Dear Members,
 
 The Directors have pleasure in presenting the 16th Annual Report of
 the company together with the audited Accounts for the financial year
 ended March 31, 2011.
 
 FINANCIAL PERFORMANCE:
 
                                                    (Rs. in million)
 
 Particulars                            Year ended        Year ended
                                        31.03.2011        31.03.2010
 
 Income from sale of power                 1404.42           1179.88
 
 Income from trading of goods                29.19            889.13
 
 Other Income                                47.25             31.88
 
                                           1480.86           2100.90
 
 Profit before interest and 
 depreciation                               209.66            173.61
 
 Interest and Finance Charges                91.48             72.42
 
 Depreciation                                68.66             73.09
 
 Profit after interest, but 
 before exceptional items                    49.52             28.11
 
 Exceptional Items (net)                         -             24.50
 
 Profit before Tax                           49.52             52.61
 
 Current Tax after Adjustments                9.14            (0.56)
 
 Profit after Tax                            40.38             52.05
 
 Profit brought forward from 
 previous year                              157.80            105.75
 
 Profit and Loss A/c Balance 
 carried forward to Balance Sheet           198.18            157.80
 
 REVIEW OF OPERATIONS:
 
 During the year under review, your Company achieved the gross turnover
 of Rs.1480.86 million as against Rs.2100.90 million in the previous
 year. The turnover for the current year was lower than the previous
 year, since the income from coal trading activity was considered on net
 basis during the year, in accordance with AS 24 (Discontinuing
 operations). The revenue from the sale of energy for the current year
 increased to Rs.1404.42 million from Rs.1179.88 million in the previous
 year. The Operating Profit (PBIDT) for the current year was Rs.209.66
 million as against Rs.173.61 million for the previous year. The Profit
 after Tax was Rs.40.38 million compared to Rs.52.05 million in the
 previous year.  The company''s 20 MW plant at Bamboo flat, Port Blair
 has achieved the Plant Load Factor (PLF) during the year 2010-11 at
 81.60% against the benchmark of 68.49% and received the incentive of
 Rs.15.60 million from Andaman & Nicobar Administration (A&N
 Administration). Comparatively, during the previous year 2009-10, the
 PLF was 76.49%, for which an incentive of Rs.9.85 million was received
 by the company.
 
 Management Discussion and Analysis report for the year under review, as
 stipulated in Clause 49 of the Listing Agreement with the Stock
 Exchange, forms part of the Annual Report. The Board of Directors and
 the Management review the progress of the Company from time to time and
 guide the Company towards its goals.
 
 DIVIDEND:
 
 With a view to conserve resources for the planned growth of the
 organization and also due to inadequacy of profits, your Directors are
 unable to recommend any Dividend on the Equity Capital of the Company.
 
 INCREASE IN CAPITAL:
 
 During the year, the Company has increased its Authorised Capital from
 Rs.900 million to Rs.1500 million, after obtaining the consent of the
 members through postal ballot, to enable the Company to issue Global
 Depository Receipts (GDRs), Foreign Currency Convertible Bonds (FCCBs)
 etc., up to US$ 100 Million.
 
 Subsequently, your Company has opened the GDR issue for subscription to
 the prospective investors on 19.04.2011 and closed the issue on
 26.04.2011. The Company has received the subscription of US$ 22,995,000
 (Rs. 1,025 million) and issued 3,650,000 GDRs to the investors @ US$
 6.30 per GDR. The underlying shares were 20 shares per GDR, which means
 73,000,000 new equity shares were issued for the GDRs. Accordingly, the
 paid up capital of the Company has gone up to Rs.1496.33 million.The
 GDRs were listed in the Euro MTF Market of Luxemburg Stock Exchange on
 28th April 2011 and the underlying equity shares were listed on BSE on
 19th May 2011.
 
 SUBSIDIARY COMPANIES:
 
 During the year under review, the performance of the subsidiaries viz.,
 Suryachakra Global Enviro Power Limited, South Asian Agro Industries
 Limited, M.S.M. Energy Limited and Sri Panchajanya Power Private
 Limited, which operate biomass based power plants at Chhattisgarh and
 Maharashtra has been severely affected due to non-availability of
 quality raw material at reasonable rates. The prices of biomass like
 rice husk, cotton stalk etc., have been steeply rising thereby
 resulting into high cost of production.
 
 As a long term strategy, the group has proposed to enter into buy-back
 agreements with some companies in Chhattisgarh and Maharashtra, which
 will endeavor to continuous supply of Napier grass catering to about
 50% of total requirement of the plants. The cost of Napier grass is
 much cheaper than other conventional biomass raw material, besides
 having higher Gross Calorific Value (GCV). The Napier grass supplying
 companies have finalized the land required for taking on lease /
 contract farming for energy plantation in Chhattisgarh and Maharashtra.
 With this continuous feed supply at competitive price, the subsidiaries
 are expected to improve their performance in the forthcoming years.
 
 1) Suryachakra Global Enviro Power Limited:
 
 During the year, the 9.8 MW plant at Madwa village, Champa–Janjgir
 District, Chhattisgarh had generated 33.166 million units achieving a
 PLF of 38.63%. The generation was low due to the scarcity of quality
 biomass fuel. As most of the paddy is grown as single crop, husk was
 available for 6 to 7 months of the year. Further, the evacuation line
 at 33 KV was connected to grid at about 20 KM from the plant. Because
 of the long transmission line, the plant operation was effected due to
 line faults during rainy season. The transmission line losses were
 approximately 5% of the generation.
 
 During the year under review, the Company had earned an amount of
 Rs.28.52 million from 42950 CERS for the period from October 2008 to
 December 2009 and Rs.20.99 million from 31604 CERs for the period from
 January 2010 to March 2011.
 
 2) South Asian Agro Industries Limited:
 
 During the year, the 9.8 MW plant at Khajuri village, Baloda Bazar,
 Raipur District, Chhattisgarh has generated 22.28 million units and
 achieved a PLF of 25.96%. The plant faced the problem of fuel shortage
 during rainy season as the rice husk is the main biomass fuel which is
 available only during milling season lasting for 4 to 5 months in a
 year since paddy is grown as a single crop in major cultivation
 acreage.
 
 During the year under review, the Company had earned an amount of
 Rs.21.16 million from 31861 CERS for the period from January 2009 to
 December 2009 and Rs.15.29 million from 23031 CERs for the period from
 January 2010 to March 2011.
 
 3) M.S.M. Energy Limited:
 
 The 10 MW biomass based power plant at Parbhani, Maharashtra was
 commissioned and synchronized with the grid of MSEDCL on 15th November,
 2010. Total generation during the year was 5.23 million units. The
 generation was low during the year due to scarcity and high price of
 quality biomass fuel. Frequent grid interruptions have also contributed
 for low generation.
 
 Another 10 MW plant is under construction at Kholapur Village, Amravati
 District, Maharashtra. The plant is expected to commence operations
 during the year 2011-12.
 
 4) Sri Panchajanya Power Private Limited:
 
 The 10 MW power plant at Limbala MIDC, Hingoli, Maharashtra was
 commissioned and synchronized with the grid of MSEDCL on 5th September,
 2010. During the year, the total generation of the plant was 9.94
 million units. The generation was low during the year due to scarcity
 of quality biomass fuel and high price. Frequent grid interruptions
 have also contributed for low generation.
 
 The application for CDM Registration filed with United Nations
 Framework Convention on Climate Change (UNFCC) for CERs got
 registration on 13th January, 2011 and date of Registration action was
 4th April, 2011. Crediting period is 01.04.2011 to 31.03.2018.
 
 Other subsidiaries:
 
 Your company had signed a Memorandum of Understanding with the Govt. of
 Chhattisgarh in February 2008 and subsequently executed the
 implementation agreement in May 2010 for setting up of coal based
 thermal power plant in the state of Chhattisgarh. The company has
 transferred the project under development to Suryachakra Energy
 (Chhattisgarh) Private Ltd., a wholly owned subsidiary of your company
 for a consideration of Rs.356.40 million being the carrying value of
 the assets in the project during the last quarter of the year.
 
 In January 2011, your company has incorporated a wholly owned
 subsidiary viz., Suryachakra Global Venture Limited in Hong Kong to
 pursue the activities of investment in coal mine and coal trading etc.
 During the year, the Company had purchased 30,000 shares of Suryachakra
 Power Venture Private Limited from it promoters to make it a subsidiary
 of the Company for the purpose of making the bids for the solar
 projects unde JNNSM Scheme. As the bids were not successful, the
 Company had sold the above shares and SPVL ceased to be th subsidiary
 of the Company.
 
 Consolidated Financial Statements:
 
 The Consolidated Accounts presented by the Company for the year 2010-11
 include the financials of its subsidiary companies In accordance with
 the General Circular issued by the Ministry of Corporate Affairs, Govt.
 of India dated 8th Februar 2011, the Balance Sheet, Profit and Loss
 Account and other documents of the subsidiary companies are not
 attached to th Balance sheet of the Company. The Company will make
 available the Annual Accounts of the subsidiary companies to an member
 of the Company or its subsidiaries, upon receiving a request for the
 same. Further, the annual accounts of th subsidiary companies including
 the consolidated annual accounts of the Company will be kept open for
 inspection at th Registered Office of the Company and that of the
 subsidiaries, during the office hours. A summary of financial
 informatio of the subsidiary companies is provided in the Annual Report
 of the Company.
 
 FIXED DEPOSITS:
 
 Your Company has neither accepted nor renewed any deposits from the
 shareholders / public under Section 58A of th Companies Act, 1956,
 during the year under review.
 
 INSURANCE:
 
 The properties of the Company including its buildings, plant and
 machinery and stocks have been adequately insured a required.
 
 CORPORATE GOVERNANCE:
 
 The Company is in conformity with the Code of Corporate Governance
 enunciated in Clause 49 of the Listing Agreemen with Stock Exchanges. A
 separate report on Corporate Governance forms part of Annual Report of
 the company togethe with a Certificate from the Practicing Company
 Secretary confirming the compliance of Corporate Governance. As pe SEBI
 requirement, Secretarial audit is being carried out at specific
 intervals by a Practicing Company Secretary. Th findings of the audit
 have been satisfactory.
 
 DIRECTORS RESPONSIBILITY STATEMENT:
 
 Pursuant to section 217(2AA) of the Companies Act, 1956, the Directors
 confirm that:
 
 i] in the preparation of the annual accounts, the applicable accounting
 standards have been followed along with prope explanation relating to
 material departures;
 
 ii] the directors have selected such accounting policies and applied
 them consistently and made judgments and estimate that are reasonable
 and prudent, so as to give a true and fair view of the state of affairs
 of the company at the end of th financial year and of the profit or
 loss of the company for that period; 
 
 iii] the directors have ensured that proper and sufficient care is
 taken in the maintenance of adequate accounting record in accordance
 with the provisions of the Companies Act for safeguarding the assets of
 the company and for preventin and detecting fraud and other
 irregularities;
 
 iv] the annual accounts are prepared on a going concern basis.
 
 DIRECTORS:
 
 In accordance with the provisions of the Companies Act, 1956 and
 Articles of Association of the Company, Mr. K Satyanarayana and Mr.
 V.S. Murthy, Directors will retire by rotation at the ensuing Annual
 General Meeting and ar eligible for re-appointment as Directors of the
 Company.
 
 During the year, Mr. P.V. Rao has resigned from the Board as Director &
 Chairman w.e.f 19th June 2010 due to persona reasons. The Board has
 appointed him again as Additional Director and Chairman on 22nd
 November 2010 pursuant t Section 260 of the Companies Act, 1956. The
 Board has also appointed Mr. K B Trehan as an Additional Director of th
 Company on 11th November 2010 pursuant to Section 260 of the Companies
 Act, 1956.  Mr. T. Venkata Raju has resigned from the Board w.e.f
 28.02.2011 due to personal reasons.
 
 ADEQUACY OF INTERNAL CONTROLS:
 
 The Company has a proper and adequate system of internal controls to
 ensure that all assets are safeguarded and protecte against loss from
 unauthorized use or disposition, and that transactions are authorized,
 recorded, and reported correctly The internal control system is
 supplemented by an extensive program of internal audits, review by
 management an documented policies, guidelines and procedures.
 
 The internal control system is designed to ensure that the financial
 and other records are reliable for preparing financial statements and
 other data and for maintaining accountability of assets. The Audit
 Committee reviews the internal control systems on a regular basis.
 
 STATUTORY AUDITORS:
 
 The Joint Statutory Auditors of the Company viz., M/s Visweswara Rao &
 Associates, Chartered Accountants and M/s B S R and Co, Chartered
 Accountants will retire at the conclusion of the ensuing Annual General
 Meeting.
 
 EXPLANATIONS FOR THE QUALIFICATIONS MADE BY THE AUDITORS IN THEIR
 REPORT:
 
 Auditors Qualifiction
 
 In their report, the Auditors stated that, pending the final agreement
 with the Andaman & Nicobar Administration (A&N Administration) they
 were unable to comment on the extent of ultimate recoverability of the
 amounts due from the A&N Administration.
 
 There were significant delays in payment of Provident Fund and Income
 Tax and repayment of dues.
 
 Scope and coverage of the internal audit system needs to be
 strengthened to make it commensurate with the size and nature of its
 business.
 
 The revenue from the sale of Certified Emission Reductions (CERs) and
 sundry debtors balance is overstated by the subsidiaries, pending
 necessary approvals for such CERs from regulatory authorities.
 
 (Auditors Report on consolidated accounts).
 
 Board Explanation
 
 Adequate disclosure was made in Note 3 of Schedule 21 (Notes to the
 Accounts) in this regard. The Company has taken up the matter with the
 Andaman & Nicobar Administration and believes that the amounts billed
 including interest thereon are recoverable based on the interpretation
 that can be inferred from the formulae contained in the PPA.
 
 After continuous and unstinted efforts, the A & N Administration has
 agreed to pay monthly tariff invoices from April 2011 on the
 provisional completed cost of the project of Rs. 75.60 crores instead
 of the earlier provisional completed cost of Rs. 63.14 crores. The
 company is hopeful of getting further increase in this.
 
 The delay was due to the tight liquidity conditions faced by the
 Company and steps would be taken by the management to ensure
 non-recurrence of such events.
 
 The adequate internal audit team is already in place. However, the team
 will be further strengthened suitably.
 
 The subsidiaries viz., Suryachakra Global Enviro Power Ltd., and South
 Asian Agro Industries Ltd., have recognized the income from sale of
 CERs during the year.The Project Design Documents (PDDs) were prepared
 for above 2 projects and received the Host Country Approval. PDDs
 havebeen validated by M/s. Det Norske Veritas (DNV), subsequently
 monitoring report was done by Ernst & Young and finally verification of
 the CERs receivables was completed by Designated Operational Entity
 (DOE) i.e., DNV, Bangalore.The Verification Report for issuance of CERs
 is submitted to United Nations Framework Convention on Climate Change,
 Germany (UNFCCC) for its consent through DNV.Final issuance of CERs is
 pending with UNFCCC.
 
 CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE
 EARNINGS AND OUTGO:
 
 The statement giving the particulars with respect to Conservation of
 Energy, Technology absorption and Foreign Exchange Earnings and
 outgoings as required under Section 217(1)(e) of the Companies Act,
 1956 read with Companies (Disclosure of Particulars in the Report of
 Board of Directors) Rules 1988 is annexed hereto and forms part of the
 Report.
 
 PARTICULARS OF EMPLOYEES:
 
 Information required under Section 217(2A) of the Companies Act, 1956
 read with the Companies (Particulars of Employees) Rules, 1975 as
 amended:
 
 None of the employees of the Company has drawn salary exceeding
 Rs.60.00 Lakhs per annum or Rs.5.00 Lakhs per month during the year in
 terms of section 217 (2A) of the Companies Act, 1956.
 
 HUMAN RELATIONS:
 
 Your Company''s industrial relations continued to be cordial throughout
 the year under review at all the units.
 
 ACKNOWLEDGMENT:
 
 Your Directors gratefully acknowledge the valuable support, guidance
 and assistance provided / extended to the Company by various
 departments of the Central and State Governments, different statutory
 authorities, State Bank of India, its group and SREI Equipment Finance
 Pvt. Limited etc.
 
 Your Directors also express their gratitude to the Shareholders of the
 company for the confidence reposed in the management.  Your Directors
 also take this opportunity to offer their sincere thanks to customers,
 and other organizations, that have helped the company from time to time
 through their continued support and co-operation. Your Directors wish
 to place on record their appreciation to the employees of the Company
 for their hard work, dedication, commitment and co-operation extended
 in achieving the results.
 
                            For and on behalf of the Board of Directors
 
 Place: Hyderabad                                              P.V. RAO
 
 Date: 11.07.2011                                              CHAIRMAN