Directors Report of Suryalata Spinning Mills Ltd.

Mar 31, 2024

The Board of Directors are pleased to present the 41^st Annual Report of the Company together with the Standalone and Consolidated Audited Financial Statements of Accounts for the financial year ended March 31, 2024.

FINANCIAL RESULTS:

The Company has prepared financial results in accordance with the Companies (Indian Accounting Standards) Rules, 2015 (Ind AS) prescribed under Section 133 of the Companies Act, 2013.

The financial performance of the Company for the financial year ended March 31, 2024 is summarized below:

(Rs. in Lakhs)
Particulars	Standalone Results		Consolidated Results
	2023-24	2022-23	2023-24	2022-23
Total Revenue	44,551	48,310	45,515	48,732
Profit before Interest Depreciation and Tax	3,807	6,063	4,657	6,448
Profit Before Tax	1,807	4,329	2,434	4,660
Less: Provision for taxes (Including Deferred Tax)	521	1,226	569	1,226
Profit After Tax	1,193	3,103	1,865	3,434
Add: Profit brought forward from last year	3,260	3,195	3,512	3,116
Amount available for appropriation	4,453	6,298	5,377	6,550
Transfer to
(a) General Reserve	1,000	3,000	1,000	3,000
(b) Dividend on Equity Shares	38	38	38	38
Balance Carried forward to Balance Sheet	3,415	3,260	4,339	3,512

Details of Standalone oprations:

The Audited Standalone Financial Statements of your Company as on March 31, 2024, prepared in accordance with the relevant applicable Ind AS and Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI Listing Regulations”) and provisions of the Companies Act, 2013 (“the Act”), forms part of this Annual Report.

Highlights of the Company’s Affairs:

The Company’s performance in the financial year under review had impacted adversely due to sluggish market conditions and subdued margins as compared to the previous year. The major highlights of the Company’s Standalone performance for the financial year 2023-24 are as under:

? Total Revenue is Rs. 445.51 crores as compared to Rs. 483.10 crores in the previous year.

? Exports decreased by 66.74% to Rs 16.32. Crores as compared to Rs 49.07 crores in the previous year (FOB Value).

? Production quantities increased to 29110 MTs as against 27497 MTs in the previous year.

? Annual Average yarn realization was decreased by Rs. 22.40 i.e to Rs.151.69 per kg. as against Rs.174.09 per kg in the previous year.

? Annual Average input (raw material) cost per Producation decreased by Rs.8.86 (i.e) to Rs.100.15 per kg. as against Rs.109.01 in the previous year.

? Contributions from operations decreased by Rs. 13.55 per kg. (i.e) Rs. 51.54 as against Rs.65.09 per kg in the previous year.

? Operational cost Decreased by Rs.3.17 per kg. (i.e) Rs. 45.69 as against Rs. 48.86 per kg in the previous year

? Profit before Tax for the is Rs.18.07 Crores as compared to Rs. 43.29 Crores in the previous year.

? Profit after Tax is Rs. 11.93 Crores as against Rs. 31.03 Crores in the previous year.

Subsidiary Company:

The Company has one wholly owned subsidiary Suntree Solar Energy Private Limited (Suntree) Suntree is in the business of generation of solar energy and the generated power units supplied to TGSPDCL as per terms of power purchase agreement.

The statement containing highlights of performance of the Subsidiary Company, salient features of its financial statements for the financial year ended on March 31, 2024 and its contribution to the overall performance of the Company is attached as Annexure-I in Form No.AOC .1.

The audited accounts of the Subsidiary Company are available and are open for inspection by the registered shareholder of the Company at its Registered Office of the Company. The Company will also make available copies of these documents to the registered shareholder upon receipt of request in writing from them.

Consolidated Financial Results:

The Audited Consolidated Financial Statements of your Company as on March 31, 2024, prepared in accordance with the relevant applicable Ind AS and Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI Listing Regulations”) and provisions of the Companies Act, 2013 (“the Act”), forms part of this Annual Report.

Sustainable Development Goals:

Sustainability development has emerged as a new paradigm in industrial environment for economicprosperity. Any development that occurs should not harm human ecology and surrounded environment. Spinning is a vital operation process that consumes more power and massive investment. Unlike otherindustrial segments, spinning mills are a big concern. Your company believes that sustainability relies onthe increase in profitability with adoption of technology innovation, optimum utilization of capacities,consistency in quality, fast & timely supply of products. Despite all these, the spinning sector can becomemore sustainable in the long run on cost optimization of power and personnel. As a step towards the costreduction of power, the Company has installed Solar Power Plants of 11 MW within the manufacturingunits for Captive consumption of power generation. These installed capacities mitigate 20% of thecompany annual power requirements and reduce the dependence on DISCOM power supplies and alsoreducing the carbon footprint. Upgradation of technology and Innovation techniques can reduce the costof personnel to become more sustainable in the long run. The company also has state-of-the-art SewageTreatment Plants in both the units whereby 95% of the water used in the factories is purified andrecycled.

Capital expenditure:

The Company had spent capital expenditure of Rs 6145.66 lakhs towards installation of vortex project in UKP Plant, with the capital expenditure of Rs 5937.60 crores. At Kalwakurthy unit Installaed Two - Ring Frames of 1824 Spindles with an investment of Rs 170.10 Lakhs for increase the production and Rs 37.96 lakhs on vehicles.

Changes in Share Capital:

There was no change in the share capital of the Company during the financial year under review.

The Authorized Share Capital of the Company as on March 31, 2024 was Rs. 17,00,00,000/- divided into 90,00,000 Equity Shares of Rs. 10/- each and 8,00,000 Preference Shares of Rs.100/- each

The issued share capital of the Company is Rs. 811,70,000/- divided into 42,67,000 equity shares of Rs. 10/- each and 3,85,000 8% Cumulative Redeemable Preference Shares of Rs. 100/- each.

The listed share capital of the Company is Rs. 4,26,70,000/- of 42,67,000 Equity shares of Rs. 10/- each.

Transfer to Reserves:

The Company has decided to transfer Rs.10 Crores to the general reserve for the financial year ended March 31, 2024. Dividends:

Your Directors have recommended the payment of dividend on the Cumulative Redeemable Preference Shares as per the terms and conditions of the Issue for the Financial Year 2023-24. The said dividend, if approved will result in cash outflow of Rs. 30,80,000/-.

Further, your Directors have recommended the payment of 20% dividend on the paid up value of the Equity Shares i.e. Rs. 2/- per share of Rs.10/- each to the Non-promoter equity shareholders of the Company for the year 2023-24. The dividend, if approved, will result in cash outflow of Rs.25,29,380/-.

Investor Education and Protection Fund (IEPF):

Pursuant to provisions of Section 124 and 125 of the Companies Act 2013 read with IEPF Rules 2016, all unpaid or unclaimed dividends up to the financial year 2015-16 was transferred to the Investor Education and Protection Fund established by the Central Government, after notice was sent to all shareholders whose shares were due to be transferred to the IEPF Authority and published requisite advertisement in the newspaper. The shareholders whose dividends and shares have been transferred to the IEPF Authority can claim their dividend and shares from the IEPF Authority.

Deposits:

During the financial year under review the Company has not accepted any deposits as per the Section 73 of the Companies Act 2013 as well as the Companies (Acceptance of Deposits) Rules, 2014.

Annual Return:

Pursuant to Section 134 (3) (a) & Section 92 (3) of the Companies Act, 2013 read with Rules 12 of the Companies (Management & Administration) Rules, 2014, the Annual Return of the company for Financial Year 2023-24 is placed on the company’s website at https: www.suryalata.com.

Number of Meetings of the Board of Directors and Committees:

4 (Four) Board Meetings & Audit Committee Meetings were held during the Financial Year 2023-24 as below:

1. May 29, 2023;

2. August 12, 2023;

3. November 06, 2023;

4. February 07, 2024.

The Meetings of the following Committees were held on the dates as mentioned below:

1. CSR Committee Meeting — May 29, 2023;

2. Nomination and Remuneration Committee — May 29, 2023;

3. Stakeholders Relationship Committee Meeting — February 07, 2024;

For details pertaining to attendance of Directors for the said Meetings, please refer to the Corporate Governance Report, which forms part of this report.

Directors Responsibility Statement:

Pursuant to the requirements under Section 134 of the Companies Act, 2013 with respect to the Directors’ Responsibility Statement, the Board of Directors of the Company hereby confirms:

(a) that in the preparation of the annual accounts for the Financial Year ended March 31, 2024, the applicable accounting standards have been followed;

(b) 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 as at March 31, 2024, and Profit and Loss Statement of the Company for that period;

(c) that the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

(d) that the directors have prepared the annual accounts for the financial year ended March 31, 2024, on a going concern basis;

(e) that the directors have laid down internal controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

(f) that the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Statement on declaration given by Independent Directors under Sub-Section (6) of Section 149 of the Companies Act, 2013:

The Independent Directors have submitted the Declaration of Independence, as required pursuant to Sub-Section (7) Section 149 of the Companies Act, 2013 stating that they meet the criteria of independence as provided in (6) of section 149 of Companies Act, 2013 and Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015.

Related Party Transactions:

All the related party transactions are entered in the ordinary course of business and on arm’s length basis they are in compliance with the applicable provisions of Companies Act 2013 and listing regulations. The disclosures relating to related party transactions as required in Form AOC-2 is enclosed to this report as Annexure-II.

The Company has adopted a related party transactions policy and the said policy as approved by the board is uploaded on the Company’s website www.snryala.ta.com.

Particulars of Loans, Guarantees and Investments:

During the year under review, the Company has continued to maintain corporate loan to its wholly owned subsidiary, Suntree Solar Energy Private Limited. However, the Company has not provided any guarantees.

Particulars of Employees:

The details pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed as Annexure III.

Further during the year under review, the list of top ten employees in terms of remuneration drawn as set out in Rule 5 Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed as Annexure III.

Details of Directors and Key Managerial Personnel’s appointed or resigned during the year:

No Director or Key Managerial Personnel was appointed or resigned during the year in review.

Subsequent to the year under review, the Board appointed two additional Diructors Sri Ramasahayam Raghuram Reddy (DIN: 02431417) Sri Meka Yugandhar (DIN : 00012265) w.e.f. June 29, 2024. Accepted resignation of Khushboo Jain Company Secretary & Compliance officer upto June 30, 2024 and also appointed S. Venkata Rao (M.No. F4809) as Company Secretary & Compliance officer w.e.f July 15, 2024.

In accordance with the provisions of the Companies Act, 2013 and in terms of Articles of Association of the Company, Sri. Mahender Kumar Agarwal - Joint Managing Director of the Company is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

Committees of the Board:

Currently the Board has four Committees:

1. Audit Committee;

2. Nomination and Remuneration Committee;

3. Corporate Social Responsibility Committee &

4. Stakeholders Relationship Committee.

Audit Committee:

The Audit Committee comprises of Sri R Surender Reddy, Chairman, Sri K R Suresh Reddy, Member and Sri Harishchandra Prasad Kanuri, Member. All the recommendations made by the members of Audit Committee were accepted by the Board.

Nomination and Remuneration Committee:

The Nomination and Remuneration Committee comprises of Sri K R Suresh Reddy, Chairman, Sri R Surender Reddy, Member and Sri Harishchandra Prasad Kanuri, Member.

Stakeholders Relationship Committee:

Stakeholders Relationship Committee comprises of Sri K R Suresh Reddy, Chairman, Sri Vithaldas Agarwal, Member and Sri Mahender Kumar Agarwal, Member.

The Scope of the committee shall include considering and resolving the grievances of the security holders of the company which may arise due to any of the reasons cited in the Stakeholders Relationship Committee of the company.

Corporate Social Responsibility Committee:

The Corporate Social Responsibility Committee consists of Sri R Surender Reddy, Chairman, Sri Vithaldas Agarwal, Member and Sri Mahender Kumar Agarwal, Member.

This policy encompasses the Company’s philosophy for giving back to society as a corporate citizen and lays down the guidelines and mechanism for undertaking socially useful programmes for the welfare & sustainable development of the community at large.

Corporate Social Responsibility:

The core theme of the Company’s Corporate Social Responsibility (CSR) policy is giving back to the society from which it draws its resources by extending helping hand to the needy and the underprivileged.

Corporate Social Responsibility is the commitment of business to contribute for sustainable economic development. It is the contribution of the corporate sector for philanthropic causes like education, health, water, sanitation, animal welfare, environment and community development. In alignment with vision the Company, through its CSR initiatives will continue to enhance value creation in the society, through its services, conduct & initiatives, so as to promote sustained growth of the society in fulfillment of its role as a Socially Responsible Corporate with environmental concern.

The CSR Policy of your Company as approved by the Board of Directors, is hosted on your Company’s website

www.suryala.ta.com.

The Report on Corporate Social Responsibility as per Rule 8 of (Corporate Social Responsibility Policy) Rules, 2014 is enclosed as Annexure IV and forms part of this Directors Report

Policy on director’s appointment and remuneration and other details:

The Company follows a policy on remuneration of directors and other senior managerial personnel. The Policy is recommended by the Nomination and Remuneration Committee and approved by the Board. More details of the same is given in the Corporate Governance Report.

Statutory Auditors and Auditors’ Report:

M/s. K.S. Rao & Co., Chartered Accountants (ICAI Firm Registration Number 003109S) were appointed as Statutory Auditors of the Company in the 39^thAnnual General Meeting (AGM) held on September 29, 2022 to hold office for a period of 5 years i.e. up to the conclusion of 44^th Annual General Meeting.

K. S. Rao & Co., Chartered Accountants, the Statutory Auditors of the company has issued an unmodified Auditors Report (standalone and consolidated) for Financial Year ended March 31,2024 and the Auditors have not reported any matter under Section 143(12) of the companies Act 2013 and therefore no details are required to be disclosed under Section 134(3) of the Companies Acts 2013.

The Auditor’s Report to the Shareholders for the financial year under review does not contain any qualification, reservation or adverse remark. The Auditors’ Report is enclosed with the financial statements in this Annual Report.

Secretarial Auditor:

The Board has appointed R&A Associates, Company Secretaries a firm of Practicing Company Secretaries, Hyderabad as the Secretarial Auditors to conduct Secretarial Audit of the Company for the Financial Year ended March 31, 2024 in compliance with the provisions of Section 204 of the Companies Act, 2013.The Secretarial Audit Report issued by R&A Associates, Company Secretaries, in Form MR-3 is enclosed as Annexure V.

Internal Auditor:

The Board of Directors of the Company have appointed M/s. Brahmayya & Co., Chartered Accountants as Internal Auditors to conduct Internal Audit of the Company for the Financial Year ended March 31, 2024.

Cost Auditor:

In terms of the Section 148(1) of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014, the Company is required to maintain cost records pertaining to textile probucts division.

M/s. Aruna Prasad & Co., Cost Auditors were appointed as Cost Auditor for conducting the cost audit of the Company for the financial year 2023-24 and paid remuneration of Rs. 45,000/-. Approved The Board of Directors have appointed M/s. Aruna Prasad & Co., Cost Auditors, Chennai for conducting the cost audit of the Company for the financial year 202425, in compliance to the provisions of Section 148 of the Companies Act, 2013 read with Companies (Cost Records and Audit Rules,) 2014, on the recommendations made by the Audit Committee and has recommended the remuneration for the approval of Members at the ensuing Annual General Meeting.

Corporate Governance Report:

The report on Corporate Governance as per Regulation 34(3) read with Schedule V of the SEBI (LODR) Regulations is included as a part of this Annual Report. The requisite certificate from R&A Associates, Company Secretaries conforming the compliance with the conditions of Corporate Governance is attached to the report on Corporate Governance.

Management Discussion and Analysis:

In terms of provisions of Regulation 34(2) of SEBI Listing Regulations report on Management Discussion & Analysis for the year under review is provided in a separate section forming part of this Annual Report.

Vigil Mechanism/Whistle Blower Policy:

The Board of Directors of the Company has adopted Whistle Blower Policy. This policy is formulated to provide an opportunity to employees and an avenue to raise concerns and to access in good faith the Audit Committee, to the highest possible standards of ethical, moral and legal business conduct and its commitment to open communication, in case they observe unethical and improper practices or any other wrongful conduct in the Company, to provide necessary safeguards for protection of employees from reprisals or victimization and to prohibit managerial personnel from taking any adverse personnel action against those employees.

The Policy on vigil mechanism/whistle blower policy may be accessed on the Company’s website www.snrya.la.ta.com. Details of adequacy of internal financial controls:

The company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weaknesses in the design or operation were observed.

The details of significant material orders passed by the regulators or courts or tribunals impacting the going concern status and Company’s operations in future:

No significant or material orders were passed by the regulators or courts or tribunals impacting the going concern status and company’s operations in future during the year under review.

Material changes and Commitments, if any, affecting the financial position of the Company occurred after the closure of financial year till the time of adoption of this report:

No other material changes and commitments have occurred after the close of the year till the date of this Report, which affect the financial position of the Company. Further there is no change in the nature of business of the Company.

Conservation of energy, technology absorption, foreign exchange earnings and outgo:

The information with respect to Conservation of energy, technology absorption, foreign exchange earnings and outgo pursuant to Section 134(3)(m) of the Act read with Rule 8 of Companies (Accounts) Rules, 2014, are provided in the Annexure VI to this Report.

Risk Management Policy:

The Company has policy for identifying risk and established controls to effectively manage the risk. Further the company has laid down various steps to mitigate the identified risk. The audit committee has additional oversight in the area of financial risks and controls. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis.

Declaration with the compliance with the code of conduct by Members of the Board and Senior Management personnel:

The Company has complied with the requirements about code of conduct for Board members and Sr. Management Personnel. The said policy is available on the website of the Company www.snrya.la.ta.com.

Mechanism for 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 schedule IV of the Companies Act, 2013 and the corporate governance requirements as prescribed by Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations 2015.

The Directors evaluation was broadly based on the parameters such as understanding of the Company’s vision, objective, skills, knowledge and experience, participation and attendance in Board/ Committee meetings; governance and contribution to strategy; interpersonal skills etc.

The Board has carried out the annual performance evaluation of its own performance, the Directors individually as well as evaluation of the working of its Board Committees. A structured questionnaire was prepared covering various aspects of the Board’s functioning such as adequacy of the composition of the Board and its Committees, Board Culture, execution and performance of specific duties, obligations and governance.

A meeting of the Independent Directors was also held which reviewed performance of non-independent directors, performance of the board as a whole and performance of the chairman after taking into account the views of executive directors and nonexecutive 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. Performance evaluation of independent directors was done by the entire board, excluding the independent director being evaluated.

Policy on Sexual Harassment:

The Company has adopted policy on Prevention of Sexual Harassment of Women at Workplace in accordance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Company regularly conducts awareness programmes for its employees.

Disclosure pertaining to sexual harassment of women at workplace:

During the Financial year ended March 31, 2024 the Company has neither received any complaints nor there are any pending complaints pertaining to sexual harassment and the Company has constituted an Internal Complaints Committee.

Compliance with Secretarial Standards:

The Company has complied with applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

Prevention of Insider Trading Code

The Company has a policy i.e., code of conduct prohibiting insider trading in conformity with SEBI (Prohibition of Insider Trading) Regulations, 2015. The said policy contains necessary procedures applicable to Directors, officers and designated persons for trading in the securities of the Company.

The trading window closures are intimated in advance to all the concerned during which period, the Board of Directors and designated persons are not permitted to trade in the securities of the company.

Acknowledgments:

Your Directors thank the government authorities, financial institutions, banks, customers, suppliers, members, employees and other business associates of your Company, who through their continued support and co-operation, have helped as partners in your Company’s progress and achievement of its objectives.

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Mar 31, 2023

The Board of Directors are pleased to present the 40^th Annual Report of the Company together with the Standalone and Consolidated Audited Financial Statements of Accounts for the financial year ended 31^st March 2023.

FINANCIAL RESULTS:

The Company has prepared Standalone and Consolidated Financial Results in accordance with the Companies (Indian Accounting Standards) Rules, 2015 (Ind AS) prescribed under Section 133 of the Companies Act, 2013.

The Financial performance of the Company for the Financial year ended 31^st March 2023 is summarized below:

(Rs. in Lakhs)

Particulars	Standalone Results		Consolidated Results
	2022-23	2021-22	2022-23
Revenue from Operations	47,926	48,034	48,400
Other Income	384	169	331
Profit before Interest Depreciation and Tax	6,063	8,079	6,449
Interest	527	878	545
Depreciation	1,207	1,143	1,238
Profit Before Tax	4,329	6,058	4,666
Less: Provision for tax	1,010	1,536	1,074
Deferred Tax Liability	216	(253)	216
Profit After Tax	3,103	4,775	3376
Add: Profit brought forward from last year	3,195	1,445	3,195
Amount available for appropriation	6,298	6,220	6,571
Appropriations:
Transfer to
(a) General Reserve	3,000	3,000	3,000
(b) Dividend on Equity Shares	38	25	38
Balance Carried forward to Balance Sheet	3,260	3,195	3,533

Details of Standalone Operations:

The Audited Standalone and Consolidated Financial Statements of your Company as on 31st March, 2023, prepared in accordance with the relevant applicable Ind AS and Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI Listing Regulations”) and provisions of the Companies Act, 2013 (“the Act”), forms part of this Annual Report.

Highlights of the Company’s Affairs:

The Company’s performance in the financial year under review has slightly been impacted adversely as compared to the previous year. The major highlights of the Company’s performance for the financial year 2022-23 are as under:

? Revenue from operations is Rs. 479.26 crores as compared to Rs. 480.34 crores in the previous year.

? Exports decreased by 42.23% to Rs. 49.07 Crores as compared to Rs 84.94 crores in the previous year. FOB value exports is US$ 59,15,152 as against US$ 1,08,07,295 in the previous year.

? Production quantities increased to 27497 MTs as against 26427 MTs in the previous year.

? Annual Average yarn realization was increased by Rs. 1.78 i.e to Rs.174.09 per kg. as against Rs.172.31 per kg in the previous year.

? Annual Average input (raw material) cost increased by Rs.5.95 (i.e) to Rs.109.01 per kg. as against Rs.103.06 per kg in the previous year.

? Contributions from operations decreased by Rs. 4.16 per kg. (i.e) Rs. 65.09 as against Rs.69.25 per kg in the previous year.

? Operational cost increased by Rs.0.44 per kg. (i.e) Rs. 48.86 as against Rs. 48.42 per kg in the previous year

? Profit before Tax for the is Rs. 43.29 Crores as compared to Rs. 60.58 Crores in the previous year.

? Profit after Tax is Rs. 31.03 Crores as against Rs. 47.75 Crores in the previous year.

? The Company has acquired 100% equity shareholding in Suntree Solar Energy Private Limited (“Suntree”) which owns a 10MW Solar Plant on 23 ^rd January 2023 making Suntree its wholly owned subsidiary.

Subsidiary Company:

The Company has one wholly owned subsidiary Suntree Solar Energy Private Limited (Suntree) which was acquired during the financial year. Suntree is in the business of generation of solar energy.

The statement containing highlights of performance of the Subsidiary Company, salient features of its financial statements for the financial year ended on March 31, 2023 and its contribution to the overall performance of the Company is attached as Annexure-I.

The audited accounts of the Subsidiary Company is available on the official website of the Company at www.snrya.la.ta.com. The annual accounts of the Company and of the Subsidiary Company are open for inspection by the registered shareholder of the Company at the Registered Office of the Company. The Company will also make available copies of these documents to the registered shareholder upon receipt of request in writing from them.

Consolidated Financial Results:

The Audited Consolidated Financial Statements of your Company as on 31st March. 2023. prepared in accordance with the relevant applicable Ind AS and Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations. 2015 (“SEBI Listing Regulations”) and provisions of the Companies Act. 2013 (“the Act”). forms part of this Annual Report.

Sustainable Development Goals:

Your Company is conscious of its responsibilities towards the protection of the environment and sustainability. As a step towards obtaining the sustainable development goals. the Company has installed Solar Power Plants of 11 MW within the manufacturing units for Captive consumption of power generation. These installed capacities mitigate 20% of the company annual power requirements and reduce the dependence on DISCOM power supplies. The average cost of power from operating these plants will be about Rs.2.20 per unit. By installing the solar power plants. the company is reducing the carbon footprint and also the cost of power consumption and the management has approved setting up of further capacities of solar power plants within the manufacturing units and bring in further cost efficiencies.

The company also has state-of-the-art Sewage Treatment Plants in both the units whereby 95% of the water used in the factories is purified and recycled.

The company also acquired Suntree Solar Energy Pvt Ltd as its 100% subsidiary. which is having 10 MW AC capacity Solar Power Plant with Power Purchase Agreement for 20 years (remaining period of 12 years) with Telangana Government.

Capital expenditure:

The Company had spent Rs. 356.89 lakhs towards installation of 1 MW Solar plant within the plant premises for captive consumption. Rs. 224.61 lakhs has been spent for purchase and installation of balance equipment required to increase the production and Rs.43.81 lakhs for purchase of vehicles.

Changes in Share Capital:

There was no change in the share capital of the Company during the financial year under review.

The Authorized Share Capital of the Company as on 31st March 2023 was Rs. 17,00,00,000/- divided into 90,00,000 Equity Shares of Rs. 10/- each and 8,00,000 Preference Shares of Rs.100/- each

The issued share capital of the Company is Rs. 811,70,000/- divided into 42,67,000 equity shares of Rs. 10/- each and 3,85,000 8% Cumulative Redeemable Preference Shares of Rs. 100/- each.

The listed share capital of the Company is Rs. 4,26,70,000/- of 42,67,000 Equity shares of Rs. 10/- each.

Transfer to Reserves:

The Company has decided to transfer Rs.30.00 Crores to the general reserve for the financial year ended 31^st March 2023. Dividends:

Your Directors have recommended the payment of dividend on the Cumulative Redeemable Preference Shares as per the terms and conditions of the Issue for the Financial Year 2022-23. The said dividend, if approved will result in cash outflow of Rs. 30,80,000/-.

Further, your Directors have recommended the payment of 30% dividend on the paid up value of the Equity Shares i.e. Rs. 3 per share of Rs.10/- each to the Non-promoter equity shareholders of the Company for the year 2022-23. The dividend, if approved, will result in cash outflow of Rs.37,94,070/-.

Investor Education and Protection Fund (IEPF):

Pursuant to provisions of Section 124 and 125 of the Companies Act 2013 read with IEPF Rules 2016, all unpaid or unclaimed dividends up to the financial year 2014-15 was transferred to the Investor Education and Protection Fund established by the Central Government, after notice was sent to all shareholders whose shares were due to be transferred to the IEPF Authority and published requisite advertisement in the newspaper. The shareholders whose dividends and shares have been transferred to the IEPF Authority can claim their dividend and shares from the IEPF Authority. All unpaid or unclaimed dividends up to the financial year 2015-16 will be transferred to the Investor Education and Protection Fund as per the due dates falling this year.

Deposits:

During the financial year under review the Company has not accepted any deposits as per the Section 73 of the Companies Act 2013 as well as the Companies (Acceptance of Deposits) Rules, 2014.

Annual Return:

Pursuant to Section 134 (3) (a) & Section 92 (3) of the Companies Act, 2013 read with Rules 12 of the Companies (Management & Administration) Rules, 2014, the Annual Return of the company for Financial Year 2022-23 is placed on the company’s website at https: www.suryalata.com.

Number of Meetings of the Board of Directors and Committees:

5 (Five) Board Meetings & Audit Committee Meetings were held during the Financial Year 2022-23 as below:

1. 23^rd May, 2022;

2. 5^th August, 2022;

3. 9^th November, 2022;

4. 6^th January, 2023;

5. 9^th February, 2023.

The Meetings of the following Committees were held on the dates as mentioned below:

1. CSR Committee Meeting — 23^rd May, 2022;

2. Nomination and Remuneration Committee — 23^rd May, 2022;

3. Stakeholders Relationship Committee Meeting —9^th February, 2023;

For details pertaining to attendance of Directors for the said Meetings, please refer to the Corporate Governance Report, which forms part of this report.

Directors Responsibility Statement:

Pursuant to the requirements under Section 134 of the Companies Act, 2013 with respect to the Directors’ Responsibility Statement, the Board of Directors of the Company hereby confirms:

(a) that in the preparation of the annual accounts for the Financial Year ended 31^st March 2023, the applicable accounting standards have been followed;

(b) 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 as at 31^st March 2023, and Profit and Loss Statement of the Company for that period;

(c) that the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

(d) that the directors have prepared the annual accounts for the financial year ended 31^st March, 2023, on a going concern basis;

(e) that the directors have laid down internal controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

(f) that the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Statement on declaration given by Independent Directors under Sub-Section (6) of Section 149 of the Companies Act, 2013:

The Independent Directors have submitted the Declaration of Independence, as required pursuant to Sub-Section (7) Section 149 of the Companies Act, 2013 stating that they meet the criteria of independence as provided in (6) of section 149 of Companies Act, 2013 and Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015.

Related Party Transactions:

All the related party transactions are entered in the ordinary course of business and on arm’s length basis they are in compliance with the applicable provisions of Companies Act 2013 and listing regulations. The disclosures relating to related party transactions as required in Form AOC-2 is enclosed to this report as Annexure-II.

The Company has adopted a related party transactions policy and the said policy as approved by the board is uploaded on the Company’s website www.snryala.ta.com.

Particulars of Loans, Guarantees and Investments:

During the year under review, the Company has granted a loan of Rs. 45,02,20,000 to its wholly owned subsidiary, Suntree Solar Energy Private Limited.

The Company has made an investment to the tune of Rs. 97,80,000/- by way of purchase of 100 % equity shares of Suntree as a result Suntree is now a Wholly Owned Subsidiary of the Company.

However, the Company has not provided any guarantees.

Particulars of Employees:

The details pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed as Annexure HH.

Further during the year under review, the list of top ten employees in terms of remuneration drawn as set out in Rule 5 Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed as Annexure HH.

Details of Directors and Key Managerial Personnel’s appointed or resigned during the year:

No Director or Key Managerial Personnel was appointed or resigned during the year in review.

In accordance with the provisions of the Companies Act, 2013 and in terms of Articles of Association of the Company, Smt. Madhavi Agarwal, Whole time Director of the Company is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offers herself for re-appointment.

Committees of the Board:Currently the Board has four Committees:

1. Audit Committee;

2. Nomination and Remuneration Committee;

3. Corporate Social Responsibility Committee &

4. Stakeholders Relationship Committee.

Audit Committee:

The Audit Committee comprises of Sri R Surender Reddy, Chairman, Sri K R Suresh Reddy, Member and Sri Harishchandra Prasad Kanuri, Member. All the recommendations made by the members of Audit Committee were accepted by the Board.

Nomination and Remuneration Committee:

The Nomination and Remuneration Committee comprises of Sri K R Suresh Reddy, Chairman, Sri R Surender Reddy, Member and Sri Harishchandra Prasad Kanuri, Member.

Stakeholders Relationship Committee:

Stakeholders Relationship Committee comprises of Sri K R Suresh Reddy, Chairman, Sri Vithaldas Agarwal, Member and Sri Mahender Kumar Agarwal, Member.

The Scope of the committee shall include considering and resolving the grievances of the security holders of the company which may arise due to any of the reasons cited in the Stakeholders Relationship Committee of the company.

Corporate Social Responsibility Committee:

The Corporate Social Responsibility Committee consists of Sri R Surender Reddy, Chairman, Sri Vithaldas Agarwal, Member and Sri Mahender Kumar Agarwal, Member.

This policy encompasses the Company’s philosophy for giving back to society as a corporate citizen and lays down the guidelines and mechanism for undertaking socially useful programmes for the welfare & sustainable development of the community at large.

Corporate Social Responsibility:

The core theme of the Company’s Corporate Social Responsibility (CSR) policy is giving back to the society from which it draws its resources by extending helping hand to the needy and the underprivileged.

Corporate Social Responsibility is the commitment of business to contribute for sustainable economic development. It is the contribution of the corporate sector for philanthropic causes like education, health, water, sanitation, animal welfare, environment and community development. In alignment with vision the Company, through its CSR initiatives will continue to enhance value creation in the society, through its services, conduct & initiatives, so as to promote sustained growth of the society in fulfillment of its role as a Socially Responsible Corporate with environmental concern.

The CSR Policy of your Company as approved by the Board of Directors, is hosted on your Company’s website www.suryalata.com.

The Report on Corporate Social Responsibility as per Rule 8 of (Corporate Social Responsibility Policy) Rules, 2014 is enclosed as Annexure IVand forms part of this Directors Report.

Policy on director’s appointment and remuneration and other details:

The Company follows a policy on remuneration of directors and other senior managerial personnel. The Policy is recommended by the Nomination and Remuneration Committee and approved by the Board. More details of the same is given in the Corporate Governance Report.

Statutory Auditors and Auditors’ Report:

M/s. K.S. Rao & Co., Chartered Accountants (ICAI Firm Registration Number 003109S) were appointed as Statutory Auditors of the Company in the 39^thAnnual General Meeting (AGM) held on 29^th September 2022 to hold office for a period of five years i.e. up to the conclusion of 44^th Annual General Meeting.

K. S. Rao & Co., Chartered Accountants, the Statutory Auditors of the company has issued an unmodified Auditors Report (standalone and consolidated) for Financial Year ended 31^st March 2023 and the Auditors have not reported any matter under Section 143(12) of the companies Act 2013 and therefore no details are required to be disclosed under Section 134(3) of the Companies Acts 2013.

The Auditor’s Report to the Shareholders for the financial year under review does not contain any qualification, reservation or adverse remark. The Auditors’ Report is enclosed with the financial statements in this Annual Report.

Secretarial Auditor:

The Board has appointed R&A Associates, Company Secretaries a firm of Practicing Company Secretaries, Hyderabad as the Secretarial Auditors to conduct Secretarial Audit of the Company for the Financial Year ended 31^st March 2023 in compliance with the provisions of Section 204 of the Companies Act, 2013.The Secretarial Audit Report issued by R & A Associates, Company Secretaries, in Form MR-3 is enclosed as Annexure V.

Internal Auditor:

The Board of Directors of the Company have appointed M/s. Brahmayya & Co., Chartered Accountants as Internal Auditors to conduct Internal Audit of the Company for the Financial Year ended 31^st March 2023.

Cost Auditor:

M/s. Aruna Prasad & Co., Cost Auditors were appointed as Cost Auditor for conducting the cost audit of the Company for the financial year 2022-23 and paid remuneration of Rs. 40,000/-. The Board of Directors have appointed M/s. Aruna Prasad & Co., Cost Auditors, Chennai for conducting the cost audit of the Company for the financial year 2023-24, in compliance to the provisions of Section 148 of the Companies Act, 2013 read with Companies (Cost Records and Audit Rules,) 2014, on the recommendations made by the Audit Committee and has recommended the remuneration for the approval of Members at the ensuing Annual General Meeting.

Corporate Governance Report:

The report on Corporate Governance as per Regulation 34(3) read with Schedule V of the SEBI (LODR) Regulations is included as a part of this Annual Report. The requisite certificate from R&A Associates, Company Secretaries conforming the compliance with the conditions of Corporate Governance is attached to the report on Corporate Governance.

Management Discussion and Analysis:

In terms of provisions of Regulation 34(2) of SEBI Listing Regulations report on Management Discussion & Analysis for the year under review is provided in a separate section forming part of this Annual Report.

Vigil Mechanism/Whistle Blower Policy:

The Board of Directors of the Company has adopted Whistle Blower Policy. This policy is formulated to provide an opportunity to employees and an avenue to raise concerns and to access in good faith the Audit Committee, to the highest possible standards of ethical, moral and legal business conduct and its commitment to open communication, in case they observe unethical and improper practices or any other wrongful conduct in the Company, to provide necessary safeguards for protection of employees from reprisals or victimization and to prohibit managerial personnel from taking any adverse personnel action against those employees.

The Policy on vigil mechanism/whistle blower policy may be accessed on the Company’s website www.snrya.la.ta.com. Details of adequacy of internal financial controls:

The company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weaknesses in the design or operation were observed.

The details of significant material orders passed by the regulators or courts or tribunals impacting the going concern status and Company’s operations in future:

No significant or material orders were passed by the regulators or courts or tribunals impacting the going concern status and company’s operations in future during the year under review.

Material changes and Commitments, if any, affecting the financial position of the Company occurred after the closure of financial year till the time of adoption of this report:

No other material changes and commitments have occurred after the close of the year till the date of this Report, which affect the financial position of the Company. Further there is no change in the nature of business of the Company.

Conservation of energy, technology absorption, foreign exchange earnings and outgo:

The information with respect to Conservation of energy, technology absorption, foreign exchange earnings and outgo pursuant to Section 134(3)(m) of the Act read with Rule 8 of Companies (Accounts) Rules, 2014, are provided in the Annexure Vito this Report.

Risk Management Policy:

The Company has policy for identifying risk and established controls to effectively manage the risk. Further the company has laid down various steps to mitigate the identified risk. The audit committee has additional oversight in the area of financial risks and controls. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis.

Declaration with the compliance with the code of conduct by Members of the Board and Senior Management personnel:

The Company has complied with the requirements about code of conduct for Board members and Senior Management Personnel.

The said policy is available on the website of the Company www.suryalata.com.

Mechanism for 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 Schedule IV of the Companies Act, 2013 and the corporate governance requirements as prescribed by Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations 2015.

The Directors evaluation was broadly based on the parameters such as understanding of the Company’s vision, objective, skills, knowledge and experience, participation and attendance in Board/ Committee meetings; governance and contribution to strategy; interpersonal skills etc.

The Board has carried out the annual performance evaluation of its own performance, the Directors individually as well as evaluation of the working of its Board Committees. A structured questionnaire was prepared covering various aspects of the Board’s functioning such as adequacy of the composition of the Board and its Committees, Board Culture, execution and performance of specific duties, obligations and governance.

A meeting of the Independent Directors was also held which reviewed performance of non-independent directors, performance of the board as a whole and performance of the chairman after taking into account the views of executive directors and nonexecutive 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. Performance evaluation of Independent Directors was done by the entire Board, excluding the independent director being evaluated.

Policy on Sexual Harassment:

The Company has adopted policy on Prevention of Sexual Harassment of Women at Workplace in accordance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.The Company regularly conducts awareness programmes for its employees.

Disclosure pertaining to sexual harassment of women at workplace:

During the Financial year ended 31^st March, 2023 the Company has neither received any complaints nor there are any pending complaints pertaining to sexual harassment and the Company has constituted an Internal Complaints Committee.

Compliance with Secretarial Standards:

The Company has complied with applicable Secretarial Standards issued by the Institute of Company Secretaries of India. Prevention of insider Trading Code

The Company has a policy i.e., code of conduct prohibiting insider trading in conformity with SEBI (Prohibition of Insider Trading) Regulations, 2015. The said policy contains necessary procedures applicable to Directors, officers and designated persons for trading in the securities of the Company.

The trading window closures are intimated in advance to all the concerned during which period, the Board of Directors and designated persons are not permitted to trade in the securities of the company.

Acknowledgments:

Your Directors thank the government authorities, financial institutions, banks, customers, suppliers, members, employees and other business associates of your Company, who through their continued support and co-operation, have helped as partners in your Company’s progress and achievement of its objectives.

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Mar 31, 2018

The Directors have pleasure in presenting the 35^th Annual Report together with the Company’s Audited Financial Statements for the financial year ended 31^st March, 2018.

Financial Results

The Company has prepared financial results in accordance with the Companies (Indian Accounting Standards) Rules, 2015 (Ind AS) prescribed under Section 133 of the Companies Act, 2013.

The financial performance of the Company during the year ended 31^st March, 2018 has been summarized below:

(Rs. in Lakhs)

Particulars	Current Year 2017 - 18	Previous Year 2016 - 17
Total Income	33,412	35,122
Profit before Interest, Depreciation and Tax	2,715	2,971
Interest	710	792
Depreciation	765	809
Profit Before Tax	1,240	1,370
Less : Provision for tax	400	425
Deferred Tax Liability	51	62
Profit After Tax	789	883
Add : Profit brought forward from last year	922	1,051
Add : Adjustment due to adoption of Ind AS	2	18
Amount available for appropriation	1,713	1,952
Appropriations:
Transfer to
(a) General Reserve	800	1,000
(b) Dividend on Equity Shares	19	25
(c) Dividend distribution tax	4	5
Balance Carried forward to Balance Sheet	890	922

Details of Operations

The year and review was marked by various structural reforms, the turbulence of sudden note ban coupled with induction of GST with effect from 1^st July, 2017. Also continued Global weakness, fluctuations in currency exchange and stress on realizations are notable factors having effect on the operations. Despite all above, with foresighted de-risking strategies and by maintaining the sale volumes, the Company delivered a solid performance in the FY 2017-18. Operations were broadly effected with the following:

Average input (raw material) cost maintained at Rs. 90.49 (exclusive of GST) as against Rs. 93.31 (inclusive of Excise Duty and Sales Tax) in the previous year. Raw materials -fiber taxable @ 18% and finished product yarn is taxable @ 12% under GST Act, results to inverse duty structure.

Average yarn realization maintained at Rs. 139.70 as against Rs. 139.30 in the previous year.

Contributions for operations increased to Rs. 47.20 per kg. from Rs. 44.69 in the previous year. Operational cost increased to Rs. 41.23 as against Rs. 39.84 in the previous year.

Highlights of the Company’s Affairs

The highlights of the Company’s performance are as under:

- Income from operations for the FY 2017-18 is Rs. 33,412 Lakhs as compared to Rs. 35,122 Lakhs in the previous year.

- Exports are Rs. 3,984 Lakhs compared to Rs. 4,025 Lakhs in the previous year.

- Production quantities is 23,401 MTs as against 24,889 MTs in the previous year as the plant produced finer counts.

- Profit Before Tax for the FY 2017-18 is Rs. 1,240 Lakhs as compared to Rs. 1,370 Lakhs in the previous year.

- Profit after Tax is Rs. 789 Lakhs as against Rs. 883 Lakhs in the previous year.

Capital expenditure

During the year under review, your company has incurred Rs. 459.96 Lakhs towards the capital expenditure. The Company also spent Rs. 715.15 Lakhs towards modernization cum expansion project undertaken at Kalwakurthy unit.

Transfer to Reserves

The Company has proposed to transfer Rs. 800 Lakhs to the general reserve for the financial year ended 31^st March, 2018.

Dividends

Your Directors have recommended the payment of Dividend on the Cumulative Redeemable Preference Shares as per the terms and conditions ofthe Issue for the Financial Year 2017-18. The said Dividend will absorb a sum of Rs. 41,30,000/-. The corporate dividend tax will be Rs. 8,40,771/-.

Also your Directors have recommended the payment of Dividend on Equity Shares at 15% (i.e.) Rs. 1.50 per share of Rs. 10/- each to Non-promoter equity shareholders of the Company for theyear 2017-18. The dividendwill absorb a sum of Rs. 18,97,035/- and the dividend tax will be Rs. 3,86,192/-.

Deposits

During the year under review the Company has not accepted any deposits in pursuance of Chapter V Companies (Acceptance of Deposits) Rules, 2014.

Disclosures under the Companies Act, 2013.

Extract of Annual Return

The Extract of Annual Return prepared in Form MGT-9 as per the provisions of Section 92 of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is enclosed to the Report as Annexure I

Number of Meetings of the Board of Directors

Four (4) Board Meetings & Audit Committee Meetings were held during the Financial Year 2017-18 on the below mentioned:

1. 19^th May, 2017

2. 4^th September, 2017

3. 9^th December, 2017

4. 10^th February, 2018

The Meetings of the following Committee’s held on the respective dates as mentioned below:

1. Nomination and Remuneration Committee (NRC) Meeting — 4^th September, 2017.

2. Corporate Social Responsibility (CSR) Committee Meeting — 19^th May, 2017.

3. Stakeholders Relationship Committee (SRC) Meeting - 10^th February, 2018.

For details pertaining to attendance of Directors for the said Meetings, please refer to the Corporate Governance Report, which forms part of this report.

Changes in Share Capital

There was no change in the share capital of the Company during the financial year under review.

Directors Responsibility Statement

Pursuant to the requirements under Section 134 of the Companies Act, 2013 with respect to the Directors’ Responsibility Statement, the Board of Directors of the Company hereby confirms:

(a) that in the preparation of the annual accounts for the Financial Year ended 31^st March, 2018, the applicable accounting standards have been followed;

(b) 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 as at 31^st March, 2018, and Statement of Profit and Loss of the Company for that period;

(c) that the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) that the directors have prepared the annual accounts for the Financial year ended 31^st March, 2018, on a going concern basis;

(e) that the directors have laid down internal controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

(f) that the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively;

Statement on Declaration given by Independent Directors under Sub-Section (6) of Section 149 of the Companies Act, 2013.

The Independent Directors have submitted the Declaration of Independence, as required pursuant to Section 149 (7) of the Companies Act, 2013 stating that they meet the criteria of independence as provided in Sub-Section (6) of section 149 of Companies Act, 2013.

Related Party Transactions

All the related party transactions are entered on arm’s length basis and are in compliance with the applicable provisions and listing regulations.

There are no materially significant related party transactions made by the Company with Promoters, Directors or Key Managerial Personnel etc., which may have potential conflict with the interest of the Company at large. Thus, disclosure pertaining to Related Party transactions in Form AOC-2 is not required.

The disclosure with respect to transactions with Related Parties in compliance with the applicable Accounting Standards is disclosed in notes forming part of financial statements annexed to this Report.

The Company has adopted a related party transactions policy and the policy as approved by the board is uploaded on the Company’s website www.suryalata.com

Particulars of Loans, Guarantees and Investments :

During the year under review, the Company has not granted any loans, neither provided guarantees nor made any investments covered in the register maintained under Section 186 of the Companies Act, 2013.

Particulars of Employees

The details pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed as Annexure — II

Further during the year under review, the list of top ten employees in terms of remuneration drawn as set out in Rule 5(2) Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed as Annexure - ///.

Details of Directors and Key Managerial Personnel’s appointed or resigned during the year:

There was no change in Directors of the Company during the Financial year under review.

In accordance with the provisions of the Companies Act, 2013 and in terms of Articles of Association of the Company, Sri Mahender Kumar Agarwal, Joint Managing Director of the Company is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

Committees of the Board:

Currently the Board has four Committees:

1. The Audit Committee

2. The Nomination and Remuneration Committee

3. The Corporate Social Responsibility Committee

4. The Stakeholders Relationship Committee

Audit Committee

The Audit Committee consists of Sri R Surender Reddy, Chairman, Sri R S Agarwal, Member and Sri K R Suresh Reddy, Member. All the recommendations made by the Audit Committee were accepted by the Board.

Nomination and Remuneration Committee.

The Nomination and Remuneration Committee consists of Sri K R Suresh Reddy, Chairman, Sri K. Lakshmikanth Reddy, Member and Sri R S Agarwal, Member.

Policy on Key Managerial Personnel’s appointment remuneration and other details:

The Company follows a policy on remuneration of directors and other senior managerial personnel’s. The Policy is recommended by the Nomination and Remuneration Committee and approved by the Board. More details of the same is given in the Corporate Governance Report.

Corporate Social Responsibility Committee.

The Corporate Social Responsibility consists of Sri R Surender Reddy, Chairman, Sri Vithaldas Agarwal, Member and Sri Mahender Kumar Agarwal, Member.

This policy encompasses the Company’s philosophy for giving back to society as a corporate citizen and lays down the guidelines and mechanism for undertaking socially useful programs for the welfare & sustainable development of the community at large, is titled as the Suryalata Spinning Mills Limited Corporate Social Responsibility Policy.

The core theme of the Company’s CSR policy is giving back to the society from which it draws its resources by extending helping hand to the needy and the under privileged.

Corporate Social Responsibility is the commitment of business to contribute for sustainable economic development. It is the contribution of the corporate sector for philanthropic causes like education, health, water, sanitation, animal welfare, environment and community development. In alignment with vision of the company, through its CSR initiatives, will continue to enhance value creation in the society, through its services, conduct & initiatives, so as to promote sustained growth of the society, in fulfillment of its role as a Socially Responsible Corporate, with environmental concern.

The Report on Corporate Social Responsibility as per Rule 8 of (Corporate Social Responsibility Policy) Rules, 2014 is enclosed as Annexure IV.

Stakeholders Relationship Committee.

Stakeholders Relationship Committee consists of Sri K R Suresh Reddy, Chairman, Sri Vithaldas Agarwal, Member and Sri Mahender Kumar Agarwal, Member.

The Scope of the committee shall include considering and resolving the grievances of the security holders of the company which may arise due to any of the reasons cited in the Stakeholders Relationship Committee of the company.

Auditor :

Statutory Auditors :

At the Annual General Meeting (AGM) held on September 4, 2017, M/s. K.S.Rao & Co., Chartered Accountants (ICAI Firm Registration Number 003109S), were appointed as Statutory Auditors of the Company to hold office for a period of five years and there appointment will be subject to the ratification of members at every Annual General Meeting. However, pursuant to the Companies (Amendment) Act, 2018, the ratification of the auditors at every annual general meeting of the company has been dispensed with.

Auditor’s Report

The Auditor’s Report to the Shareholders for the year under review does not contain any qualification or adverse remark.

Secretarial Auditor

The Board has appointed M/s. VCAN & Associates, a firm of practicing Company Secretaries, Hyderabad as the Secretarial Auditors to conduct Secretarial Audit of the Company for the Financial Year ended 31^st March, 2018 in compliance with the provisions of Section 204 of the Companies Act, 2013.

The Report of the Secretarial Auditor in Form MR-3 is enclosed as Annexure V to the Report.

Cost Auditor :

The Board of Directors have appointed M/s. Aruna Prasad & Co., Cost Auditors, Chennai for conducting the cost audit of the Company for the financial year 2017-18, in compliance to the provisions of Section 148 of the Companies Act, 2013 read with Companies (Cost Records and Audit Rules,) 2014, on the recommendations made by the Audit Committee and has recommended her remuneration for the ratification of Members at the ensuing Annual General Meeting.

Vigil Mechanism/Whistle Blower Policy:

The Board of Directors of the Company have adopted Whistle Blower Policy. This policy is formulated to provide an opportunity to employees and an avenue to raise concerns and to access in good faith the Audit Committee, to the highest possible standards of ethical, moral and legal business conduct and its commitment to open communication, in case they observe unethical and improper practices or any other wrongful conduct in the Company, to provide necessary safeguards for protection of employees from reprisals or victimization and to prohibit managerial personnel from taking any adverse personnel action against those employees.

The Policy on vigil mechanism/whistle blower policy may be accessed on the Company’s website www.suryala.ta.com

Details of adequacy of internal financial controls.

The company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operation were observed.

Corporate Governance.

A detailed Report on Corporate Governance, Management Discussion and Analysis Report and the Certificate from the Auditors of your Company regarding compliance of conditions of Corporate Governance as stipulated under Schedule V of SEBI (LODR) Regulations 2015 forms part of this Report.

Change in the Nature of Business.

There has been no change in the nature of business of the Company during the financial year under review.

The details of significant material orders passed by the regulators or courts or tribunals impacting the going concern status and Company’s operations in future.

No significant or material orders were passed by the regulators or courts or tribunals impacting the going concern status and company’s operations in future during the year under review

Material changes and Commitments, if any, affecting the financial position of the Company.

There were no material changes and commitments in the business operations of the Company from the Financial Year ended 31^st March, 2018 to the date of signing of the Board’s Report.

Conservation of energy, technology absorption, foreign exchange earnings and outgo.

The information with respect to Conservation of energy, technology absorption, foreign exchange earnings and outgo pursuant to Section 134(3)(m) of the Act read with Rule 8 of Companies (Accounts) Rules, 2014, are provided in the Annexure VI to this Report.

Risk Management Policy.

The Company has policy for identifying risk and established controls to effectively manage the risk. Further the company has laid down various steps to mitigate the identified risk. The audit committee has additional oversight in the area of financial risks and controls. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis.

Declaration with the compliance with the code of conduct by Members of the Board and Senior Management personnel .

The Company has complied with the requirements about code of conduct for Board members and Senior Management Personnel.

The said policy is available on the website of the Company www.suryalata.com

Mechanism for 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 schedule IV of the Companies Act, 2013 and the corporate governance requirements as prescribed by Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations 2015.

The Directors evaluation was broadly based on the parameters such as understanding of the Company’s vision and objective, skills, knowledge and experience, participation and attendance in Board/ Committee meetings; governance and contribution to strategy; interpersonal skills etc.

The Board has carried out the annual performance evaluation of its own performance, the Directors individually as well as evaluation of the working of its Board Committees. A structured questionnaire was prepared covering various aspects of the Board’s functioning such as adequacy of the composition of the Board and its Committees, Board Culture, execution and performance of specific duties, obligations and governance.

A meeting of the Independent Directors was also held which reviewed performance of non-independent directors, performance of the board as a whole and performance of the chairman after taking in to 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. Performance evaluation of independent directors was done by the entire board, excluding the independent director being evaluated.

Disclosure pertaining to sexual harassment of women at work place.

During the Financial year ended 31^st March, 2018 the Company has neither received any complaints nor there are any pending complaints pertaining to sexual harassment.

Acknowledgments.

The Board of Directors places on record its gratitude to IDBI Bank Limited, State Bank of India, IndusInd Bank Limited, Insurance Companies and Government Authorities for their assistance and co-operation. The Board also acknowledges the support of the shareholders of the Company. The Board also places on record their deep sense of appreciation for the committed services of all the employees of the Company.

For and on behalf of the Board

For Suryalata Spinning Mills Limited

Vithaldas Agarwal Mahender Kumar Agarwal

Managing Director Joint Managing Director

DIN: 00012774 DIN: 00012807

Place: Secunderabad

Date : 19^th May, 2018

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Mar 31, 2016

Directors'' Report

To

The Members,

The Directors have pleasure in presenting the 33rd Annual Report together with the Company''s Audited Financial Statements for the financial year ended 31st March, 2016.

Financial Results

The financial performance of the Company during the year ended 31st March, 2016 has been summarized below:

(Rs. in Lakhs)

Particulars	Current Year 2015-16	Previous Year 2014-15
Gross Sales/Turnover	35,396	37,694
Net Sales/Turnover	35,369	36,541
Profit before Interest, Depreciation and Tax	3181	3,856
Interest	915	1,070
Depreciation	811	868
Profit Before Tax	1456	1,917
Less: Provision for tax	400	482
Deferred Tax Liability	95	170
Profit After Tax	961	1,265
Add: Profit brought forward from last year	1033	925
Amount available for appropriation	1994	2,190
Appropriations:
Transfer to
(a) General Reserve	500	1,000
(b) Preference Shares Redemption Reserve	385	0
(c) Dividend on Equity Shares	25	77
(d) Dividend on Preference Shares	23	54
(e) Dividend distribution tax	10	26
Balance Carried forward to Balance Sheet	1051	1,033

Note: The above figures are extracted from the Financial Statements as per Indian Generally Accepted Accounting Principles (GAAP).

Operations

The year 2015-16 was marked by a prolonged global weakness, realization continued to decline, off take continued to remain sluggish, terms of trade weakened, consumer preferences became increasingly demanding even then the Company is proud to have ending performance in the Financial Year 2015-16. Operations were broadly effected with the following.

- Average input (raw material) cost dropped to Rs. 87.70 per kg from Rs. 99.21 per kg in the previous year.

- Average yarn realization dropped to Rs. 136.43 per kg from Rs. 152.55 per kg in the previous year.

- Contributions for operations fallen to Rs. 46.51 per kg from Rs. 51.78 per kg in the previous year.

Highlights of the Company''s Affairs

The highlights of the Company''s performance are as under:

- Revenue from operations for the FY 2015-16 is Rs. 35,396 Lakhs as compared to Rs. 37,694 lakhs in the previous year.

- Exports are Rs. 3055 lakhs compared to Rs. 10,567 Lakhs in the previous year.

- Production quantities increased to 25,795 MTS as against 24,151 MTS in previous year.

- Profit Before Tax for the FY 2015-16 is Rs.1456 as compared against Rs. 1917 Lakhs in previous year.

- Profit After Tax is Rs. 961 Lakhs as against Rs. 1265 Lakhs in previous year.

- Cash Profits of Rs 2266 Lakhs as against Rs 2785 lakhs in previous year.

Capital expenditure

During the year under review, your company has incurred Rs. 304 Lakhs towards the capital expenditure. The company also spent Rs. 514 lakhs towards Civil structures of Expansion project undertaken at Kalwakurthy Unit.

Future outlook

A note on the future outlook of your Company is presented under Management Discussion and Analysis, which forms part of this Report.

Transfer to Reserves

The Company has proposed to transfer Rs. 500 lakhs to the general reserve for the financial year ended 31st March, 2016.

Dividends

Your Directors have recommended the payment of Dividend on the Cumulative Redeemable Preference Shares as per the terms and conditions of the Issue for the Financial Year 2015-16. The said Dividend will absorb a sum of H22,53,388/. The corporate dividend tax will be H4,58,737-

Also your Directors have recommended the payment of Dividend on the Equity Shares at 20% (i.e.) Rs. 2 per share of Rs. 10/- each to Non-promoter equity shareholders of the Company for the year 2015-16. The dividend will absorb a sum of Rs 25,29,380/- and the dividend tax will be Rs 5,14,922/-.

Deposits

During the year under review the Company has not accepted any deposits during the Financial Year 2015-16 in pursuance of Chapter V Companies (Acceptance of Deposits) Rules, 2014.

Subsidiaries

YP Solar Power Private Limited had been incorporated as a Wholly Owned Subsidiary of the Company to establish solar power plant for captive consumption purpose. However the same ceased to be a subsidiary w.e.f. 18th March, 2016 as it could not turn up for the purpose during the year.

There are no associate companies or joint venture companies within the meaning of section 2(6) of the Companies Act, 2013. There has been no material change in the nature of the business of the subsidiaries.

Disclosures under the Companies Act, 2013 Extract of Annual Return

The Extract of Annual Return prepared in Form MGT-9 as per the provisions of Section 92 of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is enclosed as Annexure I to this Report.

Number of Meetings of the Board of Directors

Four (04) Board Meetings & Audit Committee Meetings were held during the Financial Year 2015-16 as below:

1. 25th May, 2015

2. 12th August, 2015

3. 7th November, 2015

4. 4th February, 2016

The Meetings of the following Committee''s held on the respective dates as mentioned below:

1. CSR Committee Meeting - 25th May, 2015

2. Independent Directors Meeting - 4th February, 2016

3. Stake holders relationship Committee Meeting - 07th November, 2015

For details pertaining to attendance of Directors for the said Meetings, please refer to the corporate governance report, which forms part of this report.

Changes in share capital

During the year under review, your company has made an issue and allotment of 3,85,000 Cumulative Redeemable Preference shares of face value of Rs. 100/- each on preferential basis at par to the promoters & promoters group of the Company.

Consequently the paid up preference share capital of the company has increased from Rs. 1,50,00,000/- to Rs. 5,35,00,000/-.

Directors Responsibility Statement

Pursuant to the requirements under Section 134 of the Companies Act, 2013 with respect to the Directors'' Responsibility Statement, the Board of Directors of the Company hereby confirms:

(a) that in the preparation of the annual accounts for the financial year ended 31st March, 2016, the applicable accounting standards have been followed;

(b) 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 as at 31st March, 2016, and Statement of Profit and Loss of the Company for that period;

(c) that the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) that the directors have prepared the annual accounts for the financial year ended 31st March, 2016, on a going concern basis;

(e) that the directors have laid down internal controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

(f) that the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively;

Statement on Declaration given by Independent Directors under Sub-Section (6) of Section 149 of the Companies Act, 2013.

The Independent Directors have submitted the Declaration of Independence, as required pursuant to Section 149 (7) of the Companies Act, 2013 stating that they meet the criteria of independence as provided in Sub-Section (6) of section 149 of Companies Act, 2013.

Related Party Transactions

All the related party transactions are entered on arms length basis and are in compliance with the applicable provisions and listing regulations.

There are no materially significant related party transactions made by the Company with promoters, Directors or Key Managerial Personnel etc which may have potential conflict with the interest of the Company at large. Thus disclosure pertaining to Related Party transactions in Form AOC-2 is not required.

The disclosure with respect to transactions with Related parties in compliance with Accounting standard 18 is disclosed in notes forming part of financial statements annexed to this report.

The Company has adopted a related party transactions policy and the policy as approved by the board is uploaded on the Company''s website www.suryalata.com

Particulars of Loans, Guarantees and Investments :

During the year under review, the Company has granted unsecured loan to a Company covered in the register maintained under section 186 of the Companies Act, 2013.

However the Company has not given any guarantee or provided any securities to any person or body corporate.

Particulars of Employees

The details pursuant to Section 197 (12) of the Companies Act, 2013 read with Rule 5 (1) of the Companies (Appointment and Remuneration Of Managerial Personnel) Rules, 2014 enclosed as Annexure - II.

Further during the year under review, none of the employees are receiving remuneration as set out in Rule 5(2) Companies (Appointment And Remuneration Of Managerial Personnel) Rules, 2014.

Details of Directors and Key Managerial Personnel''s appointed or resigned during the year:

Pursuant to the provisions of section 196, 197, 198 and 203 read with schedule V of the Companies Act, 2013, Smt. Madhavi Agarwal (DIN 06866592) was appointed as Executive Director of the Company with the designation Whole-Time Director in the last Annual General Meeting of the Company held on 21st September, 2015 for a period of Five (5) years.

Pursuant to the provisions of section 196, 197, 198 and 203 read with schedule V of the Companies Act, 2013, Sri Mahender Kumar Agarwal (DIN 00012807) was reappointed as Joint Managing Director of the Company in the last Annual General Meeting of the Company held on 21st September, 2015 for a period of Five (5) years.

Pursuant to the provisions of section 203 of the Act, the key managerial personnel (who are not Directors) of the Company are - Sri. Nageswara Rao Kommineni, Chief Financial Officer, Smt. Prameela Rani Meka, Company Secretary. There has been no change in the key managerial personnel during the year.

However, subsequent to closure of Financial year 201516 Smt. Prameela Rani Meka, Company Secretary of the Company has submitted her resignation w.e.f. 31st May, 2016. The Company has appointed Sri. Deepesh Kumar Pipalwa, as Whole-time Company Secretary of the company w.e.f. 1st June, 2016.

During the year, the non-executive directors of the Company had no pecuniary relationship or transactions with the Company, other than the sitting fees, commission and reimbursement of expenses incurred by them for the purpose of attending meetings of the Company.

In accordance with the provisions of the Companies Act, 2013 and in terms of Articles of Association of the Company, Sri K K Sinha, Director of the Company is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

Committees of the Board:

Currently the Board has four Committees:

1. Audit Committee

2. Nomination and Remuneration Committee

3. Corporate Social Responsibility Committee

4. Stakeholders Relationship Committee

Audit Committee

The Audit Committee consists of Sri R Surender Reddy, Chairman, Sri R S Agarwal, Member and Sri K R Suresh Reddy, Member. All the recommendations made by the Audit Committee were accepted by the Board.

Nomination and Remuneration Committee.

The Nomination and Remuneration Committee consists of Sri K R Suresh Reddy, Chairman, Sri K. Lakshmi Kanth Reddy, Member and Sri R. S. Agarwal, Member.

Policy on directors'' appointment and remuneration and other details:

The Company follows a policy on remuneration of directors and other senior managerial personnel''s. The Policy is recommended by the Nomination and Remuneration Committee and approved by the Board. More details of the same is given in the Corporate Governance Report.

Corporate Social Responsibility Committee

The Corporate Social Responsibility Committee consists of Sri R Surender Reddy, Chairman, Sri Vithaldas Agarwal Member and Sri Mahender Kumar Agarwal , Member.

This policy encompasses the Company''s philosophy for giving back to society as a corporate citizen and lays down the guidelines and mechanism for undertaking socially useful programmes for the welfare & sustainable development of the community at large, is titled as the Suryalata Spinning Mills Limited Corporate Social Responsibility Policy.

The core theme of the Company''s CSR policy is giving back to the society from which it draws its resources by extending helping hand to the needy and the underprivileged.

Corporate Social Responsibility is the commitment of business to contribute for sustainable economic development. It is the contribution of the corporate sector for philanthropic causes like education, health, water, environment and community welfare. In alignment with vision of the company, through its CSR initiatives, will continue to enhance value creation in the society, through its services, conduct & initiatives, so as to promote sustained growth of the society, in fulfillment of its role as a Socially Responsible Corporate, with environmental concern.

The Report on Corporate Social Responsibility as per Rule 8 of (Corporate Social Responsibility Policy) Rules, 2014 is prepared and the same is enclosed as Annexure III to this Report.

Stakeholders Relationship Committee:

Stakeholders relationship committee consists of Sri K. R Suresh Reddy, Chairman, Sri Vithaldas Agarwal, Member and

Sri Mahender Kumar Agarwal, Member.

The Scope of the Committee shall include considering and resolving the grievances of the security holders of the company which may arise due to any of the reasons cited in the Stakeholders Relationship Committee of the company.

Auditors Statutory Auditors:

The Auditors, M/s. Brahmayya & Co., Chartered Accountants, (ICAI Firm Registration No 000513S) Hyderabad, Statutory Auditors of the Company, retires at the ensuing Annual General Meeting and are eligible for re-appointment pursuant to section 139 of the Companies'' Act, 2013.

Auditor''s Report

The Auditor''s Report to the Shareholders for the year under review does not contain any qualification or adverse remark.

Secretarial Auditor

The Board has appointed M/s R. & A Associates, a firm of practicing Company Secretaries, Hyderabad as the Secretarial Auditors to conduct Secretarial Audit of the Company for the Financial year ended 31st March, 2016 in compliance with the provisions of Section 204 of the Companies Act , 2013.

The Secretarial Audit Report issued by M/s. R & A Associates, in Form MR-3 is enclosed as Annexure IV to this Report.

Cost Auditor :

The Board of Directors have appointed M/s. Aruna Prasad & Co., Cost Auditors, Chennai for conducting the cost audit of the Company for the financial year 2016-17, in compliance to the provisions of Section 148 of the Companies Act, 2013 read with Companies (Cost Records and Audit Rules,) 2014, on the recommendations made by the Audit Committee, and has recommended her remuneration for the ratification of Members at the ensuing annual general meeting.

Vigil Mechanism/Whistle Blower Policy :

The Board of Directors of the Company have adopted Whistle Blower Policy. This policy is formulated to provide an opportunity to employees and an avenue to raise concerns and to access in good faith the Audit Committee, to the highest possible standards of ethical, moral and legal business conduct and its commitment to open communication, in case they observe unethical and improper practices or any other wrongful conduct in the Company, to provide necessary safeguards for protection of employees from reprisals or victimization and to prohibit managerial personnel from taking any adverse personnel action against those employees.

The Policy on vigil mechanism/whistle blower policy may be accessed on the Company''s website www.suryalata.com

Details of adequacy of internal financial controls

The company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operation were observed.

Corporate Governance

A detailed Report on Corporate Governance is enclosed as Annexure V, Management Discussion and Analysis Report and the Certificate from the Auditors of your Company regarding compliance of conditions of Corporate Governance as stipulated under Schedule V of SEBI (LODR) Regulations 2015 forms part of this Report.

Change in the Nature of Business

There has been no change in the nature of business of the Company during the financial year under review.

The details of significant material orders passed by the regulators or courts or tribunals impacting the going concern status and Company''s operations in future

No significant or material orders were passed by the regulators or courts or tribunals impacting the going concern status and company''s operations in future during the year under review.

Material changes and Commitments, if any, affecting the financial position of the Company

There were no material changes and commitments in the business operations of the Company from the Financial Year ended 31st March, 2016 to the date of signing of the Director''s Report.

Conservation of energy, technology absorption, foreign exchange earnings and outgo.

The information with respect to Conservation of energy, technology absorption, foreign exchange earnings and outgo pursuant to Section 134(3)(m) of the Act read with Rule 8 of Companies (Accounts) Rules, 2014, are provided in the Annexure VI to this Report.

Risk Management Policy

The Company has policy for identifying risk and established controls to effectively manage the risk. Further the company has laid down various steps to mitigate the identified risk. The audit committee has additional oversight in the area of financial risks and controls. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis.

Declaration with the compliance with the code of conduct by Members of the board and Senior Management personnel

The Company has complied with the requirements about code of conduct for Board members and Sr. Management Personnel.

The said policy is available on the website of the Company www.suryalata.com

Mechanism for 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 schedule IV of the Companies Act, 2013 and the corporate governance requirements as prescribed by Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations 2015.

The Directors evaluation was broadly based on the parameters such as understanding of the Company''s vision and objective, skills, knowledge and experience, participation and attendance in Board/ Committee meetings; governance and contribution to strategy; interpersonal skills etc.

The Board has carried out the annual performance evaluation of its own performance, the Directors individually as well as evaluation of the working of its Board Committees. A structured questionnaire was prepared covering various aspects of the Board''s functioning such as adequacy of the composition of the Board and its Committees, Board Culture, execution and performance of specific duties, obligations and governance.

A meeting of the Independent Directors was also held which reviewed performance of non-independent directors, performance of the board as a whole and performance of the chairman after taking in to 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. Performance evaluation of independent directors was done by the entire board, excluding the independent director being evaluated.

Disclosure pertaining to sexual harassment of women at workplace

During the Financial year ended 31st March, 2016 the Company has neither received any complaints nor there are any pending complaints pertaining to sexual harassment.

Acknowledgments

The Board of Directors places on record its gratitude to IDBI Bank Limited, State Bank of India, Insurance Companies and Government Authorities for their assistance and cooperation. The Board also acknowledges the support of the shareholders of the Company. The Board also places on record their deep sense of appreciation for the committed services of all the employees of the Company.

For and on behalf of the Board

For Suryalata Spinning Mills Limited

R. Surender Reddy

Place: Secunderabad Chairman

Date: 08th August, 2016 DIN 00083972

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Mar 31, 2014

The Members,

The Directors have pleasure in presenting the 31st Annual Report together with the Audited Annual Accounts of the Company for the financial year ended 31st March, 2014.

Financial Results

The Financial performance of the Company during the year ended 31st March, 2014 has been briefed below:

(Rs. in Lakhs)

Particulars Current Year Previous Year 2013 - 14 2012 - 13

Gross Sales/Turnover 36,418 28,372

Net Sales/Turnover 35,011 26,947

Profit before Interest, Depreciation and Tax 3,357 3,245

Exceptional Item Nil 439

Interest 1,118 872

Depreciation 894 747

Profit Before Tax 1,345 1,187

Less:Provision for tax 285 250

Deferred Tax Liability 175 147

Excess Provisions of IT of earlier years Nil (18)

Profit After Tax 885 808

Add: Profit brought forward from last year 668 488

Amount available for appropriation 1,553 1,296

Appropriations:

Transfer to

(a) General Reserve 500 500

(b) Preference Shares Redemption Reserve 0 0

(c) Dividend on Equity Shares 55 55

(d) Dividend on Preference Shares 55 55

(e) Dividend distribution tax 18 18

Balance Carried forward to Balance Sheet 925 668

Operations

Despite operating in a volatile and uncertain environment, the Company enabled to increase Turnover and to maintain the profits in the Financial Year 2013-14.The highlights of the Company''s performance are as under :

- Revenue from operations increased by 28.35 % to Rs. 36,418 lakhs, compared to 28732 lakhs in the previous year.

- Exports increased by 24.31 % to 12209 lakhs compared to 9821 Lakhs in the previous year

- Production quantities increased to 21708 MTs as against 16577 MTs in previous year.

- Cash Profits are Rs. 2238 Lakhs as against Rs. 1934 lakhs in previous year.

- Profit Before Tax is Rs. 1345 Lakhs as against Rs. 1187 Lakhs in previous year.

- Profit After Tax is Rs. 885 Lakhs as against Rs. 808 Lakhs in previous year.

Capital expenditure

During the year under review, your company has incurred Rs. 285.95 Lakhs towards the capital expenditure.

Credit Rating

CRISIL ratings assigned investment grade BBB-/ stable, upgraded from BB stable which supports and reflects the Company''s financial discipline and prudence.

Future outlook

A note on the future outlook of your Company is presented under Management Discussion and Analysis, which forms part of this Report.

Dividends

Your Directors have recommended the payment of Dividend on the Cumulative Redeemable Preference Shares as per the terms and conditions of the Issue for the Financial Year 2013-14. The said Dividend will absorb a sum of Rs. 54,75,141/-. The corporate dividend tax will be Rs. 9,30,500/-.

Also your Directors have recommended the payment of Dividend on the Equity Shares at 15 % (i.e.) Rs. 1.50 per share of Rs. 10/- each for the year 2013-14. The dividend will absorb a sum of Rs. 55,00,500/- and the dividend tax will be Rs. 9,34,810/- Deposits

During the year under review, the Company has made the repayment / pre-mature repayment of unsecured deposits after complying with the applicable rules. There were no overdue deposits as on 31st March 2014.

The Company has outstanding deposits of Rs. 1.50 Crores as on 31st March, 2014. Pursuant to provisions of Section 74 of the Companies Act, 2013 shall be repaid on or before 31st March, 2015.

Directors

In accordance with the provisions of the Companies Act, 2013 and in terms of Articles of Association of the Company, Sri K K Sinha, & Sri K Lakshmikanth Reddy Directors of the Company are liable to retire by rotation at the ensuing Annual General meeting and being eligible, offered themselves for re-appointment. Board of Directors recommends the above re-appointments.

Further the Board of Directors proposes to appoint all the existing Independent Director i.e. Sri R Surender Reddy, Sri R S Agarwal, Sri K Lakshmikanth Reddy and Sri K R Suresh Reddy and under Section 149 of the Companies Act, 2013 so that they can act as Independent Directors of the Company for two terms of 5 years each from the ensuing Annual General Meeting.

Directors Responsibility Statement

Pursuant to the requirements under section 217(2AA) of the Companies Act, 1956, with respect to the Directors'' Responsibility Statement, the Board of Directors of your Company hereby confirms:

i. That in the preparation of the Annual Accounts for the financial year ended 31st March, 2014 the applicable accounting standards have been followed along with proper explanations relating to material departures;

ii. That your 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 and of the profit of the Company for the year under review;

iii. That your Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 and Companies Act, 2013 wherever applicable, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. Your Directors have prepared the accounts for the financial year ended 31st March, 2014 on a going concern basis.

Corporate Social Responsibility:

As an evolved and concerned corporate citizen, Suryalata believes that corporate social responsibility (CSR) initiatives are a way to pay back societal debts and obligations. We do not see CSR as charity nor even as a responsibility, but as an opportunity to change and help the society. Our CSR activities are conceived to bridge gaps in society and help transform communities around our workplace.

During the year Suryalata has taken up initiative to educate vedic students studying in various vedic schools and the company has provided donations to various charitable institutions such as Sri Kodhanda Ramalayam, Sai Geetha Ashram, Palamor Valasa Kooli Sankshema Samithi and Swamy Vivekananda Vigraham etc.

Auditors

M/s. Brahmayya & Co., Chartered Accountants, Hyderabad, Statutory Auditors of the Company, retires at the ensuing Annual General meeting and are eligible for re-appointment.

Auditors Report

The Auditors Report to the shareholders does not contain any qualification or adverse remark.

The Audit Committee of the company has reviewed the audited financial statements for the year under review at its meeting held on 12th May, 2014 and recommended the same for the approval of directors.

Cost Auditors

Pursuant to the directives from the central government and the provisions of central government and the provisions of section 233B of the companies Act, 1956 Smt. Aruna Prasad, Cost Accountant, Chennai has been appointed as Cost Auditors of the Company for the Financial Year 2013-14.

The Cost Auditor Report for the Financial Year 2013-14 shall be submitted to the Central Government within the stipulated period.

Corporate Governance

A detailed Report on Corporate Governance, Management Discussion and Analysis Report and the Certificate from the Auditors of your Company regarding compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges, forms part of this Report.

Conservation of energy, technology absorption, foreign exchange earnings and outgo.

The information as required under Section 217(1)(e) read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are provided in the annexure forming part of this Report.

Employees

Your Company has no employee whose remuneration exceeds the limits prescribed under Section 217(2A) of the Companies Act, 1956. Hence, the information required under the said section, read with the Companies (Particulars of the Employees) Rules, 1975, has not been given in the Report.

Human Resources

During the year, Industrial relations continued to be cordial throughout the year. Your Company firmly believes that a dedicated workforce constitute the primary source of sustainable competitive advantage. Accordingly, human resource development continues to receive focused attention. Your Directors wish to place on record their appreciation of the dedicated and commendable services rendered by the staff and workforce of the Company, without whose efforts, such an impressive performance may not have been possible.

Acknowledgments

The Board of Directors places on record its gratitude to IDBI Bank Limited, State Bank of India, Insurance Companies and Government Authorities for their assistance and cooperation. The Board also acknowledges the support of the shareholders of the Company. The Board also places on record their deep sense of appreciation for the committed services of all the employees of the Company.

For and on behalf of the Board For Suryalata Spinning Mills Limited

R Surender Reddy Chairman DIN:00083972 Place : Secunderabad Date : 12th May, 2014

Corporate Identification Number: L18100TG1983PLC003962

Registered Office:

Surya Towers, 1st Floor, 105

Sardar Patel Road, Secunderabad - 500003

Tel: [phone]

Fax: [phone]

Email: [e-mail]

Website : www.suryalata.com

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Mar 31, 2013

To The Members,

The Directors have pleasure in presenting the 30th Annual Report together with the Audited Annual Accounts for the financial year ended 31st March, 2013.

Financial Results

The financial performance of the Company for the year ended 31st March, 2013 is summarized below:

(Rs. in Lakhs)

Current Year Previous Year PartlCUlarS 2012 - 13 2011 - 12

Gross Sales/Turnover 28,372 25,661

Net Sales/Turnover 26,947 25,256

Profit before Interest, Depreciation and Tax 3,245 1,938

Exceptional item* 439

Interest '' 872 654

Depreciation 747 629

Profit Before Tax 1,187 655

Less : Provision for Tax for the year (Net) 232 200

Deferred Tax Liability 147 32

Profit After Tax 808 423

Add: Profit brought forward from last year 488 692

Amount available for appropriation 1,296 1,115

Appropriations: Transfer to

(a) General Reserve 500 500

(b) Dividend on Equity Shares 55 55

(c) Dividend on Preference Shares 55 55

(d) Dividend distribution tax 18 18

(e) Balance carried to Balance sheet 668 487

-k Exceptional item Rs. 439 Lakhs is fuel surcharge adjustment charges for financial years 2010-11 and 2011-12.

Operations

The Net turnover of the Company for the Financial Year 2012-13 was Rs. 26,946.89 Lakhs compared to Rs. 25,256.40 Lakhs in the previous year. The production during the year was 165.77 Lakh kgs. of yarn (169.31 Lakh kgs. in the previous year).

The Company has earned a Profit before Tax of Rs. 1,187.32 Lakhs in comparison to Rs. 655.64 Lakhs in the previous year. The Company earned a profit after tax of Rs. 808.66 Lakhs as against Rs. 423.01 Lakhs in the previous year.

Capital Expenditure

During the year under review, the company has incurred Rs. 6000.33 Lakhs towards the capital expenditure for increase of production capacity at Urukondapet unit and commenced commercial production of expansion project from 29th October 2012 The Company total capacity increased to 89,376 Spindles.

Exports

The export turnover of your Company during the current year was Rs. 9,821 Lakhs against the previous year export turnover of 12,347 Lakhs. Your Company has been exporting yarn to various countries like Turkey, Italy, Taiwan, Iran, Peru, Brazil, USA, Argentina and continues to explore new markets to improve the performance. -.

Future Outlook

A note on the future outlook of your Company is presented under Management Discussion and Analysis, which forms part of this Report.

Dividends

Your Directors have recommended the payment of Dividend on the Cumulative Redeemable Preference Shares as per the terms and conditions of the Issue for the Financial Year 2012-13. The said Dividend will absorb a sum of Rs. 54,75,141/-. The corporate dividend tax will be X. 9,30,500/-. Your Directors have recommended the payment of Dividend on the Equity Shares at 15% (i,e) Rs.1.507- per share of Rs. 10/- each for the year 2012-2013. The dividend will absorb a sum of Rs. 55,00,500/- and the dividend tax will be X. 9,34,810/-.

Deposits

During the year under review, the Company has made the repayment / premature repayment of unsecured deposits after complying with the applicable rules. There were no overdue deposits as on 31st March 2013.

Directors

In accordance with the provisions of the Companies Act, 1956 and in terms of Articles of Association of the Company the following Directors namely Sri R Surender Reddy and

Sri K R Suresh Reddy, retire by rotation at the ensuing Annual General meeting and being eligible, offered themselves for re-appointment.

Board of Directors recommends the above re- appointments.

Directors Responsibility Statement

Pursuant to the requirements under section 217(2AA) of the Companies Act, 1956, with respect to the Directors'' Responsibility Statement, the Board of Directors of your Company hereby confirms:

i) That in the preparation of the Annual Accounts for the financial year ended 31st March, 2013 the applicable accounting standards have been followed along with proper explanations relating to material departures; if any.

ii) That your 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 and of the profit of the Company for the year under review;

iii) That your Directors have 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;

iv) Your Directors has prepared the accounts for the financial year ended 31s1 March, 2013 on a going concern basis.

Corporate Social Responsibility

As an evolved and concerned corporate citizen, Suryalata believes that corporate social responsibility (CSR) initiatives are a way to pay back societal debts and obligations. We do not see CSR as charity nor even as a responsibility, but as an opportunity to change and help the society. Our CSR activities are conceived to bridge gaps in society and help transform communities around our workplace.

During the year Suryalata has provided donations to various charitable institutions such as Akshaya Vidya Foundation, Sai Geetha Ashram and Sri Balaji Seva Samithi etc.

Auditors

M/s. Brahmayya & Co., Chartered Accountants, Hyderabad, Statutory Auditors of the Company, retires at the ensuing Annual General meeting and is eligible for re-appointment.

Auditors'' Report

The Auditors'' Report to the shareholders does not contain any qulaification or adverse remark.

The Audit Committee of the Company has reviewed the audited financial statements for the year under review at its meeting held on 22nd May, 2013 and recommended the same for the approval of direcrors. "*

Cost Auditors

Pursuant to the directives from the Central Government and the provisions of Section 233B of the Companies Act 1956, Smt. Aruna Prasad, Cost Accountant, Chennai has been appointed as Cost Auditors of the Company for the financial year 2012-13.

The Cost Audit Report for the financial year 2012-13 shall be submitted to the Central Government within the stipulated period.

Corporate Governance

A detailed Report on Corporate Governance, Management Discussion and Analysis Report and the Certificate from the Auditors of your Company regarding compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges, forms part of this Report.

Conservation of energy, technology absorption, foreign exchange earnings and outgo.

The information as required under Section 217(1 )(e) read with Companies (Disclosure of Particulars in the Report of Board of Directors)

Rules, 1988, are provided in the annexure forming part of this Report.

Employees

Your Company has no employee whose remuneration exceeds the limits prescribed under Section 217(2A) of the Companies Act, 1956. Hence, the information required under the said section, read with the Companies (Particulars of the Employees) Rules, 1975, has not been given in the Report.

Human Resources

During the year, Industrial relations continued to be cordial throughout the year. Your Company firmly believes that a dedicated workforce constitute the primary source of sustainable competitive advantage. Accordingly, human resource development continues to receive focused attention. Your Directors wish to place on record their appreciation of the dedicated and commendable services rendered by the staff and workforce of the Company, without whose efforts, such an impressive performance may not have been possible.

Acknowledgments

The Board of Directors places on record its gratitude to IDBI Bank Limited, State Bank of India, Insurance Companies and Government Authorities for their assistance and co-operation. The Board also acknowledges the support of the shareholders of the Company. The Board also places on record their deep sense of appreciation for the committed services of all the employees of the Company.

For and on behalf of the Board

For Suryalata Spinning Mills Limited

Place : Secunderabad R.Surender Reddy

Date : 22nd May 2013 Chairman

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Mar 31, 2012

The Directors have pleasure in presenting the 29th Annual Report together with the Audited Annual Accounts of your Company for the financial year ended 31st March, 2012.

Financial Results

The performance of your Company during the year ended 31st March, 2012 has been briefed below:

(Rs. in Lakhs)

Current Year Previous Year

Particulars 2011-12 2010-11

Gross Sales/Turnover 25,661 24,394

Net Sales/Turnover 25,256 24,392

Profit before Interest, Depreciation and Tax 1,938 4,338

Extra-ordinary item - -

Interest 654 601

Depreciation 629 639

Profit Before Tax 655 3098

Less : Provision for Tax for the year 200 986

Deferred Tax Liability 32 133

Profit After Tax 423 1,979

Add:Profit brought forward from last year 692 300

Amount available for appropriation 1115 2279

Appropriations: Transfer to

(a) General Reserve 500 900

(b) Preference Shares Redemption Reserve 0 509

(c) Dividend on Equity Shares 55 98

(d) Dividend on Preference Shares 55 55

(e) Dividend distribution tax 18 25

Balance Carried forward to Balance Sheet 552 692

Operations

The Net turnover of your Company for the Financial Year 2011-12 was Rs. 25,256 Lakhs compared to Rs. 24,392 Lakhs in the previous year. The production during the year was 169.31 Lakh kgs. of yarn (182.97 Lakh kgs. in the previous year).

Your Company has earned a Profit before Tax of Rs. 655 Lakhs in comparison to Rs.3,098 Lakhs in the previous year. The Company earned a profit after tax of Rs. 423 Lakhs as against Rs. 1,979 Lakhs in the previous year. The decline in profits is attributed mainly due to increase in the cost of raw material and fall in price margins due to recessionary trend in the Europe. The textile companies were under pricing pressure through out the year.

Capital expenditure

During the year under review, your company has incurred Rs. 95.23 lakhs towards the capital expenditure for non-factory buildings, Plant & Machinery, water works, furniture & fixture and office equipment related expenditure. Civil works are in progress for 23,040 spindle project expansion for which Rs. 858.37 Lakhs has been spent.

Exports

The export turnover of your Company during the current year was Rs. 12,347 Lakhs against the previous year export turnover of Rs. 11,193 Lakhs. Your Company has been exporting yarn to various countries like Turkey, Italy, Morroco, Taiwan, Iran, Brazil, USA, and Argentina and continues to explore new markets to improve the performance.

Future Outlook

A note on the future outlook of your Company is presented under Management Discussion and Analysis, which forms part of this Report.

Conversion of Warrants

The company has allotted 4,00,000 Equity Shares bearing the face value of Rs. 10/- each at a premium of Rs. 100/- per share to the promoters on 13th February 2012, pursuant to the conversion of 4,00,000 share warrants that have been allotted earlier on preferential basis.

Dividends

Your Directors have recommended the payment of Dividend on the Cumulative Redeemable Preference Shares as per the terms and conditions of the Issue for the Financial Year 2011-12. The said Dividend will absorb a sum of Rs. 54,75,141/-. The corporate dividend tax will be Rs. 8,88,205/-. No amount is transferred to Preference Shares Redemption Reserve Account for the year.

Your Directors have recommended the payment of Dividend on the Equity Shares at 15% (i.e.) Rs. 1.50 per share of Rs. 10/- each for the year 2011-12. The dividend will absorb a sum of Rs. 55,00,500/- and the dividend tax will be Rs. 8,92,456/-.

Deposits

During the year under review, the Company has made the repayment / pre-mature repayment of unsecured deposits after complying with the applicable rules. There were no overdue deposits as on 31st March 2012.

Directors

In accordance with the provisions of the Companies Act, 1956 and in terms of Articles of Association of the Company the following Directors namely Sri R. S. Agarwal and Sri Yash Agarwal of the Company, retire by rotation at the ensuing Annual General meeting and being eligible, offered them self for re-appointment.

Board of Directors recommends the above re- appointments.

Directors Responsibility Statement

Pursuant to the requirements under section 217(2AA) of the Companies Act, 1956, with respect to the Directors' Responsibility Statement, the Board of Directors of your Company hereby confirms:

i) That in the preparation of the Annual Accounts for the financial year ended 31st March, 2012 the applicable accounting standards have been followed along with proper explanations relating to material departures;

ii) That your 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 and of the profit of the Company for the year under review;

iii) That your Directors have 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;

iv) That your Directors has prepared the accounts for the financial year ended 31st March, 2012 on a going concern basis.

Corporate Social Responsibility

A note on the Corporate Social Responsibility presented under the Management Discussion and Analysis, which forms part of this report.

Auditors

M/s. Brahmayya & Co., Chartered Accountants, Hyderabad, Statutory Auditors of the Company, retires at the ensuing Annual General meeting and is eligible for re-appointment.

Auditors' Report

The Auditors' Report to the shareholders does not contain any qulaification or adverse remark.

The Audit Committee of the Company has reviewed the audited financial statements for the year under review at its meeting held on 6th August, 2012 and recommended the same for the approval of the direcrors.

Cost Auditors

Pursuant to the directives from the Central Government and the provisions of Section 233B of the Companies Act 1956, Smt. Aruna Prasad, Cost Accountant, Chennai has been appointed as Cost Auditors of the Company for the financial year 2011-12.

The Cost Audit Report for the financial year 2011-12 shall be submitted to the Central Government within the stipulated period.

Corporate Governance

A detailed Report on Corporate Governance, Management Discussion and Analysis Report and the Certificate from the Auditors of your Company regarding compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges, forms part of this Report.

Conservation of energy, technology absorption, foreign exchange earnings and outgo

The information as required under Section 217(1)(e) read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are provided in the annexure forming part of this Report.

Employees

Your Company has no employee whose remuneration exceeds the limits prescribed under Section 217(2A) of the Companies Act, 1956. Hence, the information required under the said section, read with the Companies (Particulars of the Employees) Rules, 1975, has not been given in the Report.

Human Resources

During the year, Industrial relations continued to be cordial throughout the year. Your Company firmly believes that a dedicated workforce constitute the primary source of sustainable competitive advantage. Accordingly, human resource development continues to receive focused attention. Your Directors wish to place on record their appreciation of the dedicated and commendable services rendered by the staff and workforce of the Company, without whose efforts, such an impressive performance may not have been possible.

Acknowledgments

The Board of Directors places on record its gratitude to IDBI Bank Limited, State Bank of India, Insurance Companies Government Authorities and to customers for their continued assistance and co- operation. The Board also acknowledges the support of the shareholders of the Company. The Board also places on record their deep sense of appreciation for the committed services of all the employees of the Company.

For and on behalf of the Board For Suryalata Spinning Mills Limited

Place: Secunderabad R.Surender Reddy

Date : 6th August, 2012 Chairman

---

Mar 31, 2011

The Members,

The Directors have pleasure in presenting the 28th Annual Report together with the Audited Annual Accounts of your Company for the financial year ended 31st March, 2011.

Financial Results

The performance of your Company during the year ended 31st March, 2011 has been briefed below:

(Rs. in Lakhs)

2010-11 2009-10

Gross Sales/Turnover 24,394 16,970

Net Sales/Turnover 24,392 16,969

Profit before Interest, Depreciationa and Tax 4,338 2,048

Extraordinary Item - 107

Interest 601 526

Depreciation 639 522

Profit Before Tax 3,098 893

Less: Provision for Tax for the year 986 220

Fringe Benefit Tax - 1

Deferred Tax Liability 133 99

Profit After Tax 1,979 573

Add: Profit brought forward from last year 300 169

Amount available for appropriation 2,279 742

Appropriations: Transfer to

(a) General Reserve 900 200

(b) Preference Shares Redemption Reserve 509 102

(c) Dividend on Equity Shares 98 65

(d)Dividend on Preference Shares 55 55

(e) Dividend distribution tax 25 20

Balance Carried forward to Balance Sheet 692 300

Operations :

The Net turnover of your Company for the Financial Year 2010 - 2011 was Rs. 24,394 Lakhs in comparison to the Rs. 16,970 Lakhs in the previous year, which is 43.75% more than the previous year. The production during the year was 182.97 Lakh kgs. of yarn (160.83 Lakh kgs. in the previous year). Company is able to maintain increase in production at 13.77% than the previous year.

Your Company has earned a Profit Before Tax of Rs. 3,098 Lakhs in comparison to Rs. 893 Lakhs in the previous year, which is 247% higher than the previous year. The Company earned a profit after tax of Rs. 1,979 Lakhs in comparison to Rs. 573 Lakhs in the previous year, which is 246% higher than the previous year.

Capital expenditure

During the year under review, your Company has incurred Rs. 1321.68 Lakhs towards capital expenditure for increase in capacities of 2,016 spindles and for TFO Division installed at Urkondapet unit.

Exports

The export turnover of your Company during the current year was Rs. 11,193 Lakhs against the previous year export turnover of Rs. 6,417 Lakhs. Your Company has been exporting yarn to various countries like Turkey, Italy, Taiwan, Iran, Brazil, USA, and Argentina and continues to explore new markets to improve the performance. This trend of increase in exports expecting to continue in the coming years.

Future outlook

Man-made Fiber market in India is expected see a steady growth. Increasing demand for textile namely general purpose textile, fashion wear, textile used for special purpose, along with the increasing price of textile made up of cotton is expected to drive the man-made fiber market in India.

The global production of staple and filament man- made fibers is recorded at 65.9 million metric tons, of which China products 45.8 million metric tons or 70 percent. India is in second place, accounting for 6.1 million metric tons, some 9 percent. And even third place is in Asian hands - namely, Pakistan.

Considering the growth in consumption of Man Made Fibre globally and rapid growth in the country, your Board has approved expansion plans at Urukondapet unit to enhance the capacities of 23,040 spindles with project cost of Rs.60.00 Crores. This project is being implemented under Restructured Technology Upgrade Fund Scheme (TUFS) announced on 28th April, 2011 by the Ministry Textiles, Government of India.

A detailed note on the future outlook of your Company is presented under Management Discussion and Analysis, which forms part of this Report.

Dividends

The Company has reported excellent results and profits during the year under review. Therefore, keeping in view the current year expansion and availability of profits. Board of Directors recommended a dividend on the shares of the Company.

Your Directors have recommended the payment of Dividend on the Cumulative Redeemable Preference Shares as per the terms and conditions of the Issue for the Financial Year 2010 - 2011. The said Dividend will absorb a sum of Rs. 54,75,141/-. The corporate dividend tax will be Rs.8,88,205/-. An amount of Rs.5,08,87,100/- is proposed to be transferred to Preference Shares Redemption Reserve Account for the year.

Your Directors have also recommended the payment of Dividend on the Equity Shares at 30% (i.e) Rs. 3/- per share of Rs. 10/- each for the Year 2010 - 2011. The Dividend will absorb a sum of Rs. 98,01,000/- and the dividend tax will be Rs. 15,89,967/-. An amount of Rs. 9,00,00,000/- is proposed to be transferred to General Reserve Account for the year.

Deposits

During the year under review, the Company has made the repayment / pre-mature repayment of unsecured deposits after complying with the applicable rules. There were no overdue deposits as on 31st March 2011.

Directors

In accordance with the provisions of the Companies Act, 1956 and in terms of Articles of Association of the Company Sri K. Lakshmikanth Reddy, Independent Director of the Company, retire by rotation at the ensuing Annual General meeting and being eligible, offered himself for re-appointment.

Your Directors have co-opted Mr. K. R. Suresh Reddy and Mr. K. K. Sinha as an Additional Director on the Board with designation as Independent Director and Additional Director, respectively w.e.f. 31st January, 2011. It is proposed to regularize their appointments in the ensuing Annual General Meeting.

Board of Directors recommends the above appointment and reappointment.

Directors Responsibility Statement

Pursuant to the requirements under section 217(2AA) of the Companies Act, 1956, with respect to the Directors' Responsibility Statement, the Board of Directors of your Company hereby confirms:

i) That in the preparation of the Annual Accounts for the financial year ended 31st March, 2011 the applicable accounting standards have been followed along with proper explanations relating to material departures;

ii) That your 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 and of the profit of the Company for the year under review;

iii) That your Directors have 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;

iv) That your Directors has prepared the accounts for the financial year ended 31st March, 2011 on a going concern basis.

Green Initiative

As part of "Green Initiative for Corporate Governance", recently, the government has allowed companies to send notices and documents to their shareholders electronically to facilitate paperless communication

This will ensure prompt communication and avoid loss of documents in transit.

Hence, shareholders are requested to register their email Id's with their depository participants or with the Registrars of the company M/s. Sathguru Management Consultants Private Limited.

Auditors

M/s. Brahmayya & Co., Chartered Accountants, Hyderabad, Statutory Auditors of the Company, retires at the ensuing Annual General meeting and is eligible for re-appointment.

Auditors have not made any observation on the Annual Accounts of the Company for the financial year ended on 31st March, 2011.

Corporate Governance

A detailed Report on Corporate Governance, Management Discussion and Analysis Report and Certificate from the Auditors of your Company regarding compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges, forms part of this Report.

Conservation of energy, technology absorption, foreign exchange earnings and outgo.

The information as required under Section 217 (1) (e) read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are provided in the annexure forming part of this Report.

Employees

Your Company has no employee whose remuneration exceeds the limits prescribed under Section 217(2A) of the Companies Act, 1956. Hence, the information required under the said section, read with the Companies (Particulars of the Employees) Rules, 1975, the Companies (particulars of Employees) Amended Rules, 2011 has not been given in the Report.

Human Resources

During the year, Industrial relations continued to be cordial throughout the year. Your Company firmly believes that a dedicated workforce constitute the primary source of sustainable competitive advantage. Accordingly, human resource development continues to receive focused attention. Your Directors wish to place on record their appreciation of the dedicated and commendable services rendered by the staff and workforce of the Company, without whose efforts, such an impressive performance may not have been possible.

Acknowledgments

The Board of Directors places on record its gratitude to IDBI Bank Limited, State Bank of India, Insurance Companies and Government Authorities for their assistance and cooperation. The Board also acknowledges the support of the shareholders of the Company. The Board also places on record their deep sense of appreciation for the committed services of all the employees of the Company.

for and on behalf of the Board for Suryalata Spinning Mills Limited

R. Surender Reddy Chairman

Place : Secunderabad Date : 9th August, 2011

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Mar 31, 2010

The Directors have pleasure in presenting the 27th Annual Report together with the Audited Annual Accounts of your Company for the financial year ended 31st March 2010.

Financial Results

The performance of your Company during the year ended 31st March 2010 has been briefed below:

(Rs. in Lakhs)

2009-10 2008-09

Gross Sales 16,970 15,840

Net Sales 16,969 15,840

Profit before Interest,

Depreciation and Tax 2,048 1,371

Extraordinary item 107 76

Interest 526 527

Depreciation 522 498

Profit Before Tax 893 270

Less: Provision for

Tax for the year 220 32

Fringe Benefit Tax 1 5

Provision for the

earlier years - (38)

Deferred Tax Liability 99 119

Profit After Tax 573 152

Add: Profit brought forward

from last year 169 78

Amount available for

appropriation 742 230

Appropriations:

1. Transfer to

(a) General Reserve 200 10

(b) Preference Shares

Redemption Reserve 102 -

(c) Dividend on Equity Shares 65 -

(d) Dividend on

Preference Shares 55 44

(e) Dividend

distribution tax 20 7

Balance Carried forward to Balance Sheet 300 169

Operations :

The gross turnover of your Company for 2009- 10 was Rs. 16,970 Lakhs (Rupees 15,840 Lakhs in the previous year). The production during the year was 160.83 Lakh kgs. of yarn (151.95 Lakh kgs. in the previous year). Company is able to maintain increase in production at 6% and net sales turnover at 7% than the previous year.

Your Company has earned a Profit Before Tax of Rs. 893 Lakhs for 2009-10 (Rs. 270 Lakhs in the previous year). The Company earned a profit after tax of Rs.573 Lakhs (Rs. 152 Lakhs in the previous year). The extraordinary expenditure of Rs.107 Lakhs (previous year Rs.76 Lakhs) represents MTM loss on derivatives structures, which have knocked in as per the 1CAI directive. During the year 2009-10, Textile Industry was recovered from the last year recession and comparatively performed well. The trend is expected to remain positive in the coming period also.

Expansion and increase in capacities :

The Company installed new equipment for 10,080 spindles at Urukondapet Unit and Commenced Commercial Production from 18.01.2010. Total capacities of the Company increased to 69,408 spindles from 59,328 spindles.

Capital expenditure

During the year under review, your Company has incurred Rs. 1,946.13 Lakhs towards capital expenditure for increase in capacities of 10,080 spindles at Urukondapet unit.

Exports

The export turnover of your Company during the year 2009-10 was Rs.6416.62 Lakhs against the previous year export turnover of Rs.2393.97 Lakhs. Recovery of global recession resulted to manifold growth in export turnover. Your Company has been exporting yarn to various countries like Turkey, Italy, Taiwan, Iran, Brazil, USA, and Argentina and continues to explore new markets to improve the performance. This trend of increase in exports expecting to continue in the coming years.

Future outlook

A note on the future outlook of your Company is presented under Management Discussion and Analysis, which forms part of this Report.

Dividends

The Companys financial performance during the year has recovered from the impact of global recession and made a reasonable profit during the year under review. Therefore, keeping in view the current year profits and the future trends in the market Board of Directors recommended a dividend on the shares of the Company.

Your Directors have recommended the payment of Dividend on the Cumulative Redeemable Preference Shares as per the terms and conditions of the Issue for the Financial Year 2009-10. The said Dividend will absorb a sum of Rs. 54,75,141/-. The corporate dividend tax will be Rs. 9,09,352/-. An amount of Rs. 1,02,25,000/- is proposed to be transferred to Preference Shares Redemption Reserve Account for the year.

Your Directors have also recommended the payment of Dividend on the Equity Shares at 20% (i.e) Rs.2/- per share of Rs.10/- each for the Year 2009-10. The Dividend will absorb a sum of Rs. 65,34,000/- and the dividend tax will be Rs. 10,85,216/-. An amount of Rs.2,00,00,000/- is proposed to be transferred to General Reserve Account for the year.

Deposits

During the year under review, the Company has made the repayment / pre-mature repayment of unsecured deposits after complying with the applicable rules. There were no overdue deposits as on 31st March 2010.

Directors

In accordance with the provisions of the Companies Act, 1956 and in terms of Articles of Association of the Company Sri R. Surender Reddy, Director of the Company, retire by rotation at the ensuing Annual General meeting and being eligible, offered himself for re-appointment.

Your Directors have co-opted Mr. Yash Agarwal as an Additional Director on the Board as well as Wholetime Director with designation as Executive Director w.e.f. 24th July, 2010. It is proposed to regularize his appointment in the ensuing Annual General Meeting.

Also it is proposed to re-appoint Sri Mahender Kumar Agarwal as Joint Managing Director of the Company for the further period of 5 years w.e.f. 1st January, 2011.

Board of Directors recommends the above appointment and reappointment.

Directors Responsibility Statement

Pursuant to the requirements under section 217(2AA) of the Companies Act, 1956, with respect to the Directors Responsibility Statement, the Board of Directors of your Company hereby confirms:

i) That in the preparation of the Annual Accounts for the financial year ended 31st March 2010 the applicable accounting standards have been followed along with proper explanations relating to material departures;

ii) That your 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 and of the profit of the Company for the year under review;

iii) That your Directors have 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;

iv) That your Directors has prepared the accounts for the financial year ended 31st March 2010 on a going concern basis.

Corporate Social Responsibility :

As an evolved and concerned corporate citizen, Suryalata believes that corporate social responsibility (CSR) initiatives are a way to pay back societal debts and obligations. We do not see CSR as charity; nor even as a responsibility; but as an opportunity to change and help the society. Our CSR activities are conceived to bridge gaps in society and help transform communities around our workplace.

At Suryalata, CSR activities are undertaken in various manners such as providing education scholarships for employees childrens and to other childrens in surrounding villages, conducting of health camps and providing free medicines, donations to Veda Patasala, Geetha Ashramam, Yogasramam etc., to develop and impart the Indian Traditional values, etc,.

During the year Suryalata has provided sportive articles to encourage sports spirit among the young children / youth, continued efforts are made to develop cultural activities, provided drinking water during summer season and bed sheets / articles are supplied to the flood affected people during the recent floods in Andhra Pradesh.

Auditors

M/s. Brahmayya &. Co., Chartered Accountants, Hyderabad, Statutory Auditors of the Company, retires at the ensuing Annual General meeting and is eligible for re-appointment.

Auditors have not made any observation on the Annual Accounts of the Company for the financial ended on 31st March, 2010.

Corporate Governance

A detailed Report on Corporate Governance, Management Discussion and Analysis Report and the Certificate from the Auditors of your Company regarding compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges, forms part of this Report.

Conservation of energy, technology absorption, foreign exchange earnings and outgo.

The information as required under Section 217 (1) (e) read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are provided in the annexure forming part of this Report.

Employees

Your Company has no employee whose remuneration exceeds the limits prescribed under Section 217(2A) of the Companies Act, 1956. Hence, the information required under the said section, read with the Companies (Particulars of the Employees) Rules, 1975, has not been given in the Report.

Human Resources

During the year, Industrial relations continued to be cordial throughout the year. Your Company firmly believes that a dedicated workforce constitute the primary source of sustainable competitive advantage. Accordingly, human resource development continues to receive focused attention. Your Directors wish to place on record their appreciation of the dedicated and commendable services rendered by the staff and workforce of the Company, without whose efforts, such an impressive performance may not have been possible.

Acknowledgements

The Board of Directors places on record its gratitude to IDBI Bank Limited, State Bank of India, Axis Bank Limited, insurance Companies and Government Authorities for their assistance and cooperation. The Board also acknowledges the support of the shareholders of the Company. The Board also places on record their deep sense of appreciation for the committed services of all the employees of the Company.

for and on behalf of the Board

for Suryalata Spinning Mills Limited

Place : Secunderabad R. Surender Reddy

Date : 24th July, 2010 Chairman