Shree Bhavya Fabrics Ltd Directors Report

To the Members,

Your Directors have great pleasure in presenting the 36^th Annual Report together with the Audited statements of Accounts of your Company for the financial year ended on 31^st March, 2024.

- FINANCIAL SUMMARY:

The Highlights of the financial performance of the Company during the period ended March 31^st, 2024:

(Amount in Lacs)

Particulars	Financial Year 2023-24	Financial Year 2022-23
Revenue from operations	17059.00	19,408.03
Other income	44.29	74.47
Total Revenue	17,103.28	19,482.49
Expenses
a) Cost of Material Consumed	8,092.52	7,929.40
b) Purchase of stock in trade	367.68	610.95
c) Changes in inventory of finished goods, stock in trade and WIP	(1,113.70)	834.38
d) Employee benefits expense	677.26	658.40
e) Finance costs	762.12	736.07
f) Depreciation and amortization expense	86.21	86.45
g) Other expenses	7976.75	8441.60
Total Expenses	16,848.84	19,297.25
Profit/ (Loss) before tax	254.44	185.24
Tax expense:
(a) Current tax expense	60.00	53.00
(b) T ax charge relating to earlier periods	-2.39	-1.32
(c) Deferred tax	3.88	-20.27
Total Tax Expenses	61.50	31.41
Profit / (Loss) for the year	192.95	153.83
Earnings per share (face value Rs.10/-) Basic & Diluted	2.03	01.62

- OPERATIONS REVIEW:

The Companys total revenue from operations during the financial year ended 31st March 2024 were Rs. 17,059.00 Lacs as against Rs. 19,408.03 Lacs of the previous year representing decrease of approximately about 2,349.03 Lacs over the corresponding period of the previous year with total expenses of Rs. 16,848.84 Lacs (previous year of Rs. 19,297.25 Lacs)

The Company has made Net Profit of Rs. 192.95 Lacs as against Rs. 153.83 Lacs of the previous year. The EPS of the Company for the year 2023-24 is Rs. 2.03.

A detailed discussion on performance and outlook appears as part of Management Discussion and Analysis attached to this report.

- TRANSFER TO RESERVES:

During the year under review, the Company has not transferred any amount to the ‘General Reserve and entire amount of profit for the year forms part of the ‘Retained Earnings.

- DIVIDEND:

No dividend has been recommended in respect of the financial year ended 31^st March, 2024 and the entire surplus be ploughed back to the business to meet the needs for additional finance for capital expenditure.

- EXPORTS:

During the financial year, the Company has achieved export sales of Rs. 260.51 Lakhs (previous year of Rs. 314.20 Lakhs).

- DEPOSIT:

The Company has neither accepted nor invited any deposit from public, falling within the ambit of Section 73 of the Companies Act, 2013 and The Companies (Acceptance of Deposits) Rules, 2014.

- SHARE CAPITAL:

During the year under review there is no change in share capital of the Company.

The Authorised Share Capital of the Company as at 31^st March, 2024 stood at Rs.10,00,00,000/-and the Paid-up Equity Share Capital of the Company as at 31^st March, 2024 stood at Rs.9,50,00,000/-

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

a. Issue of equity shares with differential rights as to dividend, voting or otherwise.

b. Issue of shares (including sweat equity shares) to employees of the Company under any scheme including Employee Stock Option Scheme.

c. Provision of money by company for purchase of its own shares by employees or by trustees for the benefit ofemployees.

During the year under review, the Company has not issued any Share Capital.

- REPORTING OF FRAUD:

During the year under review there was no instance of any fraud which has been reported by any auditor to the audit committee or the board.

- SUBSIDIARY, JOINT VENTURE (JV) AND ASSOCIATES COMPANIES:

During the year under review, the Company does not have any Subsidiary, Joint Venture (JV) or Associates Company.

- DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP):

The Board of Directors consists of 5 (Five) members, of which 3 (Three) are Independent Directors. The Board also comprises of one woman Independent Director.

- Key Managerial Personnel (KMP):

As per the provisions of Section 203 of the Companies Act, 2013, Mr. Purushottam R. Agarwal, Chairman and Managing Director, Mr. Kishan M. Yadav, Director and Chief Financial Officer and Mr. Chetan Jain, Company Secretary are the Key Managerial Personnel of the Company.

- Retirement of Director by Rotation:

In accordance with the provisions of section 152 (6) of the Act and in terms of the Articles of Association of the Company, Mr. Purushottam R. Agarwal, Managing Director [DIN: 00396869] will retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

The Board recommends the re-appointment of Mr. Purushottam R. Agarwal, Managing Director [DIN: 00396869]) as Director of the Company liable to retire by rotation.

- 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 Regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The terms and conditions of the Independent Directors are incorporated on the website of the Company www.shreebhavyafabrics.com

- Profile of Directors seeking Appointment/Re-appointment:

As required under Regulation 36(3) of the SEBI (LODR) Regulations, 2015, particulars of Directors seeking appointment/ re-appointment at the ensuing Annual General Meeting are annexed to this notice convening Thirty Fifth Annual General Meeting. None of the Directors of the Company is disqualified for being appointed as Director as specified in Section 164 (2) of the Companies Act, 2013.

- NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW:-

During the year under review 8 (Eight) Board Meetings were convened and held as per the details below:-

Sr No. Dates of Board Meetings

01. 13.04.2023

02. 29.05.2023

03. 20.06.2023

04. 10.08.2023

05. 19.10.2023

06. 09.11.2023

07. 03.01.2023

08. 12.02.2024

The intervening gap between the two meetings was within the period prescribed under the Companies Act, 2013.

During the year, your Company has complied with applicable Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI).

The details of the meetings are furnished in the Corporate Governance Report which forming part of this Annual Report.

- COMMITTEES OF THE BOARD OF DIRECTORS:

Your Company has several Committees which have been established as part of the best Corporate Governance practices and are in compliance with the requirements of the relevant provisions of applicable laws and statutes.

The Company has following Committees of the Board of Directors:

? Audit Committee

? Stakeholders Relationship Committee

? Nomination and Remuneration Committee

The details with respect to the compositions, powers and terms of reference and other information of relevant committees are given in details in the Corporate Governance Report which forming parts of this Annual Report.

- POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION:

The Company has a Nomination and Remuneration Committee. The Committee reviews and recommend to the Board of Directors about remuneration for Directors and Key Managerial Personnel and other employee up to one level below of Key Managerial Personnel. The Company does not pay any remuneration to the Non-Executive Directors of the Company. Sitting fee is paid as per the policy of the company for attending the Meetings of the Board of Directors and Committees of the Board. Remuneration to Executive Directors is governed under the relevant provisions of the Act and approvals.

The Company has devised the Nomination and Remuneration Policy for the appointment, re-appointment and remuneration of Directors, Key Managerial. All the appointment, re-appointment and remuneration of Directors and Key Managerial Personnel are as per the Nomination and Remuneration Policy of the Company.

- CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS AND OUTGO:

Information relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earning and Outgo, required under Section 134 (3) (m) of the Companies Act, 2013 forms part of this Annual Report as Annexure-I.

- ANNUAL RETURN OF THE COMPANY:

Pursuant to Sub-section 3(a) of Section 134 and Sub-section (3) of Section 92 of the Companies Act, 2013 read with Rule 12 of Companies (Management and Administration) Rules, 2014, the copy of the draft Annual Return of the Company for the Financial Year ended on 31^st March 2024 in Form MGT-7 will be uploaded on website of the Company and can be accessed at www.shreebhavyafabrics.com.

- CORPORATE GOVERNANCE REPORT:

The Company has taken adequate steps to adhere to all the stipulations laid down under Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. A report on Corporate Governance included as a part of this Annual Report is given in Annexure-II.

A certificate from the Practicing Company Secretary of the company confirming the compliance with the conditions of Corporate Governance as stipulated under Reg. 27 & 34 the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is attached to this Annual Report.

- MANAGEMENT DISCUSSION AND ANALYSIS:

The Management Discussion and Analysis Report for the financial year under review as stipulated under Regulation 34 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is presented in the separate section forming part of this Annual Report.

- CORPORATE SOCIAL RESPONSIBILITY:

In terms of the provisions of Section 135 of the Act and Rule 9 of the Companies (Accounts) Rules, 2014, the Company has not require to formulate and implement any Corporate Social Responsibility Initiatives as the said provisions are not applicable to the Company during the year under review.

- INSURANCE:

Assets of your Company are adequately insured against various policies.

- MATERIAL CHANGES AND COMMITMENT AFFECTING FINANCIAL POSITION OF THE COMPANY

There are no material changes and commitments, affecting the financial position of the Company which has occurred between the end of financial year as on 31^st March, 2024 and the date of Directors Report i.e. 14.08.2024.

- LISTING WITH STOCK EXCHANGE:

The Companys shares are listed on the BSE Limited (BSE) at P. J. Towers, Dalal Street, Mumbai 400001. The Company has paid the Annual Listing Fees for the year 2024-25 to BSE Limited.

- VIGIL MECHANISM:

The Company has established a vigil mechanism and accordingly framed a Whistle Blower Policy. The policy enables the employees to report to the management instances of unethical behavior, actual or suspected fraud or violation of Companys Code of Conduct. Further the mechanism adopted by the Company encourages the Whistle Blower to report genuine concerns or grievances and provide for adequate safe guards against victimization of Whistle Blower who avails of such mechanism and also provides for direct access to the Chairman of the Audit Committee, in exceptional cases. The functioning of vigil mechanism is reviewed by the Audit Committee from time to time. None of the Whistle blowers has been denied access to the Audit Committee of the Board. The Whistle Blower Policy of the Company is available on the website of the Company www.shreebhavyafabrics.com.

- RISK MANAGEMENT POLICY:

The Company has a structured risk management policy. The Risk management process is designed to safeguard the organization from various risks through adequate and timely actions. It is designed to anticipate, evaluate and mitigate risks in order to minimize its impact on the business. The potential risks are inventoried and integrated with the management process such that they receive the necessary consideration during decision making. It is dealt with in greater details in the management discussion and analysis section.

- SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE

The Company has zero tolerance for sexual harassment at workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed thereunder. During the financial year 2023-24, the Company has not received any complaints on sexual harassment.

- BOARD EVALUATION:

Pursuant to the provisions of the Companies Act, 2013 and Regulation 17 and Regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a structured questionnaire was prepared after taking into consideration of the various aspects of the Boards functioning, Compos ition of the Board and Committees, culture, execution and performance of specific duties, obligation and governance. The performance evaluation of the Independent Directors was completed.

During the financial year under review, the Independent Directors met on 12^TH February 2024 inter-alia, to discuss:

? Performance evaluation of Non-Independent Directors and Board of Directors as a whole;

? Performance evaluation of the Chairman of the Company;

? Evaluation of the quality of flow of information between the Management and Board for effective performance by the Board.

The Board of Directors expressed their satisfaction with the evaluation process.

- COMPLIANCE WITH THE SECRETARIAL STANDARDS:

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

- DIRECTORS RESPONSIBILITY STATEMENT:

As stipulated in Section 134(3) (c) read with sub section 5 of the Companies Act, 2013, Directors subscribe to the "Directors Responsibility Statement", and confirm that:

a) In preparation of annual accounts for the year ended 31^st March, 2024, the applicable accounting standards have been followed and that no material departure shave been made from the same;

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 or loss of the Company for that year;

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 for the year ended 31^st March, 2024 on going concern basis.

e) The Directors had laid down the internal financial controls to be followed by the Company and that such Internal Financial Controls are adequate and were operating effectively; and

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.

- PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

The details of Loans, Guarantees or Investments covered under the provisions of section 186 of the Companies Act, 2013 made during the year under review are disclosed in the financial statements.

- PARTICULARS OF EMPLOYEES

The information required under Section 197 of the Companies Act, 2013 read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are as follows:

Remuneration Ratio of Directors/ KMP/ Employees:

Name	Designation	Remuneration Paid		Increase in remuneration from previous year (Rs.)	Ratio/ Times per Median of employee remuneration
		FY 2023-24 (Rs.)	FY 2022-23 (Rs.)
Mr. Purushottam R. Agarwal	Managing Director (MD)	3 6,02,400	36,02,400	0	0
Mr. Jagdish S. Kanzariya	Company Secretary (CS)		5,01,055	11,355	0.02%
Mr. Chetan Jain	Company Secretary (CS)	5,57,100	-	-	-
Mr. Kishan M. Yadav	Chief Financial Officer (CFO)	0	0	0	0

The particulars of the employees who are covered by the provisions contained in Rule 5(2) and rule 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are as follows:

a) Employed throughout the year :Nil

b) Employed for part of the year :Nil

The numbers of permanent employees as on rolls of Company are 140 as on 31^st March, 2024.

The remuneration paid to all Key management Personnel was in accordance with remuneration policy adopted by the Company.

- CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All the related party transactions that were entered during the financial year were in the Ordinary course of business of the Company and were on arms length basis. There were no materially significant related party transactions entered by the Company with its Promoters, Directors, Key Managerial Personnel or other persons which may have potential conflict with the interest of the Company.

All Related Party transactions are placed before the Audit Committee for approval, wherever applicable. Prior omnibus approval for normal business transactions is also obtained from the Audit Committee for the related party transactions which are of repetitive nature and accordingly the required disclosures are made to the Committee on quarterly basis in terms of the approval of the Committee. The details of Related Party Transactions are given in the notes to the financial statements. The policy on Related Party Transactions as approved by the Board of Directors is uploaded on the website of the Company www.shreebhavyafabrics.com

The particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013, as prescribed in Form AOC-2. Annexure III.

- INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY:

Your Company has laid down the set of standards, processes and structure which enables to implement internal financial control across the Organization and ensure that the same are adequate and operating effectively. To maintain the objectivity and independence of Internal Audit, the Internal Auditor reports to the Chairman of the Audit Committee of the Board.

The Internal Auditor monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with the operating systems, accounting procedures and policies of the Company. Based on the report of Internal Auditor, the process owners undertake the corrective action in their respective areas and thereby strengthen the Control. Significant audit observation and corrective actions thereon are presented to the Audit Committee of the Board.

- 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.

- AUDITORS AND AUDITORS REPORT:

The current Statutory Auditors of the Company are M/s. Nahta Jain & Associates., Chartered Accountants, Ahmedabad (Firm Registration No. 106801W) who have been appointed as Statutory Auditors of the Company at the 34^th Annual General Meeting held on September 27^th, 2022, for a term of five (5) consecutive financial years from the conclusion of the 34^th Annual General Meeting till the conclusion of 39^th Annual General Meeting.

The Auditors Report does not contain any qualification, reservation, or adverse remark on the financial statements for the financial year ended March 31^st, 2024. The Notes on financial statements referred to in the Auditors Report are self-explanatory and do not call for any further comments.

- INTERNAL AUDITORS:

M/s. Kamal M. Shah & Co., Chartered Accountants, Ahmedabad has been appointed as Internal Auditors of the Company for FY 2023-24. Internal Auditors are appointed by the Board of Directors of the Company on a yearly basis, based on the recommendation of the Audit Committee. The Internal Auditor reports their findings on the Internal Audit of the Company, to the Audit Committee on a quarterly basis. The scope of internal audit is approved by the Audit Committee.

- SECRETARIAL AUDITOR AND SECRETARIAL AUDIT REPORT:

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 Mukesh H. Shah & Co, a firm of Company Secretaries in practice to undertake the Secretarial Audit of the Company for FY 2023-24.

The Secretarial Audit Report issued by them for the financial year ended March 31^st, 2024, is attached as Annexure IV to this Report.

The Secretarial Audit Report does not contain any qualifications, reservations, or adverse remarks. During the year under review, the Statutory Auditors and Secretarial Auditors have not reported any instances of frauds committed in the Company by its officers or employees, to the Audit Committee under Section 143(12) of the Companies Act, 2013, details of which needs to be mentioned in this Report.

- COST AUDITORS:

Pursuant to provisions of Section 148 read with Companies (Audit & Auditors) Rules, 2014 and other applicable provisions, if any, of the Companies Act, 2013, the Board of Directors had, on recommendation of the Audit Committee, re-appointed Kiran J. Mehta & Co., Cost Accountants, Ahmedabad, as the Cost Auditor of the Company for the financial year 2024-25, on the remuneration terms as approved by the members at the last Annual General Meeting held on 25^th September 2023.

The Cost Audit report for the financial year 2023-24 was filed within the due date. The due date for submission of the Cost Audit Report for the financial year 2023-24 is within 180 days from 31^st March, 2023.

The Board has re-appointed M/s Kiran J. Mehta & Co., Cost Accountants, Ahmedabad for the Financial Year 2024-25 as a Cost Auditor of the Company in the Board meeting held on 30^th May, 2024, after obtaining its willingness and eligibility letter for appointment as Cost Auditor of the Company. As required under the Act and Rules made thereunder, the remuneration payable to the Cost Auditor is required to be placed before the Members in a general meeting for ratification. Accordingly, a resolution seeking ratification by members for the remuneration payable to Kiran J. Mehta & Co. is included in the Notice convening 36 ^th Annual General Meeting of the Company.

- WEBSITE OF YOUR COMPANY

Your Company maintains a website www.shreebhavyafabrics.com where detailed information of the Company and specified details in terms of the Companies Act, 2013 and SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 has been provided.

- DETAILS OF APPLICATIONS MADE OR PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE 2016:

During the year under review, there were no applications made or proceedings pending under the Insolvency and Bankruptcy Code, 2016.

- DETAILS OF DIFFERENCE BETWEEN VALUATION AMOUNT ON ONE TIME SETTLEMENT AND VALUATION WHILE AVAILING LOAN FROM BANKS AND FINANCIAL INSTITUTIONS:

During the year under review, there has been no one time settlement of loans from the Bank or Financial Institutions.

- GENERAL:

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

1. Details relating to deposits covered under Chapter V of the Companies Act, 2013.

2. Issue of Equity Shares with differential rights as to dividend, voting or otherwise.

3. Issue of shares (including sweat equity shares) to employees of the Company under any scheme save and ESOS.

4. Neither the Managing Director nor the Whole-time Directors of the Company receive any remuneration or commission from any of its subsidiaries.

5. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Companys operations in future.

- APPRECIATION:

Your Directors express their gratitude for the dedicated services put in by all the employees of the Company.

- ACKNOWLEDGEMENT:

Your Directors place on record their sincere appreciation for the continued co-operation and support extended to the Company by financial institutions, banks, and customers during the year under review. The Directors also thank the Companys vendors, investors, business associates, Stock Exchanges, Government of India, State Government and various departments and agencies for their support and co- operation.

By Order of the Board of Directors

of SHREE BHAVYA FABRICS LIMITED

SD/-

[PURUSHOTTAM R. AGARWAL]

Chairman & Managing Director

DIN: 00396869