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Contents Page Nos

Corporate Information 2

Notice 3

Directors Report 17

Management Discussion Analysis 23

Corporate Governanace Report 25

Auditors Certificate on Compliance of Corporate Governance 34

Independent Auditors Report 35

Balance Sheet 38

Statement of Profit and Loss 39

Notes on Financial Statements 40

Cash Flow Statement 61

Attendance Slip / Proxy Form 63

Important Communication to Members

The Ministry of Corporate Affairs has taken a Green Initiative in the Corporate Governance byallowing paperless compliances by the companies and has issued circular stating that service of notice

/ documents including Annual Report can be sent by e-mail to its members. To support this greeninitiative of Government in full measure, members who have not registered their e-mail addresses, sofar, requested to register their e-mail addresses in respect of electronic holdings with the Depository

through their concerned Depository Participants.

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CORPORATE INFORMATIONBOARD OF DIRECTORSSri Badrinarayan Agarwal Executive ChairmanSri R.Surender Reddy DirectorDr. Akkineni Nageswara Rao Director (upto 22.01.2014)Sri G.Ganesh Nominee Director of IDBI (upto 02.06.2013)Sri Rajender Kumar Agarwal Managing DirectorSri Jeetender Kumar Agarwal Executive DirectorSri Devender Kumar Agarwal Whole time DirectorSri Surender Kumar Agarwal DirectorSri Pankaj Goel Director (from 28.11.2013)Sri Manish Gupta Director (from 31.03.2014)

Vice President (Corporate Affairs) & Company Secretary

Sri B.R.S. Reddy

Vice President (Finance & Accounts)

Sri B. Somasekhara Rao

Auditors Audit Committee

M/s. Brahmayya & Co. Sri R. Surender ReddyFlat No. 403 & 404, Golden Green Apartments Sri Jeetender Kumar AgarwalIrrum Manzil Colony, Sri Surender Kumar AgarwalHyderabad - 500082 Sri Pankaj Goel

Bankers Stake Holder Relationship Committee

Andhra Bank Sri Rajender Kumar Agarwal

State Bank of Hyderabad Sri Surender Kumar AgarwalICICI Bank Limited Sri B.R.S. Reddy

Registered Office Nomination & Remuneration Committee

6th Floor, Surya Towers, 105, S.P.Road Sri R. Surender ReddySecunderabad 500003, Telangana Sri Surender Kumar Agarwal

Website: www.suryavanshi.com Sri Pankaj GoelEmail: [email protected]: L14220TG1978PLC002390 ISIN No. INE431C01015Phone: 91-40-30512700 Listed on BSE LimitedFax: 91-40-30512725/27815135 Script Code : 514140

Registrar and Share Transfer Agents

Karvy Computer Share Private LimitedPlot No. 17 to 24, Vithalrao Nagar, Madhapur, Hyderabad 500081Tel No. 040-44655000, Fax No. 040-23420814e-mail : [email protected]

FACTORIES

Spinning & Medical Textile DivisionsAliabad, Medchal Taluq, Ranga Reddy Dist.Telangana - 500 078.

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NOTICE

NOTICE is hereby given that the 35th Annual GeneralMeeting of the Members of Suryavanshi Spinning MillsLimited will be held on Tuesday, 30th September,2014 at 10.00 A.M. at Gayatri Gardens, Survey

No.26, Sikh Village, Near Diamond Point Hotel,

Secunderabad - 500003, to transact the followingbusiness:

ORDINARY BUSINESS

1. To receive, consider and adopt the Audited BalanceSheet as at March 31,2014 and statement of Profitand Loss of the Company and Cash Flow Statement

of the Company for the year on that date and theReports of the Directors and Auditors thereon.

2. To appoint a director in place of Sri JeetenderKumar Agarwal , who retires by rotation and, beingeligible offers himself for reappointment and in

this connection to consider and if deemed fit, topass with or without modification(s), the followingresolution as an Ordinary Resolution:

RESOLVE THAT Sri Jeetender Kumar AgarwalDIN 0041946, be and is here by re-appointedas a Director of the company , liable to retire byrotation

3. To appoint Auditors to hold office from the

conclusion of this Annual General Meeting until theconclusion of the next Annual General Meeting andin this connection, to consider and if thought fit, topass with or without modification(s), the followingResolution as an ordinary Resolution.

RESOLVED THAT M/S Brahmayya & Co.,Chartered Accountants,(Firms RegistrationNumber 0005135) be and are hereby re-appointedas statutory auditors of the company to hold officefrom the conclusion of this Annual General Meetinguntil the conclusion of the next Annual GeneralMeeting at a remuneration to be decided by theBoard of Directors of the Company.

SPECIAL BUSINESS

4. TO CONSIDER, AND IF THOUGHT FIT,

TO PASS THE FOLLOWING RESOLUTION

WITH OR WITHOUT MODIFICATION(S) AS

A SPECIAL RESOLUTION:

RESOLVED THAT subject to the provisions of

sections 196, 197, 203 and 152 and other applicableprovisions if any of the Companies Act, 2013and Companies (appointment and remunerationof managerial personnel) rules, 2014 read withschedule V thereof as amended upto date, andsubject to such other approval as may be requiredconsent of the Company be and is hereby accorded

to the appointment of Sri Badrinarayan Agarwal(DIN : 00042123) as Executive Chairman and

Whole Time Director liable to retire by rotationfor a period of three years from 01.02.2014 to31.01.2017 on the following terms and conditions :

Basic Salary: Rs.1,50,000/- per month

Commission: @ 1% (one percent) of Net Profits of

the Company or 50% of the basic salary, whicheveris less.

Perquisites: In addition to salary and commission

as stated above Sri Badrinarayan Agarwal, shall be

entitled to the following perquisites:

PART A

i. Rent free furnished residential accommodation

with all facilities and amenities including such

services such as gas, electricity, water etc. or House

Rent Allowance to the extent of 40% of the basic

salary whichever is higher.

ii. Medical Reimbursement: Reimbursement ofmedical expenses for self and family subject to a

ceiling of one months basic salary in a year or three

months basic salary over a period of three years.

iii. Leave Travel Concession: For self and family once

in a year in accordance with the Rules of the

Company.

iv. Fees of clubs: Subject to a maximum of two clubs

provided that no life membership or admission fees

is paid.

v. Personal Accident Insurance: Premium not to

exceed Rs. 4,000/- (Rupees Four Thousand) per

annum.

PART B

Contribution to Provident Fund, Superannuation Fund orAnnuity Fund as per the Rules of the Company, if any.

Gratuity payable shall not exceed half a months basicsalary for each completed year of service.

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PART C

Provision of car for use of Companys business andtelephone and other communications at residence.

Resolved further that Sri Badrinarayan Agarwal whenreappointed as Whole Time Director immediately onretirement by rotation, shall continue to hold his officeof Director and such reappointment shall not be deemed

to constitute a break in his appointment as Whole TimeDirector of the company.

RESOLVED FURTHER THAT where in any financialyear during the currency of tenure of Sri BadrinarayanAgarwal, executive Chairman, the Company has noprofits or its profits are inadequate, the Company will payremuneration by way of salary, perquisites and allowances,as specified above as a minimum remuneration subject toprovisions of Schedule V of the Companies Act, 2013





RESOLVED THAT subject to the provisionsof sections 196, 197, 203 and 152 and otherapplicable provisions if any of the Companies

Act, 2013 and Companies (appointment andremuneration of managerial personnel) rules,2014 read with schedule V thereof as amended

upto date, and subject to such other approval asmay be required, the consent of the Company beand is hereby accorded for the appointment of SriRajender Kumar Agarwal (DIN 0041892) and re-disignation from Joint Managing Director, who shallbe Managing Director liable to retire by rotationfor a period of three years from 13.02.2014 to12.02.2017 on the following terms and conditions :

Basic Salary: Rs.1,40,000/- per month

Commission: @ 1% (one percent) of Net Profits ofthe Company or 50% of the basic salary, whicheveris less.

Perquisites: In addition to salary and commission as

stated above Sri Rajender Kumar Agarwal, shall beentitled to the following perquisites:

PART A

i. Rent free furnished residential accommodationwith all facilities and amenities including suchservices such as gas, electricity, water etc. or House

Rent Allowance to the extent of 40% of the basicsalary whichever is higher.

ii. Medical Reimbursement: Reimbursement ofmedical expenses for self and family subject to aceiling of one months basic salary in a year or threemonths basic salary over a period of three years.

iii. Leave Travel Concession: For self and family oncein a year in accordance with the Rules of theCompany.

iv. Fees of clubs: Subject to a maximum of two clubsprovided that no life membership or admission feesare paid.

v. Personal Accident Insurance: Premium not to

exceed Rs. 4,000/- (Rupees Four Thousand) perannum.

PART B

Contribution to Provident Fund, Superannuation Fund orAnnuity Fund as per the Rules of the Company, if any.

Gratuity payable shall not exceed half a months basicsalary for each completed year of service.

PART C

Provision of car for use of Companys business andtelephone and other communications at residence.

Resolved further that Sri Rajender Kumar Agarwal whenreappointed as Whole Time Director immediately onretirement by rotation, shall continue to hold his officeof Director and such reappointment shall not be deemed

to constitute a break in his appointment as Whole TimeDirector of the company.

FURTHER RESOLVED THAT where in any financial yearduring the currency of tenure of Sri Rajender Kumar

Agarwal, Managing Director, the Company has no profitsor its profits are inadequate, the Company will payremuneration by way of salary, perquisites and allowances,as specified above as a minimum remuneration subject toprovisions of Schedule V of the Companies Act, 2013

6. TO CONSIDER, AND IF THOUGHT FIT,TO PASS THE FOLLOWING RESOLUTION


AN ORDINARY RESOLUTION:

RESOLVED THAT pursuant to the provisionsof Sections 149, 152 read with Schedule IV andall other applicable provisions of the Companies

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Act, 2013 and the Companies (Appointment andQualification of Directors) Rules, 2014 (includingany statutory modification(s) or re-enactment

thereof for the time being in force) and Clause49 of the Listing Agreement, Shri R. SurenderReddy (DIN: 00083972), non executive Directorof the Company who retires by rotation andoffered himself for re-appointment and whosubmitted a declaration that he meets the criteriafor independence as provided in section 149(6)of the Companies Act, 2013and who is eligiblefor appointment, be and is hereby appointed asan Independent Director of the Company to holdoffice for 5(five) consecutive years with effect from30th September 2014 to 29th September, 2019.

RESOLVED FURTHER THAT Sri R SurenderReddy as an Independent Director shall not beliable for retirement by rotation during the tenureof his office.

7. TO APPOINT SHRI SURENDER KUMAR

AGARWAL (DIN: 00281576) AS AN

INDEPENDENT DIRECTOR AND IN THIS

REGARD TO CONSIDER AND IF THOUGH

FIT, TO PASS, WITH OR WITHOUT

MODIFICATION(S), THE FOLLOWING

RESOLUTION AS AN ORDINARY

RESOLUTION.



thereof for the time being in force) and Clause49 of the Listing Agreement, Sri Surender Kumar

Agarwal (DIN: 00281576), non executive Directorof the Company of the Company and whosubmitted a declaration that he meets the criteriafor independence as provided in section 149(6) of

the Companies Act, 2013 and who is eligible forappointment, be and is hereby appointed as an

Independent Director of the Company to holdoffice for 5(five) consecutive years with effect from30th September 2014 to 29th September, 2019.

RESOLVED FURTHER THAT Sri Surender KumarAgarwal as an Independent Director shall not beliable for retirement by rotation during the tenureof his office.

8. TO APPOINT SHRI PANKAJ GOEL

(DIN: 00010059) AS AN INDEPENDENT

DIRECTOR AND IN THIS REGARD TO

CONSIDER AND IF THOUGH FIT, TO PASS,

WITH OR WITHOUT MODIFICATION(S),

THE FOLLOWING RESOLUTION AS AN

ORDINARY RESOLUTION.



thereof for the time being in force) and Clause 49of the Listing Agreement, Shri Pankaj Goel (DIN:00010059), who was appointed as an AdditionalDirector pursuant to the provisions of Section161(1) of the Companies Act, 2013 and the Articlesof Association of the Company and who holdsoffice up to the date of this Annual General Meetingand in respect of whom the Company has receiveda notice in writing under Section 160 of theCompanies Act, 2013 from a member proposinghis candidature for the office of Director, be andis hereby appointed as an Independent Director of

the Company to hold office for 5(five) consecutiveyears with effect from 30th September 2014 to29th September, 2019.

RESOLVED FURTHER THAT Sri Pankaj Goelas an Independent Director shall not be liable forretirement by rotation during the tenure of hisoffice.

9. TO APPOINT SHRI MANISH GUPTA

(DIN: 00526638) AS AN INDEPENDENT

DIRECTOR AND IN THIS REGARD TO

CONSIDER AND IF THOUGH FIT, TO PASS,

WITH OR WITHOUT MODIFICATION(S),

THE FOLLOWING RESOLUTION AS AN

ORDINARY RESOLUTION.

RESOLVED THAT pursuant to the provisionsof Sections 149, 152 read with Schedule IV and

all other applicable provisions of the CompaniesAct, 2013 and the Companies (Appointment andQualification of Directors) Rules, 2014 (includingany statutory modification(s) or re-enactment

thereof for the time being in force) and Clause 49of the Listing Agreement, Shri Manish Gupta (DIN:00526638), who was appointed as an Additional

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Director pursuant to the provisions of Section161(1) of the Companies Act, 2013 and the Articlesof Association of the Company and who holdsoffice up to the date of this Annual General Meetingand in respect of whom the Company has receiveda notice in writing under Section 160 of theCompanies Act, 2013 from a member proposinghis candidature for the office of Director, be andis hereby appointed as an Independent Director of

the Company to hold office for 5(five) consecutiveyears with effect from 30th September 2014 to 29th September, 2019.

RESOLVED FURTHER THAT Sri Manish Guptaas an Independent Director shall not be liable for

retirement by rotation during the tenure of hisoffice.





Adoption of new articles in substitution of old.

RESOLVED THAT pursuant to the provisions ofSection 14 and other applicable provisions of theCompanies Act, 2013 the regulations contained in

the draft Articles of Association submitted to thismeeting, for the purpose of identification initialedby the Chairman, be and are hereby approvedand adopted as the Articles of Association of theCompany in substitution for, and to exclusionof, all the existing Articles of Association of theCompany.

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





RESOLVED THAT the consent of the Company beand is hereby accorded in terms of Section 180(1)(c) and other applicable provisions, if any, of theCompanies Act, 2013 to the Board of Directors of

the Company to raise or borrow money from timeto time from the Companys Bankers or FinancialInstitutions or from elsewhere on such terms and

conditions as to repayment or interest or otherwiseas it thinks fit, such sums as may be necessary for

the purpose of the Companys business in excessof the paid up capital and free reserves of theCompany, that is to say the reserves not set apartfor any specific purpose provided however, that the

total amount of such borrowings together with themonies already borrowed (apart from temporaryloans obtained from the Companys bankers in theordinary course of business) in aggregate shall notexceed at any one time a sum of Rs. 200 crores(Rupees Two Hundred Crores only).



WITH OR WITHOUT MODIFICATION(S) ASA SPECIAL RESOLUTION:

RESOLVED THAT pursuant to the provisions ofSection 180(1)(a) and other applicable provisions, ifany, of the CompaniesAct,2013 and the rules made

there under (including any statutory modification(s)or re-enactment thereof for the time being inforce),and that of the Articles of Association of theCompany, the consent of the Company be and ishereby accorded to the Board of Directors of theCompany (the Board) to hypothecate/mortgageand/or charge and/or encumber in addition to thehypothecations/mortgages and/or charges and/orencumbrances if any created by the Company, in

such form and manner and with such ranking and atsuch time(s) and on such terms as the Board maydetermine, all or any part of the movable and/orimmovable properties of the Company whereversituated both present and future, and/or createa charge, mortgage /floating charge on all or anypart of the movable and immovable properties of

the Company and the whole or any part of theundertaking(s) of the Company, together withpower to take over the management of the businessand concern of the Company in certain eventsof default, in favour of the Companys Bankers/Financial Institutions/other investing agencies and

trustees for the holders of Debentures/Bonds/

other instruments/securities to secure any Rupee/Foreign currency Loans, Guarantee assistance,Standby Letters of Credit/Letters of Credit, and/or any issue of Non-Convertible Debentures,and/or Compulsorily or Optionally, Fully or PartlyConvertible Debentures and/or Bonds, and/orany other Non-Convertible and/or other Partly/Fully Convertible instruments/securities, whether

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availed by the Company or by others, within theoverall ceiling prescribed by the members of theCompany, in terms of Section 180(1)(c) of theCompanies Act, 2013.

RESOLVED FURTHER THAT the Board be and ishereby authorised to do all such acts, deeds and

things and to take all such steps as may be necessaryfor the purpose of giving effect to this resolution.

RESOLVED FURTHER THAT the Board be andis hereby authorised to delegate all or any of thepowers herein conferred to any Committee ofDirectors or any one or more Directors of theCompany.



WITHOR WITHOUT MODIFICATION(S) AS

AN ORDINARY RESOLUTION:

RESOLVED THAT the Company do herebyapprove in terms of Section 148 of the Companies

Act 2013 and Rule 4 of the Companies (Audit &Auditors) Rules, 2014, the remuneration of Rs.25000/- (Rupees Twenty Five Thousand only)plus out of pocket expenses payable to Ms. ArunaPrasad , Cost Accountant for the cost audit tobe conducted by her of the cost records of theCompany for the financial year 2014 15.





RESOLVED THAT in supersession of earlierspecial Resolution passed by the members at the33rd Annual General Meeting held on 30.07.2012and subject to the provisions of section 203,196,197and Schedule V of the Companies Act,2013 andfurther subject to such other consents as maybe required the terms of the appointment of Sri

Jeetender Kumar Agarwal executive director beand are hereby varied from 03.09.2014 to reminder

of his term I.e. up to 29.05.2015 to the effect thathe shall not draw any remuneration what so everform the company

RESOLVED FURTHER THAT all other terms andconditions of the appointment of Sri JeetenderKumar Agarwal approved earlier by the membersof the company shall remain un altered.





RESOLVED THAT in supersession of earlierspecial Resolution passed by the members at the33rd Annual General Meeting held on 30.07.2012subject to the provisions of section 203,196,197 andSchedule V of the Companies Act ,2013 and furhtersubject to such consents as may be required the

terms of the appointment of Sri Devender KumarAgarwal (DIN 0042156) whole time director be andare hereby varied from 03.09.2014 to reminder ofhis term i.e., upto 29.5.2015 to the effect that he

shall not draw any remuneration what so ever formthe company.

RESOLVED FURTHER THAT that all other termsand conditions of the appointment of Sri DevenderKumar Agarwal approved earlier by the membersof the company shall remain un altered.




AN ORDINARY RESOLUTION

RESILVED THAT pursuant to the provisions ofSection 181 of the Companies Act,2013 and otherapplicable provisions ,if any, the permission of the

company be and is here by accorded to the Boardof Directors of the company to contribute onbehalf of the company to bonafide, charitable andother funds any amounts notwithstanding that theaggregate of which will in any financial year mayexceed 5% of Companys average net profits for

the three immediately preceding financial yearshowever subject to a ceiling of Rs 5,00,000/- duringa financial year.

RESOLVED FURTHER THAT the Board be and ishereby authorised to do all such acts, deeds and

things and to take all such steps as may be necessaryfor the purpose of giving effect to this resolution

By order of the BoardFor Suryavanshi Spinning Mills Limited

B.R.S.Reddy

Vice-President (Corporate Affairs)& Company Secretary

Place: SecunderbadDate: 03.09.2014

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NOTES:

1. The register of members and share transfer booksof the Company, will be closed from Monday 29thSeptember, 2014 to Tuesday 30th September, 2014(both days inclusive) for the purpose of AnnualGeneral Meeting .

2. A member entitled to attend the meeting is entitledto appoint a proxy to attend and vote instead ofhimself and such proxy need not be a member of

the Company. A person can act as Proxy on behalfof members not exceeding fifty and holding in theaggregate not more than 10% of the total sharecapital of the Company carrying voting rights.

3. A member holding more than 10% of the total

share capital may appoint a single person as Proxyand such person shall not act as Proxy for any otherperson or member. The Instrument appointing theproxy should be deposited at the registered officeof the company not less than forty eight hoursbefore the commencement of the meeting.

4. The shareholders desiring any further informationas regards the accounts are requested to write to

the Company so as to reach it at least one weekprior to the date of the meeting for considerationof the management to deal at the meeting.

5. Unclaimed dividends of the following year will betransferred to the Investor Education & ProtectionFund set up by the Central Government on thedates mentioned against it:

For theFinancial Year

Date ofDeclaration

Due fortransfer on

2006-2007 09.08.2007 15.09.2014

Members who have not en cashed their dividendwarrants pertaining to the above year may havetheir warrants revalidated by sending them to theRegistered Office of the Company.

6. Members may note that the Notice of the 35thAGM and the Annual Report for FY 2013-14copies of audited financial statements, directorsreport, etc. will also be available on the websiteof the Company, www.suryavanshi.com fordownload. Members holding shares in electronicmode are therefore requested to keep theiremail addresses uploaded with the DepositoryParticipants. Members holding shares in physicalmode are also requested to update their emailaddresses by writing to the Registrar and Transfer

Agent of the Company at the address M/s. Karvy

Computershare Private Limited, Plot No. 17 to 24,Vithal Rao Nagar, Madhapur, Hyderabad 500 081.

7. E-Voting :

The Companies Act, 2013 provide that everyListed Company shall provide to its membersa facility to exercise their right to vote at AnnualGeneral Meeting by electronic mean. Accordinglya member may exercise his right to vote at the

AGM by electronic means. The detailed procedureand guidelines for exercising this right to vote byelectronic means is provided below :-

Pursuant to Section 108 of Companies Act, 2013read with Rule 20 of Companies (Management

and Administration) Rules, 2014, it is mandatory toextend to the Members of the Company, the facility

to vote at the AGM by electronic means.

Members of the Company can transact all the itemsof the business through electronic voting system ascontained in the Notice of the Meeting.

The Company has appointed Mrs. RashidaAdenwala, Partner R&A Associates, Hyderabad,who in the opinion of the Board is a duly qualifiedperson, as a Scrutinizer who will conduct theelectronic voting process in a fair and transparentmanner. The Scrutinizer shall within a period of

three working days from the date of conclusion of

e-voting period, submit his report of the votes castin favour or against, if any, to the Chairman of theCompany. The result of the same will be disclosedat the AGM proceedings.

INSTRUCTION FOR E-VOTING

1. To use the following URL for e-voting :

From Karvy website : http://evoting.karvy.com

2. Shareholders of the Company holding shares eitherin physical form or in dematerialized form, as on

the record date, may cast their vote electronically.

3. Enter the login credentials (i.e. user id and passwordmentioned in the Notice of the AGM). Your Folio

no.DP ID Client ID will be your user ID.

4. After entering the details appropriately, click onLOGIN.

5. You will reach the Password change menu whereinyou are required to mandatorily change yourpassword, The new password shall comprise of

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minimum 8 characters with a least one upper case (A-Z), one lower case (E-Z), one numeric value (0-9) and aspecial character. The system will prompt you to change your password and update any contact details like mobile,email etc on first login. You may also enter the secret question and answer of your choice to retrieve your passwordin case you forget it. It is strongly recommended not to share your password with any other person and take utmostcare to keep your password confidential.

6. You need to login again with the new credentials.

7. On successful login, the system will prompt you to select the EVENT i.e., Suryavanshi Spinning Mills Ltd.

8. On the voting page, enter the number of shares as on the cut off date under FOR / AGAINST or alternatively youmay enter partially any number in FOR and partially in AGAINST but the total number in FOR/AGAINST taken

together should not exceed the total shareholding. You may also choose the option ABSTAIN.

9. Shareholders holding multiple folios/demat account shall choose the voting process separately for each folios /demat account.

10. Cast your vote by selecting an appropriate option and click on SUBMIT. A confirmation box will be displayed. ClickOK to confirm else CANCEL to modify. Once you confirm, you will not be allowed to modify your vote. During the

voting period, shareholders can login any number of times till they have voted on the resolution.

11. Once the vote on the resolution is case by the shareholder, he shall not be allowed to change it subsequently.

12. The portal will be open for voting from 9 a.m. on September 24.09,2014 to 6 p.m. on 26.09.2014

13. In case of any queries, you may refer the Frequently Asked Questions (FAQs) for shareholders and e-voting usermanual for shareholders available at the download section of http://evoting.karvy.com or contact Karvy CompusharePvt. Ltd at Tel.no.1800 345 4001 (toll free).

14. The Members are free to contact either the Company or the Registrars for any clarifications they may need in thisconnection.

15. The Companies Act, 2013 provides for the facility of nomination to the holders of Shares in a Company. Accordingly,members can avail the facility of nomination in respect of their shares held either singly or jointly. Members desiring

to avail this facility are requested to fill up the prescribed nomination form and send the same to the RegisteredOffice of the Company. (The forms are available at the Regd. Office /Office of Registrars of the Company).

16. The shares of the Company continue to be listed on the Stock Exchanges at Mumbai and the Company has paid uptodate all the listing fees to these exchanges.

17. Members are requested to notify immediately any change in their addresses to the Company.

18. The members are requested to bring their copy for the annual report with them at the time of attending AnnualGeneral Meeting.

By order of the Board

For Suryavanshi Spinning Mills Limited

B.R.S.Reddy

Vice-President (Corporate Affairs)

& Company SecretaryPlace: SecunderbadDate: 03.09.2014

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EXPLANATORY STATEMENT PURSUANT TO SECTION 102 OF THE COMPANIES ACT, 2013.

Item No. 2.

Sri Jeetender Kumar Agarwal, B.E Textiles is one of the promoter directors of Suryavanshi spinning mills ltd and he has vastknowledge of textile industry for more than 22 years and his experience and guidance is considered vital to the companys

growth . He is the executive director of Company . Sri Jeetender Kumar Agarwal is liable to retirement by rotation andoffers himself for reappointment. when reappointed as Director immediately on retirement by rotation, he shall continue

to hold his office of Director and such reappointment shall not be deemed to constitute a break in his appointment asWhole Time Director of the company. His re-appointment has been recommended by the Nomination and RemunerationCommittee.

The other directorships held by him are furnished hereunder.

1. Sheshadri Industries Ltd2. Aananda Lakshmi Spinning Mills Ltd3. Suryavanshi Industries ltd4. Suryavanshi Integrated Apparel Park Limited

He holds 618376 equity shares of the company as on 03.09.2014 subsequent to the demerger

Except Sri. Jeetender Kumar agarwal, Executive Director, Sri. Badrinarayan Agarwal Executive Chairman and Sri. RajenderKumar Agarwal, Managing Director and Sri Devender Kumar Agarwal, Whole time Director and their relatives to theextent of their shareholding , no other Director / Key managerial personnel / their relatives of the Company is interested

/ concerned financially or otherwise with the above resolution.

The Board recommend the resolution for the approval of members.

Item Nos 4 & 5

Sri Badrinarayan Agarwal has been appointed and re designated from Chairman and Managing Director to ExecutiveChairman by the Board at their meetin held on 6.1.2014 for a period of 3 years w.e.f. 01.02.2014 on remuneration ofRs.150000/- P.M. PLUS all applicable perquisites.

Sri Rajender Kumar Agarwal has been appointed as Managing Director by the Board at their meeting held on 13.2.2014for a period of three years w.e.f.13.02.2014 to 12.02.2017 on remuneration of Rs.140000/- P.M. PLUS all applicable

prerequisites. He is also Director of Suryavanshi Industries Ltd, Aanandalakshmi Spinning Mills Ltd., Sheshadri IndustriesLtd., Surya Sarv Shakti Spinning Mills Pvt. Ltd., Varuna Spnning Mills Pvt. Ltd. and Sheshadri Power & Infrastructure Pvt.Ltd.

Sri Badrinarayan Agarwal is the promoter and founder of the Company and is also instrumental in floating the othercompanies and has vast knowledge of textile industry for more than 5 decades and his experience and guidance isconsidered vital to the companys growth and hence the Board recommends his reappointment in spite of the fact thathe has attained the age of 70 years. He is also Director Aanandalakshmi Spinning Mills Ltd., Sheshadri Industries Ltd andSurya Sarv Shakti Spinning Mills Pvt. Ltd.

Sri Rajender Kumar Agarwal graduate in mechanical Engineering is one of the promoter directors of the Company havingrich experience in textile industry for more than 24 years and he is instrumental in developing the business, he hasbeen associated with the company as Joint Managing Director for the last several years and his services are vital for the

growth of the company. The Board appointed him as Managing Director for a period of three years w.e.f.13.02.2014 to12.02.2017 on remuneration of Rs.140000/- Per month Plus all applicable prerequisites.

The above appointments were made subject to approval of members and such other approvals as may be required.Sl.

No.Name Period

Revised Remuneration (Rs.)per month (proposed)

1 Sri Badrinarayan Agarwal From 1st February, 2014 to31st January 2017

Rs.1,50,000/- P.M. Plus 40% HRA and with usualallowances and prerequisites.

2 Sri Rajender Kumar Agarwal From 13th February, 2014 to12th February 2017

Rs.1,40,000/- P.M. Plus 40% HRA and with usualallowances and prerequisites.

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Perquisites have been detailed in the respective resolutions. These remunerations are further subject to the ceilings

mentioned in Schedule V of the Companies Act, 2013.

The above remunerations have been approved by the Remuneration Committee.

Sri Badrinarayan Agarwal and Sri Rajender Kumar Agarwal hold 222747 and 579359 equity shares respectievely in the

company as on 03.09.2014 (subsequent to demerger).

Sri Badrinarayan Agarwal and Sri Rajender Kumar Agarwal are interested in the respective resolutions to the extent of

remuneration receivable by them Further Sri Jeetender Kumar Agarwal and Sri Devender Kumar Agarwal being relatives

to the above Directors are also deemed to be interested in the above resolutions. The relatives of the above director

may be deemed to be interested to the extent of their shareholding in the Company. None of the other directors/key

Managerial Personnel of the Company / their relatives is any way concerned or interested, financially or otherwise in the

above resolutions.

Additional Disclosure about the appointee as per Schedule V of the Companies Act, 2013.

Nature of Industry

Suryavanshi Spinning Mills Limited is in the business of manufacture of blended, polyester, polyester viscose blended yarns

Company with spindleage of 36912 (After demerger) and 3000 tpa of Medical Textile Products etc., Suryavanshi Spinning

Mills Limited is one of the fast growing established Textile sector Companies.

Date of commencement of commercial production

Not Applicable.

Financial performance

Performance of the Company for the last three years are as follows: (Rs. in lakhs)

Item 2013-2014 2012-13 2011-12

Income from Operations 11443.71 27406.12 27714.35

Profit / Loss before interest, Depreciation after Tax 780.36 56.80 944.91

Profit / Loss after Tax 9.71 (1555.64) (816.78)

Export performance and net foreign exchange earnings

Export performance of the Company for the last three years is as follows: (Rs. in lakhs)

Item 2013-14 2012-13 2011-12

FOB value of goods exported 2592.29 5621.75 5695.66

Please refer to the paragraph given under restructuring of the Company in Directors Report in page No. 16 accordingly

the information given against Item No. 4 & 5 for the year 2013-14 herein is in respect of the demerged Company i.e., Yarn

and Medical Textiles Division at Aliabad, Ranga Reddy District. The figures of the previous years i.e., 2012-13 & 2011-12relate to the Company prior to the demerger and hence are not comparable with that of 2013-14.

Foreign investments or collaborators, if any.

Foreign investments in the Company as on 31st March, 2014 are 12093 equity shares (shares allotted as per scheme of

arrangement). These shares are held by NRIs/OCBs.

At present the Company does not have any Collaboration, either technical or financial.

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II. Information about the appointee:

Background details :

Sl.

No.Name

Remuneration

per AnnumExperience

1 Sri Badrinarayan

Agarwal, Graduate

in Commerce.

Rs. 28.39 Lacs. He has more than 50 Years vast experience in Textile Industry and associated as a

promoter of the company from inception and established Spinning Units of the Group

Companies as well as Company. He looks after the overall activities of the company

with the assistants of Joint Managing Director, Executive Directors of the company,

particularly the procurement of Cotton and other core activities of the Company.

2 Sri Rajender Kumar

Agarwal, B.E.

Mechanical

Rs. 28.41 Lacs. He is qualified Mechanical Engineer having more than 24 Years experience in Production,

Planning and Administration functions of the Company. He has been appointed from

Joint Managing Director to Managing Director of the Company.

Recognition or awards : Nil

Remuneration proposed :

It is proposed to pay the remuneration as proposed in the Resolutions at item Nos. 4&5 respectively.

Comparative remuneration profile with respect to industry, size of the Company, profile of the position and person(in case of expatriates the relevant details would be w.r.t. the country of his origin):

Compared to the remuneration profile of position and person with respect to this industry and size, they areentitled to the remuneration mentioned in the resolutions at Item Nos. 4&5

Pecuniary relationship directly or indirectly with the company, or relationship with the managerial

personnel, if any:

Sri Badrinarayan Agarwal Executive Chairman is the core promoter the of the Company . Sri Badrinarayan Agarwal,Managing Director, and Sri Jeetender Kumar Agarwal, Executive Director and Sri Devender Kumar. Agarwal Whole

time Director of the company are the Sons of Sri Badrinarayan Agarwal, hence they are related to each other.

III. Other information:

Reasons for inadequate profits

The company could not earn substantial profits due to increase in cost of raw material, high cost of power andlabour attrition and high absenteeism.

The Company has taken all steps to increase the profitability of the Company. Textile sector is going through toughcompetition and has pruned gross margins due to unhealthy competition.

Steps taken or proposed to be taken for improvement

Company has taken various policies to control and ensure labour force adequately. Company is proposing tomodernise various old machinery which are less productive. Company is also planning to exapand its medical textiledivision for manufacture of cotton pads, cotton buds, cotton balls as part of forward integration. With the aboveobjective, company proposes to invest around Rs. 4 Crores during the financial year 2014-15. The above measures

will go a long way in achieving the growth objective towards production and to improve bottom line. Expected increase in productivity and profits in measurable terms.

Company is poised to increase turnover by around 10% and the company is expected to achieve reasonable profits.

Board of Directors recommends the resolutions stated at Item Nos. 4 & 5 of the Notice for your approval.

Except Sri. Badrinarayan Agarwal, Executive Chairman, Sri. Rajender Kumar Agarwal Managing Director andSri. Jeetender Kumar Agarrwal, Executive Director and Sri Devender Kumar Agarwal, Whole time Director and

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their relatives to the extent of their shareholding,no other Director / Key managerial personnel/theirrelatives of the Company is interested / concernedfinancially or otherwise with the above resolutions.

Item Nos. 6, 7, 8 & 9

The Company had, pursuant to the provisions of clause49 of the Listing Agreement entered with the StockExchange, appointed Sri R. Surender Reddy, Sri SurenderKumar Agarwal as Independent Directors at various

times, in compliance with the requirements of the clause.

During the year under review Sri Pankaj Goel & Sri ManishGupta have been appointed by the Board of Directorsas additional directors in terms of Section 161 of the

Companies Act of 2013. In terms of the said section SriPankaj Goel & Sri Manish Gupta shall hold office upto theensuing Annual General Meeting of the Company.

Notice in writing under Section 160 of the Act hasbeen received form a member signifying his intention topropose Sri Pankaj Goel & Sri Manish Gupta as Directorsof the Company along with the requisite amount ofdeposit as required under the provisions of Section 160of the Companies Act 2013 which will be refunded to themember if Sri Pankaj Goel & Sri Manish Gupta are electedas Directors

Pursuant to the provisions of section 149 of theCompanies Act, 2013 which came into effect from April1, 2014 every listed public company is required to have atleast one-third of the total number of directors (50% of

the total no. of directors should be independent directorsas per revised clause 49 of the listing agreement of BSELimited) as independent directors, who are not liable toretire by rotation.

Sri Surender Reddy, Sri Surender Kumar Agarwal,Sri Pankaj Goel and Sri Manish Gupta non-executivedirectors of the Company, have given a declaration to

the Board that they meet the criteria of independence asprovided under section 149(6) of the Act, in the opinionof the Board, each of these directors fulfill the conditionsspecified in the Act and the Rules framed there underfor appointment as Independent Director and they are

independent of the management.In compliance with the provisions of section 149 read

with Schedule IV of the Act, the appointment of thesedirectors as Independent Directors is now being placedbefore the Members for their approval.

The terms and conditions of appointment of the aboveDirectors shall be open for inspection by the Members

at the Registered Office of the Company during normalbusiness hours on any working day, excluding Saturday.

The Board recommends the above the resolutions for theapproval of members .

A brief profile of the Independent Directors to beappointed is given below.

Item No.6

SRI R SURENDER REDDY

Sri R Surender Reddy has wide experience in business and

politics. He was a Member of Parliament for four terms

and was also a Member of Legislative Assembly (Andhra

Pradesh) for four terms. He was also on the Boards of

Andhra Bank and A.P. State Financial Corporation. He has

been the Chairman of Hyderabad Race Club for several

years and is very well known in corporate circles.

The recently enacted Companies Act, 2013 read with the

amended Corporate Governance norms as prescribed

by SEBI provide that a Listed Company shall appoint

Independent Directors for a term of five consecutive

years on the Board of a Company who shall be eligible

for re-appointment on passing a special resolution by

the Company and disclosure of such appointment in

the Boards report. The Independent Director shall also

not be liable to retire by rotation during his tenure of 5

years. The Independent Director shall also abide by theprovisions set out in Schedule IV to the Companies Act,

2013.

Sri R Surender Reddy satisfies the conditions prescribed

in the Act and the Corporate Governance norms and the

Board recommends his appointment to the members of

the Company.

Names of the companies in which he is a Director.

1. Suryalata Spinning Mills Limited.

2. Hyderabad Race Club Ltd.

3. Suryalakshmi Cotton Mills Ltd.

4. Surana Ventures Ltd.5. Bhagyanagar India Ltd.

6. Lakshmi Finance & Industries Corpn. Ltd.

7. Suryajyoti Spinning Mills Ltd

No. of shares held by Sri R Surender Reddy in the

Company is 1000.

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Except Sri R Surender Reddy, None of the other directors

/key Managerial Personnel of the Company / their relatives

is in way concerned or interested, financially or otherwise

in the above resolutions.

Item No. 7

SRI SURENDER KUMAR AGARWAL

Sri Surender Kumar Agarwal , Graduate in commercehas industrial experience of more than a decade . He is apromoter Director of Nikhil Granites (P) ltd and has beensuccessfully running this company for the last 10 years.He is also Managing Director of Smartech Marketing pvtltd.He is a member of Audit committee ,Nomination &Remuneration committee and Stakeholders Relations

Committee of Suryavanshi Spinning mills ltd

Names of the companies in which he is a Director.

1. Sheshadri Industries Ltd

2. Aananda Lakshmi Spinning Mills Ltd.

3. Nikhil Granites (P) ltd

4. Smartech Marketing pvt ltd

And he does not hold any shares in the company as on31st March,2014

Except Sri Surender Kumar Agarwal, None of the otherdirectors/key Managerial Personnel of the Company/ theirrelatives is in way concerned or interested, financially or

otherwise in the above resolution.

Item No. 8

SRI PANKAJ GOEL

Sri. Pankaj Goel is a Graduate in commerce having morethan 28 years of rich and varied experience in the industryparticularly in the manufacture of PVC Pipes /HDPE / PP

Woven Sacks.

Names of the other Companies in which he is a

Director.

1. Pankaj Capfin Private limited,

2. Pankaj Strips Private limited,

3. Pankaj Tubes private Limited,4. Aman Tubes Private Limited,

5. Pankaj Polypack limited,

6. Dhanalakshmi Plastics Private Limited,

7. Suryavanshi Spinning Mills Limited

and

8. Pankaj Polytec Private limited.

Considering his industrial experience and financebackground the Board appointed him as an independentDirector subject to approval

Sri Pankaj Goel is also member of Audit Committee,Nomination & Remuneration Committee. He does nothold any shares of the Company as on 31.03.2014.

Except Sri Pankaj Goel , None of the other directors keyManagerial Personnel / their relatives of the Company isin way concerned or interested, financially or otherwisein the above resolution.

Item No.9

SRI MANISH GUPTA

Sri Manish Gupta, Commerce Graduate has vastexperience in the Civil & Construction activities. Hehas successfully completed construction of projects ofCommercial, Industrial and Residential nature Villas for

Advantage Raheja Group at Shamirpet, Villas for Babu KhanProperties at Kokapet, Industrial RCC shed for PankajPolytec, Villas for CSK Realtors, Residential Apartmentsfor Maruti Rich Ventures, Villas for Sri Sai Constructions atNarsingi, Industrial Shed for VinsBiotec at Thimmpur. Heis also director of the following companies.

1. BMG Constructions Private Limited

2. Sheshadri Power and Infrastructure Private Limited

3. Sixth Sense Learning Strategies Private Limited

4. Aananda Lakshmi Spinning Mills Limited

5. Sheshadri Industries Limited6. Suryavanshi Spinning Mills Limited

Considering his industrial experience and financebackground the Board appointed him as an independentDirector subject to approval

Except Sri Manish Gupta , none of the other directors keyManagerial Personnel / their relatives of the Company isin way concerned or interested, financially or otherwisein the above resolution.

He does not hold shares in the Company as on 31.03.2014

Item No. 10

Since the incorporation of the Company in 1978, theCompanys Articles of Association have undergoneseveral changes. Many of the provisions contained in the

articles are not in conformity with the new provisions ofthe Companies Act, 2013, and your Directors consider it

desirable to take this opportunity of adopting new Articlesof Association which would not only be in conformity with

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the provisions of the new Act and the various Rules madethere under but also with the requirements of the Stock

Exchanges with which the Companys shares are listed.

The new Articles of Association to be substituted inplace of the existing Articles of Association are based onTable F of the Act which sets out the model Articles of

Association for a Company limited by shares. Shareholdersattention is invited to certain salient provisions in the newdraft Articles of Association of the Company viz :

a) Companys lien now extends also to bonusesdeclared from time to time in respect of sharesover which lien exists ;

b) the nominee(s) of a deceased sole member arerecognized as having title to the deceaseds interest

in the shares ;c) new provisions relating to appointment of Chief

Executive Officer and Chief Financial Officer, inaddition to manager and Company Secretary ;

d) existing articles have been streamlined and alignedwith the Act ;

A copy of the draft of the new Articles of Association isavailable for inspection of the members at the CompanysRegistered Office on any working day during businesshours.

None of the Directors / Key Managerial Personnel / their

relatives are interested in the item no.10 of the Notice.

The Board commends the Special Resolution set out atitem no.10 of the Notice for approval by the shareholders.

Item No. 11 & 12

The Company in the 29 Annual General Meetingheld on 26.09.2008 has passed an ordinary resolutionunder Section 293 (1)(d) of the Companies Act, 1956empowering the company to borrow over and above

the aggregate of paid up capital and free reserves (apartfrom temporary loans obtained from the companiesbankers in the ordinary course of business) provided that

the total amount of such borrowings together with theamounts already borrowed and outstanding at any pointof time shall not be in excess of rupees Rs.500 crores.The recently enacted Companies Act, 2013 now requiresunder Section 180(1)(c) of the Companies Act, 2013 thatsuch power can be exercised by Board only with theconsent of the company with a special resolution.

Accordingly members approval is being sought to borrowmoney of Rs.200 crores over and above the aggregate ofpaid up capital and free reserves (apart from temporaryloans obtained from the companies bankers in theordinary course of business).

As the company demerged its yarn unit situated inthe state of Madhya Pradesh together with GarmentsDivisions in the state of Telangana into and vested withSheshadri Industries Limited and Yarn unit at Bhongiri,Telangana into Aanandalakshmi Spinning Mills Ltd andretaining the residual business units with the Company.The Company may be required to create separatecharges and mortgages infavour of the Banks andFinancial Institutions to the extent of the secured loansapportioned to the company consequent to the sanctionof Scheme of Arrangement sanctioned by Honble HighCourt at Hyderabad.

As the documents to be executed between the lenders/security holders/trustees for the holders of the said

securities and the company may contain provisions tocharge/dispose of substantial assets of the Company incertain events, it is necessary to pass a resolution underSection 180(1)(a)of the Act, for creation of charges/mortgages/hypothecations for an amount not exceeding200 crores. Mortgage of a property prima-facie is nota disposition of the undertaking and hence provisionsof Section 180 (1) (a) is not applicable as per circularletter no 8/19 (292)/64-PR dated 21st July 1964. On therequirement of banks / institutions we are seeking yourapproval. The above proposals are in the interest of theCompany and the Directors recommend the resolutionsfor approval by the Members.

None of the Directors and/or Key Managerial Personnel

of the Company and their relatives is concerned orinterested financially or otherwise in the resolution.

Item No. 13

Section 148 of the recently enacted companies Act, 2013read with Rule 14 of Companies (Audit & Auditors) Rules,

2014 provides for the appointment and the remunerationof the Cost Auditor for the audit of the cost records of the

company by the Board and the remuneration of the CostAuditor to be ratified by the members of the company.

The appointment of Ms. Aruna Prasad, Cost Accountanthas been approved by Board of Directors as Cost

Auditor for carrying out cost audit on the cost records

maintained by the company for the year 2014 15 on aremuneration of Rs. 25000/- plus out of pocket expenses.The ratification by the members to this remuneration is

being sought in this resolution. The Board recommendsthe resolution for the approval of the members.

None of the Directors / Key Managerial Personnel / theirrelatives of the Company are interested in this resolution.

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Item No. 14

Members at the 33 rd Annual General Meeting of thecompany reappointed Sri Jeetender Kumar Agarwal asa Executive Director for a period of three years at aremuneration of Rs. 140000/- + usual benefits.

Scheme of Arrangement by way demerger was sanctionedby Honble High Court at Hyderabad, and on completionof demerger formalities , Sri Jeetender Kumar Agarwalhas been appointed as Managing Director of SheshadriIndustries Ltd (Resulting Company-2) .w.e.f.03.09.2014on a remuneration of Rs 165000/- + usual benefits.

In terms of the provisions of section 203 and scheduleV of the Companies Act, 2013(Act) where a managerialpersonnel is employed in more than one company he shalldraw remuneration subject to ceilings provided in the

Companies Act,2013. Since Services of Sri JeetenderKumar Agarwal is required in the company as executivedirector , it would be in the interest of the Company

that he should continue as executive director withouthowever drawing any remuneration from the Company

to comply with the provisions of the Act . The Resolutionseeks to vary the terms of appointment of Sri JeetenderKumar Agarwal accordingly. The Board recommends

the Resolution for the approval members.

Except Sri Jeetender Kumar Agrwal himself, and SriBadrinarayan Agarwal, Executive Chairman, Sri.RajenderKumar Agarwal, Managing Director and Sri DevenderKumar Agarwal, Whole time Director being relatives andrelatives of the above referred Directors to the extent of

their shareholding , no other Director / Key managerialpersonnel / their relatives of the Company is interested

/ concerned financially or otherwise with the aboveresolutions

Item No. 15

Members at the 33rd Annual General Meeting of thecompany reappointed Sri Devender Kumar Agarwal as

Whole time Director for a period of three years at aremuneration of Rs. 140000/- + usual benefits.

Scheme of Arrangement by way demerger was sanctionedby Honble High Court at Hyderabad, and on completionof demerger formalities , Sri Devender Kumar Agarwalhas been appointed as Managing Director of AanandaLakshmi Spinning Mills Ltd (Resulting Company-1) w.e.f.03.09.2014 on a remuneration of Rs 140000/- + usual

benefits.

In terms of the provisions of section 203 and scheduleV of the Companies Act, 2013(Act) where a managerialpersonnel is employed in more than one company he shalldraw remuneration subject to ceilings provided in the

Companies Act,2013. Since Services of Sri DevenderKumar Agarwal is required in the company as whole

time director , it would be in the interest of the Companythat he should continue as whole time director withouthowever drawing any remuneration from the Company

to comply with the provisions of the Act . The Resolutionseeks to vary the terms of appointment of Sri DevenderKumar Agarwal accordingly. The Board recommends theResolution for the approval members.

Except Sri. Devender Kumar Agarwal himself, and SriBadrinarayan Agarwal, Executive Chairman, Sri.RajenderKumar Agarwal, Managing Director and Sri JeetenderKumar Agarwal, Executive Director being relatives andrelatives of the above referred Directors to the extent of

their shareholding , no other Director / Key managerialpersonnel / their relatives of the Company is interested

/ concerned financially or otherwise with the aboveresolutions.

Item No. 16

As per section 181 of the Companies Act,2013 theDirectors of the Company can contribute to bonafide,charitable and other funds to an amounts not exceeding5% of its average net profits for the three immediatelypreceding financial years. The Company is required tospend amounts for social, phylanthraphic, charitablepurposes and also for the rural development surrounding

the factories etc.,

The Company being a responsible corporate citizen isexpected to spend amounts for the development of theneighbourhood of the factories. In view of the above and

to increase in the business and activities of the company,the company may be required to contribute amounts to

bonafide, charitable and other funds and organizationsin excess of the 5% of its average net profits for the

three immediately preceding financial years and wouldtherefore attract the provisions of section 181 of theCompanies Act,2013 .The proposed resolution seeks tonow to authorize the Board of Directors to make suchcontributions/ expenditure up to a limit of Rs 5,00,000/- ina financial year.

The Board recommends the resolution for the approvalof the members.

None of the Directors and/or Key Managerial Personnelof the Company and their relatives is concerned orinterested financially or otherwise in the resolution.

By order of the Board

For Suryavanshi Spinning Mills Limited

B.R.S.Reddy

Vice-President (Corporate Affairs) & Company SecretaryPlace : SecunderbadDate:03.09.2014

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DIRECTORS REPORT

Dear Shareholders,

We have pleasure in presenting the 35th Annual Reporton the business and operations of Company and FinancialResults for the year ended 31st March, 2014 .

1.A. RESTRUCTURING OF THE COMPANY

With a view to ensure have focused growth and tohave economies of scale in the respective areas ofoperations the Company had formulated Schemeof Arrangement by way of demerger betweenSuryavanshi Spinning Mills Ltd, Aananda LakshmiSpinning Mills Ltd and Sheshadri Industries Ltd and

their respective members and creditors . Honble

High Court at Hyderabad vide its Order dated30th July 2014 sanctioned the above scheme ofarrangement in accordance with the provisions ofsections 391-394 of the companies Act,1956 andsection 2(19AA) of the Income tax Act,1961 . Thesaid Orders of the Honble High Court were filed

with Registrar of Companies,at Hyderabad onAugust 21, 2014 (Effective Date).The AppointedDate for the Scheme for Arrangement was April 1,2013. Accordingly, Yarn Unit at Bhongir together

with 4 acres of land with temporary structures inSurvey Nos 558 and 560 situated at Aliabad village,Medchal Taluq, Shameerpet Mandal, RangareddyDistrict, Telangana of the company was transferred

to and vested into Aananda Lakshmi Spinning MillsLimited (ALSML) and Yarn Unit at Rajna, MadhyaPradesh and Garment Units at Aliabad and Bhongir,in the state of Telangana of the Company were

transferred to and vested into Sheshadri IndustriesLimited (SIL). On a going concern basis and the

Appointed Date for the scheme was 01.04.2013.

The company shall continue to retain the residualbusiness of yarn unit and Medical textile unit at

Aliabad, Shameer pet mandal R.R. District in thestate of Telangana.

The Demerger is expected to unlock and maximizevalue to the share holders of Suryavanshi spinning

Mills ltd, Sheshadri Industries Ltd and AanandaLakshmi spinning Mills Ltd through focusedoperations of all the three Companies .

B. SHARE CAPITAL

In terms of the Scheme of Arrangement, 37 equityshare of Rs 10/- each fully paid up of SheshadriIndustries Ltd (Resulting Company -2)and 26 equity

share of of Rs 10/- each fully paid up of AanandaLakshmi spinning Mills Ltd (Resulting Company-1) have been allotted to the shareholders of theCompany for every 100 equity shares held in theCompany . Pusuant to demerger and consequent

to capital reduction / reorganization, 37 equityshare of Rs 10/- each fully paid up of the Company

were allotted for every 100 existing equity sharesof the company. The paid up capital of the companystands reduced from Rs. 13,26,64,230 dividedinto 1,32,66,423 equity shares of Rs. 10/- each

to Rs. 4,90,85,760 divided into 49,08,576 equityshares of Rs. 10/- each The shares of Suryavanshispinning Mills ltd continue to be listed and sharesof Sheshadri Industries Ltd and Aananda Lakshmi

spinning Mills Ltd will be listed on the BSE Limited .

2. FINANCIAL RESULTS (Rs. in Lakhs)

2013-2014 2012-2013

Financial Results

Turnover Revenue 11443.71 27406.12

Gross profit before financialcharges & Depreciation

780.36 56.80

Less: Depreciation 289.15 726.45

Financial charges 481.50 880.72

Profit / (Loss) BeforeTaxation

9.71 (1550.37)

Tax for Earlier years 0.00 5.27

Profit / (Loss) after taxation 9.71 (1555.64)

3. OPERATIONS

Company achieved Total Revenue of Rs. 114.44Crores (including Other Income of Rs. 1.51 crores)and achieved a profit of Rs. 0.10 Crores for the Yearended 31st March, 2014 for the residual businessconsisting of yarn unit and Medical Textiles divisionat Alaibad, RR disritct,Telangana i.e. excluding theoperations of yarn unit at Rajna together withGarments divisions in the state of Telangana and

Yarn unit at Bhongir, Telangana consequent to thescheme of demerger approved by Honble High

Court at Hyderabad. Since it is the first reportsubsequent to Demerger previous years figuresare not comparable.

4. DIVIDEND

In view of the in sufficient profits for the yearunder review, the Board is unable to recommenddividend.

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5. EXPORTS

During the year under review the companysexports were Rs. 26.89 Crores.

6. EXPANSION & MODERNISATION

Modernization and technological up-gradationprograms continue in the Company to maintaincompetitiveness and achieve better quality.Company plans to modernize by adding balancingequipment with a capital cost of about Rs. 4 Crores.Stringent cost control measures remain in place inall possible areas and are regularly reviewed.

7. FUTURE OUTLOOK.

The performance of the Company has improved

over last year since the company has taken variousmeasures in Human Resources policies likeensuring attendance of labour force adequately.The prospects of the company is expected to bepromising with the expected stability of cottonprices and the benefits of the ongoing modernizationand expansion schemes will be accruing from thecurrent year.

8. CORPORATE GOVERNANCE:

A separate report on Corporate Governanceis enclosed as a part of this Annual Report. Acertificate from the Auditors of the Companyregarding compliance with Corporate Governancenorms stipulated under Clause 49 of the Listing

Agreement is annexed to the Report on CorporateGovernance.

9. ENVIRONMENT AND POLLUTION

CONTROL:

Company continues to give top priority tomaintenance and performance improvement of allpollution abatement facilities like effluent treatmentplants, air emission control and waste disposalfacilities at its manufacturing plants. As far aspossible rainwater harvesting and treated effluentrecycling is being carried out at manufacturingplants to reduce dependence on water from othernatural resources. Training, awareness and learning

have been always at the forefront of Companysjourney to become world class in environmentalperformance. It has inculcated the habit to bein harmony with nature and in this context,afforestation, maintenance of green belts and

gardens, and reuse of treated water in horticultureactivities are routine practices. Environment impactassessment and risk analysis have been performed

right from the stage of planning for implementationof all new major expansion projects to incorporate

the necessary measures to minimize adverseenvironmental impact.

All manufacturing facilities have obtainedenvironmental clearance from the PollutionControl Board concerned and are in compliance

with all current environmental legislation. As anintegral part of its environment protection drive,

the Company ensures the very minimum quantityof generation of waste, low emission levels andlow noise pollution levels during operations of allmanufacturing facilities.

10. DIRECTORS

Pursuant to provisions of the Companies Act, 1956,Sri Jeetender Kumar Agarwal (DIN 0041946) andSri R.Surender Reddy (DIN 0008372), Directors willretire at the ensuing Annual General Meeting andbeing eligible, offer themselves for reappointment.

Sri. Pankaj Goel (DIN 00010059) and Sri ManishGupta (DIN 00526638) were appointed as anadditional Directors who are holding office till thedate of ensuing Annual General Meeting. A memberproposed their appointment at the ensuing AnnualGeneral Meeting.

In terms of the Companies Act, 2013 all theIndependent Directors Sri R. Surender Reddy,Sri Surender Kumar Agarwal (DIN 00281576), SriPankaj Goel and Sri Manish Gupta are proposed to

be appointed as independent Directors for a termof 5 years, not liable for retirement by rotation.

The necessary Resolutions for obtaining theapproval of Members for the re-appointment ofSri Badrinarayan Agarwal (DIN 00042123) andSri Rajender Kumar Agarwal (DIN 0041892)as Executive Chairman and Managing directorrespectively have also been included in notice for

the ensuing Annual General Meeting Membersapproval is sought for the above appointments ofDirectors.

Brief resume of the Directors retiring by rotation,independent Directors nature of their expertisein specific functional areas and names of public

companies in which they hold directorships asstipulated under clause 49 of the listing agreement

with the Stock Exchange are given on CorporateGovernance elsewhere in the Annual Report.

The Board regret to record that Sri AkkineniNageswara Rao Director who had been associated

with the company for morethan 22 years passed

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away on 22.01.2014. Board places on record itscondolences for the sad demise of Sri A. NageswaraRao and places on record its appreciation for the

valuable services and guidance rendered by Sri A.Nageswara Rao during the tenure of his term.

11. AUDITORS: The Statutory Auditors of the Company, M/s.

Brahmayya & Co, Chartered Accountants,Hyderabad will retire at the conclusion of ensuing

Annual General Meeting and are eligible forreappointment.

12. AUDITORS REPORT:

The Auditors Report to the Shareholders does notcontain any reservation, qualification or adverseremark.

13. COST AUDITORS: Pursuant to the provisions of Section 148 of the

Companies Act, 2013, Ms.K.Aruna Prased costAccountants (Membership No.11816), wereappointed as Cost Auditor to submit the reports

to the Central Government. The reports for theyear 2012-13 were submitted on 27.09.2013 (Duedate 27.09.2013) and for the year 2013-14 will besubmitted on or before due date.

14. DIRECTORS RESPONSIBILITY STATEMENT:

On the basis of compliance certificates receivedfrom the concerned executives of the respectiveDivisions of the Company and subject to disclosures

in the annual accounts, as also on the basis ofthe discussion with the Statutory Auditors of theCompany from time to time,

The Board of Directors of the company confirms:

i. that in the preparation of the annual accounts,the applicable accounting standards has beenfollowed and there has been no materialdepartures:

ii. that selected accounting policies wereapplied consistently and Directors madejudgments and estimates that are reasonableand prudent so as to give a true and fair viewof the state of affairs of the Company at 31stMarch,2014 of the profit of the Company for

year ended on that date;

iii. that proper and sufficient care has beentaken for the maintenance of adequateaccounting records in accordance with theprovisions of the Companies Act, 1956 forsafeguarding the assets of the Company andfor preventing and detecting fraud and otherirregularities, if any;

iv. The Annual Accounts have been prepared ona going concern basis.

15. CONSERVATION OF ENERGY,

TECHNOLOGY ABSORPTION, FOREIGN

EXCHANGE EARNINGS AND OUTGO:

A statement under section 217 (1) (e) of theCompanies Act,1956 read with the Companies(Disclosure of Particulars in the Report of Board ofDirectors) Rules, 1988 giving details of conservationof energy, technology absorption, foreign exchangeearnings and outgo, is annexed and marked

Annexure A and forms part of this Report.

16. DEPOSITS

The company has not invited/accepted depositsfrom the public.

17. PARTICULARS OF EMPLOYEES:

No employee was in receipt of remuneration inexcess of the limits prescribed under Section 217(2A) of the Companies Act, 1956, read with theCompanies (Particulars of Employees) Rules,1975and hence the prescribed information is notrequired to be given.

18. CASH FLOW ANALYSIS:

In conformity with the provisions of clause 32 ofthe Listing Agreement the Cash Flow Statement for

the year ended 31.03.2014 is annexed hereto.

19. APPRECIATION:

The Board of Directors is pleased to place onrecord their appreciation of the co-operation andsupport extended by All India Financial Institutions,Banks and various State and Central Government

Agencies.

The Board would also like to thank the Companysshareholders, customers, suppliers for the supportand the confidence which they have reposed in

the management. The Board place on recordits appreciation of the contribution made by

the employees at all levels for their hard work,

solidarity, co-operation and support.

For and on behalf of Board of Directors

Place : Secunderabad (B.N. AGARWAL)Date: 03rd September, 2014 Executive Chairman

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FORM - BForm of disclosure of particulars with respect to technology absorption

A. Research and Development (R&D):

1. Specific areas in which R & D carried out by the Company. : The Company is having R & D in introduction anddevelopment of value added products.

2. Benefits derived as a result of the above R&D : New value added products were developed.

3. Future plan of action : To further develop more value added products andimprove the quality of the products.

4. Expenditure on R & D : Expenditure on in-house Research and Developmentwas not incurred during the year under review.

i) Capital

ii) Recurring iii) Total Total R & D expenditure as a

percentage of total turnover

NA

B. Technology absorption, adaptation and innovation

1. Efforts, in brief, made towards technology absorption,adaptation and innovation

: The Company had adapted indigenous technologyand innovated upon the same.

2. Benefits derived as a result the above efforts, e.g.,improvement, cost, reduction, product development,import substitution, etc.

: Product improvement, increase in yield, productionof high value added products.

3. In case of imported technology (imported during the last

5 years reckoned from the beginning of the financial year)following information may be furnished.

: No technology has been imported during last five

years.

(a) Technology imported(b) Year of import(c) Has technology been fully absorbed(d) If not fully absorbed, areas where this has not taken

place, reasons therefor and future plans of action

::::

NilNot applicableNot applicableNot applicable

C. FOREIGN EXCHANGE EARNINGS AND OUTGO :

a) Activities relating to exports; initiatives taken toincrease exports; development of new exportmarkets for production and service and exportplans.

: Exports of the company amounting to Rs. 26.89crores to various countries like Chile, Uruguay,Mexico, Russia, Malaysia, Tunsia, Turkey, Poland,Germany, Holand & Autralia have been made. The

Company is exploring new markets for export ofits products.

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(B) TOTAL FOREIGN EXCHANGE USED AND EARNED Rs.Lacs

2013-2014 2012-13

(i) Foreign Exchange Earned :

FOB Value of Exports 2592.29 5621.75

CIF Value of Exports 2689.53 6121.56

ii) Foreign Exchange used:

Commission on exports - 39.55

b) Foreign Travel Expenses 26.50 29.82

c) Raw material - 766.56

d) Plant & Machinery 9.60 919.6

e) Spare Parts 0.34 45.62

For and on behalf of the Board of Directors

(B.N. Agarwal)

Executive Chairman

Place : SecunderabadDate: 03rd September, 2014

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1. INDUSTRY STRUCTURE, DEVELOPMENTAND PRODUCT WISE PERFORMANCE

The Company is in the business of manufacturingof Polyester, polyester-viscose Blended Yarns andMedical Textiles Products at Aliabad, ShameerpetMandal, Ranganreddy District, in the state ofTelangana, catering to both domestic and theexport markets.

Textile Industry has an overwhelming presence inthe economic life of the country. It contributes about14% to industrial production 4% to the GDP and

17% to the countrys foreign exchange earnings,and is the largest employer, next only to agricultureproviding direct employment to about 35 millionpeople. The Indian textiles industry is extremely

varied, with the hand-spun and hand-wovensector at one end of the spectrum, and the capitalintensive, sophisticated mill sector at the other. Thedecentralized power looms / hosiery and knittingsector form the largest section of the Textile sector.The yarn industry comprises 3102 mills (includingSSI) with installed spindleage of about 48.66 million.Three Fourths of the production in the spinningindustry is from the private sector and the balancefrom the Cooperative / Public Sector units.

2. INDIAN TEXTILE INDUSTRY The Indian Textile Industry is set for strong growth,

buoyed by both strong domestic consumption aswell as export demand. Abundant availability ofraw materials such as , wool silk, jute and skilled

workforce has made India a sourcing hub.

The Industry includes production of flexiblepackaging material for industrial, agricultural andconsumer goods. Indias technical textile Industryis an emerging area for investments with good

growth opportunities..

3. PRODUCTION OF YARN

The provisional estimates show that the spun yarnproduction has increased by 441 million kgs, an

increase of 11.9 percentages during financial Year2013-14. The productions of cotton yarn yarnhave registered positive growth, but 100% non-cotton spun yarn has shown marginal increase of75% during the year. The estimates show that

the cotton yarn production has increased by 345million Kgs from the level of production of 3583million Kgs in financial year 2013 to 3928 Million

Kg in financial year 2014, a 9.6% increase. Blendedyarn production has been estimated to increase by96 Million Kgs. The share of cotton yarn productionunder all spun yarns has increased from 71.6% to73.5%. Blends share has shown a marginal decrease

while 100% non cotton yarns have also shown afall of 0.9 percentages.

4. Man-made fibres(MMF)

Considering future GDP growth of 8% ,thedomestic demand for man-made fibres/filament

yarns is estimated at 3.9 billion kgs in FY15 andabout 6 billion kgs in FY20. Adjusting to this thelikely exports and imports of MMF, the overallMMF requirement is estimated at 4.2 billion kgsfor FY 15 and 6.48 billion kgs for FY20.This impliescapacity additions of about 1.8 billion kgs (FY 15)and 4.6billion kgs (FY20) ,which would require aninvestment of over Rs. 90 billion (approximatelyUS$ 2 billion ) by FY 15 and Rs. 230 billion(approximately US$ 5.1 billion) by FY20.

5. OPPORTUNITIES AND THREATS,RISKS AND CONCERNS

5.1 Opportunities:

The Government has addressed the

slowdown in textiles by proposing a debtrestructuring package and also taking variousinitiatives. Favorable Government policiesare expected to derive the industrial revivaland growth in the country in the near future.

5.2 Threats:

High cost of raw materials and decline inpurchase power of people due to highinflation.

Non availability of quality power and alsoslow pace of development of infrastructure.

Pierce completion from countries like chineand Bangladesh who produce cheap and

good quality goods .

Preferential tariff regimes for closecompetitors in certain major markets.

Continuation of recessive trends for anextended period will cast its long.

6. RISKS AND CONCERNS:

In 2013-14 double digit inflation has increased

MANAGEMENT DISCUSSION ANALYSIS FORMING PART OF THE ANNUAL

REPORT DISCUSSES BELOW THE FOLLOWING MATTERS WITH REFERENCE TO THE

COMPANYS CORE BUSINESS VIZ., YARN AND MEDICAL TEXTILES PRODUCTS

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rapidly and touched record highs. Usuallly, growinginflation dampens consumer demand for house hold

goods, including textiles and apparels.If Inflationcontiunues to stay at such a level there is a risk

that domestic sales would be negatively impacted.We suffer on an account of poor infrasture, high

transaction cost and unfavourable labour laws,

increased power cost and fuel cost, uncertainty

in the government policies, etc., Structural week

nesses need to be addressed particularly in the

wake of going threat from Chine and other

countries.

7. OUT LOOK:

The economy is on the path of recovery and the

company expects good demand for its products in

domestic as well as international markets.

Your company believes that the completion in

the emerging markets will be met by developing

production system based on cost efficiency, high

productivity and maintaining stringent quality

parameters,etc. Availability of quality raw material

at competitive prices, uninterrupted quality power

supply and labour are the three critical inputs for an

industry. The company will give utmost priority to

maintain the above issues.

8. INTERNAL CONTROL SYSTEMS AND

THEIR ADEQUACY

The Company has an adequate internal control

system commensurate with the size and

complexity of the organization. The Company has

undertaken a comprehensive review of all internal

control systems to take care of the needs of the

expanding size of the Company and also upgraded

the IT support systems. A system of internal audit

to meet the statutory requirement as well as to

ensure proper implementation of management

and accounting controls is in place. The Audit

Committee periodically reviews the adequacy of

the internal audit functions.

Material Developments in Human Resources /

Industrial Relations Front, including number of

people employed :

There are no material developments in the Human

Resources area. The industrial relations have been

generally satisfactory. The Company constantly

reviews the man power requirements and has

a properly equipped Department to take care of

the requirements. The total number of people

employed by the Company as on 03.09.2014 was

266 (subsequent to demerger).

9. DISCUSSION ON FINANCIALPERFORMANCEOPERATIONS

The operations are pertaining the residual businessconsisting of yarn and medical textile divisions at

Aliabad, RR.District ,Telangana after transferringand vesting the business units of yarn unit atBhongir Nalgonda Dist, Telangana and Yarn unit atRajna , Madhya Pradesh along with Garment unitsin the state of Telangana with Aananda Lakshmi

Spinning Mills Limited and Sheshardri IndustiresLtd respectievely consequent to the Scheme ofDemerger approved by Honble High Court atHyderabad on 30-07-2014 .

The Total Revenues for the year 2013-14 was at Rs.112.93 Crores. Company achieved a profit of Rs.0.10 Crores. The company during the year 2013-14 achieved a production of 51,13,121 kgs and19,61,919 kgs of yarn and medical textiles productsrespectively.

NOTE :

1. Readers are advised to kindly note that theabove discussion contains statements about risks,concerns, opportunities, etc., which are valid only

at the time of making the statements. A variety offactors known/unknown, expected or otherwisemay influence the financial results. These statementsare not expected to be updated or revised to takecare of any changes in the underlying presumptions.

2. Readers may therefore appreciate the context inwhich these statements are made before makinguse of the same.

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CORPORATE GOVERNANCE REPORT

1. Brief statement on Companys philosophy on code of governance.

Suryavanshis Corporate culture has meant working always proactively to meet the expectations of its customers,shareholders, employees, business associates, the society at large and in complying with the dictates of the regulatoryframe work both in letter and spirit. The Company believes Corporate Governance is an effective instrument forrealisation of this corporate aim and accordingly endeavors to function with integrity in a transparent environment.

2. BOARD OF DIRECTORS :

a) Composition and category of directors as on 31.03.2014 / Number of other Board of Directors or Committeesof which Member / Chairman.

Name of the Director Category

No. of otherDirectorships in

Public LimitedCompanies

No. ofother Board

Committees ofwhich Member

No. ofother Board

Committees ofwhich Chairman

Badrinarayan AgarwalDIN No. 00042123

Executive Chairman &DirectorPromoter/Executive

2 4 Nil

Rajender kumar AgarwalDIN No. 00041892

Managing Director Promoter/ Executive

2 Nil Nil

R.Surender Reddy DINNo.00083972

Non-Executive Independent

6 3 6

Jeetender Kumar AgarwalDIN No: 00041946

Executive DirectorPromoter/ Executive

3 Nil Nil

Devender Kumar AgarwalDIN No: 00042156

Whole time DirectorPromoter/ Executive

2 Nil Nil

Dr.A.Nageswara Rao *DIN No.00013295


3 6 1

Surender Kumar AgarwalDIN No. 00281576


2 Nil Nil

Pankaj Goel DINNo.00010059


1 4 3

Manish Gupta DIN

No.00526638

Executive

Non-promoter

Nil Nil Nil

G.Ganesh / **DIN No:

IDBI Nominee Director

Till his demise on 22.01.2014.

**Up to 03.06.2013

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b) Attendance of each Director at the Board of Directors Meeting and the last Annual General

Meeting.

Names of Directors

No. of Board Meetings attended

during the period 1st April, 2013

to 31st March, 2014

Attendance at the last Annual

General Meeting held on

28/09/2013

Badrinarayan Agarwal 6 Present

Rajender Kumar Agarwal 5 Present

R.Surender Reddy 5 Present

Jeetender Kumar Agarwal 6 Present

Devender Kumar Agarwal 3 Absent

Dr.A.Nageswara Rao * 1 Absent

Surender Kumar Agarwal 5 Present

Pankaj Goel ** 3 Absent

Manish Gupta (From 31.3.2014) - AbsentG.Ganesh. *** (Upto 3.6.2013) 1 Absent

** Appointed as an Additional Director w.e.f.28/11/2013.*** IDBI has with drawn nomination of Sri Ganesh w.e.f. 3/6/2013.*Till his demise on 22/01/2014.

No of Board of Director Meetings held, dates on which meetings were held, during the financial year 31st March,2014, Six (6) Board Meetings were held on 7.5.2013, 11.8.2013, 7.10.2013, 22.10.2013, 6.1.2014 & 13.2.2014.

REAPPOINTMENT OF RETIRING DIRECTORS

As required by Clause 49 of the Listing Agreement on Corporate Governance particulars of the Directors beingreappointed are provided elsewhere in the Report..

3. AUDIT COMMITTEE:

a. Brief description of terms of reference

i. Oversight of Companys financial reporting process and disclosure of financial information.

ii. Review of financial statements before submission to Board.

iii. Review of adequacy of internal control systems and internal audit functions.

iv. Review of Companys financial and risk management policies.

b. Composition, name of members and Chairperson

1. Sri R .Surender Reddy - Chairman, Non-Executive & Independent

2. Sri Jeetender Kumar Agarwal - Member, Executive & Promoter

3. Sri Surender Kumar Agarwal - Member, Non-Executive & Independent

4. Sri G. Ganesh ** - Member, IDBI Nominee

5. Sri Pankaj Goel* - Member, Non-Executive & Independent

** Sri Ganesh has been withdrawn as nominee of IDBI w.e.f. 3/6/2013 consequently he ceased to be memberof Audit Committee.

*Sri Pankaj Goel was appointed as Audit Committee member w.e.f. 6/1/2014.

6. Meetings and attendance during the year

During the financial year March 31, 2014 - Five Audit Committee Meetings were held on 07.05.2013,13.08.2013, 22.10.2013, 06.01.2014 and 13.02.2014.

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