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Directors Report of Suryalata Spinning Mills Ltd.

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: 040-27774200

Fax: 040-27846859

Email: cs@suryalata.com

Website : www.suryalata.com


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


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


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