AFFLUENCE

SURBHI

22nd 

Annual Report

2013-14

Regd. Office: Surbhi Estate, Mohanwadi, Katargam ,Surat – 395004

CIN: L17110GJ1992PLC017672

IMPORTANT COMMUNICATION TO MEMBERS

The Ministry of Corporate Affairs has taken a "Green Initiative in the Corporate Governance" by allowing paperless compliances by the companies and has issued circulars stating that service of notice/ documents including Annual Report can be sent by e-mail to its members. To support this green initiative of the Government in full measure, members who have not registered their e-mail addresses, so far, are requested to register their e-mail addresses, in respect of electronic holdings with the Depository through their concerned Depository Participants.

SURBHI INDUSTRIES LIMITED

Board of Directors                   1. Shri Bipinbhai J. Patel

                                                     Chairman (WTD) & CFO    

                                                 2. Shri Ravjibhai P. Patel

                                                     Managing Director/CEO    

                                                 3. Shri Pravinbhai Patel

                                                 4. Shri Nimishbhai N. Jariwala

Auditors:                                  M/s. D. C. Jariwala & Co.

                                                Chartered Accountant

                                                330, Royal Trading,

                                                Opp. Ratan Cinema, Salabatpura,

                                                Surat - 395003

Bankers:                                  Dena Bank

                                                Sahar Gate Branch

Surat - 395004

Regd. Office                                      “Surbhi Estate”,

                                                Mohanwadi,

Katargam,

Surat – 395004

Plant:                                       Plot No. 249/1,

Village: Karanj, Ta. Mandvi,

Dist. Surat

COMPANY LAW                        PRAGNESH JOSHI

CONSULTANT                          PRACTISING COMPANY SECRETARY

SURBHI INDUSTRIES LIMITED

NOTICE OF THE ANNUAL GENERAL MEETING

NOTICE is hereby given that the Twenty Second Annual General Meeting of the Members of Surbhi Industries Limited will be held on Tuesday the 30th September 2014 at 11.00 a.m. at Surbhi Estate, Mohanwadi, Katargam, Surat to transact the following business:

ORDINARY BUSINESS

1.  To receive, consider and adopt the Audited Balance Sheet as on 31st March, 2014, Profit & Loss Accounts for the period ended on 31st March, 2014 together with the Reports of the Directors’ and Auditors' thereon.

2.  To appoint a Director in place of Mr. Bipinbhai Jasmatbhai Patel (DIN 00023447), who retires by rotation and being eligible, he offers himself for re-appointment.

3.  To appoint Auditors and fix their remuneration and in this regard to consider and if thought fit, to pass, with or without modification(s), the following resolution as an Ordinary Resolution.

“RESOLVED THAT Pursuant to section 139 of Companies act 2013 and rules made there under, and pursuant to recommendation of audit committee, M/s. D. C. Jariwala & Co, Chartered Accountants, Membership No. 037990 & FRN 104063W be and is hereby appointed as Statutory Auditors of the company to hold office from the conclusion of this Annual General Meeting till the conclusion of the next Annual General Meeting of the Company at such remuneration and reimbursement of out of pocket expenses, as shall be fixed by the Board of Directors of the Company

SPECIAL BUSINESS

4.  To designate Mr. Bipinbhai Jasmatbhai Patel (DIN 00023447), Whole-Time Director as  Chief Financial Officer of the company and if thought fit, to pass, with or without modification(s), the following resolution as an Ordinary Resolution:

          “RESOLVED THAT Mr. Bipinbhai Jasmatbhai Patel CFO appointed pursuant to provisions of Listing Agreement with BSE be and is hereby designated as the Chief Financial Officer of the company pursuant to provisions of section 203 of the companies Act 2013 w.e.f. 1st April 2014.

RESOLVED FURTHER THAT the Board of Directors of the Company be and    is hereby authorised to do all acts and take all such steps as may be necessary, proper or expedient to give effect to this resolution.

5.  To Appoint Shri Nimish N. Jariwala (Din: 00421374) as an Independent Director

To consider and if thought fit to pass with or without modification(s) the following Resolution as an “Ordinary Resolution”:-

“RESOLVED THAT pursuant to the provision of Sections 149,152 read with Schedule IV and any other applicable provision of the Companies Act, 2013 and the companies (Appointment and Qualification of Directors) Rules, 2014 (including any statutory modification(s) or re-enactment thereof for the time being in force) and Clause 49 of the Listing Agreement Shri Nimish N. Jariwala (DIN: 00421374) a Non-Executive Director of the Company who has submitted a declaration that he meets the criteria of independence as provided in Section 149(6) of the Companies Act and who is eligible for appointment be and is hereby appointed as an Independent Director of the Company to hold office for five consecutive years for a term commencing from 30th September, 2014                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                to 29th September, 2019”.

6.   To Appoint Shri Pravinbhai Patel (Din: 00421416) as an Independent Director

To consider and if thought fit to pass with or without modification(s) the following Resolution as an “Ordinary Resolution”:-

“RESOLVED THAT pursuant to the provision of Sections 149,152 read with Schedule IV and any other applicable provision of the Companies Act, 2013 and the companies (Appointment and Qualification of Directors) Rules, 2014 (including any statutory modification(s) or re-enactment thereof for the time being in force) and Clause 49 of the Listing Agreement Shri Pravinbhai Patel (DIN: 00421416) a Non-Executive Director of the Company who has submitted a declaration that he meets the criteria of independence as provided in Section 149(6) of the Companies Act and who is eligible for appointment be and is hereby appointed as an Independent Director of the Company to hold office for five consecutive years for a term commencing from 30th September, 2014 to 29th September, 2019”

7.   To Borrow Money In Excess Of Paid-Up Capital And Free Reserves

To consider, and if thought fit, to pass with or without modification, the following resolution as a Special Resolution:

RESOLVED THAT pursuant to the provisions of Section 180( c ) of Companies Act, 2013 or any amendment or modifications thereof, the consent of the members of the company be and is hereby accorded to borrow and raise such sum or sums of money from time to time as may be required for the purposes of the business of the Company, in excess of the aggregate of the paid-up capital of the Company and free reserves of the Company, that is to say, reserves not set apart for any specific purpose, subject to the proviso that such borrowing shall not exceed Rs. 500,000,000 (Rupees Fifty Crores only) over and above the aggregate of the paid-up capital of the Company and its free reserves and shall exclude all temporary loans obtained by the Company from its bankers in the ordinary course of its business, on such terms and conditions as the Board may consider necessary and expedient in the best interest of the Company.

RESOLVED FURTHER THAT for the purpose of giving effect to this resolution the Board be and is hereby authorized to do all such acts, deeds, matters and things as it may in its absolute discretion consider necessary, proper or desirable and to settle any question, difficulty or doubt that may arise in this regard.”

Registered Office:                                                    By order of the Board

Surbhi Estate,

Mohanwadi,Katargam                                                                                                         

Surat                                                                                         Sd/-

                                                                                        Bipinbhai Patel

                                                                                          Chairman

Date  : 16-06-2014                                                               DIN: 00023447

Place : Surat

NOTES:

1.  A member entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and vote on a poll instead of himself and the proxy need not be a member. Proxies in order to be effective, must be duly stamped and received by the company at least 48 hours before the commencement of the meeting.

2.   The Register of Members and Share Transfer Books of the Company will remain close from Saturday, the 27th September, 2014 to Tuesday, the 30th September, 2014(both days inclusive)

3.  All documents referred to in the above Notice and the accompanying Explanatory Statements are open for inspection at the Registered Office of the Company during the business hours on any working day(except Sunday and holidays) between 10.00 a.m. and 12.30 p.m. up to the date of the Annual General Meeting.

4.  A member desirous of getting any information on the accounts or operations of the Company is required to forward his/her queries to the Company at least 7 days prior to the Meeting so that the required information can be made available at the Meeting.

5.   Copies of the Annual Report 2013-14 being sent by electronic mode only to all the members whose email address registered with the company/depository participant(s) for communication purpose unless any members has requested for a hard copy of the same. For members who have not registered their email addresses, physical copies of the Annual Report 2013-14 are being sent by permitted mode.

6.  Members are requested to intimate if shares are held in the same name or in the same order and names, but in more than one account to enable the company to club said accounts into one account.

7.   In order to comply with Ministry of Corporate Affairs circular on “Green Initiative in the Corporate Governance” members are requested to intimate their email address to their depository participant as well as to the company.

8.   Brief resume of Directors including those proposed to be appointed / re-appointed, nature of their expertise in specific functional areas, names of companies in which they hold directorships and memberships / chairmanships of Board Committees, shareholding and relationships between directors inter-se as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges, are provided in the Corporate Governance Report forming part of the Annual Report

9.  Explanatory statement as required under section 102(1) of the Companies Act, 2013 relating to the Special Business to be transacted at the Meeting forms part of this notice is annexed herewith.

10.            In compliance with the provisions of Section 108 of the Companies Act, 2013 and the Rules framed there under, the Members are being provided with the facility to cast their vote electronically, through the e-voting services provided by www.evotingindia.com on all the resolutions set forth in this Notice. The e-voting period commences on Monday, September 22, 2014 (09:00 A.M. IST) and ends on Tuesday, September 23, 2014 (6:00 P.M. IST). During this period, Members of the Company, holding shares either in physical form or in dematerialized form, as on August 29, 2014 (cutoff date), may cast their vote electronically. Thereafter the e-voting module shall be disabled. Once the vote on a resolution is cast by a Member, he/she shall not be allowed to change it subsequently.

11.            Voting Through Electronics Means- A detailed instructions and related write ups, on Electronic Voting Process, which forms part of this notice, is given at the end of this Annual Report, (before the form of attendance slip and proxy). Shareholders are requested to kindly follow the said process for casting their vote electronically.

13.          Members are requested to quote Folio number in all their correspondences.

14.          Members are requested to inform the company immediately the changes, if any, in their address specifying full address in Block Capital with Pin code of the post office.

16.            The Register of Members and Share Transfer Books of the Company will remain close from Saturday, the 27th September, 2014 to Tuesday, the 30th September, 2014(both days inclusive).

17. Members are requested to bring their copy of Annual report of the meeting as the same shall not be circulated thereat.

18. Members are requested to bring with them the attendance slip and hand it over at entry gate.

ANNEXURE TO THE NOTICE

Details of Appointees:

Mr. Bipinbhai Jasmatbhai Patel, was appointed as Director, who is liable to retire by rotation and as per the clause 49 his details are as under:

None of other directors are concerned or interested in these resolutions except the appointee.

The Board of Directors recommends the proposed resolution for acceptance by member.

STATEMENT PURSUANT TO SECTION 102(1) OF THE COMPANIES ACT, 2013 (“the Act”)

ITEM 4

In order to comply with the requirements of New Companies Act, 2013 and on account of his financial expertise Mr. Bipinbhai Jasmatbhai Patel, be re designated as the Chief-Financial Officer of the company. His brief profile is as under:

Except Mr. Bipinbhai Jasmatbhai Patel being appointee none of the Directors / Key Managerial Personnel of the Company / their relatives are, in any way, concerned or interested, financially or otherwise, in the resolution set out at Item No. 4 of the Notice.

The Board commends the Ordinary Resolution set out at Item No. 4 of the Notice for approval by the shareholders

ITEM 5 & 6

Since the new Companies Act, 2013 has also been brought on the Statue book with effect from 1st April, 2014, our Company has also to comply with Section 149(4) of the said new Act which makes it compulsory for every listed company to appoint at least 1/3rd of the total number of Directors as Independent Directors.

In view of the said development of requirement of appointment of Independent Director to comply not only with Listing Agreement provisions but also with Companies Act, 2013 provisions it is advisable to denovo approve the appointments of both the existing Independent Directors.

Shri Nimish N. Jariwala (DIN: 00421374) and Shri Pravinbhai Patel (DIN: 00421416), Non-Executive Directors of the Company, have given a declaration to the Board that they meet the criteria of independence as provided under Section 149(6) of the Act. In the opinion of the Board, each of these directors fulfill the conditions specified in the Act and the Rules framed there under for appointment as Independent Director and they are independent of the Management.

In compliance with the provisions of Section 149 read with Schedule IV of the Companies, Act, 2013 the proposal for appointment of these directors as Independent Directors is now being placed before the Members for their approval

The terms and conditions of appointment of the above Directors shall be open for inspection by the Members at the registered office of the Company during normal business hours on any working day.

A brief profile of the Independent Directors to be appointed is given below:

Except the appointee none of the Directors / Key Managerial Personnel of the Company / their relatives are, in any way, concerned or interested, financially or otherwise, in the resolution set out at Item No. 5 & 6 of the Notice.

The Board commends the Special Resolution set out at Item No. 5 &6 of the Notice for approval by the shareholders

ITEM NO. 7

As the members are aware, your Company is exploring various opportunities for the all round growth of the Company. With a view to meet fund requirements for the aforesaid purpose, the Company would be required to borrow funds from time to time by way of loans or in any other form The said borrowings may be required to be secured by way of mortgage / charge over all or any part of the movable and / or immovable properties of the Company and as per the provisions of Section 180 (c) of the Companies Act, 2013, the mortgage or charge on all or any part of the movable and /or immovable properties of the Company, may deemed as disposal of the whole, or substantially the whole, of the undertaking of the Company and hence the approval of the shareholders of the Company is required by way of a special resolution.

The Board of Directors of your Company, hence recommends the passing of the resolution of the Notice.

None of the Director(s) is deemed to be interested or concerned in the proposed resolution.

Registered Office:                                                      By order of the Board

Surbhi Estate,

Mohanwadi,Katargam                                                                        Sd/

Surat                                                                            Bipinbhai Patel

                                                                                                   Chairman

Date  : 16-06-2014                                                         DIN: 00023447                            

Place : Surat

SURBHI INDUSTRIES LIMITED

DIRECTOR'S REPORT

Dear Shareholders,

The Directors of your Company have pleasure in submitting their Twenty Second Annual Report together with the Audited Statement of Accounts for the year ended 31st March, 2014.

FINANCIAL RESULTS

During the year under review company has recorded turnover of Rs. 3532.25 lacs as against the previous year turnover of 2355.64 lacs which show 49.95 % increase in comparison with the previous year. Profit before tax rose to all most 185.98% as compared to previous year.  The net profit after tax of the company increased to Rs.150.44 lacs against the Rs. 54.48 lacs in previous year.                                                                

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 31st March 2014.

BUSINESS

Efforts are being made to provide better result than earlier years. In view of the increased activities and expansions and programs to grab the emerging opportunities.

DIRECTORS

Pursuant to Section 152 of the Companies Act, 2013 Shri Bipinbhai J. Patel and Mr. Nimish N. Jariwala Directors of the Company are due to retire at the ensuing Annual General Meeting of the Company and is eligible for re-appointment.  Your directors recommend for their appointment. To comply with the requirement of independent directors as per the Companies Act, 2013 appointment of director was made as independent director for five years.

A brief resume of director(s) retiring by rotation seeking appointment at the ensuing Annual General Meeting, nature of their expertise in specific functional areas and names of companies in which they hold directorship and/or membership/ Chairmanship of Committees of Board, as stipulated under clause 49 of the Listing Agreement with the Stock Exchanges, are given in the section of Annual Report.

FIXED DEPOSITS

The Company has not accepted any fixed deposits from the public within the meaning of the Companies (Acceptance of Deposits) Rules 1975 during the year.

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.

AUDITORS

M/s. D. C. Jariwala & Co., Chartered Accountants, the auditors of the Company, retire at the conclusion of the ensuing Annual General Meeting of the Company. They being eligible for reappointment as Statutory Auditor of the Company and have expressed their willingness to accept office and have furnished certificate under Section 139 of the Companies Act,  for their eligibility for re-appointment. Your directors recommend for their appointment.

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.

COMPLIANCE CERTIFICATE

A compliance report pursuant to section 383 of the Companies Act, 1956 attached as annexure to this report and forming part of this report.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 217(2AA) of the Companies Act, 1956, your Directors hereby confirm the following:

1.    That in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures ;

2.    That 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 at the end of the financial year ended 31.03.2014 and of the Profit & Loss of the Company for that period ;

3.    That they had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

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

POLUTION AND ENERGY CONSERVATION AND FOREIGN EXCHANGE

Company’s texturing plants are running with electricity which are supplied by the Daxin Gujarat Vij Company Limited. Moreover, Company has one DG set as a stand by arrangement. 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 installed the Wind Turbine and during the year total 13.29 lacs units were generated. Company has obtained credit of these unites against its electricity consumption at its factory. The particulars regarding technology absorption and Foreign exchange earnings and outgo pursuant to Section 217 (1) (e) of the Companies Act, 1956 are as under :

FORM A

[See Rule 2]

Conservation of Energy

A. Power and Fuel Consumption:

B.      Consumption per unit of production

Products                        Polyester Crimped   /  Texturised yarn

                             Standard         year                 year

                                                ( if any )     2013-14              2012-13

          Electricity ( Rs./Kg.)    -                n.a.                       n.a.

Technology absorption

The Company’s plant is running satisfactorily. No other technology is involved in Company’s facility other than windmill power generation.

Foreign exchange inflow / out flow                    Year          Year

                                                                           2013-14    2012-13

Foreign Exchange inflow                                                  nil                       nil

Foreign Exchange outflow                             42206440/-   80244722/-

CORPORATE GOVERNANCE

As per clause 49 of the Listing Agreement with the Stock Exchange, the report of the Corporate Governance and the Certificate of the Auditors of the Company in respect of compliance thereof are appended hereto and forming part of this report.

COST AUDIT:

Applicable provision of Cost Audit compliance is dealt separately.

The Company had appointed M/S Amish Parmar & Associates  Cost Accountants (FRN-100502, MN-24568) as Cost Auditors to audit the cost accounts of Company for the financial year 2013-14 under section 233B of the Companies act, 1956.

The Cost Audit Report in XBRL mode for the financial year ended March 31, 2013 was filed with the Ministry of Corporate Affairs on the 28/03/2014.

LISITNG

At present your Company’s securities are listed on the Bombay Stock Exchange Limited, Ahmedabad Stock Exchange Ltd and Vadodara Stock Exchange Limited. As a cost saving measures and to conserve the resources company had applied to voluntarily delist it shares from Ahmedabad Stock Exchange Ltd and Vadodara Stock Exchange and application is pending.  Necessary steps are being taken to revoke the suspension at the Bombay Stock Exchange Limited

PARTICULARS OF EMPLOYEES

There was no employee drawing in excess of limits prescribed under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975.

GENERAL

The notes forming part of Accounts, being self-explanatory are not being dealt with separately.

APPRECIATION:

Your Directors express their sincere gratitude for the assistance and co-operation extended by customers, various Government, Semi-Government and Local Authorities, suppliers, Shareholders, business associates.

Your Directors also wish to place on record their deep apprecia­tion for the dedication and hard work put by the employees at all levels towards the growth of the Company. Last but not the least, the Board of Directors wish to thank the Investor/ Shareholders for their support, co-operation and faith in the Company.

                                                                                           For and on behalf of the Board

Registered Office:                                                             By order of the Board

Surbhi Estate,

Mohanwadi,

Katargam                                                                                     sd/-

Surat                                                                                                                                                           

Date  : 05.06.2014                                                       BIPINBHAI PATEL   

                                                                                              CHAIRMAN                

Place : Surat                                                                         DIN:    00023447              

SURBHI INDUSTRIES LIMITED

CORPORATE GOVERNANCE

The Company pursuant to Clause 49 of the listing agreement with the Stock Exchanges furnishes its report on the code on Corporate Governance.

COMPANYS’ PHILOSOPHY ON CORPORATE GOVERNANCE

The Company's philosophy on Corporate Governance envisages the attainment of the highest levels of transparency, accountability and equity, in all facets of its operations, and in all its interactions, Shareholders have right to have complete information about the Directors and Management and their interest  in the company as well as governance practices followed by them. Towards this end, the company is making extensive disclosures from time to time.

Board of Directors

I. Composition and Category

The Board of Company as on date of report consists of four directors two executive and two independent non-executive directors.

II.    Board Meetings, attendance, position held in committee meetings

The Board duly met 11 times on 01/05/2013, 31/05/2013, 01/07/2013, 30/07/2013, 20/09/2013, 30/10/2013, 21/12/2013, 30/01/2014, 20/02/2014, 24/03/2014 and 31/03/2014. Notice of the meetings with agenda along with necessary details were sent to the directors in time.

The names and categories of the Directors, their attendance at Board meetings  and General Meeting as also position held by them in committees of other public limited companies as on 31st March 2014 are given below.

III. Information on Directors Re-appointment

Mr. Bipinbhai Jasmatbhai Patel, retire by rotation at the ensuing Annual General Meeting. They being eligible, offers themselves for reappointment.

* only public limited companies are considered

IV. Audit Committee

          Audit Committee, during the year under review, reconstituted and comprise of three members out of them two are independent directors, Shri Pravinbhai Patel, Independent Director, is a Chairman of the Audit Committee, and Shri Nimish  Jariwala, independent director and Shri Bipinbhai Patel are members to the committee.

          Committee met on 5 times for perusal of financial position and un-audited quarterly result and also met for the finalization of account for the year ended on 31.03.2014 and for the review of financial position of the company. The Accounts and Financial position perused by the Audit Committee were placed before board for their consideration. 

               Attendance

V. REMUNERATION COMMITTEE:

As on date remuneration committee comprise of two members who are independent and non executive directors namely Shri Pravinbhai Patel, Chairman and Shri Nimish Jariwala as per the requirement of Code of Corporate Governance as well as under Schedule XIII and under Clause 49 of the Listing Agreement. The Committee reviews and recommends the remuneration proposed to be paid to the Managing Director/Whole time Director and non-executive directors of the Company to the Board of Directors. The Committee is also empowered to decide on Employees’ Stock Option Scheme as and when such scheme is considered for introduction in the Company.

As on date Company has a Managing Director and Whole-Time Director, remunerations of the executive directors has been duly approved by Committee, No remuneration were paid to Non-executive Directors including sitting fees for attending the meetings of the Board of Directors or committee thereof. Further the remunerations of the Managing Directors/Whole time Directors as recommended by the remuneration committee thereafter decided by the Board of Directors and then subsequently approved by the shareholders at the general meeting as required by the Companies Act, 1956 (or Companies Act, 2013). The Chairman & Managing Director /Whole-time Director are paid remuneration as per the terms and conditions approved by the Board of Directors and shareholders.

During the financial year 2013-14 no meeting of Remuneration Committee was held.

VI. SHARE TRANSFER COMMITTEE /INVESTOR GRIEVANCE COMMITTEE:

The Share Transfer cum Investors’/Shareholders’ Grievance Committee comprise of three members chaired by Shri Pravin Patel, being non-executive director. The Committee looks into the redressal of investor’s complaints such as delay in transfer of equity shares, request for transmission of shares, issue of duplicate share certificates, non receipt of declared dividends/ annual reports etc.

During the financial year 2013-14, the Share Transfer cum Investors’ Grievance Committee met on 12 times a year

Investors’ Grievance Committee comprised of the following members:

Exclusive email id:

There were no trading in the shares on any of the Stock Exchanges during the year 2013-14 and hence month wise detail of market prices of the shares could not be provided.

X. MANAGEMENT DISCUSSION AND ANALYSIS:

Report on Management discussion and analysis has been given separately in this Annual Report and form part of this report.

XI. ANNUAL GENERAL MEETINGS

22nd Annual General Meeting of the members of SURBHI INDUSTRIES LIMITED will be held on 30-09-2014, TUESDAY, at 11.00 A.M. at the registered office of the Company at Surbhi Estate, Mohanwadi, Katargam, Surat - 395004

Particulars of AGM held during last three year

XII.    COMPLIANCE OFFICER:

As on date Mr. Aswin Patel is the Compliance Officer of the company.

XIII. LISTING

At present your Company’s securities are listed on the Bombay Stock Exchange Limited, Ahmedabad Stock Exchange Ltd and Vadodara Stock Exchange. As a cost saving measures and to conserve the resources company had applied to delist it shares from Ahmedabad Stock Exchange Ltd and Vadodara Stock Exchange and application is pending. Necessary steps are being taken to revoke the suspension at the Bombay Stock Exchange Limited.

XIV. STOCK CODE

 (1.) Trading Scrip Code at The Bombay Stock Exchange Ltd. : 514260

 (2.) Trading Scrip Code at Ahmedabad Stock Exchange Ltd. : 58190

 (3.) Trading Scrip Code at Vadodara Stock Exchange Ltd. :      ----

XV. FINANCIAL RESULTS:

The quarterly/half yearly /yearly financial results were informed in time to stock exchanges.

XVI. BOOK CLOSURE

For updating records and shareholding information of the members of the company, the Share Transfer Books and Register of Members shall remain closed from Saturday, the 27th September, 2014 to Tuesday, the 30th September, 2014(both days inclusive)

XVII. SHAREHOLDING PATTERN:

Shareholding pattern as on 31.03.2014

XVIII. REGISTERED OFFICE:

The registered office of the Company situated at Surbhi Estate, Mohanwadi, Katargam, Surat - 395004

Plant Location

Plot No. 249/1, Village : Karanj, Ta. Mandvi, Dist. Surat

XIV.  MANAGEMENT DISCUSSION AND ANALYSIS:

1. INDUSTRY OUTLOOK:

During the period under review economy was passing through very hard phase, international financial crisis made things more challengeable and sudden drop in Rupee against dollar made import more costly and have greater impact in costing of the products of the company. However there was tremendous potential growth shown in the markets. Due to changes in government policies with respect to textile industries and increase in cotton prices plus government regulations current scenarios are very impressive there is lot of potential demand for the next years.

2. OPPORTUNITIES AND THREATS:

The company envisaged remarkable growth over previous years. Company’s turn over shows increasing trends due to expansion the financial charges and depreciation are higher over the previous year. Government is providing various incentives under TUFs .The Customers also growing rapidly. At the same time, there is intense price pressure from the competitors and international financial   crisis.

3.  INITIATIVES

The initiatives are being taken by the Company for improving the quality standards and reduction of costs at appropriate level. New machineries are imported to provide better result and to cope up with changing requirement of the industry. The employees at all levels are being made aware of the changing conditions and the challenges of the open market conditions and to train the personnel to tackle the difficult situations which will improve the overall productivity, profitability.

4. RISKS AND CONCERNS;

Major fluctuations Rupee v/s dollar price corresponding to fluctuation in the raw material price and stringent market conditions can affect the company's performance. 

1.            INTERNAL CONTROL SYSTEM:

The Company has an adequate internal audit system commensurate with its size and the nature of its business towards achieving efficiency in the operation, optimum utilization of resources and effective monitoring thereof and compliance with applicable laws.

2.   HUMAN RESOURCES:

Employee’s relations continue to be cordial. Training and development activities are identified, organizes and progress monitored as part of human resource development activities.

3.   FUTURE PLAN:

As a long term planning strategy, company is planning to develop cotton based technology. Company intend to launch new project in the field of textile particularly embroidery based production.

Promoters are working very hard to lead company to new horizons and giving better results.

Registered Office:                    For and on behalf of the Board of Directors

Surbhi Estate,                                                        By order of the Board

Mohanwadi,Katargam                                                                                     

Surat – 395004                                                                          Sd/-

                                                                                         Bipinbhai Patel

                                                                                              Chairman

DIN: 00023447

Date  :  05.06.2014                                     

Place : Surat

AUDITOR’S REPORT ON CORPORATE GOVERNANCE

To,

The Members of

SURBHI INDUSTRIES LIMITED.

Surat

We have examined the compliance of conditions of Corporate Governance by SURBHI INDUSTRIES LIMITED (the Company) for the year ended  March 31, 2014, as stipulated in amended Clause 49 of the Listing Agreement of the said Company with the Stock Exchanges.

The compliance of conditions of Corporate Governance is the responsibility of the Management. Our examination was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance with the conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us, the representation made by the directors and management, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in amended Clause 49 of the above mentioned Listing Agreement.

As required by the Guidance Note issued by the Institute of Chartered Accountants of India, we have to state that no investor grievances is pending as on 31st March, 2014 no other investor grievances are pending for a period exceeding one month against the Company as per the records maintained by the Company which are presented to Shareholders/ Investors Grievance Committee.

We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the Management has conducted the affairs of the Company.

                                                                               For  D. C. Jariwala & Co.

Place : SURAT                                                               (DEVENDRA JARIWALA)

Date  : 05.06.2014                                                                          PROPRIETOR                         

                                                                                                                        Membership No.  37990

Whole-time Director / CFO Certification

To

The Board of Directors,

Surbhi Industries Limited,

Surat

We, Bipinbhai J. Patel - Whole-time Director (CFO) and Ravjibhai P. Patel – Managing Director (CEO) Surbhi Industries Limited hereby certify that:

a)     We have reviewed Financial Statements and the Cash Flow Statement for the Financial Year ended March 31, 2014 and that to the best of our knowledge and belief:

i.   these statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading;

ii.  these statements together present a true and fair view of the Company’s affairs and are in compliance with existing accounting standards, applicable laws and regulations.

b)     There are, to the best of our knowledge and belief, no transactions entered into by the Company during the year which are fraudulent, illegal or violative of the Company’s code of conduct.

c)   We are responsible for establishing and maintaining internal controls for financial reporting and that we have evaluated the effectiveness of the internal control systems of the Company pertaining to financial reporting and we have disclosed to the Auditors and the Audit Committee, deficiencies in the design or operation of such internal controls, if any, of which we are aware and the steps we have taken or propose to take to rectify these deficiencies.

d)      We have indicated to the Auditors and the Audit committee that;

i.   there have been no significant changes in internal control over financial reporting during the year;

ii.  there have been no significant changes in accounting policies during the year; and

iii. there have been no instances of significant fraud of which we have become aware and the involvement therein, if any, of the management or an employee having a significant role in the Company’s internal control system over financial reporting.

Bipinbhai Jasmatbhai Patel         Ravjibhai Parbatbhai Patel

Whole-time Director(CFO)            Managing Director(CEO)

(DIN 00023447)                          (DIN 00023332)

Place: Surat

Dated: June, 5 2014

DECLARATION OF WHOLE-TIME DIRECTOR

Pursuant to the provisions of Clause 49 of the Listing Agreement, it is hereby declared that all the Board Members and Senior Management Personnel of Surbhi Industries Limited have affirmed compliance with the Code of Conduct for Directors and Senior Management for the Financial Year ended March 31, 2014.

Bipinbhai Jasmatbhai Patel

Whole-time Director

(DIN 00023447)   

The instructions for members for voting electronically are as under:-

In case of members receiving e-mail:

a.   For CDSL: 16 digits beneficiary ID,

b.   For NSDL: 8 Character DP ID followed by 8 Digits Client ID,

c.   Members holding shares in Physical Form should enter Folio Number registered with the Company.

(iv) Next enter the Image Verification as displayed and Click on Login.

(vii)            After entering these details appropriately, click on “SUBMIT” tab.

(viii)           Members holding shares in physical form will then reach directly the Company selection screen. However, members holding shares in demat form will now reach ‘Password Creation’ menu wherein they are required to mandatorily enter their login password in the new password field. Kindly note that this password is to be also used by the demat holders for voting for resolutions of any other company on which they are eligible to vote, provided that company opts for e-voting through CDSL platform. It is strongly recommended not to share your password with any other person and take utmost care to keep your password confidential.

(ix) For Members holding shares in physical form, the details can be used only for e-voting on the resolutions contained in this Notice.

(x)  Click on the EVSN for the SURBHI INDUSTRIES LTD, on which you choose to vote.

(xi) On the voting page, you will see “RESOLUTION DESCRIPTION” and against the same the option “YES/NO” for voting. Select the option YES or NO as desired. The option YES implies that you assent to the Resolution and option NO implies that you dissent to the Resolution.

(xii)            Click on the “RESOLUTIONS FILE LINK” if you wish to view the entire Resolution details.

(xiii)           After selecting the resolution you have decided to vote on, click on “SUBMIT”. A confirmation box will be displayed. If you wish to confirm your vote, click on “OK”, else to change your vote, click on “CANCEL” and accordingly modify your vote.

(xiv)           Once you “CONFIRM” your vote on the resolution, you will not be allowed to modify your vote.

(xv)            You can also take out print of the voting done by you by clicking on “Click here to print” option on the Voting page.

(xvi)           If Demat account holder has forgotten the changed password then Enter the User ID and the image verification code and click on Forgot Password & enter the details as prompted by the system.

Institutional Shareholders:

In case of members receiving the physical copy:

(A) Please follow all steps from sl. no. (i) to sl. no. (xvi) above to cast vote.

(B) The voting period begins on 22nd September, 2014 (9.00 am) and ends on 23rd  September, 2014 (6.00 p.m). During this period shareholders’ of the Company, holding shares either in physical form or in dematerialized form, as on the cut-off date 29th August, 2014, may cast their vote electronically. The e-voting module shall be disabled by CDSL for voting thereafter.

(D) The voting rights of shareholders shall be in proportion to their shares of the paid up equity share capital of the Company as on the cut-off date of 29th August, 2014.

(E) Mr. Pragnesh M. Joshi, Company Secretaries, (Membership No. FCS:7238) (Address : B-314, Gopal Palace, Nr. Shiromani Complex, Opp. Ocean Park, Shivranjani Nehrunagar Road, Ahmedabad-380015) has been appointed as the Scrutinizer to scrutinize the e-voting process (including the physical ballots received from members who don’t have access to the e-voting process) in a fair and transparent manner.

(F) The Scrutinizer shall within a period not exceeding three (3) working days from the conclusion of the e-voting period unblock the votes in the presence of at least two (2) witnesses not in the employment of the Company and make a Scrutinizer’s Report of the votes cast in favour or against, if any, forthwith to the Chairman of the Company.

(G) The Results shall be declared on the date of AGM of the Company. The Results declared along with the Scrutinizer’s Report shall be placed on the Company’s website www.surbhi.com and on the website of NSDL within two(2) days of passing of the resolutions at the AGM of the Company and communicated to the BSE Limited.