Suryalata Spinning Mills Ltd Directors Report

To The Members

Suryalata Spinning Mills Limited

Your 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: ( 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 Companys Affairs:

The Companys 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 Companys 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 companys 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 arms 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 Companys 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 Personnels 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 Companys 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 Companys 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 Companys 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 directors 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 Auditors 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 Companys 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 Companys operations in future:

No significant or material orders were passed by the regulators or courts or tribunals impacting the going concern status and companys 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 Companys 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 Boards 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 Companys progress and achievement of its objectives.

Sd/-

Vithaldas Agarwal

Managing Director

DIN: 00012774

Add: 8-2-684/3/k/8To10, MLA Colony, Road No.12,

Banjara Hills, Hyderabad-500034 , Telangana

Place: Secunderabad

Date: 29th June 2024