Surbhi Industries Ltd Directors Report

To,

The Members,

Surbhi Industries Limited

The Directors of your Company have pleasure in submitting their 33^rd Annual Report together with the Audited Financial Statements for the year ended 31^st March, 2025.

FINANCIAL HIGHLIGHTS

Particulars	Year ended 31st March 2025	Year ended 31st March 2024
Total Revenue	39,34,84,894.10	20,01,13,635
Profit/(Loss) before taxation	29570168	-16036945
Less: Current Tax	0	0
Deferred Tax	-3354388	0
Income Tax earlier years	0	0
Profit For The Year	32924555	-16036945
Less: Income Tax Items not classified in Profit and Loss accounts	0	0
Total Comprehensive Income for the period	32924555	-16036945
Less: Appropriation	0	0
Adjustment relating to ITEMS not classified in P and L account	0	0
Transferred to General Reserve	0	0
Closing Balance of Profit and Loss Accounts	13,40,89,634	10,11,65,079

STATE OF THE COMPANYS AFFAIRS:

During the year under review, the company had total revenue of Rs. 39.34 Crores representing a significant increase of approximately 96% compared to the previous years revenue of ?20.01 Crores. The company achieved profit after tax of Rs 3,29,24,555 as against a net loss of Rs 1,60,36,945 in the previous financial year. This turnaround was primarily driven by increased turnover, along with a reduction in proportionate finance costs and depreciation expenses. The overall market environment for the textile industry showed signs of improvement during the year 2024-25, which contributed positively to the Companys performance. Despite challenges, the Company was able to maintain a reasonable profit margin. Looking ahead, the Company remains committed to further strengthening its operational efficiency and financial performance to achieve even better results in the coming years.

DIVIDEND

In view of requirement of financial resources and considering the future requirements of funds, your Directors are unable to recommend any Dividend for the year ended 31^st March 2025.

TRANSFER TO RESERVES

No amount has been transferred to any Reserve/s Account during the year under review.

ANNUAL RETURN

Pursuant Section 92 (3) Annual Return will be available on following web link:

https: //www.surbhi.com/investor-relations Company will upload the Annual Return as per the provisions of the Companys Act 2013.

BUSINESS

The ongoing geopolitical instability led by USA led Trump Tariff or the Tariff War, Bangladesh Crisis, the Russia-Ukraine conflict and the escalating crisis in the Middle East including the Israel-IRAN, NATO-Russia conflict situations have significantly impacted the overall business environment, both locally and internationally. These developments have led to increased volatility in global oil prices, which may adversely affect the cost of raw materials and the transportation of finished goods. As a result, the companys future operations may face challenges related to cost management and supply chain efficiency.

Despite these external pressures, the company is actively monitoring the evolving situation and remains committed to maintaining performance levels better than those achieved in previous years. In view of the increased activities, expansions and programs to grab the emerging opportunities are under hold and after re-assessment of the same further business expansion activities will be done.

DEPOSITS FROM PUBLIC

The Company has not accepted any deposits from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet.

CHANGE IN THE AUTHORISED, ISSUED, SUBSCRIBED AND PAIDUP SHARE CAPITAL DETAILS: THE INCREASE / DECREASE DURING THE YEAR UNDER REVIEW:

The Authorised Share Capital of the Company is Rs. 5,00,00,000 divided into 50,00,000 (Fifty Lakh) Equity Share of Rs. 10 Each. The Issued, Subscribed and Paid-up Share capital of the Company is Rs, 3,43,74,000 divided into 34,37,400 (Thirty-Four Lakhs Thirty-Seven Thousand Four Hundred) of Rs. 10 each. During the year there is no Increase/decrease in Authorised share capital as well as paid up share capital of the company.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

The loans if any, made by the Company are within the limits prescribed u/s 186 of the Companies Act, 2013 and no guarantee or security is provided by the company.

The particulars of loans, guarantees and investments have been disclosed in the financial statements at Note No. 11. Members are requested to review the schedule for the same.

INSURANCE

All the properties and the insurable interest of the company including building, plants and machinery and stocks wherever necessary and to the extent required have been adequately insured.

TRANSFER OF UNCLAIMED DIVIDEND/SHARES TO INVESTOR EDUCATION AND PROTECTION FUND - IF ANY:

There is no amount transferred to IEPF during the year under review.

DETAILS ABOUT SUBSIDIARY COMPANIES

There is no subsidiary company of the company during the year under review.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Name of Director	DIN	Designation	Date of Appointment/ Resignation
Ravjibhai Parbatbhai Patel	00023332	Managing Director	21/05/1992
Bipinbhai Jasmatbhai Patel	00023447	Whole-time Director & CFO	21/05/1992
Sheetal Harsh Patel	06858676	Independent Director	30/06/2018
Satish Narandas Patel	08168748	Independent Director	30/06/2018
Hetalben Arvindbhai Joshi	ATMPJ4541 N	Company Secretary	01/04/2016

A declaration has been received from Independent Directors stating name of companies in which they hold directorship and/or membership/ Chairmanship of Committees of Board, as stipulated under Regulations of LODR Regulation, 2015 are given at Corporate Governance of the Annual Report.

STATUTORY AUDITORS

On the recommendation of Audit Committee and pursuant to section 139 and other applicable provision of the companies act, 2013 read with the companies (Audit and Auditors) rules, 2014, as amended, the Members of the company at their AGM held on 30^th September, 2021, approved the appointment of M/s GHAEL CHOKSI & COMPANY, Chartered Accountants, FRN: 0153978W as a Statutory Auditor of the Company for the term of five years commencing from the conclusion of 29th AGM of the company till the conclusion of 34^th AGM of the company to be held in the year 2026 at a remuneration as may be agreed upon by the Audit Committee/Board of Directors in consultation with the Statutory Auditors.

The company had received the Consent and Eligibility Certificate in accordance with section 139, 141, and other applicable provisions of the companies act, 2013, from M/s Ghael Choksi & Company.

Pursuant to the provisions of the Companies (Amendment) Act, 2017, which became effective from May 7, 2018, the requirement for annual ratification of the appointment of auditors by shareholders has been removed. Accordingly, the Board has noted that the appointment of the statutory auditors, as approved at the 29th Annual General Meeting for a term until the conclusion of the 34th Annual General Meeting, remains valid. Since no formal resolution for ratification is required, the same has not been included in the Notice of the Meeting.

M/s Tamakuwala & Associates, Chartered Accountants (FRN:143306W) were appointed as Internal Auditor of the Company.

AUDITORS REPORT

In the opinion of the directors, the notes to the accounts are self-explanatory and adequately explained the matters, which are dealt with by the auditors. There are no adverse remarks in the report and hence nothing to report thereon.

DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SUB-SECTION (12) OF SECTION 143 OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT:

There was no fraud reported by Auditor during the financial year 2024-25.

EXPLANATIONS OR COMMENTS BY THE BOARD ON EVERY QUALIFICATION, RESERVATION OR ADVERSE REMARK OR DISCLAIMER MADE:

There is no additional qualification, reservation or adverse remark given by statutory Auditor. With respect to Secretarial Auditor remarks in their report Board like to submit that certain delay was unintentional and due to new system of reporting developed by the BSE some technical issues arise to clear XBRL taxonomy and in one occasion it was delay of just 4 minutes, further we like to state that our financial results were declared post trading hours of BSE and hence it had not impacted to public at large for dissemination of information in delay by 4 minutes. Further, Board has taken note of the same and ensure to avoid such technical issues in future.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act, 2013, the board of directors, to the best of their knowledge and ability, confirm:

1. That in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures.

2. That such accounting policies have been selected and applied 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 ended on 31^st March 2025 and of the Profit & Loss of the Company for that period.

3. That proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

4. That the annual accounts have been prepared on a going concern basis

5. That internal financial control has been laid down to be followed by the Company and that such internal financial controls are adequate and operating effectively.

6. That proper system has been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

RISK MANAGEMENT

A detail of risk management committee is given under the Corporate Governance report, which is forming part of this report.

VIGIL MECHANISM

Company has appropriate VIGIL Mechanism/whistle blower policy for directors and employees to report genuine concerns. It shall provide for adequate safeguards against victimization of director(s) or employee(s) or any other person who avail the mechanism and also provide for direct access to the chairperson of the Audit Committee in appropriate or exceptional cases. The Vigil Mechanism /Whistle Blower policy has been posted on the website of the Company (www. surbhi. com)

NUMBER OF MEETINGS OF THE BOARD & COMMITTEES

For details of the meetings of the board, please refer to the corporate governance report, which forms part of this report.

POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION AND OTHER DETAILS

The Companys policy on directors appointment and remuneration and other matters provided in Section 178(3) of the Act has been disclosed in the corporate governance report, which is forming part of the directors report.

DECLARTION OF INDEPENDENT DIRECTORS:

Pursuant to the provisions of Section 149 of the Act, which came into effect from April 1, 2014, Mr. SATISH NARANDAS PATEL (DIN: 08168748), Mrs. SHEETAL HARSH PATEL (DIN: 06858676) have submitted their disclosures to the Board that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 and under SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.

SECRETARIAL AUDIT AND OBSERVATIONS

Pursuant to the provisions of Section 204 of Companies Act, 2013 and rules made there under, the Company has appointed, Kishor S. Dudhatra, Practicing Company Secretaries to undertake the Secretarial Audit of the Company.

Report of the secretarial auditor will be followed after board report as an attachment which forms part of this report. The remark on the Secretarial Audit report and other details are selfexplanatory and explanation to them are already given above.

SECRETARIAL STANDARD

The Company complies with all applicable secretarial standards issued by the Institute of Company Secretaries of India.

TRANSACTIONS WITH RELATED PARTIES

None of the transactions with related parties falls under the scope of section 188(1) of the Act. The Company has paid rent of Rs. 1,32,000/- as per the agreement to Surbhi Textile Mills Private Limited, and has purchased a property, of Rs. 1,60,50,000 at Mandavi, Surat, on arm length price, which are as per Section 188 read with Rule 15 is not material related party

transaction and thus, pursuant to Information on transactions with related parties under section 134(3)(h) of the Act read with rule 8(2) of the Companies (Accounts) Rules, 2014 is not provided in Form AOC- 2.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

CONSERVATION OF ENERGY:

Companys knitting and twisting plants are running with electricity which is supplied by the Dakshin Gujarat Vij Company Limited. The plants are periodically checked as a measure of periodical maintenance to minimal break down and energy conservation. However, company production facilities do not offer much scope for energy conservation.

The Company has internal process for continuous efforts towards reduction and optimization of energy consumption at its Corporate Office as well as all its manufacturing facilities by usage of latest available technical solutions. The Company also emphasizes to utilize the maximum natural sources of energy instead of using electricity.

a) Steps taken or Impact on conservation of energy: Company has installed wind mills & ground mounted solar park to conserve the natural resources and to promote green energy.

The energy conservation measures taken are given as under during the financial year:

1. Total 8.56 lakh units were generated through wind mill.

2. Total 10.95 lakh units were generated through Ground mounted solar park.

Above units credit were given by DGVCL against its electricity consumption by the unit.

b) Steps taken by the company for utilizing alternate source of energy: Company is using wind energy and solar energy as alternate source of energy and the electricity generated by the wind mill and solar was given as credit in the electricity bills raised by the DGVCL.

c) Capital investment on energy conservation equipment: Company has made investment in wind mill and solar.

A. Power and Fuel Consumption:

Sr. No. Particulars	2024-25	2023-24
1 Electricity
(a.) Purchased	-	-
Total Units (In lacs kw)	28.27	27.89
Total Amount (In lacs Rs.)	230.19	238.31
Rate / unit (In Rs.)	8.14	8.54
(b) Own Generation
Wind Mill (units in lacs) (Credit was given in Electric Bill of Rs 62.02 lacs which amounts to Rs. 7.25 per unit)	8.56	9.11
Ground Mounted Solar Park (units in lacs) (Credit was given in Electric Bill of Rs 63.73 lacs which amounts to Rs. 5.82 per unit)	10.95	10.18
Surplus units of Solar Power (units in lacs) - (Sale Bill of Rs 16.63 lacs which amounts to Rs. 2.25 per unit)	7.39	8.51
2 Diesel	N.A.	N.A.
3 Furnace Oil	N.A.	N.A.
4 Others	N.A.	N.A.

Technology absorption

The Companys plant is running satisfactorily. Wind power generation production is going on. No amount was used in research & development

Foreign exchange inflow / outflow	Year 2024-25	Year 2023-24
Foreign Exchange inflow	Nil	Nil
Foreign Exchange outflow	Rs.1,05,403	Rs. 6,42,173

CORPORATE SOCIAL RESPONSIBILITY:

Our company does not fall under the purview of Section 135 of companies Act, 2013. Hence no Corporate Social Responsibility initiatives have been taken during the year. However, companies do carry on CSR activities on its own as and when deemed fit.

BOARD EVALUATION

The board of directors has carried out an annual evaluation of its own performance, board committees and individual directors pursuant to the provisions of the Act and the corporate governance requirements as prescribed by Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations 2015 (“SEBI Listing Regulations”).

The performance of the Board was evaluated by the Board after seeking inputs from all the directors on the basis of the criteria such as the Board composition and structure, effectiveness of board processes, information and functioning, etc.

The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc.

The Board and the Nomination and Remuneration Committee (“NRC”) reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the Chairman was also evaluated on the key aspects of his role.

In a separate meeting of independent Directors, performance of non-independent directors, performance of the board as a whole and performance of the Chairman was evaluated, taking into account the views of executive directors and non-executive directors. The same was discussed in the board meeting that followed the meeting of the independent Directors, at which the performance of the Board, its committees and individual directors was also discussed.

INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors and external consultants and the reviews performed by management and the relevant board committees, including the audit committee, the board is of the opinion that the Companys internal financial controls were adequate and effective during the financial year 2024-25.

The details in respect of internal financial control and their adequacy are included in the management discussion & analysis, which forms part of this report.

PROCEEDING PENDING UNDER IBC CODE, 2016 AND DIFFERENCE IN VALUATION AS PER RULE 8(5)(XI) & (XII) OF COMPANIES (ACCOUNTS) RULES, 2014:

No application or any proceeding is pending under IBC code, 2016. The company has never made any One Time Settlement against the loans obtained from Banks etc and hence the said clause is not applicable.

CORPORATE GOVERNANCE

As per Regulation 15 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the company is not required to comply with the provisions of Regulations 17 to 27 and Clauses (b) to (i) and (t) of sub regulation (2) of Regulation 46 and para C, D and E of Schedule V respectively, but for better governance, the Company had voluntarily complied the same to

the extent possible.

Pursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the report of the Corporate Governance and the Certificate of the Auditors of the Company in respect of compliance thereof is not applicable to company.

COST AUDIT:

Applicable provisions of Cost Audit compliance, if any, were dealt separately. During the year under review cost audit was not applicable to company and pursuant to Section 148 (1) company had maintained the applicable cost records.

LISITNG

At present your Companys securities are listed on the BSE Limited and scrip code of company is 514260.

PARTICULARS OF EMPLOYEES

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

a. The ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year*:

Executive directors/ Non-executive director	Ratio to median
Ravjibhai Parbatbhai Patel	19.40:1
Bipinbhai Jasmatbhai Patel	18.00:1

Note: Generally, more than 85% of employees are of daily wage earner or of blue-collar workers and hence statistical date of median remuneration are not comparable in this type of industries.

b. The percentage increase in remuneration of each director, chief executive officer, chief financial officer, company secretary in the financial year *

Directors, Chief Executive Officer, Chief Financial Officer and Company Secretary	% increase in remuneration in the financial year
Ravjibhai Parbatbhai Patel	10%
Bipinbhai Jasmatbhai Patel	10%
Hetal Joshi (CS)	0%

c. The percentage increase in the median remuneration of employees in the financial year*- approx. 10 %

* Company operates in the field of textile where in most of the employees are on daily wages basis most of them are of operator, helper and cleaner category and due to high attrition and irregular presence the salary of average employees are around approximate Rs. 500-800 per day. In our case comparison of median salary of employee and KMP is not comparable.

d. The number of permanent employees on the rolls of Company-

110 employees.

e. Average percentile increases already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:

* Company operates in the field of textile where in most of the employees are on daily wages basis most of them are of operator, helper and cleaner category and due to high attrition and irregular presence the salary of average employees are around approximate Rs. 500-800 per day. In our case comparison of percentile increase already made in salary of employee and KMP is not comparable.

f. Affirmation that the remuneration is as per the remuneration policy of the Company:

The Directors of Company affirms remuneration is as per the remuneration policy of the Company.

There is no employee appointed in the company for which Information required under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is required to be provided.

TAXES:

Company is regularly paying Income tax, Goods and Services Tax and other statutory dues like Provident Fund, ESIC, as applicable. As regard to applicable Taxes appropriate provision and treatments have been made as per law. Details of the payment refund and appeals and disputed amount, if any, have been adequately provided in audit report and the same are selfexplanatory and the amount of dispute is being dealt with various authorities and waiting for final outcome.

INDUSTRIAL RELATIONS

Your Companys relations with its employees remained cordial throughout the year. The Directors wish to place on record their deep appreciation for the services rendered by staff members and executives of the company. Your company has taken adequate steps for the health and safety of its employees.

Your Directors further state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

MATERNITY BENEFITS

The company aims to fully comply with the provisions of the Maternity Benefit Act 1961 as amended. This Act provides for maternity leave, maternity bonus, and other benefits to women employees to ensure their health and well-being during and after pregnancy. The Company remains committed to promoting a supportive and inclusive workplace for all women employees.

MATERIAL CHANGES AFFECTING FINANCIAL POISTION OF THE COMPANY

No material changes or commitments, affecting the financial position of the Company have occurred between the end of the financial year of the company to which the financial statements relate, i.e. 31^st March, 2025 and the date of Board Report.

	By order of the Board
	Sd/-
	BIPINBHAIJASMATBHAI PATEL
Date: 01.09.2025	(DIN: 00023447)
Place: Surat	Chairman
Registered Office:
SURBHI INDUSTRIES LIMITED
“Surbhi House”, 2nd Floor, FP NO 206, B/h Old Sub Jail, Ring Road, Khatodara, Surat - 395002