Shervani Industrial Syndicate Ltd Directors Report

Dear Members,

Your Directors take pleasure in presenting the 77th Annual Report together with the Audited Financial Statements for the year ended on 31st March, 2025.

FINANCIAL RESULTS

Particulars (Rs. in Lakhs)

Total Revenue 4,868

Profit before Depreciation 679

Depreciation 133

Profit after Depreciation before tax 546

Tax Expense 101

Profit after Tax 445

Other Comprehensive Income 3

Total Comprehensive Income 448

DIVIDEND

The Board of Directors have recommended Dividend of 30% on the Ordinary and Deferred shares which respectively is Rs. 3.00/ and Rs. 7.50/ on each share of the Company for the financial year ended on March 31,2025.

OPERATION REVIEW

The Construction activities of Group Housing Project, Victory Towers are progressing in a satisfactory and timely manner. The development is being executed in accordance with the approved plans and established timelines. The management remains confident that the project will be completed within the committed timeframe, thereby ensuring timely delivery of units to the customers. All efforts are being made to maintain quality standards, adopt best construction practices, and ensure compliance with applicable regulatory and environmental norms.

With respect to the Group Housing Project The Crescent, we are pleased to inform that the execution of sale deeds in favour of a majority of the homebuyers has been successfully completed. This milestone reflects the Companys sustained efforts towards customer satisfaction and project closure. The management continues to provide necessary support services to the residents and ensure compliance with postpossession obligations to the RWA.

In our previous report we had informed you that Company had initiated preconstruction activities for a 50bed MultiSpeciality Hospital aimed at delivering quality healthcare infrastructure in Prayagraj. We are happy to report that significant progress has been achieved since then. The earth excavation work has been fully completed, and construction work has been started.

Recognising the growing demand for accessible medical services and to utilise the hospitals infrastructure and facilities more efficiently and optimum level, the Company is also pursuing approvals from the Prayagraj Development Authority for the addition of 50 more beds, bringing the total capacity to 100 beds. The proposed expansion will enhance the operational viability of the hospital and recognise it as a

key healthcare provider in the region. The Company is committed to ensuring that the hospital meets all necessary regulatory requirements and is constructed in accordance with modern healthcare standards.

In alignment with the Companys longterm strategy to diversify its business operations and revenue streams, your Board is pleased to inform that we have conceptualised a Holiday Resort to be developed in Village Sansarpur, Tehsil Koraon, District Prayagraj. The approved architectural and development plans envisage the creation of an ecoconscious and experiencedriven hospitality destination designed to promote rural tourism. The resort is aimed to provide calm natural environment with a mediumsized lake at its centre. Planned amenities include holiday rooms, fishing, outdoor recreational activities, indoor games, and a fullservice restaurant to provide a complete leisure experience for guests. This venture is expected to tap into the growing domestic tourism market and is aimed to establish a distinguished presence in the ecotourism segment of Uttar Pradesh.

MANAGEMENT DISCUSSION AND ANALYSIS

A. Business Overview, Industry Structure and

Development

The Indian real estate sector witnessed a significant revival during the Financial Year 202425, supported by continued economic recovery, growing urbanisation, rising income levels, and sustained government support for housing and infrastructure. Demand across residential, commercial, and industrial segments remained resilient, while new project launches and completions picked up pace in major urban centres. During the year, residential real estate continued to drive the sector, with midincome and premium housing leading growth due to favourable demographics, evolving lifestyle preferences, and improved affordability. More transparent regulatory environment led by RERA and digitisation of land records continued to strengthen investor confidence.

The Indian real estate industry is one of the largest contributors to the nations GDP and the secondlargest employment generator after agriculture. The sector is broadly classified into four segments: residential, commercial, retail, and industrial (logistics and warehousing). In FY 202425, demand in all the segments continued and customers recognises the developers who are organised, compliant, and customercentric.

The housing market saw strong absorption levels, driven by a favourable interest rate regime (despite minor upward revisions), government incentives for affordable housing, and renewed consumer confidence due to Regulator pro activeness. Developers focused on timely execution, quality offerings, and enhanced aftersales service, which further improved buyer sentiment. TierII and TierIII cities gained prominence as attractive residential hubs due to improved infrastructure and workfromanywhere flexibility.

B. Outlook on Opportunities, Threats, Risks and Concerns

The real estate industry continues to evolve under the influence of several policydriven, economic, and social factors. While the sector presents promising opportunities, it is also subject to inherent risks that require strategic attention and mitigation.

Government initiatives at both the Union and State levels have played a pivotal role in stimulating real estate activity. Policies such as Pradhan Mantri Awas Yojana (PMAY), Smart Cities Mission, and improved urban connectivity are creating new growth corridors, particularly in TierII and Tier III cities.

Banking sector policies, including rationalisation of interest rates and simplification of housing loan procedures, have significantly improved affordability and access to home finance. The enactment of the Real Estate (Regulation and Development) Act (RERA) has further strengthened customer confidence by promoting transparency, accountability, and timely project delivery. Socioeconomic changes such as increased migration to urban areas, increased income, and ambition of the middle and salaried classes have positively impacted housing demand. These factors have a greater impact of of housing demand in TierII and TierIII cities, which aligns closely with the Companys present strategic focus.

On the other side this industry is facing many challenges. The most prominent among them is inflation and price escalation, which directly impacts project costs, developer margins, and delivery timelines. Any delay in project completion due to cost pressures can erode customer trust and damage brand credibility.

Another area of concern is the availability and pricing of construction materials. While cement and steel fall within the organised sector and are governed by regulatory frameworks, critical inputs like sand and bricks are predominantly sourced from the unorganised sector. Disruption or mismatch between these supply chains can jeopardise project schedules and quality.

Regulatory delays, despite the presence of RERA, and procedural bottlenecks in land approvals or construction permissions can slow down project initiation and completion.

To mitigate these risks, your company has geared up the planning of men and materials to optimize the operating efficiency in the light of experience of previous projects. Furthermore, the Company remains deeply focused on addressing customercentric issues, prioritising transparency, timely communication, and quality delivery to reinforce customer trust and satisfaction.

Furthermore, the Company remains deeply focused on addressing customercentric issues, prioritising transparency, timely communication, and quality delivery to reinforce customer trust and satisfaction.

C. Subsidiary Company

M/s Farco Foods Private Limited, a whollyowned subsidiary of your Company, is engaged in the manufacture of biscuits on a job work basis for M/s Surya Foods and Agro Limited, under their wellknown “Priya Gold” brand. During the year under review, the Company produced 4,759 MT of biscuits. However, it incurred a loss of 15.65 Lakhs. The loss was primarily due to underutilization of production capacity, as lower volume of work orders was received from the principal company during the year. The Board has also taken a decision to permanently discontinue the goat farming project, as the climatic conditions at the project site were found unsuitable for goat rearing. With the land now lying vacant, the Company has resolved to lease out the premises, considering the security and effective utilization of the property

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 wholeheartedly 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 www.shervaniind.com

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 Managerial 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. 33 attached to the standalone balance sheet and none of the transactions are of material nature and have 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

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:

Ms. Aradhika Chopra Mr. Saleem Iqbal Shervani Mr. Mustafa Rashid Shervani 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

Mr. Mohd. Aslam Sayeed, Mr. Gopal Swarup Chaturvedi & Dr. Ashutosh Pratap Singh ceased to be the Director of the Company due to completion of their tenure as Independent Director and Mr. Raju Verghese has resigned from the directorship. Board appreciate their services during the tenure they served.

Upon recommendation by the Board, the members of the Company approved the appointment of Mrs. Shiela Singh (DIN: 10731823) & Mr. Kartik Singhal (DIN: 03025302) as Independent Director of the Company in the Annual General Meeting held on 30.09.2024.

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. Shrawan Kumar Shukla, Company Secretary.

The Directors recommend all the resolutions placed before the Members relating to 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 the 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 & Consolidated financial statements of the Company for the year ended March 31, 2025 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 selfexplanatory 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 to undertake the Secretarial Audit of the Company. The Report of Secretarial Audit for the year 202425 is annexed herewith as Annexure B and forms integral part of this Report.

CERTIFICATE OF NONDISQUALIFICATION 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 NonDisqualification of Director, issued by M/s Siddiqui & Associates, Company Secretaries is annexed herewith as Annexure C and forms integral part of this Report.

INTERNAL AUDITOR

The Board noted and appointed M/s Rajeev Prem & Associates, Chartered Accountants, as the Internal Auditor of the Company pursuant to the provisions of Section 138 of the Companies Act, 2013 and rules made thereunder. The Internal Auditor shall carry out the internal audit of the functions and activities of the Company and submit their reports to the Audit Committee/Board, as applicable. The scope, functioning, periodicity and methodology of the internal audit shall be as determined by the Board/Audit Committee from time to time.

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 reenactment thereof for the time being in force), M/s Shishir Jaiswal & Co., Cost Accountants (Firm Registration No. 102450) has been appointed as Cost Auditors 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 Indian Accounting Standard Ind AS27 on consolidated financial statement(s), your Company has prepared the consolidated financial statements and annexed to this report. A Statement in form AOC1 containing salient features of the financial statements of the subsidiary and associate companies are attached as AnnexureD.

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 E.

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

The Company has in place an Prevention of Sexual Harassment Policy (known as “POSH”) 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. COMPLIANCE WITH THE MATERNITY BENEFIT ACT 1961

The Company has complied with the applicable provisions of the Maternity Benefit Act, 1961 during the year under review. UNCLAIMED DIVIDEND

Pursuant to provisions of section 124(5) of the Companies Act, 2013, unclaimed dividend for the financial year 201718, has been transferred to the IEPF Authority.

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.

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 noncompliance of policies.

LISTING WITH 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 cooperation 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.

For and on behalf of the Board of Directors Shervani Industrial Syndicate Limited

Mustafa Rashid Shervani Saleem I. Shervani

Managing Director Chairman

DIN :02379954 DIN :00023909

Place : Prayagraj Date : May 22, 2025