Shervani Industrial Syndicate Ltd Directors Report

Dear Members,

Your Directors take pleasure in presenting the 76th Annual Report together with the Audited Financial Statements for the year ended on 31st March, 2024.

FINANCIAL RESULTS

DIVIDEND

The Board of Directors have recommended Dividend of 200% on the Ordinary and Deferred shares which respectively is Rs. 20.00/- and Rs. 50.00/- on each share of the Company for the financial year ended on March 31, 2024.

OPERATION REVIEW

The construction activity of Group Housing project Victory Tower is progressing satisfactorily, and we are very hopeful that we shall be able to achieve all milestones so as to uphold the commitments given to customers. In respect of the project Naman Homes the execution of sale deeds in favour of the majority of customers is complete. The Company has also completed the Group Housing Project The Crescent during the year as per the commitment given to the customers. In this project the execution of sale deeds in favour of the customers has also commenced.

We are pleased to inform that the Prayagraj Development Authority has sanctioned the Companys plan for setting up of a Multi Speciality 50 bed Hospital to be constructed within the premises of Shervani Legacy. Pre-construction work has begun/commenced, with plans to expand the hospital to accommodate 50 more beds in the future. Simultaneously, the company is making efforts to diversify its business activities into other fields. During the year under review, the company successfully secured an IT contract from Maulana Azad National Urdu University, Hyderabad, to supply equipment and setting up an IT Data Center for an AR/VR Software Research and Development Lab in the university premises. This was part of a MeitY project aimed at developing an app for use by specially-abled children. This project has been successfully completed and handed over, and the company is actively seeking similar projects in the IT sector.

The Companys consistent adherence to delivery schedules and maintaining high standards in construction and quality has earned significant trust and confidence of customers, as reflected in increased interest and enquiries. The management reassures shareholders that efforts will continue to uphold and enhance this goodwill, positively impacting sales.

A. Business Overview, Industry Structure and Development

The default committed by some larger players of the real estate sector in Metro cities has adversely affected the public sentiment. The public sentiment is apprehensive and hesitant to commit themselves to any medium to long period financial impact resulting in a slow-down. Quite some time has passed and although the upswing is evident but the upswing requires more thrust to speed up for bringing in more customers and investment. On the positive side the slow down, with passage of time, has only increased the demand. The demand for housing by the salaried and middle class exists and stands unfulfilled and is waiting to be capitalized. The banking sector is actively facilitating the availability of housing loans to potential customers, which is expected to positively impact sales and demand in the real estate market. In light of the cautious public sentiment, the role of builders has become increasingly important. Builders are responsible for maintaining customer trust by adhering to cost controls and delivery schedules. Your Company has successfully upheld these commitments, earning significant goodwill and trust among customers. Due to the trust and goodwill already established, the Company does not foresee any problems in sales and is well-positioned to capitalize on the existing demand in the market.

B. Outlook on Opportunities, Threats Risks and Concern

Despite the adverse public sentiment in Metro cities and its cascading effect on the public at large the smaller cities continue to witness increasing demand due to migration of public. In the smaller cities the builders, usually are local have rapport and trust with customers. Your Company operates in a smaller city and enjoys a high level of trust and confidence among customers. The quality of construction and adherence to schedules have set your Company apart, making it a leading example in the industry. This strong reputation for delivering on promises positions your Company well to meet the growing demand. At the same time the public has increased its product consciousness both in terms of quality and the ability of the developer to maintain the delivery schedule. In this connection it would not be out of place to mention that company has earned sufficient goodwill and trust on both the said factors. Given the existing demand and your Companys ability to meet customer expectations, there is a strong potential for growth and prosperity. The Company is well-positioned to capitalize on the favorable conditions in market.

Another matter of concern to the developers and customers is increase in costs and scarcity of construction materials.

Increase in costs have negative impact on cost of projects, margins and the trust of public in the project and the builder. However both can be countered by adhering to the construction schedule and reducing wastage. Another factor of concern is the competition from other builders but on this count the reputation, goodwill and the ability to deliver on time ensures that the demand for our product is high.

C. Subsidiary Company

M/s Farco Foods Private Limited, the wholly owned subsidiary of your company is engaged in manufacture of biscuits on job work basis for M/s Surya Foods and Agro Limited for their "Priya Gold" brand. During the year under review the Company produced 5830 MT of biscuits and earned a profit of Rs. 14.21 lakh after tax. In our previous report, we had informed that the environment/climate around goat project site is not conducive to rearing of livestock. It was also informed that further investments in goat project is clouded with uncertainty. Under these circumstances it has been decided to sell off the live stock with the intent to close down the project.

D. Internal Financial Controls

The Company has an adequate system of internal control to ensure compliance with policies and procedures commensurate with the size and scale of operations. The internal audit work has been assigned to an independent firm of Chartered Accountant which evaluates the efficiency and adequacy of internal control systems. The internal audit reports and recommendations are reviewed by the Audit Committee of the Board.

E. Development in Human Resource and Industrial Relations

The Company maintains a very cordial relationship with its employees. They whole-heartedly support the management in all its activities and endeavors.

F. Research and Development

In view of the nature of business activities of the Company there is little scope for research and development work. The company is making all efforts to reduce costs by maintaining standards that benefit the consumers.

CORPORATE GOVERNANCE

The Company is committed to maintain the highest standards of Corporate Governance and adhere to Corporate Governance requirements set out by SEBI. The Company has complied with all mandatory requirements of Corporate Governance. A separate report on governance practices followed by the Company in compliance of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 on Corporate Governance along with a Certificate of Compliance from the Statutory Auditors is attached with the said separate report which forms integral part of this Directors Report.

EXTRACT OF ANNUAL RETURN

Pursuant to section 92(3) of the Companies Act, 2013 read with Rules thereunder and provisions of section 134(3)(a) of the Act, the Annual Return of the Company is available on website of the Company i.e. www.shervaniind.com

BOARD MEETINGS

The calendar of Meetings is prepared and circulated in advance to the Directors. During the year four (4) Board Meetings were convened and details of same are given in the Corporate Governance Report.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134 (3) of the Companies Act, 2013, the Directors state that;

(i) in the preparation of the Annual Accounts, the applicable Indian accounting standards have been followed;

(ii) 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 as at the end of the financial year and of the profit and loss of the Company for that period;

(iii) the Directors have 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;

(iv) the Directors had prepared the Annual Accounts on a going concern basis:

(v) 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; and

(vi) 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.

DECLARATION 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 SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

NOMINATION & REMUNERATION

The Board on the recommendation of the Nomination & Remuneration Committee, make the appointment of Directors, senior management and fix their remuneration. Key Management Personnel are appointed by the Board after consideration of their qualification and exposure to required fields. The details are stated in the Corporate Governance Report.

RELATED PARTY TRANSACTIONS

To provide transparency in management and ensure compliance with the provisions of various laws, the Audit Committee has provided guidelines to the Directors/Board. The guidelines inter alia provide for identification, manner of dealing, conduct and documentation of such transactions as per the provisions of the Companies Act and other applicable rules and regulations.

All related party transactions that were entered in to during the financial year were in the ordinary course of business and are disclosed at Note No. 35 attached to the standalone balance sheet and none of the transactions are of material nature and have no potential conflict with the interest of the Company.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO

There is nothing to report about the conservation of energy and technology absorption during the year. There is no foreign exchange earning and outgo.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Pursuant to provisions of section 135 of the Companies Act, 2013, a committee of Board of Directors has been formed and the member of the Committee are:

Mr. Saleem Iqbal Shervani Mr. Mustafa Rashid Shervani Mr. Mohammad Aslam Sayeed

The Report of Corporate Social Responsibility for the year 2023-24 is annexed herewith as Annexure-A and forms integral part of this Report.

BOARD EVALUATION

The Board carries out annual evaluation of its own performance, of the Directors individually as well of the working of its various Committees. The key areas for evaluation are the quality of deliberations and contribution towards performance and guidance to management. The Board of Directors expressed their satisfaction with the evaluation process.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

In accordance with the provisions of the section 152 of the Companies Act, 2013, Mr. Sadiq Husain Siddiqui (DIN-02125236), Director retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for reappointment.

The Board recommended appointment of Mrs. Shiela Singh (DIN: 10731823) & Mr. Kartik Singhal (DIN: 03025302) as Independent Director of the Company subject to Shareholders approval in the ensuing Annual General Meeting w.e.f 01.10.2024.

Pursuant to provisions of section 203 of the Companies Act, 2013 the Key Managerial Personnel of the Company are Mr. Mustafa Rashid Shervani, Managing Director, Mr. Tahir Hasan, Chief Financial Officer and Mr. S. K. Shukla, Company Secretary.

The Directors recommend all the resolutions placed before the Members relating to appointment of Directors for their approval.

STATUTORY AUDITORS

Pursuant to provisions of the Companies Act, 2013 and the Companies (Audit & Auditors) Rules, 2014, M/s P. L. Tandon , Chartered Accountants has been appointed for term of 5 (Five) consecutive years from the conclusion of 74th Annual General meeting till the conclusion of 79th Annual General Meeting to undertake the statutory audit of the Company.

The Auditors Report on the standalone and consolidated financial statements of the Company for the year ended March 31, 2024 forms part of this Annual Report. The Auditors Report does not contain any qualifications, reservations, adverse remarks or disclaimer. Notes to the Financial Statements are self-explanatory and do not call for any further comments.

SECRETARIAL AUDITORS

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 has appointed M/s Siddiqui & Associates, Company Secretaries in Practice for financial year 2024-25 to undertake the Secretarial Audit of the Company. The Report of Secretarial Audit for the year 2023-24 is annexed herewith as Annexure -B and forms integral part of this Report.

CERTIFICATE OF NON-DISQUALIFICATION OF DIRECTORS

Pursuant to Regulation 34(3) and Schedule V. Para C clause (10)(i) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Certificate regarding Non-Disqualification of Director, issued by M/s Siddiqui & Associates, Company Secretaries in Practice is annexed herewith as Annexure-C and forms integral part of this Report.

INTERNAL AUDITOR

The Board of Directors on the recommendation of the Audit Committee appointed M/s Rajeev Prem & Associates, Chartered Accountants, Kanpur to carry out the Internal Audit of the Company.

COST AUDITORS

Pursuant to the provisions of section 148 and all other applicable provisions, if any, of the Companies Act, 2013 ("Act") and the Companies (Audit & Auditors) Rules, 2014 (including any statutory modification(s) or re-enactment thereof for the time being in force), M/s Shishir Jaiswal & Co., Cost Accountants (Firm Registration No. 102450) has been appointed as Cost Auditor for financial year 2024-25 and the Company is maintaining cost records as per the provision of "Act".

DEPOSITS

The Company has not accepted or renewed any deposit during the year falling within the ambit of Section 73 of the Companies Act 2013 and the Companies (Acceptance of Deposits) Rules 2014 accordingly no amount was outstanding as on the date of Balance Sheet.

CONSOLIDATED FINANCIAL STATEMENT

In accordance with the section 129(3) of the Companies Act, 2013 and the Ind AS-27 on consolidated financial statement(s) read with Ind AS-28 on accounting for investments in associates your Company has prepared the consolidated financial statements and annexed to this report. A Statement in form AOC-1 containing salient features of the financial statements of the subsidiary and associate companies are attached as Annexure-D.

DISCLOSURE UNDER RULE 5 OF THE COMPANIES (APPOINTMENT & REMUNERATION) RULES, 2014.

None of the employee of the Company was in receipt of total remuneration of Rs. 60,00,000/- per annum or Rs. 5,00,000/- per month during the financial year under review.

Disclosure required under section 197 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment & Remuneration) Rules, 2014 have been annexed as Annexure F.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place an anti sexual harassment policy in line with the requirements of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act 2013. Till date the company has not received any complaint there under.

UNCLAIMED DIVIDEND

In accordance with the provisions of Section 124 and 125 of the Companies Act, 2013 read with Investor Education and Protection Fund (Accounting, Audit, Transfer and Refund) Rules, 2016 ("IEPF Rules"), dividend which remains unpaid or unclaimed for a period of seven years from the date of transfer to the Unpaid Dividend Account shall be transferred by the company to the Investor Education and Protection Fund ("IEPF").

Further, the provisions of Section 124(6) of the Companies Act 2013, read with the IEPF Rules mandates companies to transfer all shares in respect of which dividend has not been paid or claimed for seven consecutive years or more to the designated demat account of the IEPF Authority. The Members whose dividend/shares are transferred to the IEPF Authority can claim their shares/dividend from the IEPF Authority by following the procedure prescribed in the IEPF Rules.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The details of loans, guarantees and investments covered under the provisions of section 186 of the Companies Act, 2013 are given in the notes to the financial statements.

AUDIT COMMITTEE

The Company has an Audit Committee and details of constitution and terms of reference are set out in the Corporate Governance Report.

VIGIL MECHANISM

Pursuant to the provisions of the section 177 of the Companies Act, 2013 the Company has adopted Vigil Mechanism policy which also incorporates a whistle blower policy. Adequate safeguards are provided against victimization to those who avail the mechanism and access to the Chairman of the Audit Committee while reporting about unethical practices, malpractice and non-compliance of policies.

LISTINGWITH STOCK EXCHANGE

The Equity shares of the Company are listed on Bombay Stock Exchange Limited. Further details are set out in the Corporate Governance Report.

REPORTING OF FRAUD

The Auditors of the Company have not reported any fraud to Audit Committee as stipulated under second proviso of section 143(12) of the Companies Act, 2013.

INDUSTRIAL RELATIONS

Industrial relations remained cordial during the period under review.

ACKNOWLEDGEMENTS

Your Directors wish to convey their deep sense of appreciation for the continued support, and co-operation extended by banks, Central and State Governments and all other Stakeholders. The Directors also wish to place on record their sincere appreciation for the commitment and enthusiasm of the employees for the Company.