DIRECTORS' REPORT

The Board of Directors of your Company ('Board') is pleased to present its 44^th Annual Report and the
Audited Financial Statements for the Financial year ended 31^st March 2026.

1. Financial Results

The above figures are extracted from the audited financial statements as per Indian Accounting
Standards (Ind AS). There has been no change in the nature of the business activities of the Company
during the year.

2. Dividend

The Board of Directors has decided not to recommend any dividend for the financial year ended on 31^st
March 2026, after careful consideration of the Company's financial position and future growth plans.

3. General Review

The financial year 2025-26 continued to present a complex operating environment for the textile
industry, shaped by persistent global macroeconomic adjustments and evolving trade dynamics. While
fabric imports from competing markets remained an active challenge for domestic players, the Company
maintained its strategic focus on reinforcing product positioning, optimizing demand forecasting, and
executing agile pricing strategies across specialized yarn segments to navigate competitive pressures.

On the operational front, the Company's continuous focus on resource optimization and sustainable
infrastructure is yielding positive outcomes. The 4 MW solar power plant at the Guna unit, which was
commissioned in FY 2024-25, completed its first full year of operations, contributing predictably to
enhanced energy self-reliance, reduced carbon footprint, and meaningful power cost savings.

Concurrently, the Company has taken definitive, proactive steps to address the steep increase in power
costs at the Baddi plant caused by the upward revision in state government tariffs. To aggressively
mitigate this expenditure and secure long-term cost efficiencies, the Company has installed a 2.976
MW solar power plant at the Baddi unit in FY 2026-27. This strategic green-energy expansion across
our manufacturing footprint will substantially insulate our operations from volatile tariff structures,
structurally lowering our power cost baseline and driving sustainable profitability moving forward.

Looking ahead, the Company remains optimistic about the long-term prospects of the textile sector.
Supported by improving global demand, increasing preference for reliable sourcing partners, and
continued emphasis on operational excellence, the Company is well-positioned to capitalize on
emerging opportunities while maintaining its focus on sustainable growth and profitability.

4. Credit Rating

The Company has the following credit rating from M/s. ICRA Limited on 23^rd September 2025 .

5. Internal Financial Control Systems

The Company has established robust policies and procedures to ensure the orderly and efficient
conduct of its business. Its Internal Financial Control (IFC) framework is commensurate with the size,
scale, and nature of its operations. The IFC systems are designed to safeguard the Company's assets,
prevent and detect fraud and errors, ensure the accuracy and completeness of accounting records, and
facilitate the timely preparation of reliable financial information.

During the year under review, no instance of fraud was reported. The Company has adopted accounting
policies that are in line with the applicable Accounting Standards and the provisions of the Companies
Act, 2013.

Internal Audit is conducted on a quarterly basis by independent Chartered Accountants. The Internal
Auditors monitor and evaluate the adequacy and effectiveness of the internal control systems. Based
on their reports, the respective departments undertake corrective actions to strengthen the control
environment. Significant audit observations and the corrective measures taken are reviewed by the
Audit Committee of the Board of Directors.

6. Statutory Auditors

As per Section 139 of the Companies Act, 2013, read with the Companies (Audit and Auditors) Rules,
2014, the members of the Company in 40^th Annual General Meeting ('AGM') had approved the
appointment of M/s. Salarpuria & Partners, Chartered Accountants (ICAI Registration No. 302113E) as

the Statutory Auditors of the Company for a term of five consecutive years, that is, from conclusion of
40^th AGM of the Company till the conclusion of the 45^th AGM of the Company.

7. Auditors' Report

The Auditors' Report to the Shareholders given by M/s. Salarpuria & Partners, Chartered Accountants,
on the Financial Statements of the Company for the Financial Year 2025-26 is part of the Annual Report.
The Auditor's Report does not contain any reservations, qualifications or adverse remarks. 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. Secretarial Audit

In terms of the SEBI (Listing Obligations and Disclosure Requirements) (Third Amendment) Regulation,
2024, the members of the Company in 43^rd AGM had approved the appointment of M/s A. Arora & Co.,
Company Secretaries (PCS Registration No. 993) as the Secretarial Auditors of the Company for a term
of five consecutive financial years commencing from 1^st April 2025 till 31^st March 2030 .

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 2025-26. The Secretarial Audit
Report is annexed as 'Annexure - I', and forms an integral part of this Report.

The Secretarial Audit Report does not contain any reservations, qualifications or adverse remarks.
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.

9. Cost Audit

Pursuant to Section 148 of the Companies Act, 2013, read with the Companies (Cost Records and Audit)
Amendment Rules, 2014, the Company is required to make and maintain cost records in respect of its
manufacturing activities and get them audited by a qualified Cost Accountant

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 Financial Year 2026-27. The
Company has received their written consent that the appointment is under the applicable provisions
of the Companies Act, 2013 and rules framed thereunder. They have also confirmed that they are not
disqualified to be appointed as Cost Auditors of the Company for the Financial Year 2026-27.

The remuneration of the Cost Auditor has been approved by the Board of Directors on the
recommendation of the Audit Committee. As required under the Companies Act, 2013, in terms of
the provisions of Section 148(3) of the Companies Act, 2013 read with Rule 14(a)(ii) of the Companies
(Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditor is required to be placed
before the members in a general meeting for their ratification. Accordingly, the necessary resolution
is proposed for ratification of the remuneration payable to M/s. Shakti K. & Associates, Cost Auditors in
the Notice convening the 44^th AGM.

10. Directors and Key Managerial Personnel (KMP)

i) Shri Pradip Kumar Daga (DIN- 00040692), the Chairman Emeritus of the Company, passed away
on 18th November 2025. He was the Founder Director of the Company, and his contribution to its
inception and growth was immense. His vision, leadership, and dedication played a pivotal role
in shaping the Company's journey and success. He will be remembered with deep respect and
gratitude.

ii) Shri Shantanu Daga (DIN - 08757724), Non-Executive Non-Independent Director, resigned from
his directorship on 14^th September 2025. Shri Shantanu Daga resigned due to his differences of
opinion with the manner in which the leadership of the Company carried out its business and other
affairs.

iii) By the provisions of the Companies Act, 2013, SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 ('Listing Regulations') and the Articles of Association of the Company, and based
on the recommendation of the Nomination and Remuneration Committee and the approval of
the Audit Committee, the Board of Directors appointed Shri Rajaram Kankani (DIN: 09188079),
President of the Company, as Whole-Time Director, designated as 'President and Whole-Time
Director, for three years with effect from 22^nd May 2025 to 21^st May 2028.

His appointment was approved by the shareholders of the Company by way of a Special Resolution
at the 43^rd AGM.

iv) Pursuant to Section 152 of the Companies Act, 2013 and Articles of Association of the Company,
Shri Yashwant Kumar Daga (DIN 00040632), retires by rotation at the forthcoming AGM and,
being eligible, offers himself for re-appointment. The Board recommends his re-appointment.
The brief resume and other details as required under the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 (Listing Regulations), read with the Secretarial Standard 2, are
provided in the Notice of the 44^th AGM.

v) The tenure of Shri Yashwant Kumar Daga (DIN 00040632) as Chairman and Managing Director
expires on 22^nd December 2026. In accordance with the provisions of the Companies Act, 2013
and Articles of Association of the Company, pursuant to recommendation of the Nomination
and Remuneration Committee and approval of the Audit Committee, the Board recommends re¬
appointment of Shri Daga as Chairman and Managing Director for a period of five years with effect
from 23^rd December 2026 till 22^nd December 2031 to the members of the Company at the ensuing
AGM.

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

(a) Statement on declarations given by Independent Directors

All the Independent Directors of your Company have submitted the declarations confirming
that they meet the criteria of independence as laid down under Section 149(6) of the Companies
Act 2013 and Regulation 25 read with Regulation 16 of the Listing Regulations and are eligible
to continue as Independent Directors.

All the Independent Directors of the Company have confirmed compliance with the relevant
provisions of Rule 6 of the Companies (Appointment and Qualifications of Directors) Rules,
2014.

The Board believes that the Independent Directors of the Company possess the requisite
qualifications, experience and expertise and hold the highest standards of integrity.

(c) Meetings of the Board of Directors

During the year, Five Board Meetings were convened and held, the details of which are given in
the Corporate Governance Report. The intervening gap between any two consecutive meetings
did not exceed the gap prescribed by the Companies Act, 2013 and the Listing Regulations.

(d) Committees of the Board

The Board of Directors of the Company has the following four Committees -

a) The Audit Committee,

b) The Corporate Social Responsibility Committee,

c) The Nomination and Remuneration Committee and

d) The Stakeholders Relationship Committee.

During the year, all recommendations made by the Committees were approved and accepted
by the Board. A detailed note on the composition of the Board and its Committees is provided
in the Corporate Governance Report.

(e) Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and Listing Regulations, an annual
evaluation was conducted for all Board Members as well as for the working of the Board and its
Committees. 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 with a specific focus on performance and effective functioning
of the Board. The Board evaluation was conducted through a questionnaire designed with
qualitative parameters and feedback based on ratings.

The performance evaluation of the Chairman and Non-Independent Directors was carried
out by the Independent Directors at their meeting held on 29^th January 2026. The Directors
expressed their satisfaction with the evaluation process.

11. Directors' Responsibility Statement

The Board of Directors acknowledge the responsibility for ensuring compliance with the provisions of
Section 134(3)(c ) read with Section 134(5) of the Companies Act, 2013 in the preparation of the annual
accounts for the year ended on 31^st March 2026 and confirm as under -

a) That in the preparation of the annual accounts, the applicable accounting standards had been
followed along with a 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

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 per the eligibility criteria provided in the Companies Act, 2013, the Company was not eligible to
incur CSR expenditure during the year 2025-26. Hence, no meeting of the CSR was held during the year.

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

13. Vigil Mechanism

Pursuant to Section 177(9) of the Companies Act, 2013, read with Rule 7 of the Companies (Meetings of
Board and its Powers) Rules, 2014 and Regulation 22 of Listing Regulations, the Company has in place a
Policy for Vigil Mechanism for reporting of concerns of any wrongful conduct concerning the Company
or its business or affairs.

The policy provides a framework for raising concerns by its employees and directors against any kind of
malpractices, fraud, violation of the Company's policies or rules, and other matters on account of which
the interest of the Company is affected or is likely to be affected. The policy provides that all protected
disclosures can be addressed to the Vigil Officer or the Chairman, of the Audit Committee in certain
cases.

Adequate safeguards are provided against the victimization of those who avail of the mechanism.
Complaints received, if any, by Vigil Officer are investigated by the Vigil Officer and a report thereon is
submitted to the Audit Committee.

It is affirmed that no personnel was denied access to the Vigil Officer and the Audit Committee, and no
complaints were received during the Financial Year 2025-26.

The Policy on Vigil Mechanism is also posted on the Company's website www.dsl-india.com.

(weblink: http://www.dsl-india.com/policies-code-of-conduct )

14. Risk Management Policy

The Company's risk management framework, which is formalised in its Risk Management Policy, ensures
periodic assessment, mitigation and monitoring of risk pertaining to its business. The Audit Committee
has been delegated the responsibility for monitoring and reviewing risk management, assessment and

minimisation procedures. The risk management procedures are reviewed by the Audit Committee and
the Board of Directors every quarter.

15. Nomination and Remuneration Policy

The Board has, on the recommendations of the Nomination and Remuneration Committee, adopted
a policy for the selection and appointment of Directors, KMP and Senior Management and their
remuneration. The extract of the Company's Remuneration Policy is attached as 'Annexure-III' and
forms part of this report of the Board of Directors. The web link of the said Policy on the Company's
website is (http://www.dsl-india.com/policies-code-of-conduct)

16. Related Party Transactions

Your Company has a well-defined policy on Related Party Transactions (RPTs), duly approved by the
Board of Directors. The Audit Committee reviews and monitors all RPTs on a quarterly basis to ensure
compliance with the applicable provisions of the Companies Act, 2013 and Listing Regulations.

All contracts/arrangements/transactions with Related Parties during the Financial Year 2025-26 were
on an arm's length pricing basis and were in the ordinary course of business and did not attract the
provisions of Section 188 of the Companies Act, 2013.

There were no materially significant related party transactions during the year that could have had a
potential conflict with the interests of the Company. Accordingly, Form AOC-2 is not required to be
annexed. The necessary disclosures, as mandated under Ind AS-24, have been appropriately provided
in the Notes to the Financial Statements.

The Audit Committee has reviewed the related party transactions for the financial year 2025-26 and
also approved estimated related party transactions for the financial year 2026-27 in accordance with
the applicable provisions of the Companies Act, 2013 and Listing Regulations.

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
other than those disclosed in the Financial Statements.

17. 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 a 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 44^th AGM and up to the date of
the said AGM during business hours on working days.

c) No employee, except Shri Yashwant Kumar Daga, Chairman and Managing Director, by himself or
along with his relatives, 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. The Company is
compliant with all the provisions relating to the constitution of an Internal Complaint Committee
under the said Act and rules thereunder.

e) Compliance with Maternity Benefits Act, 1961

Your Company is committed to ensuring a safe, supportive, and inclusive workplace for all women
employees. All eligible women employees have been extended the benefits under the said Act,
including maternity leave, nursing breaks, and other statutory entitlements as prescribed. Your
Company has duly complied with the provisions of the Maternity Benefits Act, 1961, as amended
from time to time. The Company continuously strives to maintain a work environment that upholds
the rights and well-being of its women workforce in accordance with applicable laws.

18. Public Deposits

During the year, the Company has neither accepted any deposits falling within the ambit of Section 73
of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014. The requisite
return for FY 2024-25 with respect to amounts(s) not considered as deposits has been filed on MCA
portal.

19. Loans, Guarantees and Investments

The Company has not given loans, directly or indirectly, to any person or other body corporate or given
a 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. Management Discussion and Analysis Report

A report for the year under review as required under Regulation 34 and as stipulated under Part B of
Schedule V of Listing Regulations, is annexed herewith and forms part of this report.

21. Corporate Governance

A report on Corporate Governance as required under Regulation 34 and as stipulated in Part C of
Schedule V of Listing Regulations is annexed herewith and forms part of this report. A Compliance
Certificate issued by a Practicing Company Secretary, regarding compliance with Corporate Governance,
is also annexed therewith.

22. Annual Return

In terms of Section 92(3) of the Companies Act, 2013 and Rule 12 of the Companies (Management
and Administration) Rules, 2014, the Annual Return (Form MGT- 7) of the Company is available on the
website of the Company at the weblink http://www.dsl-india.com/annual-return.

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 - V' 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 of the Company and its future operations.

25. Material Changes and Commitments

There are no material changes and commitments affecting the financial position of the Company which
occurred between the end of the financial year of the Company to which the financial statements are
related and the date of this report.

26. Compliance with Secretarial Standards

The Company has complied with applicable Secretarial Standards issued by the Institute of Company
Secretaries of India.

27. Acknowledgement

We place on record our deep appreciation for the co-operation and support extended by our Bankers,
stakeholders, business associates, and the Central and State Government authorities, including
district-level administrations. Their continued guidance and assistance have been invaluable, and the
Board looks forward to their sustained support in the future. We are pleased to thank all employees and
workmen for their dedication and excellence displayed in conducting the operations of the Company.

On behalf of the Board of Directors
Yashwant Kumar Daga

Pl_{ace :} K_olkata Chairman and Managing Director

Date : 26.05.2026 (DIN - 00040632)