To,

The Members,

Shri Dinesh Mills Limited.

The Directors have pleasure in presenting their Report together with the Annual Financial Statement for the year ended 31st March, 2018

1. PERFORMANCE OF THE COMPANY (Rs.in Lakhs)

2. DIVIDEND

Your Directors have recommended for your consideration Dividend of Rs. 1.50 per Equity share (Previous year Rs.1.50 per Equity share) on 50,84,382 equity shares of Rs.10/- each amounting to Rs. 76,26,573/- subject to approval of shareholders of the Company at their ensuing 83rd Annual General Meeting.

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

The Company has already transferred unclaimed dividend upto financial year 2009- 2010 to IEPF during the year under review. The Dividend for the financial year 2010-2011 will be transferred to IEPF in the current financial year i.e. 2018-2019 on due date as mentioned in the Note No. 5 of the ensuing 83rd AGM Notice. During the year under review, the Company has also transferred 55,110 equity shares of Rs.10/- each to the Demat Account of the IEPF Authority pursuant to the provisions of IEPF (Accounting, Audit, Transfer & Refund) Rules, 2016.

4. MATERIAL CHANGES AND COMMITMENT, IF ANY

There are no other material changes and commitments affecting the financial position of the Company occurred from 1st April, 2018 to the date of this Report.

5. 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.

6. 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.

7. THE CORPORATE SOCIAL RESPONSIBILITY

As the provisions relating to the Corporate Social Responsibility (CSR) as prescribed u/s. 135 of the Companies Act, 2013 along with Rules made thereunder are not applicable to our Company and therefore, neither the CSR Committee nor the CSR Policy are required to be framed by the Company.

8. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

During the year under review, the Company has not given any loans, guarantees or made investments pursuant to Section 186 of the Companies Act, 2013.

9. CONTRACTS / ARRANGEMENT WITH THE RELATED PARTIES

During the year under review, no contracts / arrangements are entered with the Related Parties pursuant to Section 188 of the Companies Act, 2013. However, the transactions with Related Parties are given in Note No. 42 attached to the Annual Financial Statement as Good Corporate Governance practice.

10. AUDITORS REPORTS

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

The Secretarial Audit Report issued by the Secretarial Auditor, M/s. Kashyap Shah & Co., Practicing Company Secretaries, Vadodara is self explanatory and therefore, does not call for any explanation There were no qualifications, reservations or adverse remarks made by the above referred Secretarial Auditor. The copy of the Secretarial Audit Report is attached as Annexure - “B” to this Report.

11. 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

12. WOMAN HARRASSMENT

The Company has formed the Committee to deal with the complaints, if any regarding sexual harassment of woman employees and no complaint was received by the Committee during the financial year 2017 - 2018.

13. ANNUAL RETURN

The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is furnished in Annexure - “C” attached to this Report.

14. 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 which are effective from 1st October, 2017.

15. THE MEETINGS OF THE BOARD OF DIRECTORS

During the year under review, seven meetings of Board of Directors of the Company were held on 30/05/2017, 14/08/2017, 27/09/2017, 14/11/2017, 30/01/2018, 14/02/2018 and 28/03/2018.

16. KEY MANAGERIAL PERSONNEL (KMP) AND REMUNERATION

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

During the year under review, Shri Sudip Ray resigned as Chief Financial Officer (CFO) of the Company w.e.f 01/ 08/2017 and Shri Apurva Shah has been appointed as CFO w.e.f. 30th January, 2018.

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 as given hereunder:

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

Ratio: 80:1

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

Ratio: 80:1

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 : 14%

(2) Shri Nimishbhai Patel - Managing Director : 14%

(3) Shri Apurva Shah - Chief Financial Officer (w.e.f 30/01/2018): NIL%

(4) Shri J. B. Sojitra - Company Secretary : 5%

c) The percentage increase in the median remuneration of employees in the financial year: 5%

d) There are 676 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 incurred the losses due to implementation of VRS but to retain the employees and considering the inflation, normal increments are given.

f) Comparison of the Remuneration of the Key Managerial Personnel (KMP) against the performance of the company: Due to sluggish domestic & international markets and intense competition on prices, cheaper imports from China and preference to the readymade garments, the revenue from Operations has been adversely affected and as a result thereof, our Company has incurred losses also due to implementation of VRS during the year under review. However, considering the qualifications, experience, long association, untiring efforts and their contribution to the Company, the remuneration are paid within the permissible limits under Schedule V to the Companies Act, 2013.

17. CORPORATE GOVERNANCE

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

18. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

The Company has Subsidiary Company viz. Dinesh Remedies Ltd., engaged in manufacturing of Empty hard Gelatin Capsules Shells at Village Mahuvad, Haranmal Road, Padra-Jambusar Highway, Taluka Padra, District Vadodara - 391 440.

During the year under review, the Company has incorporated two subsidiary companies viz. Fernway Technologies Ltd. and Fernway Textiles Ltd. on 30th October, 2017 and 6th November, 2017 respectively. There are no other Joint Ventures and Associate companies.

The financial statements of the above referred subsidiary companies are consolidated and the separate statements containing the salient features of the financial statement of these subsidiary companies have 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).

19. 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 2017 - 2018.

20. DIRECTORS

Pursuant to Section 149 and 152 of the Companies Act, 2013 read with the Companies (Appointment and Qualification of Directors) Rules, 2014, Independent Directors are not liable to retire by rotation whereas other Directors are liable to retire by rotation and accordingly, Shri Nimishbhai Patel, Managing Director of the Company would retire by rotation and being eligible, offer himself for re-appointment. The particulars of the Director retiring by rotation and seeking re-appointment have been given in the Notice of the ensuing 83rd Annual General Meeting of the members of the Company.

21. 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.

22. PERFORMANCE EVALUATION OF DIRECTORS

The performance evaluation of all the Directors including Independent Directors and the Board as a whole which includes the Committees thereof was done on 28th March, 2018 as per the Performance Evaluation Policy of the Company.

As per provisions of the Companies Act, 2013 read with Rules made thereunder, a separate meeting of the Independent Directors was held on 28th March, 2018 to consider the following agenda:

a) Review the performance of Non-Independent Directors and the Board as a whole including Committees thereof.

b) Review the performance of the Chairperson of the Company.

c) Asses the efficacy and adequacy of flow of information.

Except Mrs. Tarunaben Patel, all other Independent Directors of the Company were present in the meeting held on 28th March, 2018 and they considered the above referred agenda.

23. STATUTORY AUDITORS

The tenure of M/s. Dhirubhai Shah & Co., Chartered Accountants, Ahmedabad would expire on the conclusion of the ensuing 83rd Annual General Meeting. The Company has received a letter dated 28th April, 2018 from the above referred Auditors to the effect that, if they are reappointed, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013. The continuance of appointment and payment of remuneration to M/ s. Dhirubhai Shah & Co., Chartered Accountants are proposed to be approved in the ensuing 83rd Annual General Meeting.

24. COMPOSITION OF AUDIT COMMITTEE AND VIGIL MECHANISM

Presently, the Audit Committee consists of four Independent Directors viz. Shri Rakesh Agrawal, Shri T. M. Patel, Shri Sanjiv Shah and Mrs. Tarunaben Patel.

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

25. 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 Board of Directors of the Company have allotted 16,200 equity shares of Rs.10/- each to the employees of the Company as per the terms & conditions of the ESOP-2016 Scheme of the Company based on the decision taken by the Nomination, Remuneration & Compensation Committee of the Directors of the Company. As a result of the allotment of 16,200 equity shares of Rs.10/- each under ESOP, the paid up equity share capital of the Company has been increased to Rs. 510.06 Lakhs w.e.f. 28th May, 2018.

26. 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 to Rule 5(2) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014.

27. INSURANCE:

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

28. DIRECTORS RESPONSIBILITY STATEMENT:

Your Directors confirm that:

(a) in the preparation of the Annual Accounts for the financial year 2017-2018, the applicable Accounting Standards had been followed along with 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.

29. 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

Place : Vadodara BHARAT PATEL

Date : 28th May, 2018 CHAIRMAN