our bankers, State Bank of India and the balance by internal accruals. The implementation of the same is in progress. It will lead to increased production and a higher turnover resulting in better profitability.

Your Directors have decided to set up a one megawatt capacity solar power generation facility in Madhya Pradesh at an expected cost of Rs. 10 crores under the REC (Renewable Energy Certificate) mechanism, which will be eligible for fiscal incentive fo 100% depreciation in the first year as well as tax holiday.

SUBSIDIARY COMPANY

M/S DSL Hydrowatt Limited is the only subsidiary of the Company.

Pursuant to the General Circular no. 2/2011 dated 8th February 2011, the Ministry of Corporate Affairs has granted general exemption to all companies from attaching balance sheet of their subsidiaries with their Annual Report. However, the annual accounts of the subsidiary, M/s DSL Hydrowatt Limited and other related information shall be made available to the shareholders of the Company on receipt of request in this regard by the Company. The Consolidated Financial Statements presented by the Company include the financial results of its subsidiary.

DIRECTORS' REPONSIBILITY STATEMENT

In terms of the provisions of Section 217 (2AA) of the Companies Act, 1956 your Directors confirm as under:

i) That in the preparation of the annual accounts, the applicable accounting standards have been followed alongwith proper explanation relating to material departures.

ii) That the Directors 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 at the end of the financial year and of the profit or loss of the Company for that period.

iii) That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv) That the Directors have prepared the annual accounts on a going concern basis.

DIRECTORS

Shri Vikram Prakash, Director retires by rotation at the forthcoming Annual General Meeting and being eligible, offers himself for re-appointment. AUDITORS & AUDITORS' REPORT M/s Singhi & Co. Chartered Accountants, (Registration No. 302049E) New Delhi retire as Auditors of the Company at the ensuing Annual General Meeting and are eligible for re-appointment. Auditors' observations are self explanatory and suitably explained in the Notes on Accounts.

The remarks made by the Auditors in para vi of their report with respect to accumulated Cenvat credit have been suitably explained in Note No. 12 of the Annual Accounts.

COST AUDIT

Pursuant to the directives of the Central Government under the provisions of Section 233B of the Companies Act, 1956 qualified Cost Auditors have been appointed to conduct cost audit relating to the products manufactured by the Company.

ADDITIONAL INFORMATION

A report on Corporate Governance and Management Discussion and Analysis as required under clause 49 of the Listing Agreement is attached.

Energy conservation measures, progress made in technology absorption and foreign exchange earnings and outgo as required by the Companies (Disclosure of particulars in the Report of the Board of Directors) Rules, 1988 are annexed and form part of this report.

None of the employees of the company is covered under the provisions of Section 217(2A) of the Companies Act, 1956 as amended to date.

ACKNOWLEDGEMENT

Your Directors record their appreciation of the co- operation extended by our Bankers and various authorities of the State Governments. They also record their appreciation of the dedicated services rendered by the executives, staff members and workers of the Company.

YASHWANT DAGA

PRADEEP KUMAR DROLIA P. K. DAGA

Place : New Delhi J. N. PATHAK VIKRAM PRAKASH Chairman and

Date : 15.05.2012 Directors Director Managing Director

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Mar 31, 2010

The Directors are pleased to present their Report together with the Audited Accounts for the period ended 31st March 2010.

FINANCIAL RESULTS (Rs. in Lacs)

Profit before Depreciation,

Exceptional Items and Tax 422.61

Less : Depreciation (765.55)

Impairment (850.00)

Exceptional Item

(Loss on sale of Capital (41.13)

Goods)

Tax Provision

Tax related to previous year (4.96)

Deferred Tax Credit 147.70

Net Loss (1091.33)

DIVIDEND

In view of loss incurred after provision for depreciation, your Directors do not recommend any dividend for the period ended 31st March 2010.

GENERAL REVIEW

In view of the economy showing signs of recovery, increased overseas and domestic demand, there is improvement in the performance of the Company. We hope to achieve better results in spite of devalued US dollar and Euro and rising cost of labour.

SUBSIDIARY COMPANY

M/s. DSL Hydrowatt Limited is the only subsidiary of the Company. Consolidated accounts and the Statement under Section 212 of the Companies Act, 1956, are annexed with this Annual Report.

DIRECTORS’ REPONSIBILITY STATEMENT

In terms of the provisions of Section 217 (2AA) of the Companies Act, 1956, your Directors confirm as under :

i) That in the preparation of the annual accounts, the applicable accounting standards have been followed alongwith proper explanation relating to material departures.

ii) That the Directors have selected such account- ing 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 or loss of the Company for that period.

iii) That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv) That the Directors have prepared the annual accounts on a going concern basis.

DIRECTORS

Shri Jagdish Narain Pathak, Director retires by rotation at the forthcoming Annual General Meeting and being eligible, offers himself for re-appointment.

Shri Pradip Kumar Daga was appointed Managing Director of the Company for a period of two years, by Board, with effect from 16th April 2010. His appointment as Managing Director of the Company is sought to be approved by the members of the Company at the forthcoming Annual General Meeting.

Shri V. N. Khemka, vacated the office of Executive Director during this year.

AUDITORS & AUDITORS’ REPORT

M/s Singhi & Co., Chartered Accountants, (Registration No. 302049E) New Delhi retire as Auditors of the Company at the ensuing Annual General Meeting and are eligible for re-appointment. Auditors’ observations are self explanatory and suitably explained in the Notes on Accounts.

The remarks made by the Auditors in para vi of their report with respect to accumulated Cenvat credit

have been suitably explained in para 10 of the Notes of Accounts.

ADDITIONAL INFORMATION

A report on Corporate Governance and Management Discussion and Analysis as required under clause 49 of the Listing Agreement is attached.

Energy conservation measures, progress made in technology absorption and foreign exchange earnings and outgo as required by the Companies (Disclosure of particulars in the Report of the Board of Directors) Rules, 1988 are annexed and form part of this report.

None of the employees of the Company is covered under the provisions of Section 217(2A) of the Companies Act, 1956, as amended to date.

ACKNOWLEDGEMENT

Your Directors record their appreciation of the co- operation extended by our Bankers and various authorities of the State Governments. They also record their appreciation of the dedicated services rendered by the executives, staff members and workers of the Company.

P. K. DAGA VIKRAM PRAKASH Chairman cum

Director Managing Director