MIRA INFORM REPORT

Report Date :

14.11.2008

IDENTIFICATION DETAILS

Name :	SURYA LAKSHMI COTTON MILLS LIMITED
Registered Office :	Surya Towers, 6^th Floor, 105 Sardar Patel Road, Secunderabad – 500003, Andhra Pradesh
Country :	India
Financials (as on) :	31.03.2008
Date of Incorporation :	13.08.1962
Com. Reg. No.:	01-923
CIN No.: [Company Identification No.]	L17115AP1962PLC000923
TAN No.: [Tax Deduction & Collection Account No.]	HYDS00046E
Legal Form :	Public Limited Liability company. The company’s shares are listed on the Stock Exchanges.
Line of Business :	Manufacturer and Importer of Yarn, Fabrics and Cotton Waste.

RATING & COMMENTS

MIRA’s Rating :

Ba

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Maximum Credit Limit :	USD 6466000
Status :	Satisfactory
Payment Behaviour :	Slow but correct
Litigation :	Clear
Comments :	Subject is a well established company having satisfactory track. Trade relations are fair. Payments are reported as slow but correct. Profitability is under severe pressure. The company can be considered normal for business dealings at usual trade terms and conditions.

LOCATIONS

Registered Office :	Surya Towers, 6^th Floor, 105 Sardar Patel Road, Secunderabad – 500003, Andhra Pradesh, India
Tel. No.:	91-40-7819856/7819858
Fax No.:	91-40-7846854/7846854
E-Mail :	slcmltd@suryalakshmi.com
Website :	http://www.suryalakshmi.com
Factory :	Yarn Divisions Ø Pillalamarri Road, Mahabubnagar District, Andhra Pradesh - 509 002 Ø Amanagallu, Mahabubnagar District, Andhra Pradesh-509 321 Denim Division Ø Ramtek Mauda Road, Village Nagardhan, Tehsil Ramlek, Nagpur, Maharashtra-440010

DIRECTORS

Name :	Mr. L.N. Agarwal
Designation :	Chairman and Managing Director
Age :	75 years
Qualification :	Under graduate
Date of Appointment :	22.06.2004
Experience :	48 years
Name :	Mr. U.K. Agarwal
Designation :	Additional Managing Director
Age :	53 years
Qualification :	BA
Date of Appointment :	29.09.2003
Experience :	29 years.
Name :	Mr. Paritosh K. Agarwal
Designation :	Managing Director
Age :	35 years
Qualification :	Graduate
Date of Appointment :	21.06.2005
Experience :	16 years
Name :	Mr. R. Surender Reddy
Designation :	Director
Other Directorship :	Suryalata Spinning Mills Limited Hyderabad Race Club Suryavanshi Spinning Mills Limited Suryakiran International Limited Suryaamba Spinning Mills Limited Novopan Industries Limited Surana Telecom Limited Bhagyanagar India Limited Lakshmi Finance and Industries Corporation Limited L Pack Polymers Limited
Name :	Mr. C. Narsi Reddy
Designation :	Director
Name :	Dr. A. Nageswara Rao
Designation :	Director
Name :	Dr. B. Brahrnaiah
Designation :	IDBI Nominee
Name :	Mr. Navrang Lal Tibrewal
Designation :	Director
Name :	Mr. R.S. Agarwal
Designation :	Director
Name :	Mr. V. Ramachandra Rao (upto 09.03.2004)
Designation :	Director
Name :	Mr. B. Rama Rao
Designation :	Director
Name :	Mr. K. Sunil Kumar
Designation :	Director
Name :	Mr. H.L. Ralhan
Designation :	Director
Name :	Mr. N.D. Auddy
Designation :	Director

KEY EXECUTIVES

Name :	Mr. E.V.S.V. Sarma
Designation :	Company Secretary
Name :	Mr. P.S. Subramanyam
Designation :	G.M. (Finance)

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 31.03.2008

Particulars	No. of Shares	Percentage of Holding
Promoters	8085844	60.51
Mutual Funds	2800	0.02
Banks and Financial Institutions	8600	0.06
Private Corporate Bodies	827406	6.19
NRI’s	71253	0.54
Indian Public	4366387	32.68
Total	13362290	100.00

BUSINESS DETAILS

Line of Business :

Manufacturer and Importer of Yarn, Fabrics and Cotton Waste.

Products :

Yarn, Fabrics and Cotton Waste

Product Description	Item Code No. (ITC Code)
Cotton Yarn	520300
PV Yarn	550900
Denim Fabric	520700

PRODUCTION STATUS As on 31.03.2008

Particulars	Unit	Licensed Capacity	Installed Capacity
Spindles	Nos.	48240	48240
Looms	Nos.	221	201

GENERAL INFORMATION

Suppliers :

Ø Ravindra Polymers

Ø Suneetha Paper Cones and Pulp Board

Ø S P P Polypacks (P) Limited

Ø Sri Sai Industries

Ø Raviraj Plastics

Ø SS Packaging

Ø Plastic Extrusions

Ø Sri Sai Plastic Industries

Ø Shrivari Polypacks

Bankers :

Ø State Bank of India

Ø Industrial Finance Branch, Hyderabad

Ø State Bank of Hyderabad

Ø Commercial Branch , Secunderabad

Ø State Bank of Mysore

Ø Sarojini Devi Road, Secunderabad

Facilities :

Secured Loans : 

	As on 31.03.2008 Rs. in Millions
A.TERM LOANS 1) Rupee Term Loans Under textile modernisation Fund scheme from
a) Industrial Development Bank of India - TUF Scheme-I	29.143
b) Industrial Development Bank of India - 1	16.500
c) Industrial Development Bank of India - 2	71.291
d) Industrial Development Bank of India - TUF Scheme - II	648.341
e) I F C I Limited - I	15.125
f) I F C I Limited - II	40.670
g) State Bank of India - TUF Scheme-I	267.900
h) State Bank of India - TUF Scheme - II	401.787
i) State Bank of Mysore - TUF Scheme	88.900
2) Foreign Currency Loans from
j) Industrial Development Bank of India	27.503
k) I F C I Limited	12.710
l) State Bank of India	3.200
B.WORKING CAPITAL LOANS FROM
State Bank of India - Cash Credit	309.530
- Packing Credit	38.970
- SLC	50.000
State Bank of Hyderabad –Cash Credit	37.289
- Packing Credit	50.553
- ADHOC Limit	50.082
State Bank of Mysore -Cash Credit	129.071
C.VEHICLE LOANS	0.527
Total	2289.092

Notes:

1. The Loans referred at (a) to (f) and (h) to (l) above are secured by mortgage of (present and future) movable and immovable properties of the company on first charge pari passu basis and guaranteed by two Directors of the company, in their personal capacities.

2. The Loan referred to in (g) above is secured by hypothecation of specified plant and machinery as per the scheme and guaranteed by two Directors of the company.

3. All Working Capital loans are secured by hypothecation of stocks of raw materials, yarn, fabric, stock in process, stores and spares and book debts and by a second Mortgage over the (present and future) movable and immovable properties of the company on first charge pari passu basis and guaranteed by two Directors of the company, in their personal capacities.

4. Hire purchase loans referred at (C) above are secured by hypothecation of the respective assets and Guaranteed by one of the Directors of the company.

Unsecured Loans : 

	As on 31.03.2008 Rs. in Millions
From Directors	10.090
Fixed Deposits	67.798
Inter Corporate Deposits	61.282
Deferred Sales tax Liability	12.304
Total	151.474

Banking Relations :	Satisfactory
Auditors :	Brahmayya and Company Chartered Accountants Hyderabad
Associates :	Ø Surya Kiran Spinning Mills Limited

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
25000000	Equity Shares	Rs.10 each	Rs.250.000 millions
672000	0.10 % Cumulative Redeemable Preference Shares	Rs.100 each	Rs.67.200 millions
	Total		Rs.317.200 millions

Issued Capital :

No. of Shares	Type	Value	Amount
	Issued Capital
19891556	Equity Shares	Rs.10/- each	Rs.198.916 millions
672000	0.10 % Cumulative Redeemable Preference Shares	Rs.100/- each	Rs.67.200 millions
	Total		Rs.266.116 millions

Subscribed & Paid-up Capital :

13362290	Equity Shares	Rs.10/- each	Rs.133.623 millions
671600	0.10 % Cumulative Redeemable Preference Shares	Rs.100/- each	Rs.67.160 millions
Add	Forfeited Shares		Rs.17.730 millions
	Total		Rs.218.513 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2008	31.03.2007	31.03.2006
SHAREHOLDERS FUNDS
1] Share Capital		218.513	218.513	218.500
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		1074.741	1071.324	1068.200
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		1293.254	1289.837	1286.700
LOAN FUNDS
1] Secured Loans		2289.092	2321.156	1701.800
2] Unsecured Loans		151.474	125.634	40.100
TOTAL BORROWING		2440.566	2446.790	1741.900
DEFERRED TAX LIABILITIES		174.824	169.270	0.000
TOTAL		3908.644	3905.897	3028.600
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		2622.952	2598.526	1860.300
Capital work-in-progress		0.618	72.666	114.300
INVESTMENT		46.942	48.993	51.500
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	870.100	785.311	458.800
	Sundry Debtors	467.908	320.838	294.300
	Cash & Bank Balances	16.526	25.434	14.600
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	434.266	452.695	631.200
Total Current Assets		1788.800	1584.278	1398.900
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	584.078	442.534	354.100
	Provisions	0.000	0.000	94.900
Total Current Liabilities		584.078	442.534	449.000
Net Current Assets		1204.722	1141.744	949.900
MISCELLANEOUS EXPENSES		33.410	43.968	52.600
TOTAL		3908.644	3905.897	3028.600

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2008	31.03.2007	31.03.2006
Sales Turnover		3463.691	2290.888	2244.400
Other Income		106.749	41.993	165.100
Total Income		3570.440	2332.881	2409.500
Profit/(Loss) Before Tax		12.049	12.714	462.200
Provision for Taxation		8.554	12.498	164.600
Profit/(Loss) After Tax		3.495	0.216	297.600
Expenditures :
	Manufacturing Expenses	9.911	8.231	284.600
	Administrative Expenses	0.000	0.000	111.800
	Raw Material Consumed	2003.976	1409.814	1200.200
	Purchases made for re-sale	300.477	8.517	0.000
	Consumption of stores and spares parts	283.410	243.645	0.000
	Increase/(Decrease) in Finished Goods	(96.639)	(176.315)	(133.500)
	Salaries, Wages, Bonus, etc.	163.079	125.141	77.400
	Managerial Remuneration	5.720	6.012	0.000
	Interest & Financial Charges	174.890	109.820	87.200
	Power & Fuel	308.932	244.001	162.600
	Miscellaneous Expenses Written Off	10.559	8.681	40.900
	Depreciation & Amortization	200.415	187.290	116.100
	Other Expenditure	190.958	195.435	0.000
	Prior Year Adjustment	2.703	(50.105)	0.000
Total Expenditure		3558.391	2320.167	1947.300

QUARTERLY RESULTS

PARTICULARS	30.06.2008 1^st Quarter	30.09.2008 2^nd Quarter
Type
Sales Turnover	778.300	855.000
Other Income	13.600	12.800
Total Income	791.900	867.800
Total Expenditure	705.100	798.700
Operating Profit	86.800	69.100
Interest	50.000	50.600
Gross Profit	36.800	18.500
Depreciation	57.700	56.900
Tax	0.300	0.300
Reported PAT	(21.200)	(38.700)

KEY RATIOS

PARTICULARS	31.03.2008	31.03.2007	31.03.2006
Debt-Equity Ratio	1.89	1.63	1.35
Long Term Debt-Equity Ratio	1.42	1.38	1.16
Current Ratio	1.28	1.74	1.93
TURNOVER RATIOS
Fixed Assets	0.97	0.76	1.10
Inventory	4.18	3.68	6.61
Debtors	8.78	7.45	8.78
Interest Cover Ratio	1.11	0.66	6.30
Operating Profit Margin(%)	11.41	11.34	29.65
Profit Before Interest And Tax Margin(%)	5.62	3.16	24.48
Cash Profit Margin(%)	5.97	6.46	18.43
Adjusted Net Profit Margin(%)	0.18	(1.72)	13.26
Return On Capital Employed(%)	5.27	2.17	24.35
Return On Net Worth(%)	0.51	(3.23)	32.52

LOCAL AGENCY FURTHER INFORMATION

HISTORY:

A part of the Suryalakshmi group, Subject was incorporated in 1962 and manufactures cotton and synthetic yarn with two units in Mahaboobnagar district, Andhra Pradesh. L N Agarwal is the Chairman and Managing Director. 

Subject spent about Rs.400 millions on modernisation of its units in the past. A 100% export-oriented spinning mill with a capacity of 25,000 spindles was set up at Andhra Pradesh at a cost of Rs.700 millions. The company exported its products to highly quality-conscious markets like Spain and Belgium and has established its presence in Bangladesh and Korea.

In 1995-96, first phase of denim project at Ramtek, Maharashtra, for 1131.000 millions was set up, and the project was financed with foreign currency loan of 544.600 million, rupee term loan of 100.300 millions and rights cum public issue of 405.600 millions in Sep'96. To resturcture its debt the company has to issue Cumulative Preference Shares to IDBI for Rs.40.000 millions and to IFCI for Rs.27.200 millions.

OPERATIONS: 

The operations during the year ended with a profit of Rs.3.495 millions against Rs.0.200 million during previous year. The turnover at Rs.3570.400 millions was higher by 53% over the previous year.

Last year has been one of the extremely difficult periods for the textile industry in general and the company was no exception. 

The euphoria generated by the abolition of quota regime and the impressive growth that immediately followed have given way to despair in the textile industry in the country. The recent appreciation in rupee against the US $ to the extent of around 12% together with various other problems like high cost and non availability of the required varieties of cotton, excess capacity, high cost of power, labour issues etc. have resulted in fall in exports and sickness in the textile industry. 

The operations in the Company's Denim Division were seriously affected due to an unfortunate fire accident in January 2008. One of the spinning units in the Denim Division was badly damaged, dislocating the operations. The new machinery are expected to be installed shortly and the Spinning Unit is expected to resume operations. Though the machinery is completely insured the dislocation in the operations was also responsible for the lower profits.  

The production of Denim was higher by 10% compared to the previous year. Denim Industry continues to be adversely affected by glut in the supplies resulting in lower realization. There is only a marginal improvement in realization compared to the previous year. The turnover of the Denim Division has been higher by around 18% compared to the previous year. The commercial production of Bottom Weights has already commenced and the product has been received well by the market, though the realization is still low.  

CAPITAL EXPENDITURE: 

During the year the company has incurred Capital Expenditure of Rs.237.600 millions. 

EXPORTS: 

The exports during the year, at Rs.825.800 millions is higher by 80% over the previous year. The exports were badly affected by the appreciating rupee. During the year the Company added new niche customers like Marks and Spencer, George/ASDA, VF Europe and also reached new destinations like Serbia (Port Bar), Lao PDR. The Company has added many new value added items like 100% Excel Denim, Coated Denim, etc. 

MANAGEMENT DISCUSSION AND ANALYSIS FORMING PART OF THE ANNUAL REPORT DISCUSSES BELOW THE FOLLOWING MATTERS WITH REFERENCE TO THE COMPANY'S CORE BUSINESS VIZ., YARN AND DENIM. 

Industry structure, developments and product wise performance: 

The Company manufactures Cotton, Polyster and Blended Yarns in its Spinning Division at Amanagallu in Mahabubnagar District, Andhra Pradesh and Denim Fabric at its Denim Division at Village Nagardhan, near Ramtek, Maharashtra. 

Textile Industry continues to play a pivotal role in the economic life of the country. It contributes about 14% to industrial production 4% to the GDP and 15% to the country's foreign exchange earnings, and is the largest employer, next only to agriculture providing direct employment to about 38 million people. The textile industry is extremely complex and diversified ranging from small scale sector to highly sophisticated mills. The yarn industry comprises 3044 mills (including SSI) with installed spindleage of about 39.50 million. Three Fourths of the production in the spinning industry is from the private sector and the balance from the Cooperative / Public Sector units. 

The euphoria generated by the abolition of quota regime and the impressive growth that immediately followed have given way to despair in the textile industry in the country. The recent appreciation in rupee against the US $ to the extent of around 12% together with various other problems like high cost and non availability of the required varieties of cotton, excess capacity, high cost of power, labour issues etc. have resulted in fall in exports and sickness in the textile industry. 

The rising rupee has highlighted the inherited problems in textile industry like fragmented set up, absence of economies of scale, geographically widely dispersed state of industry, outdated technology, several layers of stakeholders and unfriendly labour legislation, etc.  

Considering the pivotal role played by the textile industry in the Indian economy the Government of India has attempted to mitigate the problems faced by the industry by revising the draw back rates etc. The cotton prices continue to rule high while the yarn prices have not shown any corresponding increase resulting in the closure of many small units. 

YARN: 
The Indian market has been very badly affected by strengthening of Rupee vis-a-vis US $. There has been a significant drop in the realization in the export market which has also affected the domestic market. In the recent past the market has been further affected by the high prices of the rawmaterials, cotton, polyster and chemicals. 

DENIM : 
The denim industry which is already reeling under excess capacity and low realization has been further hit by appreciating rupee and high cost and non availability of low staple fibre cotton and many units have resorted to production cuts. 

Countries like Bangladesh and Turkey have in the recent past added capacities which have seriously affected the position of the domestic market in the Denim Industry. The supply demand mismatch is expected to last for some more time while the world demand for denim is expected to grow only around 3 to 4% p.a. Many manufacturers have been forced to diversify into garmenting and speciality denim products like industrial textiles etc. 

Opportunities and threats, risks and concerns: 

The past few months have very strikingly demonstrated the threats and risks to which the textile industry has been exposed. The free export of cotton has deprived the industry of its rawmaterial at reasonable rates. The required varities of cotton are very difficult to procure for the Denim industry. The strengthening of Rupee against US$ has most adversely affected the exports. The inflexible labour laws have put the Indian Industry at a great disadvantage in the fiercely competitive market abroad. The surging inflationary trends have affected the purchasing power of the consumers. 

In this scenario the Industry needs to innovate and explore different options to survive in the new global competitive world. The new growth areas like technical textiles needs to be seriously considered; industry may also have to establish backward linkages facilitating production of the required cotton. Some Companies have already taken up contract farming in the country. 

The Company has already been making only value added varieties of Denim fabric and is now increasing the variety of fancy and mercerized Denims where the price sensitivity is relatively low. The Company has also started making coated Denims which are speciality fashion products of high value consumed in high end expensive brands. 

India is still a favoured destination for the international brands as an outsourcing hub. The superior design and processing capabilities of the Indian mind and the large base of skilled labour needs to be gainfully exploited. The Company is seriously exploring different options to improve its competitive edge in the fast changing market.  

Discussion on financial performance: 

The operations during the year, ended with a profit of Rs.3.495 millions against Rs.0.200 million during previous year. The turnover at Rs.3570.400 millions was higher by 53% over the previous year. 

The operations in the Company's Denim Division were seriously affected due to an unfortunate fire accident in January 2008. One of the spinning units in the Denim Division was badly damaged, dislocating the operations. The new machinery are expected to be installed shortly and the Spinning Unit is expected to resume operations. Though the machinery is completely insured the dislocation in the operations was also responsible for the lower profits. 

The production of Denim was higher by 10% compared to the previous year. Denim Industry continues to be adversely affected by glut in the supplies resulting in lower realization. There is only a marginal improvement in realization compared to the previous year. The turnover of the Denim Division has been higher by around 18% compared to the previous year. The commercial production of Bottom Weights has already commenced and the product has been received well by the market, though the realization is still low. 

YARN: 
The production of Yarn in the Amanagallu Unit at 126.71 tonnes is higher by 41% over the previous year. The realization in Yarn has been adversely affected.  

CONTINGENT LIABILITIES NOT PROVIDED FOR:

	31.03.2008 Rs. In Millions
Contracts to be executed on capital accounts.	19.863
Against Foreign Letters of Credit	95.480
Against Bank Guarantees	1.915
Against Bills discounted	104.049
Demand from the Central Excise Department under Textiles and Textile Articles Act (TTA), disputed by the Company pending in appeals with the Commissioner, Customs and Central Excise, Nagpur, not provided for.	28.534
Demand from Central Excise Department in connection with the clearance of the goods disputed by the Company and allowed by the Commissioner Appeals, Nagpur in Company’s favour. However, the Department has preferred and appeal against the Commissioner’s order.	7.850
Demand from Service Tax Department in connection with Service Tax on commission paid to non resident agents disputed by the Company with the Addl. Commissioner, Central Excise, Hyderabad. Appeal was allowed partly awaiting final orders. The Company has preferred and appeal for the balance amount before CESTAT (South Zonal Bench), Bangalore.	5.582
Disputed demand from sales tax department on input tax credit, pending in appeal before Dy. Commissioner, Hyderabad.	5.874
Disputed demand from sales tax department on subjecting the turnover of unit at Maharashtra to tax along with the turnover of Andhra Pradesh, pending disposal of the appeal before STAT (A.P.)	78.700
Demand raised by Income Tax Department for Assessment Year 2003-04 in connection with disallowance U/S 80 HHC disputed by the Company in appeal with CIT (Appeals), Hyderabad.	0.045

FIXED ASSETS:

Land

Factory Buildings

Non-Factory Buildings

Township

Work Shop Equipment

Plant and Machinery

Testing Equipment

Electrical Installations

Weighing Machines

Waterworks

Furniture and Fixtures

Vehicles

Data Processing Equipment

OTHER INFORMATION:

UNAUDITED (STANDALONE) FINANCIAL RESULTS FOR THE QUARTER ENDED 30TH JUNE, 2008.

(Rs. in Millions)

Sl. No.	Particulars	3 Months ended	3 Months ended	Accounting Year Ended
		30.06.2008	30.06.2007	31.03.2008
		Un-Audited	Un-Audited	Audited
1	Net Sales/Income from Operations	778.280	660.724	3463.691
2	Other Income	13.589	14.105	106.749
3	Total Income(1+2)	791.869	674.829	3570.440
4	Expenditure
	a) (Increase)/Decrease in stock in trade and work in progress	(46.804)	(140.811)	(96.639)
	b) Consumption of Raw Materials	525.128	477.780	2304.453
	c) Power and Fuel	71.017	76.621	308.932
	d) Employees Cost	40.304	39.021	163.079
	e) Depreciation	57.670	56.182	200.415
	f) Other Expenditure	115.518	110.663	500.558
	g) Total	762.834	619.456	3380.798
5	Interest	49.975	44.765	174.890
6	Exceptional Items (prior period exp.)	---	---	2.703
7	Profit (+) / Loss (-) from ordinary activities before tax (3) -(4+5+6)	(20.940)	10.608	12.049
8	Tax Expense	0.300	1.577	8.554
9	Net Profit(+)/Loss(-) from Ordinary Activities after tax (7-8)	(21.240)	9.031	3.495
10	Extraordinary Items ( net of tax expense )	---	---	---
11	Net Profit(+)/Loss(-) for the period (9-10)	(21.240)	9.031	3.495
12	Paid-up equity share capital (Face value of the share shall be indicated) (Rs.10/-)	133.623	133.623	133.623
13	Reserves excluding revaluation reserves as per B/S of previous accounting year			1092.470
14	Earnings Per Share (EPS)a) Basic and diluted EPS before Extraordinary items for the period, for the year to date and for the previous year (not to be annualised)	(0.159)	0.068	0.026
	b) Basic and diluted EPS after extraordinary items for the period, for the year to date and for the previous year ( not to be annualised)	(0.159)	0.068	0.026
15	Public share holding
	- Number of Shares	5276446	5276446	5276446
	- Percentage of shareholding	39.49	39.49	39.49
16	Consolidated Turnover			3620.104
	Consolidated Net Profit/Loss After Tax			(1.837)
	Consolidated Earning Per Share			(0.014)

NOTE:

1. The above standalone results have been subjected to limited review by the Auditors and also

reviewed by the Audit Committee and taken on record by the Board of Directors at their meeting

held on 31.07.2008.

2. Previous year figures have been regrouped and rearranged wherever necessary

3. Status of investor complaints

Segment wise Revenue, Results and Capital Employed

(Rs. in Millions)

Sl. No.	Particulars	3 months ended 30.06.2008	3 months ended 30.06.2007	Year Ended 31-03-2008
		Unaudited		Audited
1	Segment Revenue a) Spinning b) Denim manufacturing c) Others	335.731 442.549	287.617 373.107	1245.681 2218.010
	Total Less: Inter Segement revenue	778.280 -	660.724 -	3463.691 -
	Net Sales/Income from Operations	778.280	660.724	3463.691
2	Segment Results (Profit(+)/Loss(-) before tax and Interest from each segment) a) Spinning b) Denim manufacturing c) Others	27.999 1.036	41.173 14.200	109.304 77.635
	Total Less: (i) Interest (ii) Other un-allocable expenditure net off un-allocable income	29.035 49.975	55.373 44.765 --	186.939 174.890 --
	Total Profit/(Loss) before tax	(20.940)	10.608	12.049
3	Capital Employed (Segment Assets -Segment Liabilities) a) Spinning b) Denim manufacturing	1402.658 2594.503	1378.822 2592.390	1277.989 2597.246
	TOTAL	3997.161	3971.212	3875.235

AUDITED (STANDALONE) FINANCIAL RESULTS FOR THE YEAR ENDED 31st MARCH, 2008.

(Rs. in Millions)

Sl. No.	Particulars	3 Months ended	3 Months ended	Accounting Year Ended	Accounting Year Ended
		31.03.2008	31.03.2007	31.03.2008	31.03.2007
		Un-Audited	Un-Audited	Audited	Audited
1	Net Sales/Income from Operations	1156.317	706.240	3463.691	2290.888
2	Other Income	70.220	59.901	106.749	41.993
3	Total Income(1+2)	1226.537	766.141	3570.440	2332.881
4	Expenditure
	a) (Increase)/Decrease in stock in trade and work in progress	34.201	(13.779)	(96.639)	(176.315)
	b) Consumption of Raw Materials	784.973	394.196	2304.453	1418.331
	c) Power and Fuel	73.424	74.930	308.932	244.001
	d) Employees Cost	56.037	38.984	163.079	125.141
	e) Depreciation	43.781	46.660	200.415	187.290
	f) Other Expenditure	172.142	121.839	500.558	462.004
	g) Total	1164.558	662.830	3380.798	2260.452
5	Interest	44.623	31.598	174.890	109.820
6	Exceptional Items (prior period exp.)	2.703	---	2.703	50.105
7	Profit (+) / Loss (-) from ordinary activities before tax (3) -(4+5+6)	14.653	71.713	12.049	12.714
8	Tax Expense	1.863	10.760	8.554	12.498
9	Net Profit(+)/Loss(-) from Ordinary Activities after tax (7-8)	12.790	60.953	3.495	0.216
10	Extraordinary Items ( net of tax expense )		---		---
11	Net Profit(+)/Loss(-) for the period (9-10)	12.790	60.953	3.495	0.216
12	Paid-up equity share capital (Face value of the share shall be indicated) (Rs.10/-)	133.623	133.623	133.623	133.623
13	Reserves excluding revaluation reserves as per B/S of previous accounting year			1092.470	1089.054
14	Earnings Per Share (EPS)a) Basic and diluted EPS before Extraordinary items for the period, for the year to date and for the previous year (not to be annualised)	0.096	0.456	0.026	0.002
	b) Basic and diluted EPS after extraordinary items for the period, for the year to date and for the previous year ( not to be annualised)	0.096	0.456	0.026	0.002
15	Public share holding
	- Number of Shares	5276446	5276446	5276446	5276446
	- Percentage of shareholding	39.49	39.49	39.49	39.49
16	Consolidated Turnover			3620.104
	Consolidated Net Profit/Loss After Tax			(1.837)
	Consolidated Earning Per Share			(0.014)

NOTE:

1. The above standalone results have been subjected to limited review by the Auditors and also

reviewed by the Audit Committee and taken on record by the Board of Directors at their meeting

held on 28.06.2008.

2. With reference to the qualification by the Auditors in point 4(f) of their Audit Report it is clarified

that as the Derivative transaction under European Option did not mature during the year no liability

has arisen and hence no provision has been made.

3 Previous year figures have been regrouped and rearranged wherever necessary

4 Status of investor complaints

WEBSITE DETAILS:

It was in the year 1962, Mr. L.N.Agarwal started Subject, with 6,000 spindles to manufacture world class cotton and blended yarns, with a vision and commitment to establish the company as a leading enterprise in the textile industry. The company has, as a result, grown multifolds in just four decades and also established the state of the art denim manufacturing plant having a capacity of 30 million meters per annum. Today Suryalakshmi's yarn and rope dyed denim are acknowledged as the finest across international markets.

The Company achieved a gross income of Rs.3128 million during the year 2003-2004, registering a growth of over 600% in the last decade alone.

Suryalakshmi's on going programme of modernisation and higher production Capacity has resulted in its denim production from 10 million metres to 30 million metres per annum. While yarn production capacity has also increased in multifolds.

Suryalakshmi's denim plant at Ramtek near Nagpur, Maharashtra is equipped with the state of the art machines to produce Rope dyed denim.

The plant has a capacity to produce 30 million metres of denim per annum.

Suryalakshmi's Denim plant ranks among the best in the world. The blow room line, cards and draw frames are from Trutzschler. Autocore open end are of schalafhorst.

Ball warping Machines and Long Chain Beamers are from Reed Chatwood Inc. and McCoy Ellison. Rope Dyeing Machine is from KTM, USA.

The finishing range is from Monforts. The Company has airjet looms of Nissan, Toyoda, Tsudakoma and Picanol.

Complete harmony is present not only across width of the fabric but right through the different batches. Fabric enriched by its excellent gradation. All this is made possible through their technologically superior machinery.

Products Range:

The Company has over 300 different varieties of denim to offer. Other than the basics, the product range can be broadly classified into Silky, Streaky, Ring, Cross hatch, Blends, Stretch, SL magic, Trends and last but not the least a wide range in Shirting denim fabrics.

Right from 4.5 oz per sq.yard to 15.5 oz per sq.yard, the company makes it all.

DENIM

• Basics
• Blends
• Silky
• Stretch
• Streaky Ring
• SL magic
• Cross Hatch
• Trends

SPINNING

Suryalakshmi has the capacity to produce yarn for hosiery or weaving in both carded and combed varieties.

The company has an exciting product range in the counts 16s Ne to 40s Ne.

The range can be broadly classified as

• 100 % cotton combed yarns

CMT REPORT (Corruption, Money Laundering & Terrorism]

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

1] INFORMATION ON DESIGNATED PARTY

No records exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

2] Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

3] Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

6] Records on Int’l Anti-Money Laundering Laws/Standards :

Charges or investigation registered against subject: None

7] Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

8] Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

9] Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

CONTRAVENTION

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.48.79
UK Pound	1	Rs.75.41
Euro	1	Rs.61.48

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	6
PAID-UP CAPITAL	1~10	5
OPERATING SCALE	1~10	5
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	5
--PROFITABILIRY	1~10	5
--LIQUIDITY	1~10	5
--LEVERAGE	1~10	5
--RESERVES	1~10	5
--CREDIT LINES	1~10	5
--MARGINS	-5~5	--
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	YES
--AFFILIATION	YES/NO	NO
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		46

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
NR		In view of the lack of information, we have no basis upon which to recommend credit dealings	No Rating

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions