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FORWARD-LOOKING STATEMENT :
In this Annual Report, we have disclosed forward-looking information to enable
investors to fully appreciate our prospects and take informed investment
decision. Many factors may affect the actual results, which could be different
from what the Directors' envisage in terms of future performance and outlook.
We undertake no obligation to publicly update any forward-looking statements,
whether as a result of new information, future events or otherwise.
CORPORATE INFORMATION
BOARD OF DIRECTORS
Shri. Babu Srinivasan Chairman
Shri. Dineshchand Surana Managing Director
Shri. Kokkarne Natrajan Prithviraj Independent Director
Shri. Krishna Udupa Non-Executive Director
Smt. Soundharya Panchapakesan Independent Director
Shri. Biju George Kozhippattu Nominee Director (IDBI)
Shri. Venkatasubramanian Subramanian Nominee Director (IFCI)
KEY MANAGERIAL PERSONNEL
Shri. Dineshchand Surana Managing Director
Shri. Anil Gupta Group - Chief Financial Officer
Shri. D. Hem Senthil Raj Company Secretary and Compliance Officer
ONE - LEVEL BELOW KEY MANAGERIAL PERSONNEL
Shri. Rahul Dinesh Surana Group - Chief Executive Officer
Shri. B. Ramachandran Group - Chief Operating Officer
SENIOR MANAGEMENT
Shri. A.K.Loganathan Technical Director
Shri. Vijay Chordiya Vice President - Finance
Shri. M. Selvaraj General Manager - Finance
Shri. Karthik Kannan General Manager - Accounts
Shri. V. Ramesh Babu General Manager-Human Resource & Administration
Shri. Veda Siddharth General Manager - Operation & Projects
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ANNUAL REPORT 2014-15
AUDITORS
M/s. Deloitte Haskins & Sells LLP Statutory Auditor
ASV N Ramana Towers, 52, Venkatnarayana Road,
T.Nagar, Chennai - 600 017.
M/s. JV Associates, Cost & Management Accountants, Cost Auditor
Q - 4, Lotus Colony,
Nandanam, Chennai - 600 035.
M/s. Agrya Consulting Private Limited, Internal Auditor
G-1, RM Towers, 108, Chamiers Road,
Teynampet, Chennai - 600 018.
M/s. Lakshmmi Subramanian & Associates, Secretarial Auditor
Practicing Company Secretaries,
81,Murugesa Naicker Office Complex,
Greams Road, Chennai - 600 006.
REGISTRARS AND SHARE TRANSFER AGENTS
M/s. Cameo Corporate Services Ltd,
"Subramanian Building", 5th Floor, No.1,
Club House Road, Chennai - 600 002.
REGISTERED CUM CORPORATE HEAD OFFICE
No.29, Whites Road, 2nd Floor, Royapettah, Chennai - 600 014.
Phone : 044 - 28525127(3 Lines) Fax : 044 - 28520713
Email : [email protected]
Web : www.suranaind.com
BRANCH OFFICE
1. No. 303, Ritual Park, Arumugam Circle, Basavangudi, Bangalore - 560 004.
2. No.20-171/2, 1st Floor, Sama Venkat Reddy Building, Ralla Guda Road, Shamshabad,
Hyderabad - 501 218.
FACTORY & WORKS ADDRESS
1. F-67, 68 & 69, Sipcot Industrial Complex Gummidipoondi - 601 201. Tamilnadu.
2. Plot No. 231-234, Raichur Growth Centre, KIADB, Raichur District, Raichur - 584 102, Karnataka.
(Integrated Steel Complex)
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ANNUAL REPORT 2014-15
BANKERS & FINANCIAL INSTITUTIONS
ALLAHABAD BANK Chennai Main Branch, 41, Mount Road, Chennai - 600 002.
BANK OF BARODA Corporate Financial Services Branch, No. 21,
Gopalakrishnan Street, T. Nagar, Chennai - 600 017.
BANK OF INDIA Large Corporate Banking Branch, IV Floor, Tarapore Tower,
826, Anna Salai, Chennai - 600 002.
BANK OF MAHARASTRA 116, Sri Gujarati Mandal Bhavan, Broadway Branch,
Chennai - 600 108
CANARA BANK Teynampet Branch, 574, Anna Salai, Chennai - 600 018.
CENTRAL BANK OF INDIA Corporate Finance Branch, Addison Building, No. 803,
Mount Road, Chennai -600 002.
DENA BANK Dena Corporate Centre, C-10, G Block, Bandra Kurla
Complex, Bandra East, Mumbai - 400 051.
IDBI BANK Chennai Main Branch, No.115, Anna Salai, Saidapet,
Chennai-600 015.
INDIAN OVERSEAS BANK C & IC Branch, No. 98-A, Dr. Radhakrishnan Salai,
Chennai - 600 004.
ORIENTAL BANK OF COMMERCE Mylapore Branch, No. 63, Dr. Radhakrishnan Salai,
Chennai - 600 004.
PUNJAB NATIONAL BANK Mint Street Branch, No. 35, Mint Street, Sowcarpet,
Chennai - 600 079.
STATE BANK OF INDIA Industrial Finance Branch, No. 155, Anna Salai,
Chennai - 600 002.
SYNDICATE BANK Corporate Finance Services Branch, No. 170,
Eldams Road, Teynampet, Chennai - 600 018.
UCO BANK Flagship Corporate Branch, PLA Towers, No. 212,
Anna Salai, Chennai - 600 006.
IFCI Continental Chambers, 142, Mahatma Gandhi Road,
Post Box No.3318, Chennai - 600 034.
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ANNUAL REPORT 2014-15
CONTENTS Page Nos.
1. Notice for AGM 001-014
2. Directors Report and Management Discussion & 015-047
Analysis Report (MDA)
3. Annexure A to E to Director’s Report 048-067
4. Corporate Governence Report 068-099
5. Independent Auditor’s Report 100-104
6. Annexure to Independent Auditor’s Report 105-109
7. Balance Sheet 110-110
8. Statement of Profit and Loss 111-111
9. Cash Flow Statement 112-113
10. Notes to Financial Statements 114-145
11. Independent Auditor’s Report on Consolidated Financial Statements 146-151
12. Annexure to Independent Auditor’s Report on 152-157
Consolidated Financial Statements
13. Consolidated Balance Sheet 158-158
14. Consolidated Statement of Profit and Loss 159-159
15. Consolidated Cash Flow Statement 160-161
16. Notes to Consolidated Financial Statement 162-202
17. Attendance Slip 203-203
18. Proxy Form 204-205
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ANNUAL REPORT 2014-15
Notice is hereby given that Twenty Fourth Annual
General Meeting of M/s. Surana Industries
Limited will be held on the Monday, the
10th August, 2015 at 9.30 a.m. at New Door
No. 01, Ambedkar Nagar GNT Road,
Madhavaram, Chennai - 600 060 to transact the
following businesses:
ORDINARY BUSINESS :
1) To receive, consider and adopt the Audited
Balance Sheet as at 31st March, 2015 and
the Profit and Loss Account for the year
ended on that date together with the reports
of the Board of Directors and the Auditors
thereon.
2) To appoint a Director in place of Shri.
Dineshchand Surana, Director who retires
by rotation and being eligible, offers himself
for re-appointment.
3) To appoint a Director in place of Shri. Biju
George, Director who retires by rotation and
being eligible, offers himself for
re-appointment.
4) To appoint the statutory auditors of the
company and to fix their remuneration and
to pass the following resolution as an
ordinary resolution thereof:
"RESOLVED THAT pursuant to section 139, 142
and other applicable provisions of the Companies
Act, 2013 and the Rules made thereunder,
pursuant to the recommendation of the audit
committee of the Board of Directors, M/s. Deloitte
Haskins & Sells LLP, Chartered Accountants,
Chennai having Firm Registration Number
(117366W/W 100018) be and hereby appointed
as Statutory Auditors of the Company to hold
office from the conclusion of this Annual General
Meeting until the conclusion of the 29th Annual
General Meeting of the Company, subject to
ratification of members in each Annual General
Meeting and that the Board of Directors be and is
hereby authorized to fix the remuneration payable
to them for the financial year ending March 31,
2016 as may be determined by the audit
committee in consultation with the auditors, and
that such remuneration may be paid on a
progressive billing basis as may be agreed upon
between the auditors and the Board of Directors”.
SPECIAL BUSINESSES:
5) To consider and if thought fit, to pass with or
without modification(s) the following
resolution as Ordinary Resolution:
NOTICE OF 24th ANNUAL GENERAL MEETING OF SURANA INDUSTRIES LIMITED
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ANNUAL REPORT 2014-15
APPOINTMENT OF SHRI. BABU
SRINIVASAN (DIN: 06608264) AS AN
INDEPENDENT DIRECTOR:
"RESOLVED THAT pursuant to the
provisions of Sections 149, 152 and other
applicable provisions if any, of the
Companies Act, 2013 (Act) and the Rules
framed there under, read with Schedule IV
of the Act, as amended from time to time,
Shri. Babu Srinivasan (DIN: 06608264),
who was appointed as a "Non-Executive
Independent Director" by the Board of
Directors of the Company with effect from
15th May, 2015, who has submitted a
declaration that he meets the criteria for
independence as provided in Section 149
(6) of the Act and who is eligible for
appointment, be and is hereby appointed as
an Independent Director of the Company,
not liable to retire by rotation for a tenure of
Five (5) years with effect from 15th May, 2015
to 14th May, 2020."
6) To consider and if thought fit, to pass with or
without modification(s) the following
resolution as Ordinary Resolution :
APPOINTMENT OF SMT. SOUNDHARYA
PANCHAPAKESAN (DIN: 07220601) AS
AN INDEPENDENT DIRECTOR:
"RESOLVED THAT pursuant to the
provisions of Sections 149, 152 and other
applicable provisions if any, of the
Companies Act, 2013 (Act) and the Rules
framed there under, read with Schedule IV
of the Act, as amended from time to time,
Smt. Soundharya Panchapakesan (DIN:
07220601), who was appointed as an
Additional Director by the Board of
Directors of the Company who has
submitted a declaration that she meets the
criteria for independence as provided in
Section 149 (6) of the Act and who is
eligible for appointment, be and is hereby
appointed as an Independent Director of the
Company, not liable to retire by rotation for
a tenure of Five (5) years with effect from
30th June, 2015 to 29th June, 2020."
7) To consider and if thought fit, to pass with or
without modification(s) the following
resolution as Ordinary Resolution:
RATIFICATION OF REMUNERATION
PAYABLE TO COST AUDITOR FOR THE
FINANCIAL YEAR 2015-16:
"RESOLVED THAT pursuant to the
provisions of sections 141, 148 and other
applicable provisions, if any of the
Companies Act, 2013 and rules made there
2 |
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ANNUAL REPORT 2014-15
under and subject to such guidelines and approvals as may be required from the Central
Government, the company hereby approves and ratifies the remuneration of Rs.1,00,000/-
(Rupees One Lakh Only) plus applicable taxes and out of pocket expenses payable to
M/s. JV Associates, Cost and Management Accountants, Chennai having Firm Registration
Number : 100212, who was appointed as Cost Auditors of the Company for the Financial Year
2015-16."
Date: June 29, 2015 By Order of the Board of Directors
Place : Chennai
-Sd-
Dineshchand Surana
Managing Director
(DIN: 00007032)
NOTES :
1. A MEMBER ENTITLED TO ATTEND AND
VOTE, IS ENTILTED TO APPOINT A
PROXY TO ATTEND AND VOTE INSTEAD
OF HIMSELF AND THE PROXY NEED NOT
BE A MEMBER. PROXY FORMS, IN
ORDER TO BE VALID SHOULD BE
DEPOSITED AT THE REGISTERED
OFFICE OF THE COMPANY NOT LESS
THAN 48 HOURS BEFORE THE
COMMENCEMENT OF THE MEETING I.E.
BY 9.30 A.M. ON SATURDAY, 8TH AUGUST 2015.
2. A PERSON CAN ACT AS A PROXY ON
BEHALF OF MEMBERS NOT EXCEEDING
FIFTY AND HOLDING IN THE
AGGREGATE NOT MORE THAN TEN
PERCENT OF THE TOTAL SHARE
CAPITAL OF THE COMPANY CARRYING
VOTING RIGHTS. A MEMBER HOLDING
MORE THAN TEN PERCENT OF THE
TOTAL SHARE CAPITAL OF THE
COMPANY CARRYING VOTING RIGHTS
MAY APPOINT A SINGLE PERSON AS
PROXY AND SUCH PERSON SHALL NOT
ACT AS A PROXY FOR ANY OTHER
PERSON OR SHAREHOLDER.
3. Members/Proxies are requested to bring their
Attendance slip duly filed in for attending the
meeting along with their copy of the Annual
Report.
4. Corporate Members intending to send their
authorized representative(s) to attend the
meeting are requested to send a certified
copy of Board Resolution together with their
respective specimen signatures authorizing
such representative(s) to attend and vote on
their behalf at the Meeting.
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ANNUAL REPORT 2014-15
4 |
5. Brief resume of Directors including those
proposed to be appointed/re-appointed,
nature of their expertise in specific functional
areas, names of companies in which they
hold directorships and memberships/
chairmanships of Board Committees,
shareholding and relationships between
directors inter-se as stipulated under Clause
49 of the Listing Agreement with the Stock
Exchanges, are provided in the explanatory
statement annexed with this notice.
6. A Statement pursuant to Section 102 (1) of
the Companies Act, 2013, relating to the
Special Businesses under item nos 5,6 and
7 to be transacted at the Meeting is annexed
hereto.
7. Members are adv ised to quote the
Registered Folio Numbers/ DPID & Client ID
Number in all correspondence with the
company.
8. All documents referred to in the above
notice and statement is open for inspection
at the Registered Office of the company
between 10.30 A.M. to 01.00 P.M on all
working days.
9. The register of members of the company
shall remain closed from 31st July 2015 to
10th August, 2015 (both days inclusive).
10. Members are requested to contact the
Registrar and Transfer Agent (RTA) for all
matters relating to Company's shares at:
M/s. Cameo Corporate Services Limited,
No.1, Club House Road, 5th Floor,
"Subramanian Building", Chennai 600 002
11. Members holding shares in physical form are
requested to notify/send the following to the
Company's Registrar and Share Transfer
Agents to facilitate better services:
(i) Any change in their address, mandates,
and Bank details.
(ii) Share certif icates held in multiple
accounts names or joint names in the
same order of names for consolidation
of such shareholding into one account.
12. Non - Resident Indian Members are
requested to inform the Registrar and Share
Transfer Agent of the Company, immediately
of the change in their residential status on
return to India for Permanent settlement
together with the particulars of their Bank
Account maintained in India with complete
name, branch, account type, account
number and address of the Bank with PIN
code number if not furnished earlier.
13. The Securities and Exchange Board of
India (SEBI) has mandated the submission
of Permanent Account Number (PAN) by
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ANNUAL REPORT 2014-15
| 5
every participant in securities market.
Members holding shares in electronic form
are, therefore, requested to submit their PAN
to their Depository Participants with whom
they are maintaining their demat accounts.
Members holding shares in physical form can
submit their PAN to the Company / RTA.
14. Members who hold shares in physical form
in multiple folios in identical names or joint
holding in the same order of names are
requested to send the share certificates to
RTA, for consolidation into a single folio.
15. Members who have not registered their
e-mail addresses so far are requested to
register their e-mail address for receiving all
communication including Annual Report,
Notices, Circulars, etc. from the Company
electronically.
16. We propose to send a l l documents
including Annual Reports in electronic form
to the Members on the email address
provided by them to the Company/ RTA /
Depositories. The Members holding shares
in physical form are requested to intimate/
update the email address to the Company/
RTA, while those holding in demat form can
intimate/update their email address to their
respective Depository Participants.
17. Members are entitled to be furnished, free
of cost, the physical copy of the documents
sent by e-mail upon receipt of a requisition
from them.
18. In compliance with provisions of the New
Companies Act, 2013 the Company is
pleased to offer e-voting facility, for all the
Shareholders of the Company. For this
purpose, the Company has entered into an
agreement with CDSL for facilitating
e-voting to enable the Shareholders to cast
their votes electronically.
19. The Company has appointed Smt. Lakshmmi
Subramanian, Senior Partner, [M.No .3534]
of M/s. Lakshmmi Subramanian & Associ-
ates, Practicing Company Secretary, as
Scrutinizer for conducting the e-voting
process in a transparent manner.
20. In terms of Clause 35B of the Listing
Agreement, the Company is pleased to
provide the facility to Members to exercise
their right to vote by electronic means. The
Members, whose names appear in the
Register of Members / list of Beneficial
Owners as on Friday, July 31, 2015, i.e. the
cut-off date taken by the Company for the
purpose of e-voting.
E-voting process:
21. The instructions for members for voting
electronically are as under:-
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ANNUAL REPORT 2014-15
6 |
In case of members receiving e-mail:
i. Log on to the e-voting website
www.evotingindia.com.
ii. Click on "Shareholders" tab.
iii. Now, select the "COMPANY NAME" from the drop down menu and click on "SUBMIT"
iv. Now Enter your User ID (For CDSL: 16 digits beneficiary ID, For NSDL: 8 Character DP ID
followed by 8 Digits Client ID, Members holding shares in Physical Form should enter Folio
Number registered with the Company and then enter the Captcha Code as displayed and Click
on Login.
v. If you are holding shares in Demat form and had logged on to www. evotingindia. com and
voted on an earlier voting of any company, then your existing login id and password are to be
used. If you are a first time user follow the steps given below.
vi. Now fill up the following details in the appropriate boxes:
User Id For Members holding shares For members holding shares in Physical form.
in DEMAT form.
For NSDL: 8 Character DP ID Folio Number registered with the Company.
followed by 8 digits Client ID.
For CDSL: 16 digits beneficiary ID
PAN* Enter your 10 digit alpha-numeric *PAN issued by Income Tax Department when
prompted by the system while e-voting (applicable for both demat as well as
physical shareholders)
DOB# Enter the Date of Birth as recorded in your demat account or in the company
records for the said demat account or folio in dd/mm/yyyy format.
Dividend Bank Enter the Dividend Bank Details as recorded in your demat account or in the
Details # company records for the said demat account or folio.
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ANNUAL REPORT 2014-15
| 7
Members who have not updated their PAN with
the Company/Depository Participant are re-
quested to use the first two letters of their name
and the sequence number in the PAN Field. In
case the sequence number is less than 8 digits
enter the applicable number of 0's before the
number after the first two characters of the name.
E.g. If your name is Ramesh Kumar with
sequence number 1 then enter RA00000001 in
the PAN Field.
# Please enter any one of the details in order to
login. In case both the details are not recorded
with the depository or company please enter the
member id / folio number / (default value) in the
Dividend Bank details field.
vii. After entering these details appropriately,
click on "SUBMIT" tab.
viii. Members holding shares in physical form will
then reach directly the Company selection
screen. However, members holding shares
in demat form will now reach 'Password
Creation' menu wherein they are required to
mandatorily enter their login password in the
new password field. Kindly note that this
password is to be also used by the demat
holders for voting for resolutions of any other
company on which they are eligible to vote,
provided that company opts for e-voting
through CDSL platform. It is strongly
recommended not to share your password
with any other person and take utmost care
to keep your password confidential.
ix. For Members holding shares in physical form,
the details can be used only for e-voting on
the resolutions contained in this Notice.
x. Click on <Company Name> on which you
choose to vote.
xi. On the voting page, you will see Resolution
Description and against the same the option
"YES/ NO" for voting. Select the option YES
or NO as desired. The option YES implies
that you assent to the Resolution and option
NO implies that you dissent to the
Resolution.
xii. Click on the "Resolutions File Link" if you wish
to view the entire resolutions.
xiii. After selecting the resolution you have
decided to vote on, click on "SUBMIT". A
confirmation box will be displayed. If you wish
to confirm your vote, click on "OK", else to
change your vote, click on "CANCEL" and
accordingly modify your vote.
xiv. Once you "CONFIRM" your vote on the
resolution, you will not be allowed to modify
your vote.
xv. You can also take out print of the voting done
by you by clicking on "Click here to print"
option on the Voting page.
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ANNUAL REPORT 2014-15
8 |
xvi. If Demat account holder has forgotten the
changed password then enter the User ID
and Captcha Code click on Forgot Password
& enter the details as prompted by the
system.
xvii. Institutional shareholders (i.e. other than
individuals, HUF, NRI etc.) are required to
log on to https:// www.evotingindia.co.in and
register themselves as Corporate. After
receiving the login details they have to link
the account(s) which they wish to vote on
and then cast their vote. They should
upload a scanned copy of the Board
Resolution and Power of Attorney (POA)
which they have issued in favour of the
Custodian, if any, in PDF format in the
system for the scrutinizer to verify the same.
In case of members receiving the physical
copy:
A. Please follow all steps from sl. no. (i) to sl.
no. (xvii) above, to cast vote.
B. The voting period begins on 4th August, 2015
at 10.00 A.M. and ends on 6th August, 2015
at 05.00 P.M. During this period sharehold-
ers of the Company, holding shares either in
physical form or in dematerialized form, as
on the cut- off date (record date) of July 31,
2015 may cast their vote electronically. The
e-voting module shall be disabled by CDSL
for voting thereafter. The voting right of
shareholders shall be in proportion to their
share in the paid up equity share capital of
the Company as on the cut-off date, being
July 31, 2015.
C. In case you have any queries or issues
regarding e-voting, you may refer the
Frequently Asked Questions ("FAQs") and
e-voting manual available at www.
evotingindia.com under help section or write
an email to helpdesk.evoting @cdslindia.
com
D. Members may also contact the Company's
Secretarial Department at secretarial @
suranaind.com or the Registrar and
Transfer Agents at narasimhan @
cameoindia.com
E. The result of the voting will be placed on the
website of the Company http://www.
suranaind.com, website of CDSL http://
www.evotingindia.com and also on the
website of all stock exchanges where the
Company's shares are listed on or after 11th
August, 2015.
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ANNUAL REPORT 2014-15
| 9
The following statements sets out all material facts
relating to the special business mentioned in the
accompanying notice:
ITEM NO.5 & 6:
Pursuant to the provisions of Section 149 of the
Companies Act, 2013 (Act) which came in to
effect from April 1, 2014, every public limited
company and listed company is required to
appoint an Independent Director, who is not
liable to retire by rotation.
Shri. Babu Srinivasan (DIN: 06608264), who
was appointed as the Additional Director in the
category of Independent Director of the Company
vide the circular resolution passed by the Board
of Directors of the Company on 15th May, 2015
and Smt. Soundharya Panchapakesan (DIN:
07220601), who was appointed as Additional
Director of the Company both of whom has given
a declaration to the Board that they meet the
criteria of Independence as provided under
Section 149(6) of the Act. In the opinion of the
Board, both the Directors fulfills the conditions
specified in the Act and the Rules framed there
under for appointing them as the Independent
Directors of the Company and both of them are
independent of the management.
Pursuant to the provisions of Section 161 of the
Companies Act, 2013, Shri. Babu Srinivasan and
Smt. Soundharya Panchapakesan will hold office
up to the date of the ensuing AGM. The company
has received notice in writing under the provisions
of Section 160 of the Companies Act, 2013, from
a member, along with a deposit if Rs. 1,00,000/-
proposing the candidature of Shri. Babu
Srinivasan and Smt. Soundharya Panchapakesan
respectively for the office of Independent
Director, to be appointed as such under the
provisions of Section 149 of the Companies Act,
2013. The Nomination and Remuneration
Committee has recommended the appointment
of these directors as Independent Directors.
In compliance with the provisions of Section 149
read with Schedule IV of the Act, the appointment
of Shri. Babu Srinivasan (DIN: 06608264) and
Smt. Soundharya Panchapakesan (DIN:
07220601) as Independent Directors is now
being placed before the Members for their
approval.
The Board recommends the resolutions set forth
for the approval of the members.
None of the Directors, key managerial personnel
of the Company or their relatives, except to whom
the resolution relates, is in any way, concerned
or interested in the said resolution.
EXPLANATORY STATEMENT PURSUANT TO SECTION 102
OF THE COMPANIES ACT, 2013
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ANNUAL REPORT 2014-15
10 |
Profile of Shri. Babu Srinivasan:
A brief profile of Shri. Babu Srinivasan (DIN: 06608264) to be appointed as Independent Director of
the Company is given below:
Shri. Babu Srinivasan is a former senior executive of Punjab National Bank, who has over four
decades of rich and valuable experience in Banking and Finance sector. During his tenure he was
elevated to the higher management positions and had finally superannuated as Circle head DGM of the
Bank. He had also served earlier in various senior positions in corporates across India.
Name Shri. Babu Srinivasan
Father's Name Shri G. Srinivasan
Age 62 Years
Expertise in Specific functional area Business Development & Administration
Other Company Directorship Surana Power Limited
Membership of Board & Committees Surana Power Limited
Member of Audit Committee & Nomination &
Remuneration Committee
No of Shares Nil
Relationship with other Directors No
Profile of Smt. Soundharya Panchapakesan
A brief profile of Smt. Soundharya Panchapakesan (DIN: 07220601) to be appointed as Independent
Director of the Company is given below:
Smt. Soundharya Panchapakesan is a commerce graduate from the Madras University, in addition
she holds a post graduation in commerce. Currently she is working as a corporate consultant for firms
and corporates across India.
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ANNUAL REPORT 2014-15
| 11
ITEM NO.7:
In pursuance of Section 148 of the Companies Act, 2013 and Rule 14 of the Companies (Audit and
Auditors) Rules, 2014, the Company is required to appoint a Cost Auditor to audit the cost records
maintained by the Company.
On the recommendation of the Audit Committee, the Board has considered and approved the
appointment of M/s. JV Associates, Cost & Management Accountants, Chennai having Firm
Registration Number: 100212 as the Cost Auditor for the financial year 2015-16 at a remuneration of
Rs.1,00,000/- (Rupees One Lakhs Only) per annum plus service tax, out of pocket, travelling expenses,
etc., as may be mutually agreed between the Board of Directors and the Auditors.
In accordance with the provisions of the Section 148 of the Companies Act 2013, read with the
Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditors is
required to be ratified by the shareholders of the Company.
The board recommends the same to the members for their approval.
None of the directors, key managerial personnel of the company and their relatives, is in any way,
concerned or interested in the said resolution.
Name Smt. Soundharya Panchapakesan
Father's Name Shri. Panchapakesan
Age 24 Years
Expertise in Specific functional area Finance
Other Company Directorship Nil
Chairmanship & Membership of other Committees of the Board Nil
No of Shares Nil
Relationship with other Directors No
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ANNUAL REPORT 2014-15
12 |
Details of Director seeking Re-appointment pursuant to Clause 49 of the Listing Agreement
Profile of Shri. Dineshchand Surana
Name Shri. Dineshchand Surana
Father's Name Shri. Udairaj Surana
Age 49 Years
Expertise in Specific functional area Steel & Iron Industry
Background Details Shri. Dineshchand Surana, aged 49 years, is presently the
Managing Director of the Company. He belongs to a
business family and hails from Rajasthan. He has 29 years
of experience in the Steel Industry. He also has long years
of experience in managing the affairs of the Company. He
has extensively travelled across many countries such as
Taiwan, Russia and Romania and has gained considerable
expertise in the steel making process. Shri Dineshchand
Surana has played a key role in evolution of Surana
Industries Limited from a small size steel manufacturer and
trader to one of the major Integrated Special Steel
manufacturers in the Country.
Other Company Directorship Surana Power Limited
Chairmanship & Membership of other Surana Power Limited
Committees of the Board Member of Audit Committee
No of Shares 50,67,876
Relationship between Directors
Inter-se Nil
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ANNUAL REPORT 2014-15
| 13
Profile of Shri. Biju George
Name Shri. Biju George Kozhippattu
Father's Name Shri. George Paulose Kozhippattu
Age 48 Years
Expertise in Specific functional area Steel & Iron Industry
Background Details Shri. Biju George, aged 48 years, is currently working in the
capacity of GM at IDBI Bank. He is the Nominee Director of
the Company. He has an extensive experience in project
implementation, maintenance and planning. He has
previously worked with Excel Glass Ltd., Chennai Refinery
and Binani Zinc Ltd., He has been with IDBI bank since 2001.
Other Company Directorship Nil
Chairmanship & Membership of
other Committees of the Board Nil
No of Shares Nil
Relationship between Directors
Inter-se Nil
Date: June 29, 2015 By Order of the Board of Directors
Place: Chennai
-Sd-
Dineshchand Surana
Managing Director
(DIN: 00007032)
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ANNUAL REPORT 2014-15
14 |
Route Map to the venue of the AGM
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ANNUAL REPORT 2014-15
| 15
DIRECTOR'S REPORT & MANAGEMENT DISCUSSION AND ANALYSIS REPORT
To
The Members
The Directors of the Company present to you the 24th Annual Report of the Company, together with the
Audited Balance Sheet as at 31st March, 2015 and the Statement of Profit and Loss for the year ending
on 31st March, 2015.
1. FINANCIAL RESULTS
The Financial Results of the Company for the year under review is summarized below for your perusal
and consideration.
(Rs. in Crores)
PARTICULARS 2014-15 2013-14
NET REVENUE 642.17 555.20
PROFIT BEFORE TAX AND DEPRECIATION (172.66) (201.95)
PROFIT /(LOSS) BEFORE TAX (PBT) (234.49) (233.87)
PROVISION FOR CURRENT TAX - -
TAX EXPENSE 28.29 (78.41)
PROFIT AFTER TAXES/(LOSS) (PAT) (262.78) (155.46)
1.1 FINANCIAL PERFORMANCE
The Company has achieved Net sales of Rs. 642.17 Crores for the year ended 31st March, 2015 as
compared to Rs.555.20 crores in the previous year.
The Company has incurred a Net loss of Rs. 262.78 Crores as against a loss after taxes of Rs. 155.46
Crores in the previous year. The losses are attributable to high input costs, irregular supply of raw
materials, high finance costs and unfavourable market conditions. While the Raichur plant was
particularly affected by the iron ore mining ban and labour issues, the Gummudipoondi plant faced with
irregular power supply and adverse market conditions.
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ANNUAL REPORT 2014-15
1.2 CORPORATE DEBT RESTRUCTURING
(CDR)
The lenders have restructured the debts of the
Company to the extent of Rs.1331 crs under the
CDR mechanism. All overdues have been
restructured with effect from 1st June 2013, on
the basis of the terms of moratorium and revised
repayment schedule contained in the Final Letter
of Approval (Final LOA) dated March 13, 2014.
The package also includes a priority loan of
Rs.41.72 crs for balancing equipment required for
the Rolling mill and electric arc furnace. Overdues
on the existing loans as on the Cut-off date have
been converted into funded interest term loans.
Further repayment of loans has been resched-
uled over a 10 year period ending the year 2023.
2. SHARE CAPITAL
The paid up Equity Share Capital as on 31st
March, 2015 was Rs. 44.52 Crores. During the
year under report, the Company has not issued
any shares with differential voting rights nor
granted stock options nor sweat equity.
3. DIVIDEND
Your Directors have not recommended any
dividend for the financial year 2014-15 in view of
the losses incurred and the need to conserve
resources of the Company. The Company is also
required to seek prior approval of the lenders for
declaration of dividend, in terms of the Corporate
Debt Restructuring package.
4. MANAGEMENT DISCUSSION AND
ANALYSIS
STEEL INDUSTRY OUTLOOK:
INDUSTRY OVERVIEW
The Indian steel industry, one of the core
industries in India, is more than a century old.
India is currently the world's fourth largest
producer of crude steel and is expected to
become the second largest producer by 2016.
Steel industry derives its demand from other
important sectors like infrastructure, aviation,
engineering, construction, automobile, pipes and
tubes etc. Thus its intense integration with other
important industries makes it a strategic sector
for Government as well.
The Indian steel sector enjoys advantages of
domestic availability of raw materials and cheap
labour. Iron ore is also available in abundant
quantities, though the recent mining restrictions
have put a strain on its availability. This
abundance has been providing a major cost
advantage to the domestic and steel industry.
Steel plays a vital role in the development of any
modern and emerging economy. The per capita
consumption of steel is generally accepted as a
yardstick to measure the level of socio-economic
development and living standards of its
countrymen. As such no developing country can
afford to ignore the steel industry.
16 |
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ANNUAL REPORT 2014-15
Therefore, our endeavour, through this conglom-
eration of Governments, policy makers, industrial
leaders and potential investors from India and
abroad is to discuss new growth drivers that are
revolutionizing the Indian steel industry and
assess the challenges & opportunities associated
with new technologies along with identifying new
growth frontiers.
Structure of the Indian steel industry
The Indian steel industry is divided into primary
and secondary sectors. The primary sector
comprises a few large integrated steel providers
producing billets, slabs and hot rolled coils, among
others. The secondary sector comprises small
units focused on the production of value added
products such as cold rolled coils, galvanized
coils, angles, columns, beams and other
re-rollers, and sponge iron units. Both sectors
cater to different market segments.
On the basis of ownership, the Indian steel
industry is broadly divided into private and public
sector enterprises. The private sector dominates
production accounting for almost 78 percent of
the finished steel output while the public sector
has higher capacity utilizations.
Indian steel industry is more consolidated
than the global steel industry
The capacity share of the top five Indian steel
players stood at 51 percent of the total capacity
(87.3 MTPA) in fiscal year (FY) 2015 compared to
less than 15 percent capacity share for the top
five global steel players. This has resulted in the
large integrated producers having significant
pricing power, forcing the secondary producers to
look at backward integration to remain competitive.
INDIAN STEEL INDUSTRY OUTLOOK
Domestic steel demand to remain muted
during FY 2012-17 on account of a weak
macroeconomic environment
The demand for longs is expected to increase by
19 million ton (MT) at a CAGR of 9 percent and
for flats by 16 MT at a CAGR of 8 percent
between FY2015 and FY2017. This is due to
relatively weaker growth prospects of flats
end-user industries (such as automotive and
consumer durables) than those for longs.
Increased domestic competition
Incumbents and challengers have announced 71
million ton per annum (MTPA) of steel capacity
addition between FY2015 and FY2017 through
both brownfield and greenfield routes. However,
there is considerable uncertainty on the actual
capacity addition as many projects are yet to
achieve financial closure due to delays or lack of
regulatory clearances.
Based on our bottom-up assessment of the
announced capacity additions, projects aggregat-
ing to 35 MTPA of crude steel capacity have
| 17
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ANNUAL REPORT 2014-15
already achieved financial closure. Hence, we
expect a minimum aggregate capacity of 122
MTPA to be commissioned by FY2017.
This capacity addition will lead to two structural
changes. First, the concentration in the longs
segment will increase by 5-7 percent in the
medium term, deepening the sustainability
challenge for secondary producers.
Second, it will shift the current flats-longs
capacity split of 50:50 to 60:40 by FY2017, if all
the announced projects are commissioned. As a
result, one can expect oversupply in flats and a
capacity shortfall in longs.
GLOBAL SCENARIO
❖ In 2014-15, the world crude steel production
reached 1661.5 million tonnes (mt) and
showed a growth of 1.2% over 2013-14.
(Source: World Steel Association or WSA,
prov.)
❖ China remained the world's largest crude steel
producer in 2014 (823 mt) followed by Japan
(110.7 mt), the USA (88.3 mt) and India
(83.2 mt) at the 4th position.
❖ WSA has projected that global apparent steel
use will increase by 2% to 1,562 mt in 2015
following growth of 3.8% in 2014 while in 2016;
world steel demand will grow by another 2%
and will reach 1,594 mt. As per their forecast,
India's outlook is improving and in 2015,
India's steel demand is expected to grow by
3.4% to 76.2 mt, following growth of 1.8% in
2014. In 2016 structural reforms and improv-
ing confidence will support a further 6%
growth in Indian steel demand but elevated
inflation and fiscal consolidation remain key
downside risks to the outlook.
DOMESTIC SCENARIO
❖ The Indian steel industry has entered into a
new development stage from 2007-08, riding
high on the resurgent economy and rising
demand for steel.
❖ Rapid rise in production has resulted in India
becoming the 4th largest producer of crude
steel and the largest producer of sponge iron
or DRI in the world.
❖ As per the report of the Working Group on
Steel for the 12th Five Year Plan, there exist
many factors which carry the potential of
raising the per capita steel consumption in
the country. These include among others, an
estimated infrastructure investment of nearly
a trillion dollars, a projected growth of manu-
facturing from current 8% to 11-12%, increase
in urban population to 600 million by 2030
from the current level of 400 million,
emergence of the rural market for steel
currently consuming around 10 kg per annum
buoyed by projects like Bharat Nirman,
Pradhan Mantri Gram Sadak Yojana, Rajiv
Gandhi Awaas Yojana among others.
18 |
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ANNUAL REPORT 2014-15
❖ At the time of its release, the National Steel Policy 2005 had envisaged steel production to reach 110
million tonnes (mt) by 2019-20. However, based on the assessment of the current ongoing projects,
both in Greenfield and brownfield, the Working Group on Steel for the 12th Five Year Plan has
projected that domestic crude steel capacity in the county is likely to be 140 mt by 2016-17 and has
the potential to reach 149 mt if all requirements are adequately met.
❖ The National Steel Pol icy 2005 is current ly being reviewed keeping in mind the rapid
developments in the domestic steel industry (both on the supply and demand sides) as well as the
stable growth of the Indian economy since the release of the Policy in 2005.
❖ Data on production for sale of pig iron, sponge iron and total finished steel (alloy + non-alloy) are
given below for last five years and April-December 2014-15:
Steel contributes to nearly two per cent of the gross domestic product (GDP) and employs over 500,000
people. The total market value of the organized Indian steel sector stood at US$ 57.8 billion in 2011 and
is expected to touch US$ 95.3 billion by 2016. The infrastructure sector is India's largest steel consumer,
thereby attracting investments from several global players. Owing to this connection with core
infrastructure segments of the economy, the steel industry is of high priority right now. Also, steel
demand is derived from other sectors like automobiles, consumer durables and infrastructure;
therefore, its fortune is dependent on the growth of these user industries.
| 19
Indian steel industry : Production for Sale (in million tonnes)
Category 2009-10 2010-11 2011-12 2012-13 2013-14 April-December2014-15
Pig Iron
Sponge Iron
Total Finished Steel(alloy + non alloy)
5.88
24.33
60.62
5.68
25.08
68.62
5.371
19.63
75.70
6.870
14.33
81.68
7.950
18.20
87.67
6.081 (5.868)
13.276 (13.413)
65.197 (64.190)
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ANNUAL REPORT 2014-15
The liberalisation of the industrial policy and other
government initiatives has given a definite
impetus for entry, participation and growth of the
private sector in the steel industry. Allowing
foreign direct investment (FDI) has been a posi-
tive step since India is heavily dependent on
foreign technologies. These foreign technologies
generally add life to the plant and production units,
which ultimately lead to the country's economic
growth.
POTENTIAL GROWTH CONSTRAINTS
Demand-side constraints
The growth in the steel market is expected to be
muted in the short term on account of poor growth
in core consumer sectors such as infrastructure
and construction. The demand is expected to
rebound in the latter half of 2015 with growth in
infrastructure as announced in the Twelfth
Five-year Plan. Growth in the automobile and
consumer durable sectors will also support
demand growth in the long term.
Supply-side constraints
The large steel players and new entrants have
announced capacity addition of about 71 MTPA
till 2017. Regulatory hurdles and land acquisition
challenges remain the largest supply-side
constraint for the Indian steel market. Mining bans
in Karnataka and Goa and delays in the
execution of announced capital projects can
further constrain supplies.
SHORT RANGE OUTLOOK OF STEEL
INDUSTRY FOR THE FY 2015-16
World steel forecasts that global apparent steel
use will increase by 0.5% to 1,544 Mt in 2015
following growth of 0.6% in 2014. In 2016, it is
forecast that world steel demand will grow by
1.4% and will reach 1,565 Mt.
THE OUTLOOK FOR THE STEEL INDUSTRY
SUGGESTS SLOW GROWTH FOR GLOBAL
STEEL DEMAND
Commenting on the outlook, Hans Jurgen
Kerkhoff, Chairman of the world steel Econom-
ics Committee said, "We are realizing a restrained
growth outlook for the global steel industry mainly
due to the deceleration in China. The outlook also
reflects the influence of major structural
adjustments in most economies, particularly
owing to limited investment growth post 2008. As
these changes take effect, the steel industry will
experience a slower pace of growth, it will focus
on operational efficiencies and on the value that
steel products generate for customers and
society."
"While we continue to face some downside risks
coming from some parts of Europe - geopolitical
instability, international capital flow volatility and
the economic slowdown in China - the impact of
these risks has come down. We have also started
to see some encouraging developments. We hear
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ANNUAL REPORT 2014-15
increasingly positive news from developed
economies, especially signs of firming recovery
momentum in the Eurozone. In the developing
and emerging world, we see increased optimism
about India and growth in steel use in some MENA
and ASEAN countries. While these developments
will not be enough to counterbalance the
deceleration of China, we expect to see
gradually improving growth prospects beyond
2016"
An interesting factor which has become
increasingly apparent is that in some developing
economies the steel markets are beginning to
exhibit the characteristics of mature markets.
MARKET SIZE
India's real consumption of total finished steel
grew by 0.6 per cent year-on-year in April-March
2013-14 to 73.93 million tonnes (MT), according
to Joint Plant Committee (JPC), Ministry of Steel.
Construction sector accounts for around 60 per
cent of the country's total steel demand while the
automobile industry consumes 15 per cent.
India became net steel exporter in 2013-14 and
is likely to maintain the momentum in 2015-16 as
producers are looking to dock more overseas
shipment to tide over subdued domestic
consumption. Total steel exports by India during
2013-14 stood at 5.59 MT, as against imports of
5.44 MT.
Iron ore export from India has showed a 253 per
cent increase during the period October-Decem-
ber 2013, at 3.75 MT as against 1.06 MT in the
corresponding period of the previous year, on the
back of the opening of new mines in Chhattisgarh,
Madhya Pradesh and Rajasthan, as per the
Federation of Indian Mineral Industries (FIMI).
RESEARCH & DEVELOPMENT IN IRON &
STEEL SECTOR
R&D in Indian Steel Sector is carried out mainly
by major steel plants and some of the national
laboratories like National Metallurgical Laboratory
(NML) Jamshedpur & Institute of Minerals and
Materials Technology (IIMT) Bhubaneswar. The
R&D projects mainly comprise short term
initiatives for solving day to day problems faced
by the Industry with minimum emphasis on
development of innovative/disruptive technologies.
Consequently, investment in R&D is very low @
0.15-0.30% of turnover of the steel companies,
as against 1-2% in the reputed steel companies
abroad. To augment R&D in the steel sector,
Ministry of Steel is extending financial support from
Steel Development Fund as well as Plan Fund.
INVESTMENTS & GOVERNMENT INITIATIVES
MINISTRY OF STEEL - FACILITATOR FOR
DEVELOPMENT OF STEEL INDUSTRY
The Ministry of Steel is expected to play a crucial
role in ensuing harmonious and integrated growth
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ANNUAL REPORT 2014-15
of Steel Sector. Being a core sector, its sustained growth is a prerequisite for attaining the high level of
Gross Domestic Product (GDP) growth. The industry has strong forward and backward linkages with
other sectors of the economy and, therefore, its own growth pattern is also influenced by other sectors
of the economy specially infrastructure development, real estate, auto mobiles/auto components etc.
The environment in which the domestic steel sector operates calls for a greater promotional role by the
Ministry of Steel specially as a facilitator to remove sectoral bottlenecks/constraints like availability of
raw materials, development of infrastructure and also interaction with other concerned Ministries/De-
partments of the Govt. for appropriate policy formulation and implementation.
India needs investment of US$ 210 billion over the next decade to achieve the steel production capacity
of 300 million tonnes per annum (MTPA) by 2025 from the current 90 MT. The future of the Indian steel
industry is bright. The government plans to increase infrastructure spending from the current 5 per cent
GDP to 10 per cent by 2017, and the country is committed to investing US$ 1 trillion in infrastructure
during the 12th Five-Year plan.
The Government of India has allowed 100 per cent FDI through the automatic route in the Indian steel
sector. It has significantly reduced the duty payable on finished steel products and has streamlined the
associated approval process.
In order to provide thrust on research and development (R&D), the Ministry of Steel is encouraging
R&D activities both in public and private steel sectors, by providing financial assistance from Steel
Development Fund (SDF) and Plan Scheme of the Central Government. Under the SDF scheme, 82
R&D projects have been approved with total project cost of Rs 677 crore (US$ 111.92 million) wherein
22 |
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ANNUAL REPORT 2014-15
SDF assistance is Rs 370 crore (US$ 61.17 mil-
lion). Under the Plan Scheme, eight projects were
approved with a total cost of Rs 123.27 crore (US$
20.38 million) wherein Government assistance is
Rs 87.28 crore (US$ 14.43 million).
To encourage beneficiation and pelletisation of
iron ore fines in the country, basic customs duty
on the plants and equipment required for initial
setting up or substantial expansion of iron ore
pellets plants and iron ore beneficiation plants has
been reduced from 7.5 per cent to 2.5 per cent.
Import of critical raw materials for steel industry,
such as coking coal, non-coking coal and scrap
are subject to zero or very low levels of custom
duty.
INVESTMENT SCENARIO IN STEEL
Incumbents and challengers have announced 71
MTPA of steel capacity addition between FY2012
and FY2017 through both brownfield and
greenfield routes. However, there is considerable
uncertainty on the actual capacity addition as
many projects are yet to achieve financial closure
due to delays or lack of regulatory clearances.
Land acquisition and regulatory clearances
pose major challenges to new greenfield
investments
Delays in the government allocating sufficient iron
ore blocks, regulatory approvals and challenges
in land acquisition have slowed many steel
projects. Moreover, regulatory clearances and land
acquisition challenges have affected expansion
and modernization projects. Major investments
from leading MNCs and large Indian corporates
across Karnataka, Odisha, Jharkhand and West
Bengal have been affected due to land acquisi-
tion challenges.
Need to secure raw material supply have led
Indian steel companies to look at global asset
base
The raw material security scenario has slightly
improved due to regulatory support to overseas
acquisitions. The Indian steel companies are
actively seeking mining leases and assets globally
to secure raw material supplies. The capability to
acquire, develop and operate these assets has
become a key strategic imperative. These assets
provide a natural hedge at the raw material
portfolio level, and are also important for over
coming the short-term domestic challenges.
Several Indian steel companies have acquired iron
ore and coking coal assets in countries such as
Canada, Australia and South Africa through joint
ventures. One of the leading Indian steel
companies acquired a majority stake in a new iron
ore reserve in Canada. It had acquired a minority
stake in an Australian mine, which was sold last
year to a leading global miner. Another Indian steel
company has acquired and operates anthracite
mines in South Africa. It has also acquired a sig-
| 23
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ANNUAL REPORT 2014-15
24 |
nificant minority stake in an Australian coal miner
with exploration rights for coking coal in
Queensland.
CHALLENGES
1. Domestic iron ore production declined
continuously over the last three years, and
the trend has been continuing in the current
year as well on account of various restrictions
in key iron ore producing states. While the
Supreme Court has allowed Category A and
B mines in Karnataka to resume mining op-
erations in the state, the requirement of fulfill-
ing various conditions has resulted in only a
limited number of mines commencing
operations till now, leading to a significant
supply shortage in the state. While the
Mining ban in the state of Goa has been lifted,
mining is yet to resume pending policy
formation by the State government. The iron
ore mining industry in Odisha may also face
a ban in light of the report of the Justice M. B.
Shah Commission. Despite falling supplies,
domestic iron ore prices nevertheless declined
over the last one year. Domestic lump ore
prices are ruling at levels which are 10-15%
lower than the rates one year back. This is
because of the ongoing downturn in the steel
industry, leading to a nominal production
growth for steel players without captive iron
ore mines.
2. International coking coal contract prices too
have declined during FY 14-15, but the
depreciation in the INR vis-a-vis the USD has
largely offset the benefit from the same for
Indian steelmakers importing coking coal.
However, a further decline in contract prices
of coking coal is likely to have a positive
bearing on their margins.
3. Insufficient infrastructure and logistics. The
steel industry is a major user of infrastruc-
ture resources like railways, roads and ports.
A growth in steel production will increase the
burden of the country's already stretched lo-
gistics infrastructure. To meet the needs of a
growing steel industry, major improvements
in various infrastructure facilities are required.
4. Land Acquisitions and rules for calculation of
compensation to landowners need clarity.
Further, the number of approvals governing
land acquisition and setting up new capacity
needs to be streamlined.
5. Overcapacity: Steel producers across the
globe are grappling with low capacity use lev-
els, resulting in a high fixed cost. Indian steel
producers' capacity use contracted to below
80% in FY13. Any increase in the capacity
use due to an uptick in demand could be lim-
ited by significant new capacities (about 13-
15 million tonnes (mt)), scheduled to start in
FY15. Domestic steel producers will have to
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ANNUAL REPORT 2014-15
| 25
increase their focus on cost competitiveness and
efficiency of operations to protect their margins.
CHALLENGING GLOBAL ENVIRONMENT
Globally, steel players have been operating in a
challenging environment. These trends are now
extending to India leading to margin compression
and weaker growth prospects.
Steel companies globally have been operating in
a challenging environment of rising input costs
and limited pricing power (in most years), leading
to steady erosion in margins. In response, steel
makers have been integrating upstream facilities
to secure supplies of iron ore and coking coal.
The global scenario has been a prologue to the
Indian market where after a decade of exponen-
tial revenue and profit growth, the steel players
are entering a down-cycle. Historically, high
asset utilizations, benign global pricing,
consolidated industry structure and a local
demand-supply environment have enabled Indian
players to generate better realizations compared
to their global counterparts.
Recently, however, the Indian steel industry has
started witnessing the signs of down-cycle
leading to margin compression despite strong
volume growth. This is primarily due to high input
costs and a weak macroeconomic environment,
both globally and domestically.
Declining margins, coupled with sluggish demand
growth, has made investors cautious about steel
companies. As a result, enterprise value for the
Indian steel industry has declined almost 30
percent since FY2010.
This situation is further complicated by key trends
in the global and domestic steel industry that have
far-reaching impact on Indian steel players and
customer markets.
Steel demand growth is expected to flatten in
heavy-weight economies including OECD
economies, even as major structural shifts in
China and fewer acquisitions of raw material
suppliers in India are expected to reshape
these markets.
The steel industry in OECD economies is witness-
ing persistent low capacity utilization compounded
by margin squeeze. This, coupled with three key
trends, is leading to a structural shift in the global
steel industry.
Shift toward relatively lower steel demand
growth in most of the heavy-weight economies
including China
The global macroeconomic crisis appears to have
accelerated the pre-existing trend toward
declining the steel intensity in the OECD
economies. The steel industry is staring at a
flatter demand trajectory globally, including in
China-which is expecting a very low single-digit
growth.
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ANNUAL REPORT 2014-15
26 |
Structural shifts in China could fundamentally
impact Indian players
China is experiencing significant overcapacity as
players have created capacity ahead of demand.
This, coupled with weak pricing, presents a
significant threat to demand in the local and other
Asian markets for Indian players.
Cooling down of iron ore and coking coal
prices, reducing acquisition pace of Chinese
and Indian players
Steel players in China and India were on an
acquisition spree for iron ore and coking coal
assets around the globe to insulate themselves
from price volatility. But as raw material prices
cooled in the past few years, the race for
self-sufficiency has taken a backseat.
FUTURE OUTLOOK OF THE INDUSTRY:
With urban population increasing globally, there
is a greater need for steel to build public-
transport infrastructure. Emerging economies will
also continue to be a major driver of demand as
these necessitate a huge amount of steel for
urbanization and industrialization. As per the
World steel forecasts, in India, steel demand is
expected to grow by 3.3% to 76.2 Mt in 2015,
following 1.8% growth in 2013, due to an improved
outlook for the construction and manufacturing
sectors, even though this will be constrained by
high inflation and structural problems. Steel
demand is projected to grow by 4.5% in 2015
supported by the expectation that structural
reforms will be implemented. Over a longer term,
volume growth however would be critical, given
that substantial fresh capacities are likely to be
commissioned in the next two years. Unless
demand conditions improve significantly, overall
capacity utilization levels and profitability of steel
players would remain impacted.
Source: a) Ministry of Steel, b) World Steel c)
Confederation of Indian Industry.
5. OPERATIONS
5.1 SIL OPERATIONS AT CHENNAI PLANT
Production at Chennai Plant had adversely
been affected for the last couple of years due
to severe power cut in Tamil Nadu. The plant
faced a 20% power cut and this situation
continued for most part of the financial year.
The power shortage coupled with
unfavourable market prices for end products
have resulted in lower operation level at the
plant.
5.2 SIL OPERATIONS AT RAICHUR PLANT
EXISTING OPERATIONS
The existing operations at the Integrated Steel
Complex at Raichur comprises of the Sponge
Iron Plant (Direct Reduction of Iron), Steel
Melting Shop and the Rolling Mill.
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ANNUAL REPORT 2014-15
| 27
The Company has been facing labour unrest at
the plant for the majority of the financial year.
Consequently, production had been adversely
affected, post implementation of the CDR
package. The Company is set to re-start the DRI
operations in full swing by June 2015. The
company is using pellets for producing sponge
iron due to non-availability of high grade iron ore
lumps. However, the SMS Plant and Rolling Mill
is expected to commence productions once the
refurbishment work is completed which is
subject to release of the priority loan by the
consortium lenders.
The existing facilities at the Raichur plant are
summarized below:
Facility Metric Tonnes Per Annum
DRI Plant 160,000
Electric Arc Furnace 250,000
Billet Caster 240,000
Bar Mill 400,000
EXPANSION PROJECT- BENEFICIATION &
PELLET PLANT
Earlier in terms of the Hon'ble Supreme Court
order the illegal mines were all closed down in
Karnataka. And the Hon'ble Supreme Court
wanted to regulate the mining activities. As a
result, there was a shortage of iron ore supply in
the State of Karnataka. Your company resorted
to buy pellets instead of iron ore lumps. In order
to obviate this difficulty the company had planned
a Backward Integration exercise of setting up a
Beneficiation and Pelletisation Plant. This
expansion envisages Beneficiation of Iron ore fines
and the company will be producing Pellets which
in turn will be utilized for the production of Sponge
Iron. In other words, the Pellets which will be
produced will become the raw materials for the
manufacture of Sponge Iron in our Direct
Reduction of Iron (DRI) Kilns.
The Techno Economic Viability of the project was
also carried out by M/s. MITCON Consultancy
which has found the project to be viable.
6. WAY FORWARD FOR THE COMPANY
As stated earlier, the Company has availed the
CDR mechanism to restructure its existing debts
with the lenders. The Company has signed a
Master Restructuring Agreement (MRA) with its
lenders. The repayment is spread over a ten year
period ending in the year 2023-24. The
mechanism also stipulates stringent monitoring by
the lenders including monthly cash flows. The
lenders have constituted a Monitoring Committee
(MC) lead by the Monitoring Institution (MI) viz.
IDBI Bank Ltd.
The Company with a view to augment the
operational profitability has introduced certain
concepts which will help in utilizing the full
capacity of the plant and simultaneously
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ANNUAL REPORT 2014-15
28 |
contributing towards the recovery of fixed cost.
Further, the cost optimization exercise is being
undertaken on continuous basis for improving the
overall productivity and thereby helping in
improving the bottom line.
Even though there has been delay in expected
commencement of operations at Raichur, the
resolution of the Labour dispute amicably has
created a positive working environment. The
Company in all its earnest is looking to capitalize
this positive environment and immediately
commence the operations at Raichur subject to
necessary approvals for release of sanctioned
funds from the consortium lenders. The Company
is very positive that on the commencement of
Raichur operations the overall financial outlook
of the company will become vibrant.
The Company in the past few years had suffered
severe liquidity crunch on account of negative
market sentiments per se prevailing in steel
industry. This had been the major contributing
factor for the company's decision to utilize the
CDR forum for restructuring its debts with
consortium of bankers. With a view to improve
the financial viability of the company conscious
decision to dilute the company's holding in its
subsidiaries is envisaged. It is also planned to
unlock the inherent valuations of each of the
projects by bringing in strategic partners to
augment the parent company in realizing its
investment.
UNLOCKING INVESTMENTS IN SUBSIDIARIES
SIL has made total investments of Rs.534.24
Crores in its subsidiaries viz. SPL (Rs. 418.50
Crores), SGPL (Rs. 56.15 Crores) & SMML (Rs.
59.59 Crores). These investments are yet to yield
returns. While the investment decision is sound,
the execution of these businesses have faced
various bottlenecks in the form of non-availability
of working capital, un-favourable market
conditions, coal linkage, inordinate delay in
getting certain regulatory approvals and other
macroeconomic issues. These have stressed the
cash flows of the parent company, SIL. Presently,
we are in advanced discussions with various
investors. Going forward, it is proposed to
unlock their value by divesting majority equity
stake in these Companies.
The Board of Directors of SIL has in principle
approved the divestment of the three subsidiaries
viz; M/s. Surana Power Limited, M/s. Surana
Green Power Limited and M/s. Surana Mines &
Minerals Limited.
7. SUBSIDIARIES
In accordance with the General Circular issued
by the Ministry of Corporate Affairs, Government
of India, the Balance Sheet, Statement of Profit
and Loss and other documents of the subsidiary
companies are not being attached with the
Balance Sheet of the Company. However, the
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ANNUAL REPORT 2014-15
| 29
financial information of the subsidiary companies
is disclosed in the Annual Report in compliance
with the said circular.
SURANA POWER LIMITED
Surana Power Limited a 100% subsidiary of
Surana Industries Limited is in the process of
setting up of 2 x 210 MW Thermal Power Plant at
Raichur. The original project cost was estimated
at Rs.2400 crs in the year 2010. However, the
project cost has been revised to Rs.3090 crores
on account of increase in Interest during
Construction (IDC). SPL has an 35MW
operational thermal power plant. After
completing the 2 x 210 MW Thermal Power Plant,
the generation capacity of Surana Power Limited
will be increased to 455 MW.
The operations of the 35MW were adversely
affected during the year due to fall in power tariff
rates and increase in input costs. Consequently,
the debt under sole banking with UCO Bank was
restructured.
During the financial year 2014-15, the revenue
from operation is stood at Rs. 51.77 Crores as
compared to Rs.70.97 Crores for the previous
financial year 2013-14. Revenue from operation
is only through sale of coal in stock and the 35
MW Captive Power Plant was not in operation
for the entire financial year due to labour unrest,
financial constraint and other unviable market
conditions.
During the financial year 2014-15, the Other
Income stood at Rs. 0.09 Crores as compared to
Rs. 0.12 Crores for the previous financial year
2013-14.
Finance cost stood at Rs. 25.90 Crores for the
financial year 2014-15 as against Rs. 23.80 Crores
for the financial year 2013-14.
Depreciation and amortization expenses stood at
Rs. 76.90 Crores for the financial year 2014-15
as against Rs. 12.13 Crores for the financial year
2013-14.
Other expenses stood at Rs. 53.02 Crores for the
financial year 2014-15 as against Rs. 36.61 Crores
for the financial year 2013-14.
Loss before tax is Rs. 150.84 Crores for the
financial year 2014-15 and Rs.29.07 Crores for
the financial year 2013-14. Loss after tax for the
financial year 2014-15 stood at Rs.160.08 Crores
and Rs. 116.24 Crores for the financial year
2013-14.
Surana Industries Limited has already infused a
capital contribution of Rs.418.50 Crores. SPL has
already spent around Rs. 1929.66 Crores as on
31st March 2015. The source for the same was
equity contribution of Rs. 350 Crores, and balance
by way of term loan from consortium of lenders.
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ANNUAL REPORT 2014-15
30 |
SURANA MINES AND MINERALS LIMITED
Surana Mines and Minerals Ltd, SMML a 100%
subsidiary of Surana Industries Limited, at
Singapore is expected to commence trading
activities in coal as well as scraps in the global
market for supply to steel and power plants in the
group. SMML has a step down subsidiary PT
Borneo Mines & Minerals Ltd which has acquired
mining rights in the Sassanga coal mines in
Indonesia. The 2640 acres of the Sassanga coal
mines have proven reserves of 60-70 million
tonnes of coal. The Company is facing difficulty
in raising funds for working capital due to the
restructuring of the debts of the parent company
Surana Industries Ltd and has incurred a loss of
US$ 40374 on a consolidated basis for the FY
2014-15.
SURANA GREEN POWER LIMITED
SGPL, a 100% subsidiary of Surana Industries
Limited, is in the business of Power Generation.
SGPL has currently 7 windmills of 1.5MW capac-
ity. SGPL has a step down subsidiary (wholly
owned subsidiary) M/s. Surana Green Energy
Limited (SGEL), an SPV through which the
Company is availing the Group Captive Scheme
(GCS), whereby SGEL is able to sell electricity to
other Captive users.
SGPL has also been registered under the
UNFCCC (United Nations Framework
Convention on Climate Change) Clean
Development Mechanism Scheme (CDM). The
project is eligible for Carbon Credits which are
sold in the international markets. This has
provided additional revenue to SGPL.
For the FY 2014-15, the Company has operated
on average PLF of 14.95% and generated 152.22
lakh units. During the year there was a decline in
the turnover and it stood at Rs.0.70 Crs compared
to Rs. 0.95 Crs in the previous year ended
March 31, 2014.
For the FY 2014-15, SGEL had achieved a total
turnover of Rs. 8.14 Crores as against Rs.7.87
Crores during the previous year ended
March 31, 2014.
A Statement Pursuant to first proviso to sub-
section (3) of section 129 read with rule 5 of
Companies (Accounts) Rules, 2014 containing
salient features of the financial statement of
subsidiaries/associate companies/joint ventures
in Form AOC-1 is annexed to this report as
"Annexure A".
8. OPPORTUNITIES
The steel production capacity in the country has
increased substantially and the production may
touch around 200 million tonnes by the year 2020.
The country has the necessary iron ore reserves
to achieve this level of steel production. Due to
expected acceleration in GDP growth rate in the
medium and long term, the demand for steel is
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ANNUAL REPORT 2014-15
| 31
bound to go up significantly. This will benefit all
steel producers including your Company.
The Infrastructure sector is expected to get an
impetus under the new government, which will
also translate into substantial increase in steel
demand. The Company also undertakes Cold
Rolling operations which provide a good margin
of profitability. The Company procures materials
mainly from leading steel producers and after cold
rolling, sells the same in the market. This shall
also add to the overall profitability of the
Company.
9. THREAT PERCEPTION
Your Directors feel that the Company will have to
gear up its marketing activities so as to compete
effectively with the established producers.
Marketing of Alloy Steel and Special Steels needs
concerted efforts and experience. In the Raichur
steel plant, the Company will be manufacturing
Special Alloy Steels which are mostly meant for
Automobile Manufacturers who will demand strict
adherence to the quality of the products. The
alloy steel market has high competition. There-
fore, it is essential for the Company's marketing
team to aggressively and effectively market the
products.
Similarly, in the case of TMT Bars, there can be
good competition from the various producers.
Builders and contractors are the ultimate end
users of TMT Bars and it is necessary for the
Company to aggressively market these products.
Shortage of quality raw materials, surging freight
costs and escalation of the costs of inputs, fuels
etc. will continue to keep the cost of production
high for steel manufacturers.
The main threat perception is linkage of iron ore
and coal. Delay in completion of the backward
integration project can also affect profitability of
future operations.
Further, in regards to financial implications, there
can be threat perceptions, due to tough
competition it would be difficult for the Company
to pass on the entire cost push to the Customers
by way of increased finished steel prices. Faced
with aggressive marketing strategy and cost
cutting initiatives, the Company constantly reviews/
monitors the costs of various inputs and finds
out ways (either technological or commercial) to
reduce the cost of steel production, wherever is
possible. The Directors have been taking
requisite measures to overcome various
impediments which may come in the way of
smooth functioning of the Company.
10. RISK PERCEPTION
The Directors are constantly assessing the
business risks pertaining to the performance of
the Company. The following are the important risks
perceptions:
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ANNUAL REPORT 2014-15
32 |
❖ Quality Maintenance of the End Products
❖ Adequate availability of Raw Materials
❖ Requisite Power Supply
❖ Removal of Transport Bottlenecks
❖ Sudden Increase in Prices of Inputs
❖ Customers Default
❖ Inadequacy of Finance Arrangement
❖ Statutory Policies
❖ Events Due to Unforeseen Circumstances
❖ Volatility in international supply/demand of
steel products
Your Directors are fully conscious of the various
business risks and have taken adequate care to
tackle any situation. Strict controls are enforced
on the quality front and all other matters for
smooth operation of the steel plants.
11. INTERNAL CONTROL SYSTEM AND THEIR
ADEQUACY
The Company has a internal control system which
is in the process of streamlining. All transactions
are subject to proper scrutiny. The Company also
has Independent Internal Auditors who carry out
the internal audit on a quarterly basis covering all
areas during the financial year and submit their
report on a quarterly basis to the Audit Commit-
tee. The Management takes immediate correc-
tive action wherever it is being pointed out to help
streamline the internal control process. The
Audit Committee further insisted that there should
be stronger internal control systems to be in place.
A policy on internal controls had already been
devised and implemented for the company and
the management shall ensure the effectiveness
of the working of such policy.
12. CONSOLIDATED FINANCIAL STATEMENTS
In accordance with the Accounting Standard (AS)
- 21 on Consolidated Financial Statements read
with AS - 23 on Accounting for Investments in
Associates and AS - 27 on Financial Reporting
of Interests in Joint Ventures, the audited
consolidated financial statements is provided in
the Annual Report.
13. HUMAN RESOURCES
The Management envisions trained and
motivated employees as the backbone of the
Company. Special attention is given to recruit
trained and experienced personnel not only in the
production department but also in marketing,
finance and accounts. The Management strives
to retain and improve employee morale. The
Company has total staff strength of about 300
employees. The Company is in the process of
revamping the employer employee engagement
program.
The labour unrest at the Raichur Integrated steel
plant plagued the operations of the plant for the
major part of the financial year. For the last three
years a certain section of the workers of our
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ANNUAL REPORT 2014-15
| 33
Raichur Integrated Steel Plant have been
resorting to illegal activities and have been
instigated by local elements with vested interests.
The Company would like to bring to the notice of
the share holders that the said strike / labour
dispute have been amicably resolved and we
expect no turbulence in the near future.
The Company has streamlined its manpower
strength at the Chennai offices including the
corporate head office. As a result of manpower
rationalization exercise, the monthly payroll has
been optimized. The decision for rationalization
of labour has enabled the company to curtail fixed
manpower costs. However, the core technical
expert team is retained to guide the Company to
achieve higher and efficient level of production.
14. CORPORATE GOVERNANCE
The Directors pay special attention to ensure that
the guidelines given for the corporate governance
are strictly adhered to. All possible steps are taken
to adhere to the requirements set out by SEBI
Guidelines on Corporate Governance. The
Company is also aligning itself to implement
global corporate governance practices. This is
ensured by taking ethical business decisions and
conducting business with a firm commitment to
values, while meeting stakeholder's expectations.
At Surana, it is imperative that the company
affairs are managed in a fair and transparent
manner. This is vital to gain and retain the trust of
our stakeholders.
A separate report on the Corporate Governance
also forms part of the Annual Report. Requisite
certificates from the Auditors of your Company
regarding compliance of the conditions of the
corporate governance as stipulated under Clauses
49 of the Listing Agreement with the Stock
Exchanges is also attached to the corporate
governance report. With regard to the Business
Responsibility Report, the Company is not
covered in the top 100 listed entities, based on
the market capitalization at BSE & NSE, in terms
of SEBI Circular CIR/CFD/DIL/8/2012 dated
August 13, 2012.
15. CORPORATE SOCIAL RESPONSIBILITY
AND GOVERNANCE COMMITTEE
The Board of Directors has constituted a
Corporate Social Responsibility and Governance
Committee (CSR&G Committee) in compliance
with the provisions under the Companies Act,
2013. The committee comprises of Shri K.N
Prithiviraj as the Chairman, Shri Krishna Udupa
and Shri. Dineshchand Surana as its other
members.
The said Committee has been entrusted with the
responsibility of formulating and recommending
to the Board, a Corporate Social Responsibility
Policy (CSR Policy) indicating the activities to be
undertaken by the Company, monitoring the
implementation of the framework of the CSR
Policy and recommending the amount to be spent
on CSR activities.
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ANNUAL REPORT 2014-15
34 |
Since the company is making losses for the past
three years, CSR spend does not apply to the
company for the financial year 2014-15. Hence
submission of a report on CSR activities does not
apply.
16. RISK MANAGEMENT COMMITTEE AND
POLICY
The Board of Directors has constituted a Risk
Management Committee and framed a Risk
Management Policy in compliance with the
provisions under the Companies Act, 2013 and
Clause 49 of the Listing Agreement. The
committee comprises of Shri Dineshchand
Surana as the Chairman, Shri Krishna Udupa,
Shri. Anil Gupta and Shri. D. Hem Senthil Raj as
its other members.
17. SEXUAL HARASSMENT POLICY
The Company had adopted the sexual
harassment policy as recommended by the Audit
Committee of the Board of Directors; however the
Company is in the process of constituting a
committee for the same.
18. DEPOSITORY SYSTEM / E-VOTING
MECHANISM:
The Company has entered into a Tripartite
Agreement with both the Depositories viz.
National Securities Depository Limited (NSDL)
and Central Depository Services (I) Ltd (CSDL)
along with Registrars M/s Cameo Corporate
Service Ltd, Chennai for providing electronic
connectivity for dematerialization on the
Company's shares facilitating the investors to hold
the shares in electronic form and trade in those
shares. The shares of your Company are being
traded now in on the Bombay and National Stock
Exchanges under compulsory demat form.
Further, in accordance with provisions stipulated
under Companies Act, 2013, the facility of
e-voting is also made available to all shareholders
of the Company. The instructions regarding e-voting
are available in a separate section of the Annual
report. All shareholders are also requested to
update their email ids with the Company or our
RTA M/s. Cameo Corporate Services Ltd.
19. TRANSFER OF AMOUNTS TO INVESTOR
EDUCATION AND PROTECTION FUND
Pursuant to the provisions of Section 205A(5) and
205C of the Companies Act, 1956, relevant
amounts which remained unpaid or unclaimed for
a period of seven years have been transferred
by the Company, from to time to time on due
dates, to the Investor Education and Protection
Fund. The details of the same are covered under
the Corporate Governance Report.
Pursuant to the provisions of Investor Education
and Protection Fund (Uploading of information
regarding unpaid and unclaimed amounts lying
with companies) Rules, 2012, the Company has
uploaded the details of unpaid and unclaimed
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ANNUAL REPORT 2014-15
| 35
amounts lying with the Company as on 18th July
2014 (date of last Annual General Meeting) on
the Company's website (www.suranaind.com), as
also on the Ministry of Corporate Affairs' website.
20. AUDITORS
STATUTORY AUDITORS
During the year M/s Deloitte Haskins & Sells LLP.,
Chartered Accountants, having firm registration
number 117366W/W 100018 have been
appointed as statutory auditors of the company
to fill the casual vacancy arisen on account of
resignation of M/s. CSP Jain & Co due to their
pre-occupation with other assignments. The said
appointment has been approved by the share-
holders at the Extra-Ordinary General Meeting of
the company held on 30th September 2014.
M/s. Deloitte Haskins & Sells LLP., Chartered
Accountants, Chennai having firm registration
number 117366W/W 100018, Statutory Auditor
hold office up to the conclusion of the 24th AGM
and are eligible for re-appointment. The Company
has appointed M/s. M/s. Deloitte Haskins & Sells
LLP for a period of five years starting from the
financial year 2015-16 to 2019- 20, subject to rati-
fication of members in the each annual general
meeting. Further, the company had received
letters to the effect that their re-appointment, if
made, would be within the prescribed limits under
Section 141(3) (g) of the Companies Act, 2013
and that they are not disqualified for such
re-appointment. Your Board of Directors
recommends their re-appointment as Statutory
Auditors to hold office from the conclusion of the
24th AGM till the conclusion of the 29th AGM of the
Company.
21. AUDITORS REPORT AND MANAGEMENT'S
RESPONSE TO AUDITORS OBSERVATIONS
The Auditors have qualified and emphasized
certain matters in their report.
AUDITORS QUALIFICATION
I. Capital work in progress relating to the
Pelletisation and Beneficiation (P&B)
Project includes:
a) Interest on borrowings aggregating to Rs.
40765 Lakhs (including Rs. 22339 Lakhs for
the year) relating to the periods during which
the project has been stalled, which constitutes
a departure from Accounting Standard 16
(AS-16) on "Borrowing Costs". Had the
interest capitalized during the period in which
the project was stalled been charged to the
Statement of Profit & Loss, the loss for the
year and, the Deficit in the Statement of Profit
and Loss, will be higher by Rs. 40765 Lakhs
and Capital Work in Progress will be lower by
Rs. 40765 Lakhs.
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ANNUAL REPORT 2014-15
36 |
b) Preoperative expenses incurred in relation to
the project aggregating to Rs. 68 Lakhs
(including Rs. 19.82 Lakhs for the year) relat-
ing to the periods during which the project has
been stalled, which constitutes a departure
from Accounting Standard 10 (AS-10) on
"Fixed Assets". Had such expenditure capi-
talized during the period in which the project
was stalled been charged to the Statement of
Profit & Loss, the loss for the year and the
Deficit in the Statement of Profit and Loss,
will be higher by Rs. 68 Lakhs and Capital
Work in Progress will be lower by Rs. 68
Lakhs.
MANAGEMENT'S RESPONSE
We submit that Interest and pre-operative expen-
diture have been capitalised considering the
exceptional nature of this industry and prolonged
project implementation period and is being
retained under capital work in progress as per
the CDR package.
AUDITORS QUALIFICATION
II. Current investments include investments
in subsidiaries aggregating to Rs 53424
Lakhs which are held for sale and valued
at cost. As per Accounting Standard 13 -
Accounting for Investments, these invest-
ments should be valued at the lower of cost
and net realizable value. In the absence
of the net realizable value, we are unable
to comment on the adjustments, if any, to
the carrying value of the value of invest-
ments as at March 31, 2015.
MANAGEMENT'S RESPONSE
We submit that, our Company is in negotiations
with prospective buyers. In the opinion of the
management, the Company will be able to
realize the carrying value of the said investments
and hence, no adjustment to their carrying
values is considered necessary.
AUDITORS QUALIFICATION
III. As at 31 March, 2015, the quantity, quality
and realizable value of Inventory aggregating
to Rs. 25869 Lakhs, was not assessed and
determined. As per by Accounting Standard
2 - Inventories these inventories should
be valued at the lower of cost and net
realizable value. In the absence of the net
realizable value, we are unable to
comment on the adjustments that may be
required to the carrying values of
inventories as at March 31, 2015.
MANAGEMENT'S RESPONSE
We submit that, currently efforts are being made
to segregate the inventory at Raichur plant with
that inventory belonging to a subsidiary and
physically verify the stock of stores and spares.
Raw Materials lying at the Raichur plant will be
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ANNUAL REPORT 2014-15
| 37
segregated and physically weighed on resumption
of production and blended with fresh materials
purchased for use in production. The extent of
deterioration or obsolescence, if any on the above
inventory will be assessed at the time of physical
verification / resumption of production and
appropriate adjustments will be recorded on
completion of the exercise. In the opinion of the
management, any such adjustment arising out of
physical verification / assessment of the quality
will not be material and will be appropriately dealt
with on completion of the exercise.
AUDITOR'S OBSERVATIONS ON CONSOLI-
DATED FINANCIAL STATEMENTS AND
MANAGEMENT'S RESPONSE TO THE
OBSERVATIONS
The Statutory Auditors have issued a qualified
opinion dated 30th May 2015 on the consolidated
audited financial statements for the year ended
March 31, 2015 and the basis for qualified
opinion and management responses are as
under:
AUDITORS QUALIFICATION
IV. a) Interest on borrowings aggregating to
Rs. 48535 Lakhs (including Rs. 22872
Lakhs for the year) relating to the periods
during project have been stalled, which
constitutes a departure from Accounting
Standard 16 (AS-16) on "Borrowing Costs".
Had the interest capitalized during the
period in which the projects were stalled
been charged to the Statement of Profit &
Loss, the loss for the year and, the Deficit
in the Statement of Profit and Loss, will be
higher by Rs. 48535 Lakhs and Capital
Work in Progress will be lower by Rs. 48535
Lakhs.
b) Preoperative expenses incurred in
relation to the project aggregating to Rs.
5475 Lakhs (including Rs. 448 Lakhs for
the year) relating to the periods during
which the project has been stalled, which
constitutes a departure from Accounting
Standard 10 (AS-10) on "Fixed Assets".
Had such expenditure capitalized during
the period in which the project was stalled
been charged to the Statement of Profit &
Loss, the loss for the year and the Deficit
in the Statement of Profit and Loss, will be
higher by Rs. 5475 Lakhs and Capital Work
in Progress will be lower by Rs. 5475 Lakhs.
MANAGEMENT'S RESPONSE
Please refer our submission to our responses in
note I (a & b) above.
AUDITORS QUALIFICATION
V. As at 31 March, 2015, the quantity, quality
and realizable value of inventory aggregating
to Rs. 29369 Lakhs was not assessed and
determined. As per Accounting Standard 2
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ANNUAL REPORT 2014-15
38 |
- Inventories these inventories should be
valued at the lower of cost and net realiz-
able value. In the absence of the net real-
izable value, we are unable to comment on
the adjustments that may be required to
the carrying value of these inventories as
at March 31, 2015.
MANAGEMENT'S RESPONSE
Please refer our submission to our responses in
note III above.
AUDITORS QUALIFICATION
VI. Long term loans and advances include
dues from subcontractors aggregating to
Rs 4034 Lakhs represent the amounts
taken over from the EPC contractors which
are considered good and recoverable by
the management. In the absence of any
confirmation / agreement from these
parties, we are unable to comment on the
adjustments that may be required on the
carrying value of these advances.
MANAGEMENT'S RESPONSE
We submit that, the dues are collectable /
adjustable on resumption of project work, and no
provision is considered necessary.
AUDITORS QUALIFICATION
VII. Trade payables include amounts payable
to subcontractors aggregating to Rs. 3141
Lakhs and retention monies aggregating
to Rs 661 Lakhs In the absence of details
or confirmations from the parties, we are
unable to comment on the completeness
of these liabilities.
MANAGEMENT'S RESPONSE:
We submit that, the Management is of the opin-
ion that the said payables are complete and will
be settled in the normal course of business on
resumption of the 2 X 210 MW project work and
there will be no additional liabilities on this
account.
INTERNAL AUDITOR
The Board has appointed M/s. Agrya Consulting
Private Limited, (CIN: U74900TN2010PTC078072)
Chennai as the Internal Auditors of the Company
pursuant to Section 138 of Companies Act, 2013
and Rule No. 13 of The Companies (Accounts of
Companies) Rules, 2014 for the financial year
2015-16.
The Internal Auditors of the Company has a
qualified team of Internal Audit professionals, who
shall be reporting directly to the Audit
Committee of the Company. The Internal Audit
would ensure that strong internal control
mechanism is put in place in the Company as
per the recommendations and guidance of Audit
Committee.
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ANNUAL REPORT 2014-15
| 39
COST AUDITOR
The Board of Directors had appointed M/s. JV
Associates, Cost & Management Accountants,
Chennai (M.No. 6128) as the Cost Auditors of the
Company to audit the cost accounting records of
the Company for the financial year 2015-16.
SECRETARIAL AUDIT
Pursuant to the provisions of Section 204 of the
Companies Act, 2013 and The Companies
(Appointment and Remuneration of Managerial
Personnel) Rules, 2014, the Company has
appointed M/s. Lakshmmi Subramanian &
Associates, Practising Company Secretaries,
Chennai to undertake the Secretarial Audit of the
Company. The report of the Secretarial Audit
Report is annexed herewith as "Annexure B"
MANAGEMENT'S RESPONSE TO SECRETARIAL
AUDITOR'S OBSERVATIONS
1. The Company is yet to appoint a woman
director on its Board as per section 149(1)
of the Companies Act, 2013
The Company had taken necessary steps for
inducting a woman director on its Board
pursuant to the provisions of Section 149 of
the Companies Act, 2013 and the same will
be complied on or before June 30, 2015.
2. For the 3rd and 4th Quarter, there was a
vacancy in the Board in place of the
Independent director which was not filled
in during the audit period as required under
section 149(4) read with Schedule IV and
revised Clause 49 of the Listing Agreement
entered with the Stock Exchange.
As per the provisions of revised Clause
49(D)(4) of the Listing Agreement any vacancy
caused due to resignation or removal of an
Independent Director from the Board shall be
replaced by a new Independent Director at the
earliest but not later than the immediate next
Board meeting or three months from the date
of such vacancy, whichever is later.
However the company had taken appropriate
steps in inducting an Independent Director on
its Board including registration in the Independent
Directors Repository for finding a suitable
candidate who has a sound technical knowledge
in the field of steel and power industry.
3. The composition of the audit committee in
the 3rd and 4th quarter had fallen below the
minimum threshold limit of independent
directors and total number of members.
Further, there was a lack of quorum in the
audit committee meeting held in the 4th
quarter of the audit period.
The Composition of the audit committee
during the 3rd and 4th quarter had fallen
below the minimum threshold limit of independent
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ANNUAL REPORT 2014-15
40 |
directors as per the revised clause 49 of the
Listing Agreement due to resignation of few
independent directors on the board with
retrospective effect due to their other
pre-occupations.
Further, the lack of quorum for the audit
committee meeting held during the 4th
quarter was unexceptional due to the resig-
nation of an independent director on the board
who formed part of the Audit Committee as
Member and the same was intimated to the
stock exchanges by way of outcome of Board
Meeting.
4. Directors retiring by rotation under section
152 of the Companies Act, 2013 in the 23rd
Annual General Meeting of the Company
held on 18th July 2014, as per Companies
Act, 1956 and Independent directors was
appointed and under section 149 of the
Companies Act 2013 on 30th September
2014 in the extra-ordinary general meet-
ing of the company.
The Independent Directors of the company
who retired by rotation at the 23rd Annual
General Meeting of the company held on July
18, 2014 are those Independent Directors who
are appointed under the erstwhile Companies
Act, 1956, Further it is to be noted that the
Independent Directors are not liable to retire
by rotation only under the Companies Act,
2013.
Subsequently the Company had appointed
all its Independent Directors at the Extraordi-
nary General Meeting of the Company held
on September 30, 2014 as per the provisions
of Section 149 of the Companies Act, 2013.
5. The service of notice of annual general
meeting together with the annual report
of the company for the financial year 2013-
14 was done partly through courier and
by book post.
The Company had served the notice of 23rd
annual general meeting together with the
annual report of the company for the finan-
cial year 2013-14 well within the stipulated
time period under the Companies Act 2013
by way of electronic mode, the confirmation
from the Registrar and Share Transfer Agents
is also obtained evidencing the same.
6. The Company is yet to ratify the limits for
inter-corporate investments, loans, guar-
antees and securities as per section 186
of the Companies Act, 2013 and the Rules
made thereunder which is required to be
complied not within 1 year from the date
of notification of the provisions of the
Companies Act, 2013.
The Company had proposed to ratify the
limits for inter-corporate investments, loans,
guarantees and securities as per section 186
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ANNUAL REPORT 2014-15
| 41
of the Companies Act, 2013 and the Rules
made thereunder from the shareholders by
way of postal ballot which will be held during
the month of July 2015.
22. DIRECTORS:
The following changes have occurred in the Board
of Directors during the financial year 2014-2015:
22.1 INDUCTIONS/ CHANGE IN DESIGNATION
Appointment of Shri. V. Subramanian as Nomi-
nee Director of M/s. IFCI Ltd on 18th July 2014
and Appointment of Shri. Biju George as
Nominee Director of M/s. IDBI Ltd on 6th
September 2014;
Further on the recommendations of the nomination
and remuneration committee, the Board
appointed Shri. Babu Srinivasan and Smt.
Soundharya Panchapakeran as additional
Directors of the Company We seek your support
in conforming the appointment of Shri. Babu
Srinivasan and Smt. Soundharya Panchapakeran
in the ensuing Annual General Meeting.
At the Extra-ordinary General Meeting held on
30th September 2014, the members had
appointed the existing Independent Director viz.,
Shri. K.N. Prithviraj as Independent Director
under the Companies Act, 2013 for a term of five
years with effect from 30th September 2014.
Shri. Krishna Udupa, Director (Projects) has been
redesignated as Director (Non-Executive) of the
Company with effect from 18th July 2014.
22.2 DECLARATION BY INDEPENDENT
DIRECTORS
All Independent Directors have given declarations
that they meet the criteria of independence as laid
down under Section 149(6) of the Companies Act,
2013 and Clause 49 of the Listing Agreement.
22.3 RESIGNATIONS
Dr. B. Samal has resigned from the position of
Independent Director with effect from 25th
September 2014; Shri. S.K. Gupta has resigned
from the position of Independent Director with
effect from 14th October, 2014, Shri. B.S. Patil has
resigned from the position of Independent
Director with effect from 1st December 2014 and
Shri. V. Aranganathan has resigned from the
position of Executive Director with effect from 31st
May 2014.
The Board had placed on record its appreciation
for the outstanding contributions made by
Dr. B. Samal, Shri. S.K. Gupta, Shri. B.S. Patil
and Shri. V. Aranganathan during their tenure of
office with the Company.
Shri. G.R. Surana has resigned from the position
of Executive Chairman of the company with
effect from 29th April 2015 due to personal
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ANNUAL REPORT 2014-15
42 |
reasons. Shri. G.R. Surana is a co-founder of the
Company and has played a seminal role in
shaping its destiny. The Board appreciates and
thanks him for his efforts in driving delivery and
quality excellence for the Company, The Board
also places on record its gratitude for the services
rendered by Shri. G.R. Surana during his long
association with the Company.
22.4 RE-APPOINTMENTS
In accordance with the provisions of the Companies
Act, 2013 and in terms of the Memorandum &
Articles of Association of the Company, At the
ensuing 24th Annual General Meeting, Shri.
Dineshchand Surana, Director and Shri. Biju
George, Director of the Company are liable to
retire by rotation and being eligible offer them
selves for re-appointment. The Board
recommends their re-appointment.
The Companies Act, 2013, provides for the
appointment of independent directors. Sub
section (10) of Section 149 of the Companies Act,
2013 provides that independent directors shall
hold office for a term of up to five consecutive
years on the board of a company; and shall be
eligible for re-appointment on passing a special
resolution by the shareholders of the Company.
Accordingly all independent directors except for
Shri. Babu Srinivasan & Smt. Soundharya
Panchapakeran who were appointed as
additional director of the Company & Smt.
Soundharya Panchapakeran were appointed by
the shareholders at the General Meeting as
required under Section 149(10). Further, accord-
ing to sub section (11) of Section 149, no inde-
pendent director shall be eligible for appointment
for more than two consecutive terms of five years.
Sub section (13) states that the provisions of
retirement by rotation as defined in Sub section
(6) and (7) of Section 152 of the Act shall not
apply to such independent directors.
None of the independent directors will retire at
the ensuing Annual General Meeting.
22.5 BOARD EVALUATION
Pursuant to the provisions of Clause 49 of the
Listing Agreement, the Board shall monitor and
review the Board evaluation framework. The
Companies Act, 2013 states that a formal annual
evaluation needs to be made by the Board of its
own performance and that of its committees and
individual directors. Schedule IV of the
Companies Act, 2013 states that the performance
evaluation of independent directors shall be done
by the entire Board of Directors, excluding the
director being evaluated. The Board has carried
out an annual performance evaluation of its own
performance, the directors individually as well as
the evaluation of the working of its Audit,
Nomination & Remuneration and Compliance
Committees. The manner in which the evaluation
has been carried out has been explained in the
Corporate Governance Report.
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ANNUAL REPORT 2014-15
| 43
22.6 FAMILIARIZATION PROGRAMME /
TRAINING OF INDEPENDENT DIRECTORS
Every new independent director of the Board
attends an orientation program. To familiarize the
new inductees with the strategy, operations and
functions of our Company, the executive
directors/senior managerial personnel make
presentations to the inductees about the
Company's strategy, operations, product and
service offerings, markets, organization structure,
finance, human resources, technology, quality,
facilities and risk management.
22.7 REMUNERATION POLICY
The Board has, on the recommendation of the
Nomination & Remuneration Committee framed
a policy for selection and appointment of
Directors, Senior Management and their
remuneration. The Remuneration Policy is stated
in the Corporate Governance Report. All
remuneration paid to the Directors, Key Managerial
Personnel and senior management personnel are
as per the remuneration policy of the Company.
23. DIRECTORS' RESPONSIBILITY STATE-
MENT:
To the best of their knowledge and belief and
according to the information and explanations
obtained by them, your Directors, make the
following statement in terms of Section 134 (3)
(c) of the Companies Act, 2013:
(a) in the preparation of the annual accounts,
the applicable accounting standards had
been followed along with proper explanation
relating to material departures;
(b) t h e d i r e c t o r s h a d s e l e c t e d s u c h
accounting policies and applied them
consistently and made judgments and
estimates that are reasonable and prudent
so as to give a true and fair view of the
state of affairs of the company at the end
of the financial year and of the profit and
loss of the company for that period;
(c) the directors had taken proper and
sufficient care for the maintenance of
adequate accounting records in accordance
with the provisions of this Act for
safeguarding the assets of the company
and for preventing and detecting fraud and
other irregularities;
(d) the directors had prepared the annual
accounts on a going concern basis; and
(e) the directors, had laid down internal
financial controls to be followed by the
company and that such internal financial
controls are adequate and were
operating effectively.
(f) the directors had devised proper systems
to ensure compliance with the provisions
of all applicable laws and that such
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ANNUAL REPORT 2014-15
44 |
systems were adequate and operating
effectively.
24. CONSERVATION OF ENERGY AND
TECHNOLOGY ABSORPTION
A statement containing the particulars relating to
conservation of energy, research and develop-
ment and technology absorption as required
under Section 134 (3) (m) of the Companies Act,
2013 and Rule 8 (3) (A), (3) (B) and 3 (A) (C) of
The Companies (Accounts) Rules, 2014 is
annexed to this report as "Annexure C"
25. PARTICULARS OF LOANS, GUARANTEES
OR INVESTMENTS UNDER SECTION 186 OF
COMPANIES ACT, 2013
Details of Loan, Guarantees and Investments
covered under the provisions of Section 186 of
the Companies Act, 2013 are given in the notes
to financial statements refer note 27B, 30B and
30C of notes to financial statement.
26. PARTICULARS OF EMPLOYEES:
The information required pursuant to Section 197
of the Companies Act 2013 read with Rule 5 of
The Companies (Appointment and Remuneration
of Managerial Personnel) Rules 2014 in respect
of the employees of the company, will be
provided upon request. In terms of Section 136
of the Act, the Report and Accounts are being
sent to the Members and others entitled thereto,
excluding the information on employees'
particulars which is available for inspection by the
Members at the Registered Office of the
Company during business hours on working days
of the Company up to the date of the ensuing
Annual General Meeting. If any Member is
interested in obtaining a copy thereof, such
Member may write to the Company Secretary in
this regard.
27. DEPOSITS
Your Company has not accepted any deposits
from the public during the year under review.
28. MEETINGS
During the year five Board Meetings and four
Audit Committee Meetings were convened and
held. The details of which are given in the
Corporate Governance Report. The intervening
gap between the meetings was within the period
prescribed under the Companies Act, 2013.
29. COMMITTEES
Currently, the Board of Directors of the Company
pursuant to the mandatory provisions of
Companies Act, 2013 has the following
committees namely:
a) Audit Committee
b) Nomination & Remuneration Committee
c) Stakeholders Relationship Committee
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ANNUAL REPORT 2014-15
| 45
d) Corporate Social Responsibility & Governance Committee
e) Risk Management Committee
A detailed note on the Board and its committees along with the composition of the committees and
compliances is provided under the Corporate Governance Report section in this Annual Report.
30. AUDIT COMMITTEE
Currently, the Company has an independent and qualified Audit Committee as per the provisions of
Section 177 (8) of the Companies Act, 2013 and Rule 7 of The Companies (Meetings of Board and its
Powers) Rules, 2014 and Clause 49 of the Listing Agreement, the following is the current composition
of Audit Committee:
The Board has accepted all the recommendations provided by the Audit Committee.
31. VIGIL MECHANISM/WHISTLE BLOWER POLICY
The Company has a vigil mechanism/whistle blower Policy to deal with instance of fraud and misman-
agement, if any. The details of the vigil mechanism Policy is explained in the Corporate Governance
Report and also posted on the website of the Company.
32. PARTICULARS OF CONTRACTS OR ARRAGEMENTS WITH RELATED PARTIES REFERRED
TO IN SECTION 188(1) OF THE COMPANIES ACT, 2013:
All related party transactions that were entered into during the financial year were on an arm's length
basis and were in the ordinary course of business. There are no materially significant related party
transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other
Name of the Director Category Status
Shri. Babu Srinivasan
Shri. K.N. Prithviraj
Shri. Krishna Udupa
Non-Executive Independent Director
Non-Executive Independent Director
Non-Executive Director
Chairman
Member
Member
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ANNUAL REPORT 2014-15
46 |
designated persons which may have a potential
conflict with the interest of the Company at large.
All Related Party Transactions are placed before
the Audit Committee as also the Board for ap-
proval. The Company is in the process of devel-
oping a Related Party Transactions Manual, Stan-
dard Operating Procedures for purpose of iden-
tification and monitoring of such transactions. The
policy on Related Party Transactions as approved
by the Board is uploaded on the Company's
website at the Weblink, http://www. suranaind.
com/related-party-transaction-policy. None of the
Directors has any pecuniary relationships or trans-
actions vis-a-vis the Company. Particulars of
Contracts or arrangement with related parties
referred to in Section 188(1) of the Companies
Act, 2013, in the prescribed Form AOC-2, is
appended as Annexure "D" to the Board's
Report.
33. ENHANCING SHAREHOLDER VALUE
Your Company believes that its Members are
among its most important stakeholders.
Accordingly your company's operations are
committed to the pursuit of achieving high levels
of operating performance and cost competitiveness,
consolidating and building for growth, enhancing
the productive asset and resource base and
nurturing overall corporate reputation. Your
company is also committed to creating value for
its other stakeholders by ensuring its corporate
actions positively impact the socio-economic and
environmental dimensions and contribute to
sustainable growth and development.
34. EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the
Annual Return in form MGT 9 is annexed
herewith as "Annexure E".
35. GREEN INITIATIVES
During fiscal 2014-15, we started a sustainability
initiative with the aim of going green and
minimizing our impact on the environment. This
year, we are publishing only the statutory
disclosures in the print version of the Annual
Report. Additional information is available on our
website, www.suranaind.com.
Electronic copies of the Annual Report 2014-15
and Notice of the 24th Annual General Meeting
are sent to all the members whose email
addresses are registered with the Company/
Depository Participant(s). For members who have
not registered their email addresses, physical
copies of the Annual Report 2015 and the Notice
of 24th Annual General Meeting are sent in the
permitted mode. Members requiring physical
copies can send a request to the Company.
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ANNUAL REPORT 2014-15
| 47
36. ACKNOWLEDGEMENT
The Board of Directors of the Company wishes to express their deep sense of appreciation and offer
their sincere thanks to all the Shareholders of the Company for their unstinted support to the Company.
The Board also wishes to express their sincere thanks to all the esteemed Customers for their support
to the Company's products.
The Board would also like to place on record their deep sense of gratitude to the various Central and
State Government Departments, Organizations and Agencies for the continued help and co-operation
extended by them.
The Directors also gratefully acknowledge and thank all financial institutions and banks for their timely
support in restructuring the Company's debt under the CDR mechanism failing which the Company
would have succumbed to the recession faced by the Steel Industry.
In the end, the Board would like to place on record their deep sense of appreciation to all the executives,
officers, employees, staff members, and workers at the factories.
For and on behalf of the Board of Directors
-Sd- -Sd-
Babu Srinivasan Dineshchand Surana
Date: June 29, 2015 Chairman Managing Director
Place : Chennai (DIN: 06608264) (DIN: 00007032)
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ANNUAL REPORT 2014-15
48 |
ANNEXURE "A" TO DIRECTORS REPORT
Form AOC-1 - Statement containing salient features of the financial statement of
subsidiaries/associate companies/joint ventures
(Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of Companies
(Accounts) Rules, 2014)
Part "A": Subsidiaries
(Information in respect of each subsidiary to be presented with amounts in Rs. )
Name of the Subsidiaries
ParticularsS.
No. SuranaPower Ltd
Surana GreenPower Ltd
(Consolidated)
Surana Mines &Minerals Limited(Consolidated)
1
2
3
4
5
6
7
8
9
10
11
12
13
Reporting period for the subsidiary
concerned, if different from the holding
company's reporting period
Reporting currency and Exchange rate as on
the last date of the relevant Financial year in
the case of foreign subsidiaries
Share capital
Reserves & surplus
Total assets
Total Liabilities
Investments
Turnover
Profit (Loss) before taxation
Provision for taxation/Tax Expense
Profit (Loss) after taxation
Proposed Dividend
% of shareholding
31st March 2015
INR
3,451,492,000
(698,604,245)
22,379,742,198
22,379,742,198
Nil
52,637,235
(1,508,438,772)
92,325,505
(1,600,764,277)
Nil
100
31st March 2015
INR
561,536,000
(232,896,994)
578,036,364
578,036,364
Nil
82,107,881
(222,377,739)
(11,208,866)
(233,586,605)
Nil
100
31st March 2015
INR
705,436,052
(58,563,669)
813,169,198
813,169,198
Nil
-
-
-
-
Nil
100
* Conversion rate of USD is taken as 60.099 INR as on March 31, 2015
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ANNUAL REPORT 2014-15
| 49
Part "B": Associates and Joint Ventures
Statement pursuant to Section 129 (3) of the Companies Act, 2013 related to Associate Companies
and Joint Ventures
-NIL-
This space is intentionally left blank
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ANNUAL REPORT 2014-15
50 |
ANNEXURE "B" TO DIRECTORS REPORT
SECRETARIAL AUDIT REPORT
FOR THE FINANCAL YEAR ENDED 31.03.2015
[Pursuant to section 204(1) of the Companies Act, 2013 and rule No.9 of the Companies
(Appointment and Remuneration Personnel) Rules, 2014]
To
The Members
Surana Industries Limited
2nd Floor, Chokkani Building
No 29, Whites Road, Royapettah,
Chennai 600014
We have conducted the secretarial audit of the
compliance of applicable statutory provisions and
the adherence to good corporate practices by
Surana Industries Limited (hereinafter called the
company). Secretarial Audit was conducted in a
manner that provided us a reasonable basis for
evaluating the corporate conducts/statutory com-
pliances and expressing our opinion thereon.
Based on our verification of the Company's books,
papers, minute books, forms and returns filed and
other records maintained by the company and
also the information provided by the Company,
its officers, agents and authorized representatives
during the conduct of secretarial audit, We hereby
report that in our opinion, the company has, dur-
ing the audit period covering the financial year
ended on 31st March, 2015, complied with the
statutory provisions listed hereunder and also that
the Company has proper Board-processes and
compliance-mechanism in place to the extent, in
the manner and subject to the reporting made
hereinafter:
We have examined the books, papers, minute
books, forms and returns filed and other records
maintained by Surana Industries Limited ("the
Company") for the financial year ended on 31st
March, 2015 according to the provisions as
applicable to the Company during the period of
audit:
(i) The Companies Act, 2013 (the Act) and the
rules made there under;
(ii) The Securities Contracts (Regulation) Act,
1956 ('SCRA') and the rules made there
under;
(iii) The Depositories Act, 1996 and the Regulations
and Bye-laws framed there under to the
extent of Regulation 55A;
(iv) Foreign Exchange Management Act, 1999
and the rules and regulations made there
under to the extent of Overseas Direct Invest-
ment, imports and export of goods and
services;
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ANNUAL REPORT 2014-15
| 51
(v) The following Regulations and Guidelines
prescribed under the Securities and Exchange
Board of India Act, 1992 ('SEBI Act'):-
(a) The Securities and Exchange Board of India
(Substantial Acquisition of Shares and
Takeovers) Regulations, 2011;
(b) The Securities and Exchange Board of India
(Prohibition of Insider Trading) Regulations,
1992;
(c) The Securities and Exchange Board of India
(Registrars to an Issue and Share Transfer
Agents) Regulations, 1993 regarding the
Companies Act and dealing with client to the
extent of securities issued;
(d) The Securities and Exchange Board of India
(Issue of Capital and Disclosure Require-
ments) Regulations, 2009;
(vi) There are no laws/ Regulations (as amended
from time to time), as informed and certified
by the management of the Company which
are specifically applicable to the Company
based on their sector/industry.
We have also examined compliance with the
applicable clauses of the following:
(i) Secretarial Standards issued by The Institute \
of Company Secretaries of India. (Not
applicable for the audit period).
(ii) The Listing Agreements entered into by the
Company with the Stock Exchanges, where
the equity shares of the Company are listed.
During the period under review, the Company has
generally complied with the provisions of the Act,
Rules, Regulations, Guidelines, Standards etc.,
mentioned above subject to the following
observations:
1. The Company is yet to appoint a woman
director on its Board as per section 149(1) of
the Companies Act, 2013.
2. For the 3rd and 4th Quarter, there was a
vacancy in the Board in place of the Indepen-
dent director which was not filled in by the
Company during the audit period as required
under section 149(4) read with schedule IV
of Companies Act, 2013 and revised clause
49 of the listing agreement entered with the
Stock Exchanges and Company is yet to ap-
point one of its Independent Director on the
Board of Directors of the non listed Indian
Material subsidiary company as per Clause
49 of Listing Agreement.
3. The composition of the audit committee in the
3rd and 4th quarter had fallen below the mini-
mum threshold limit of independent directors
and total number of members. Further, there
was a lack of quorum in the audit committee
meeting held in the 4th quarter of the audit
period.
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ANNUAL REPORT 2014-15
4. Directors retiring by rotation under section
152 of the Companies Act, 2013 in the 23rd
Annual General Meeting of the Company held
on 18th July 2014, as per Companies Act, 1956
and Independent directors was appointed and
under section 149 of the Companies Act 2013
on 30th September 2014 in the extra-ordinary
general meeting of the company.
5. The service of notice of annual general
meeting for the financial year 2013-14 was
done partly through courier and by Book Post.
6. The Company is yet to ratify the limits for
inter-corporate investments, loans, guaran-
tees and securities as per section 186 of the
Companies Act, 2013 and the Rules made
there under which is within 1 year from the
date of notification of the provisions of the
Companies Act, 2013.
We further report that there were no actions/
events occurred in the pursuance of
(a) The Securities and Exchange Board of India
(Share Based employee Benefits) Regula-
tions, 2014
(b) The Securities and Exchange Board of India
(Delisting of Equity Shares) Regulations, 2009
(c) The Securities and Exchange Board of India
(Buyback of Securities) Regulations, 1998
(d) The Securities and Exchange Board of India
(Issue and Listing of Debt Securities) Regu-
lations, 2008;
requiring compliance thereof by the Company
during the Financial Year under review.
We further report that, on examination of the
relevant documents and records and based on
the information provided by the Company, its
officers and authorized representatives during the
conduct of the audit, and also on the review of
quarterly compliance reports by respective
department heads / company secretary / CEO
taken on record by the Board of Directors of the
Company, in our opinion, adequate systems and
processes and control mechanism exist in the
Company to monitor and ensure compliance with
applicable other general laws including Industrial
Laws, Environmental Laws, Human Resources
and labour laws however a few updations are
required to the labour law compliances.
We further report, that the compliance by the
Company of applicable financial laws, like direct
and indirect tax laws, has not been reviewed in
this Audit since the same have been subject to
review by statutory financial auditor and other
designated professionals.
We further report that:
The Board of Directors of the Company is consti-
tuted with a balance of Executive Directors, Non-
Executive Directors and Independent Directors
52 |
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ANNUAL REPORT 2014-15
subject to our observation in point number 1-4 above. The changes in the composition of the Board of
Directors that took place during the period under review were carried out in compliance with the provi-
sions of the Act.
Adequate notice is given to all directors to schedule the Board Meetings, Committee Meetings, agenda
and detailed notes on agenda were delivered and a system exists for seeking and obtaining further
information and clarifications on the agenda items before the meeting and for meaningful participation
at the meeting.
All decisions at Board Meetings and Committee Meetings are carried out unanimously as recorded in
the minutes of the meetings of the Board of Directors or Committee of the Board, as the case may be.
We further report that during the audit period, no events, other than the following, have occurred during
the year, which have a major bearing on the Company's affairs
" The Company has sought the approval of the members for issue of shares to its promoters on a
preferential basis under the CDR scheme, however the issue and allotment of shares is not done during
the audit period.
" The Board has approved the disinvestment/ divestment of its subsidiaries (including material sub-
sidiary) subject to the approval of the shareholders through Postal Ballot during the financial year 2015-
2016.
For LAKSHMMI SUBRAMANIAN & ASSOCIATES
Sd/-
Lakshmmi Subramanian
Senior Partner
FCS No. 3534
C.P.NO. 1087
Date: June 29, 2015
Place: Chennai
Note: This report is to be read with our letter of even date which is annexed as Annexure A and
forms an integral part of this report.
| 53
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ANNUAL REPORT 2014-15
Annexure to SECRETARIAL AUDIT REPORT
To,
The Members
Surana Industries Limited
2nd Floor, Chokkani Building
No 29, Whites Road, Royapettah,
Chennai 600014
1. Maintenance of secretarial records is the responsibility of the management of the Company. Our
responsibility is to express an opinion on these secretarial records based on our audit.
2. We have followed the audit practices and processes as were appropriate to obtain reasonable assur-
ance about the correctness of the contents of the secretarial records. The verification was done on the
random test basis to ensure that correct facts are reflected in secretarial records. We believe that the
processes and practices, we followed provide a reasonable basis for our opinion.
3. We have not verified the correctness and appropriateness of financial records and Books of
Accounts of the Company.
4. Where ever required, we have obtained the Management representation about the compliance of
laws, rules and regulations and happening of events etc.
5. The compliance of the provisions of Corporate and other applicable laws, rules, regulations,
standards is the responsibility of management. Our examination was limited to the verification of
procedures on random test basis.
6. The Secretarial Audit report is neither an assurance as to the future viability of the company nor of
the efficacy or effectiveness with which the management has conducted the affairs of the Company.
For LAKSHMMI SUBRAMANIAN & ASSOCIATES
Sd/-
Lakshmmi Subramanian
Senior Partner
FCS No. 3534
Date: June 29, 2015 C.P.NO. 1087
Place: Chennai
54 |
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ANNUAL REPORT 2014-15
| 55
ANNEXURE "C" TO DIRECTORS REPORT
Information pursuant to Sec 217(1)(e) of the Companies Act, 1956 read with the companies (Disclosure
of Particulars in the Report of Director) Rules 1988 for the year ended at 31st March 2015.
A. CONSERVATION OF ENERGY:
NOTES:
1. Total amount of electricity charges paid includes demand charges, belated payment charges, peak
hour charges and meter rent.
2014-151. ELECTRICITY
Purchased
a) Total Units Consumed
b) Total Amount (Rs)
c) Rate Per Unit (Rs)
2. FURNACE OIL
a) Total Consumption (lts)
b) Total Amount (Rs)
c) Rate Per Litre (Rs)
3. COAL
a) Total Consumption (Tonnes)
b) Total Amount (Rs)
c) Rate per Tonne (Rs)
(Amount in Rs.)
40,00,620
3,71,23,538
9.28
3,22,580
83,90,541
26.01
3,686.284
2,92,64,310
7,938
84,38,228
6,32,36,173
7.49
1,05,172
40,21,674
38.24
27,027.18
17,69,00,848
6,545
2013-14
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ANNUAL REPORT 2014-15
56 |
B. RESEARCH AND DEVELOPMENT NIL
C. TECHNOLOGY ABSORPTION NIL
D. FOREIGN EXCHANGE EARNINGS AND EXPENDITURE
This space is intentionally left blank
2014-15PARTICULARS
Earnings
Export of Goods
Expenditure
Travel Expenditure
(Amount in Rs.)
NIL
NIL
NIL
NIL
2013-14
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ANNUAL REPORT 2014-15
| 57
ANNEXURE "D" TO DIRECTORS REPORT
Particulars of Contracts/arrangements made with related parties
[Pursuant to Clause (h) of Sub-section (3) of Section 134 of the Companies Act, 2013, and Rule 8(2)
of the Companies (Accounts) Rules, 2014 - AOC-2]
This Form pertains to the disclosure of particulars of contracts/arrangements entered into by the Com-
pany with related parties referred to in Sub -section (1) of Section 188 of the Companies Act, 2013
including certain arm's length transactions under third proviso thereto.
Details of contracts or arrangement or transactions not at arm's length basis
There were no contracts or arrangement or transactions entered into during the year ended March 31,
2015, which were not at arm's length basis.
Details of material contracts or arrangement or transactions at arm's length basis
The details of material contracts or arrangement or transactions at arm's length basis for the year ended
March 31, 2015 are as follows:
(1) During the year a unsecured loan amounting to Rs. 27.50 Crore is converted into equity.
(2) Shri. Rahul Dinesh Surana, relative of Shri. Dineshchand Surana is holding an office or place of
profit as Vice President (Projects) in the subsidiary company M/s. Surana Power Limited.
Place: Chennai For and on behalf of the Board
Date: June 29, 2015 -Sd- -Sd-Babu Srinivasan Dineschand Surana Chairman Managing Director
(DIN: 06608264) (DIN: 00007032)
Nature ofRelationship
Salient termsName of the Related Party Duration of theContract
Amount(Rs in Crore)
Nature of ContractInvestment in equity instrument
Surana Power Limited (1)Surana Green Power LimitedSurana Mines & Minerals Limited
Remuneration to Relative of KMP
Surana Power LimitedShri. Rahul Dinesh Surana (2)
SubsidiarySubsidiarySubsidiary
Relative of Shri.DineshchandSurana
Not ApplicableNot ApplicableNot Applicable
Not ApplicableNot ApplicableNot Applicable
418.5056.1559.59
534.27
0.12
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ANNUAL REPORT 2014-15
58 |
ANNEXURE - "E" TO DIRECTORS REPORT
EXTRACT OF ANNUAL RETURN
as on the financial year ended on 31st March, 2015
[Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies Manage-
ment and Administration) Rules, 2014]
CIN
Registration Date
Name of the Company
Category/Sub Category of the Company
Address of the Registered Officeand Contact Details
Whether Listed Company
Name, address and contact details of RegistrarAnd Transfer Agent, if any
I. REGISTRATION DETAILS
L27104TN1991PLC020533
25th March 1991
Surana Industries Limited
Company having Share Capital
No: 29, II Floor, Whites Road, Royapettah,Chennai - 600014.Email: [email protected]: 044-28526336
Yes
Cameo Corporate Services Limited,No.1, Club House Road, 5th Floor,"Subramanian Building", Mount Road,Chennai - 60002Tel No: 044-28460390/395
Name and Description of mainProducts / Services
Iron & Steel
II. PRINCIPAL BUSINESS ACTIVITIES
NIC Code of theProduct/Service
27190
All the business Activities contributing 10% or more of the total turnover of the Company shall bestated:
% to Total Turnover
100%
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ANNUAL REPORT 2014-15
| 59
S.No
II. PRINCIPAL BUSINESS ACTIVITIES
1
2
3
4
5
6
7
Name and Address of theCompany CIN/GLN
Holding/Subsid-iary/Associate
% of Shareheld
ApplicableSection
Surana Power LimitedNo: 29, Whites Road,Royapettah, Chennai -600014
Surana Green PowerLimitedNo: 29, Whites Road,Royapettah, Chennai -600014
Surana Mines & MineralsLimited20, Maxwell Road, #08-01,N Maxwell House,Singapore - 069113.
Surana Holdings Pte Limited315, Outram Road, #10-02,Tan Boon Liat Building,Singapore - 169074.
Surana Green EnergyLimitedNo: 29, Whites Road,Royapettah, Chennai -600014
PT Borneo Mines & MineralsLimitedDI Jakarta
Power India (Singapore)Pte Limited1, North Bridge Road, #13-03, High Street Centre,Singapore - 179094.
U74999TN2008PLC066902
U40109TN2010PLC074770
200818654G
201206127E
U40300TN2012PLC085008
-
-
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Step downSubsidiary
Step downSubsidiary
Step downSubsidiary
97.54
100.00
100.00
51.00
74.00
51.00
80.00
2(87)(a)
2(87)(a)
2(87)(a)
2(87)(a)
2(87)(a)
2(87)(a)
2(87)(a)
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ANNUAL REPORT 2014-15
60 |
I. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)
i) Category-wise Share Holding:
(A) Promoters
(1) Indian
(a) Individual/HUF
(b) Central Govt
(c) State Govt (s)
(d) Bodies Corp.
(e) Banks / FI
(f) Any Other
Sub-Total (A) (1)
(2) Foreign
(a) NRIs - Individuals
(b) Other - Individuals
(c) Bodies Corp.
(d) Banks / FI
(e) Any Other….
Sub-Total (A) (2)
Total Shareholding
of Promoter
(A) = (A) (1) + (A) (2)
No. of Shares held at thebeginning of the year
Categoryof
Shareholders Demat
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
%of Changeduring the
Year
45.62
Nil
Nil
Nil
Nil
Nil
45.62
Nil
Nil
Nil
Nil
Nil
Nil
45.62
Physi-cal
Total% ofTotal
Shares
Demat Physi-cal
Total% ofTotal
Shares
No. of Shares held at theend of the year
20307502
Nil
Nil
Nil
Nil
Nil
20307502
Nil
Nil
Nil
Nil
Nil
Nil
20307502
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
20307502
Nil
Nil
Nil
Nil
Nil
20307502
Nil
Nil
Nil
Nil
Nil
Nil
20307502
45.62
Nil
Nil
Nil
Nil
Nil
45.62
Nil
Nil
Nil
Nil
Nil
Nil
45.62
20307502
Nil
Nil
Nil
Nil
Nil
20307502
Nil
Nil
Nil
Nil
Nil
Nil
20307502
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
20307502
Nil
Nil
Nil
Nil
Nil
20307502
Nil
Nil
Nil
Nil
Nil
Nil
20307502
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ANNUAL REPORT 2014-15
| 61
(A) Public Shareholding(1) Institutions(a) Mutual Funds(b) Banks/FI(c) Central Govt(d) State Govt (s)(e) Venture Capital funds(f) Insurance Companies(g) FIIs(h) Foreign VentureCapital Funds(i) Others (Specify)Sub-Total (B)(1)(2) Non- Institutions(a) Bodies Corpi. Indianii. Overseas(b) individualsi. Individual shareholdersholding nominalshare capital up toRs. 1 lakhii. Individualshareholders holdingnominal share capital inexcess of Rs 1 lakh(C) Others (Specify)Sub-Total (B)(2)Total Shareholding of Public= (B) (1) + (B) (2)C. Shares held bycustodian for GDRs& ADRsGrand Total(A+B+C)
No. of Shares held at thebeginning of the yearCategory
ofShareholders Demat
NilNilNilNilNilNil
+ 1.12Nil
Nil+ 1.12
- 1.10
- 0.01
Nil
- 1.110.01
Nil
0.01
%of Changeduring the
Year
NilNilNilNilNilNil
2.67Nil
Nil2.67
20.58
1.15
0.74
22.4725.14
Nil
25.14
Physi-cal
Total% ofTotal
Shares
DematPhysi-
calTotal
% ofTotal
Shares
No. of Shares held at theend of the year
NilNilNilNilNilNil
688665Nil
Nil688665
9650802
388905
316102
1035580911044474
Nil
11044474
NilNilNilNilNilNilNilNil
NilNil
800
126055
12500
139355139355
Nil
139355
NilNilNilNilNilNil
688665Nil
Nil688665
9651602
514960
328602
1049516411183829
Nil
11183829
NilNilNilNilNilNil
1.55Nil
Nil1.55
21.68
1.16
0.74
23.5825.13
Nil
25.13
NilNilNilNilNilNil
1188665Nil
Nil1188665
9161557
384143
317314
986301411051679
Nil
11051679
NilNilNilNilNilNilNilNil
NilNil
800
125956
12500
139256139256
Nil
139256
NilNilNilNilNilNil
1188665Nil
Nil1188665
9162357
510099
329814
1000227011190935
Nil
11190935
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ANNUAL REPORT 2014-15
62 |
(iii) Change in Promoters' Shareholding (please specify, if there is no change):
1
2
3
4
5
6
7
8
9
10
11
12
G.R.Surana
Shantilal Surana
Dineshchand Surana
Vijayraj Surana
Chandan Bala Surana
Rajesh Surana
Vasantha Surana
Sarala Devi Surana
Alka Surana
Mahaveer Surana
Kavitha Surana
Rajiv Surana
Total
Shareholders' Name
%of Changeduring the
Year
Shareholding at thebeginning of the year
No. ofShares
Shareholding at theend of the year
4407775
4519725
3989736
4182521
206250
180745
807350
206250
388400
605000
462850
350900
20307502
9.90
10.15
8.96
9.39
0.46
0.41
1.81
0.46
0.87
1.36
1.04
0.79
45.62
50.87
100
30.23
53.83
100
100
100
100
100
100
100
100
30.16
5076875
5076875
5076875
5076875
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
20307502
11.40
11.40
11.40
11.40
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
45.62
100
100
100
100
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
45.62
+ 1.50
+ 1.25
+ 2.44
+ 2.01
- 0.46
- 0.41
-1.81
-0.46
-0.87
-1.36
- 1.04
-0.79
S.No.
% of totalShares of
thecompany
% of SharesPledged /
encumberedto total shares
No. ofShares
% of totalShares of
thecompany
% of SharesPledged /
encumberedto total shares
Particulars
Shareholding at thebeginning of the year
Cumulative Shareholdingduring the year
No.No. ofShares
% of totalShares of the
company
No. ofShares
% of totalShares of the
company
1
2
3
At the beginning of the year
Increase / Decrease inPromoters Share holdingduring the year specifyingthe reasons for increase /decrease
At the End of the year
20307502
Nil
20307502
45.62
Nil
45.62
20307502
Nil
20307502
45.62
Nil
45.62
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ANNUAL REPORT 2014-15
| 63
(iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters andHolders of GDRs and ADRs):
(v) Shareholding of Directors and Key Managerial Personnel:
Director Name: Shri. Dineshchand Surana
For Each of the Top 10Shareholders
Shareholding at thebeginning of the year
Cumulative Shareholdingduring the year
S.No. No. of
Shares
% of totalShares of the
company
No. ofShares
% of totalShares of the
company
1
2
3
At the beginning of the yearDate wise Increase /
Decrease in Share holdingduring the year specifying thereasons for increase / de-crease (e.g. allotment / trans-fer / bonus/ sweat equity etc):
At the End of the year ( or onthe date of separation, ifSeparated during the year)
21528240
661390
22189630
48.36
1.48
49.84
22189630
Nil
22189630
49.84
Nil
49.84
For Each of the Directorsand KMP
Shareholding at thebeginning of the year
Cumulative Shareholdingduring the year
S.No. No. of
Shares
% of totalShares of the
company
No. ofShares
% of totalShares of the
company
1
2
3
At the beginning of the year
Increase /Decrease in Pro-
moters Share holding during
the year specifying the rea-
sons for increase / decrease
:
Inter-Se Transfer
At the End of the year
3989736
1087140
5076876
8.96
2.44
11.40
5076876
Nil
5076876
11.40
Nil
11.40
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ANNUAL REPORT 2014-15
(A)
(B)
(C)
64 |
Director Name: Shri. G.R. Surana
II. INDEBTEDNESS:
Indebtedness of the Company including interest outstanding/accrued but not due for payment
For Each of the Directorsand KMP
Shareholding at thebeginning of the year
Cumulative Shareholdingduring the year
S.No. No. of
Shares
% of totalShares of the
company
No. ofShares
% of totalShares of the
company
1
2
3
At the beginning of the year
Increase / Decrease in Pro-moters Share holding duringthe year specifying the rea-sons for increase/decrease :Inter-Se Transfer
At the End of the year
4407775
669101
5076876
9.90
1.50
11.40
5076876
Nil
5076876
11.40
Nil
11.40
ParticularsS.
No.
Secured LoansexcludingDeposits
(A)
UnsecuredLoans
(B)
Deposits
('C)
TotalIndebtedness
(D)=(A+B+C)
Indebtedness at the beginning of
the Financial Year
(i) Principal Amount
(ii) Interest due but not paid
(iii) Interest accrued but not due
Total ( i+ii+iii )
Change in Indebtedness during the
Financial Year
Addition
Reduction
Net Change
Indebtedness at the end of the
Financial Year
(i) Principal Amount
(ii) Interest due but not paid
(iii) Interest accrued but not due
Total ( i+ii+iii )
11,133,761,663
-
-
11,133,761,663
1,140,783,833
119,032,800
1,021,751,033
12,155,512,696
-
-
12,155,512,696
1,300,645,368
-
-
1,300,645,368
970,199,461
1,300,645,368
(330,445,907)
970,199,461
-
-
970,199,461
-
-
-
-
-
-
-
-
-
-
-
12,434,407,031
-
-
12,434,407,031
2,110,983,294
1,419,678,168
691,305,126
13,125,712,157
-
-
13,125,712,157
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ANNUAL REPORT 2014-15
| 65
III. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL:
A. Remuneration to Managing Director, Whole-time Directors and/or Manager:
(Rs in Lakhs)
Note :The promoter directors Shri Dineshchand Surana & Shri G.R.Surana have waived their salary forDirectors for the Financial Year 2014-15
Particulars ofRemuneration
S.No.
Name of MD/WTD/Manager
DineshchandSurana, MD
G.R.Surana,WTD resignedeffective April
29, 2015
V. Aranganathan,WTD resigned
effectiveMay 31, 2014
KrishnaUdupa,
WTD resignedeffective May
18, 2014
TotalAmount
Gross salary
Salary as perprovisions con-tained in section17(1) of the In-come-tax Act, 1961
Value of perquisitesu/s 17(2) Income-tax Act, 1961
Profits in lieu ofsalary under sec-tion 17(3) Income-tax Act, 1961
Stock Option
Sweat Equity
Commission- as % of profit- others, specify…
Others, pleasespecify
(a)
(b)
(c)
2
3
4
5
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
1
Total (A)
Ceiling as per the Act
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
4.00
Nil
Nil
Nil
Nil
Nil
Nil
4.00
7.00
Nil
Nil
Nil
Nil
Nil
Nil
7.00
11.00
Nil
Nil
Nil
Nil
Nil
Nil
11.00
96.00
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ANNUAL REPORT 2014-15
66 |
B. Remuneration to other Directors:
Particulars ofRemuneration
S.No.
a. IndependentDirectors
Fee for attendingboard / committeemeetings
Commission Others, please
specify
Total (1)
b. Other Non-ExecutiveDirectors
Sitting Fee forattending board /committee meetings
Commission Others, please
specify
Total (2)
Total (B) = (1)+(2)
Total ManagerialRemuneration
Overall Ceiling as per theAct
0.22-
0.22
0.20
-
0.20
0.42
0.42
Name of Directors
B Samal
0.45-
0.45
0.22
-
0.22
0.67
0.67
0.45-
0.45
0.60
-
0.80
1.25
1.25
1.13-
1.13
0.20
-
0.20
1.35
1.35
--
-
0.45
-
0.45
0.45
0.45
2.25-
2.25
1.87
-
1.87
4.12
4.12
1% of NetProfit
SK Gupta BS Patil KNPrithviraj
S. Babu
TotalAmount
Particulars ofRemuneration
S.No.
Name of Directors
G.A. Tadas UshaV
SubramanianBiju
GeorgeKrishnaUdupa
TotalAmount
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ANNUAL REPORT 2014-15
| 67
C. Remuneration to other Directors, Key Managerial Personnel other than MD/MANAGER/WTD:
In Lakhs Per Annum
IV. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:
Note : 1. Remuneration paid to Chief Financial Officer with effect from July 2014.2. Remuneration paid to Company Secretary with effect from October 2014.
S.No Particulars of RemunerationCEO CFO CS Total
Key Managerial Personnel
(a)
(b)
(c)
234
5
Salary as per provisions containedin section 17(1) of the Income-taxAct, 1961
Value of perquisites u/s 17(2)Income-tax Act, 1961Profits in lieu of salary under section17(3) Income-tax Act, 1961Stock OptionSweat EquityCommission- as % of profit- others, specify…Others, please specify
Nil
Nil
Nil
NilNilNil
Nil
Nil
45.00
Nil
Nil
NilNilNil
Nil
45.00
5.50
Nil
Nil
NilNilNil
Nil
5.50
50.50
Nil
Nil
NilNilNil
Nil
50.50Total (A)
Type
Penalty
Punishment
Compounding
C.OTHER OFFICERS IN DEFAULT
Penalty
Punishment
Compounding
Sectionof the
CompaniesAct
BriefDescription
Details ofPenalty /
Punishment/Compound-
ing feesimposed
Authority[RD /NCLT/
COURT]
Appealmade, if any
(giveDetails)
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
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ANNUAL REPORT 2014-15
68 |
REPORT ON CORPORATE GOVERNANCE
(Pursuant To Clause 49 of the Listing Agreement)
MANDATORY REQUIREMENTS
1. COMPANY'S PHILOSOPHY ON CODE OF
GOVERNANCE
Corporate Governance is about commitment to
values and ethical business conduct that evolved
over a period of time. Your Company has set
itself the objective of expanding its capacities and
becoming globally competitive in its business. The
basic philosophy of corporate governance in your
company has been to achieve business excel-
lence, to enhance shareholder value keeping in
view the needs and interest of all its stakehold-
ers. Surana Industries Limited believes that good
governance stems from the culture and mindset
of the organization and generates goodwill among
business partners, customers, investors and
earns respect from society at large. Your Com-
pany is committed to the principles of good gov-
ernance. The Company's policy is reflected by
the values of transparency, professionalism and
accountability. The Company constantly strives
towards betterment of these aspects. The Com-
pany also endeavors to enhance long-term share-
holder value. Your Company confirms the com-
pliance of Corporate Governance as contained
in Clause 49 of the Listing Agreement with the
Bombay Stock Exchange Ltd (BSE), National
Stock Exchange of India Ltd (NSE).
We believe that it is our responsibility to adhere
and enforce the principles of sound Corporate
Governance with the objectives of transparency,
professionalism and accountability, while
facilitating effective management of the
businesses and efficiency in operations.
2. BOARD OF DIRECTORS
2.1 APPOINTMENT AND TENURE
The Directors of the Company are appointed by
Shareholders at General Meetings. All the Direc-
tors except the Nominee Director(s) and Inde-
pendent Director(s) are subject to retirement by
rotation and at every Annual General Meeting one
third of such Directors as are liable to retire by
rotation, if eligible, generally offer themselves for
re-election, in accordance with the provisions of
the Companies Act and that of the Articles of
Association of the Company.
2.2 COMPOSITION OF THE BOARD
The Board of Directors of our Company
comprises of Four Non-Executive, Two Nominee
and One Executive Director. The Chairman of the
Board is a Non- Executive Director and Two
Non-Executive Directors are Independent Direc-
tors as per the criteria of independence stated in
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ANNUAL REPORT 2014-15
| 69
Clause 49 of the Listing Agreement. The optimum
combination of Executive, Non-executive and
Independent Directors ensures independence of
the Board and separation of Board function of
governance and management.
2.3 BOARD AND COMMITTEE MEETINGS AND
PROCEDURES
The Board of Directors oversees the entire
functioning and operations of the Company. They
evaluate performance of the Company and
provide direction and guidance to the Company
for undertaking the business of the Company in
accordance with its corporate goals and statutory
requirements. They also give valuable advice,
monitor the Management Policies and their
effectiveness and ensure that the long term
interests of the shareholders are served. The
Managing Director is being assisted by Key
Management Personnel, Senior Management
Staff and Officers to ensure proper functioning of
the Company in terms of set guidelines.
The Board has constituted other Committees viz
Executive Committee, Borrowing Committee,
Allotment Committee, Audit Committee, Stake-
holders Relationship Committee, Nomination &
Remuneration Committee, Allotment Committee,
Corporate Social Responsibility & Governance
Committee, Risk Management Committee,
Project Monitoring Committee and Management
Committee. The Board constitutes additional func-
tional committees from time to time depending
upon the necessity. A minimum of four Board Meet-
ings are held every year. At times more meetings
are convened depending upon the requirements.
Dates for the Board Meetings are decided well in
advance. The Board/Committee meetings are
conducted as per well defined procedures and
systems. The information placed before the Board
includes:
❖ Compliance with Statutory/Regulatory
requirements and review of major legal issues.
❖ Quarterly/Half Yearly/Annual Financial Results
of the Company.
❖ Noting of the proceedings of the Meeting of
Audit Committee and other Committees of the
Board and such other items as mentioned in
Clause 49 of the Listing Agreement.
❖ Review of the Board Minutes of subsidiaries.
❖ Annual and Accounting Policies
❖ Monitoring of Performance
❖ Annual operating Plans
❖ Capital Budgets and updates on the same
❖ Detailed analysis of Steel Market Position and
Economic Scenario
❖ Delegation of Authority and renewal thereof,
etc.
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ANNUAL REPORT 2014-15
70 |
2.4 DISTRIBUTION OF BOARD AGENDA
PAPERS
Board Notes are circulated well advance in the
devised agenda format. All material information
is incorporated in the agenda notes so that there
can be meaningful discussions in the Board
Meetings.
2.5 MINUTES OF THE BOARD MEETINGS
The Board Meeting Minutes are recorded imme-
diately after the Board Meetings are over and
these are sent to the Directors in draft form for
their approval. Any changes suggested by them
in the draft are incorporated and then final
minutes are prepared and signature of the Chair-
man is obtained.
2.6 FOLLOW UP OF DECISIONS TAKEN AT
THE BOARD MEETINGS
The Company has an effective system of follow
up of the decisions taken at the Board Meeting.
An Action Taken Report is prepared and circu-
lated to the Board in the next Meeting. The Com-
pany Secretary ensures the flow of necessary
information and feedback from the Board to the
respective departments. Observations made by
the Board are sent to respective functional heads
for follow up and implementation.
2.7 COMPLIANCE WITH STATUTORY
REQUIREMENTS
At the time of preparation of agenda notes it is
ensured that all the statutory requirements are
complied with under Companies Act, SEBI
Regulations and guidelines from other statutory
bodies. The Company endeavors to comply
voluntarily with Secretarial Standards prescribed
by the Institute of Company Secretaries of India.
3. BOARD MEETINGS
Five Board Meetings were held during the
financial year 2014-15. The maximum gap
between any two meetings was less than 4
months as stipulated under Clause 49 of the
Listing Agreement. The dates on which the said
meetings held are as follows:
30th May 2014, 18th July 2014, 14th November
2014, 14th February 2015 and 26th March 2015.
Attendance of each Director at Board Meetings
& Annual General Meeting of the Company held
during the year and the number of Directorship(s)
and Committee Chairmanships / Memberships
held by them in other companies are given
below:
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ANNUAL REPORT 2014-15
| 71
Name of the Director
Shri. G.R. Surana**
Shri. BabuSrinivasan***
Shri. DineshchandSurana
Shri. K.N. Prithviraj
Shri. Krishna Udupa
Shri. BijuGeorge****
Shri.V. Subramanian*****
Shri. B. Samal#
Dr. S.K. Gupta ^
Shri. B.S. Patil@
Shri. G.A. Tadas &
Smt. Usha$
Shri.V. Aranganathan%
CategoryAttendance
No. Of Director-ships in publiclimited compa-nies includingthis company *
Committee Memberships(including this Company) *
Board AGM Chairman Member
ExecutiveDirector
Non-ExecutiveChairman
ManagingDirector
IndependentDirector
Non-ExecutiveDirector
NomineeDirector
NomineeDirector
IndependentDirector
IndependentDirector
IndependentDirector
NomineeDirector
NomineeDirector
ExecutiveDirector
Yes
No
Yes
Yes
Yes
No
No
No
No
No
No
No
Yes
1
2
2
12
3
4
2
13
5
7
-
3
2
-
1
1
1
-
4
1
2
6
4
-
5
-
-
1
2
2
1
6
2
2
1
3
-
-
-
-
-
5
5
4
1
4
1
2
2
1
1
1
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ANNUAL REPORT 2014-15
72 |
* Represents directorship(s)/membership(s) of
Audit and Stakeholders' Relationship
Committee(s) in public limited companies gov-
erned by the Companies Act, 2013
** Shri. G.R. Surana ceased to be a Director with
effect from April 29, 2015.
*** Shri. S. Babu has been inducted as an Inde-
pendent Director of the company on May 15, 2015
**** Shri. Biju George has been inducted as a
Nominee Director with effect from 6th September
2014 representing M/s. IDBI Ltd.
***** Shri. V. Subramanian has been inducted as
a Nominee Director with effect from 18th July 2014
representing M/s. IFCI Ltd.
# Shri. B. Samal ceased to be a Director with
effect from 25th September, 2014.
^ Dr. S.K. Gupta ceased to be a Director with
effect from 14th October, 2014.
@ Shri. B.S. Patil ceased to be a Director with
effect from 1st December, 2014.
& Shri. G.A. Tadas ceased to be a Nominee
Director with effect from 6th September 2014.
$ Smt. Usha ceased to be a Nominee Director
with effect from 18th July 2014.
% Shri. V. Aranganathan ceased to be a Director
with effect from 31st May 2014.
The Board has been provided with all material
and substantial information that facilitates them
for imparting significant decisions while discharg-
ing its duties as trustees of shareholders.
4. CODE OF CONDUCT
A declaration signed by the Managing Director,
stating that all Directors and senior management
personnel of the Company have affirmed
compliance with the code of conduct of the
Company is enclosed at the end of the report.
The code of conduct is available on the website
of the Company www.suranaind.com
5. PREVENTION OF INSIDER TRADING
Pursuant to the requirements of the Securities
and Exchange Board of India (Prohibition of
Insider Trading) Regulations, 2015, as amended,
our Company has adopted a Code of Conduct
for prevention of Insider Trading. This Code is
applicable to all Board members/officers/desig-
nated employees. The objective of this code is to
prevent purchase and/or sale of shares of the
Company by an insider on the basis of unpub-
lished price sensitive information.
6. SECRETARIAL STANDARDS RELATING
TO BOARD MEETINGS & COMMITTEE MEETINGS
The Secretarial and the operating practices
generally followed by our Company are in line
with the Standards on Secretarial practice
relating to meetings of the Board and Commit-
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ANNUAL REPORT 2014-15
| 73
tees stipulated by The Institute of Company Secretaries of India even if such laid down standards are
recommendatory in nature.
7. AUDIT COMMITTEE
7.1 COMPOSITION, NAMES OF MEMBERS AND CHAIRMAN
The Audit Committee has been reconstituted on May 15, 2015 which comprises of Shri. Babu Srinivasan,
Shri. K.N. Prithviraj and Shri. Krishna Udupa out of which two are Non-Executive Independent Directors
of the Company with Shri. Babu Srinivasan, as its Chairman. The Company Secretary acts as Secretary
of the Committee.
7.2 MEETINGS AND THE ATTENDANCE DURING THE YEAR
Four meetings of the Audit Committee were held during the year 30th May 2014, 18th July 2014, 14th
November 2014 and 14th February 2015.
# Appointed with effect from 15th May 2015.
*Dr. S.K. Gupta, Shri. B. Samal and Shri. B.S. Patil ceased to be the members of the Audit Committee
of the Company during the financial year 2014-15.
7.3 BRIEF DESCRIPTION OF TERMS OF REFERENCE
The Terms of Reference of Audit Committee cover the matters specified for Audit Committee under
Name of the Director Status No. of Meetings attended
Shri. Babu Srinivasan #
Shri. K.N. Prithviraj
Shri. Krishna Udupa
Dr. S.K. Gupta*
Shri. B. Samal*
Shri. B.S. Patil*
Chairman
Member
Member
Member
Member
Member
-
4
4
2
2
1
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ANNUAL REPORT 2014-15
74 |
Clause 49 of the Listing Agreement as well as in
Section 177 of the Companies Act, 2013.
The Brief Terms of Reference are:
The Audit Committee acts as a link between the
Internal and Statutory Auditors and the Board of
Directors.
The Committee provides the Board with additional
assurance as to the adequacy of the Company's
internal control systems and financial disclosures.
The broad terms of reference of the Audit Com-
mittee are as per Section 177 of the Companies
Act, 2013 and to review with the Management
and/or Internal Auditors and/or Statutory Auditors
in the following areas:
i) Overview of the Company's financial re
porting process and financial information
disclosures;
ii) Review with the Management, the annual
and quarterly financial statements before
submission to the Board;
iii) Rev iew wi th the Management , the
Internal and External Audit Reports and the
adequacy of internal control systems;
iv) Review the adequacy and effectiveness of
accounting and financial controls of the
Company, compliance with the Company's
policies and applicable laws and regulations;
v) Recommending the appointment and
removal of External Auditors and fixation of
audit terms;
vi) Review of utilization of proceeds raised
from Public/Rights issues.
8. NOMINATION AND REMUNERATION
COMMITTEE
In compliance with the provisions of Section 178
of the Companies Act, 2013 and the Listing Agree-
ment, the Board has renamed the existing
"Remuneration Committee" as "Nomination and
Remuneration Committee" in the Board Meeting
held on 14th November 2014.
The Nomination and Remuneration Committee
of our Company has been constituted to recom-
mend to the Board the appointment/reappoint-
ment of the Executive and Non-Executive
Directors, Key Managerial Personnel and other
Senior Management personnel, the induction of
Board members into various committees and
suggest revision in total remuneration package
of the Executive Director(s)keeping in view the
prevailing statutory guidelines. The Committee
has also been empowered to review/recommend
the periodic increments, if any, in salary and an-
nual incentive of the Executive Director(s).
This Committee comprises of Two Independent
Directors and One Non-Executive Director, which
was re-constituted on May 15, 2015 comprising
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ANNUAL REPORT 2014-15
| 75
of Shri. S. Babu Srinivasan, Chairman, Shri. K.N. Prithviraj and Shri. Krishna Udupa, as Members of the
Committee. The Company Secretary acts as Secretary of the Committee. The Committee met two times
during the financial year 2014-15 on 18th July 2014 and 14th November 2014.
# Appointed with effect from 15th May 2015.
* Dr. S.K. Gupta and Shri. B. Samal ceased to be the members of the Audit Committee of the Company
during the financial year 2014-15.
9. REMUNERATION TO DIRECTORS
Due to the heavy losses incurred by the Company, the Promoter Directors viz. Shri. G.R. Surana, Execu-
tive Chairman & Shri.Dineshchand Surana, Managing Director, have waived their salary for the financial
year 2014-15.
The Remuneration paid/payable to the Executive Directors for the year ended 31st March 2015 is as
follows:
Remuneration paid to Shri. Krishna Udupa, Director (Projects) until July 2014. Shri. Krishna Udupa has
been redesignated as a Non-Executive Director with effect from July 18, 2014
Name of the Director Category No. of Meetings attended
Shri. Babu Srinivasan #
Shri. K.N. Prithviraj
Shri. Krishna Udupa
Shri. B. Samal*
Dr. S.K. Gupta*
Chairman
Member
Member
Member
Member
-
2
2
1
1
(Rs.in Lakhs)
Salary with Perquisites
Total
7.00
7.00
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ANNUAL REPORT 2014-15
76 |
Remuneration paid to Shri. V. Aranganathan, Director (F&A) until May 2014.
Shri. V. Aranganathan ceased to be a Director with effect from May 30, 2014.
10. NON-EXECUTIVE DIRECTOR'S COMPENSATION
The Sitting Fees paid to Non-Executive Directors for the year ended 31st March 2015 is as follows:
(Rs.in Lakhs)
(Rs.in Lakhs)
Salary with Perquisites
Total
4.00
4.00
Sitting fee *
Shri. K.N. Prithviraj
Shri. Krishna Udupa
Shri. B. Samal
Shri. B.S. Patil
Dr. S.K. Gupta
Shri. G.A. Tadas
Smt. Usha
Shri. Biju George
Shri. V. Subramanian
Shri. Babu Srinivasan
Total
1.13
0.45
0.22
0.45
0.45
0.40
0.22
0.20
0.80
-
4.12
Name of the Director
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ANNUAL REPORT 2014-15
| 77
* Includes sitting fee paid for attending
Committee Meetings.
The sitting fee payable to Non Executive
Directors for attending the Board and Committee
Meetings has been fixed at Rs. 20,000/- and
Rs. 2,500/- respectively.
11. STAKEHOLDERS' RELATIONSHIP
COMMITTEE
The Stakeholders' Relationship Committee is
functioning to look into Redressal of Investor/
Shareholders complaints expeditiously. The
Stakeholders' Relationship Committee is
primarily responsible to review all matters
connected with the Company's transfer of securi-
ties and Redressal of shareholders/investors/
security holders' complaints. The Committee also
monitors the implementation and compliance with
the Company's Code of Conduct for prohibition
of Insider Trading.
The Stakeholders' Relationship Committee's
composition and the terms of reference meet with
the requirements of Clause 49 of the Listing
Agreement and provisions of the Companies Act,
2013.
The Stakeholder's Relationship Committee
Comprises of Shri. K.N. Prithviraj as Chairman,
Shri.Dineshchand Surana and Shri. Krishna
Udupa, as members. The Company Secretary
acts as the Secretary of the Committee. The
Committee met five times during the financial year
2014-15 on 10th November 2014, 19th November
2014, 1st December 2014, 27th January 2015 and
15th March 2015.
During the year, the Company received 2 Com-
plaints mostly pertaining to non-receipt of annual
reports etc., all of these complaints have been
dealt with satisfactorily and there were no
complaints pending as on 31st March, 2015.
12. CORPORATE SOCIAL RESPONSIBILITY&
GOVERNANCE COMMITTEE
In compliance with the provisions of Section 135
of the Companies Act, 2013 the board has
constituted a Corporate Social Responsibility&
Governance (CSR&G) Committee to review the
existing CSR policy. The Board also empowered
the Committee to look into matters related to
sustainability and overall governance.
The Committee's prime responsibility is to assist
the Board in discharging its social responsibilities
by way of formulating and monitoring implemen-
tation of the framework of 'corporate social respon-
sibility policy', observe best practices of
Corporate Governance at all levels, and to
suggest remedial measures wherever necessary.
The Corporate Social Responsibility &
Governance Committee Comprises of Shri. K.N.
Prithviraj as Chairman, Shri.Krishna Udupa and
Shri.Dineshchand Surana as members. The
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ANNUAL REPORT 2014-15
78 |
Company Secretary acts as the Secretary of the
Committee.
13. RISK MANAGEMENT COMMITTEE-
(CONSTITUTED IN NOVEMBER 2014)
In compliance with the provisions of Listing Agree-
ment, the Board has constituted Risk Manage-
ment Committee.
Business Risk Evaluation and Management is an
ongoing process within the Organization. The
Company has a robust risk management frame-
work to identify, monitor and minimize risks as
also identify business opportunities.
The Risk Management Committee Comprises of
Shri. Dineshchand Surana, Chairman, Shri.
Krishna Udupa, Shri. Babu Srinivasan, Shri. Anil
Gupta and Shri.D. Hem Senthil Raj as members.
The Committee met 2 occasions during the year
on 14th November 2014 and 14th February 2015.
14. SHARE TRANSFER AND TRANSMISSION
COMMITTEE
The Share Transfer and Transmission Commit-
tee oversees and reviews all matters connected
with transfers, transmissions, transpositions,
splitting, consolidation of shares, demat and remat
requests.
The Share Transfer and Transmission Commit-
tee were reconstituted on May 22, 2015 which
comprises of Shri. Dineshchand Surana, Manag-
ing Director as Chairman and Shri.Krishna
Udupa, Non-Executive Director as Member.
15. EXECUTIVE COMMITTEE
The Executive Committee oversees the imple-
mentation of the Group's strategic initiatives which
are set by the Board and also to oversee the day
to day operations and general decision making
powers to be made from time to time. It is led by
Shri. Dineshchand Surana as Chairman, Shri.
Krishna Udupa, Shri. Babu Srinivasan and Shri.
Anil Gupta as Members.
16. BORROWING COMMITTEE
The Borrowing Committee oversees the
borrowing from time to time, any sums of monies
which together with the monies already borrowed
by the company (apart from temporary loans
obtained or to be obtained from the Company's
bankers in the ordinary course of business). It is
led by Shri. Dineshchand Surana as Chairman,
Shri. Krishna Udupa, Shri. Babu Srinivasan and
Shri. Anil Gupta as Members.
17. INDEPENDENT DIRECTORS' MEETING
During the year, the Independent Directors met
on November 14, 2014 inter alia, to discuss:
a) Evaluation of the performance of Non In
dependent Directors and the Board of
Directors as a whole;
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ANNUAL REPORT 2014-15
| 79
b) Evaluation of the performance of the
Chairman of the Company, taking into
account the views of the Executive and
Non Executive Directors.
c) Evaluation of the quality, content and
timelines of flow of information between
the Management and the Board that is
necessary for the Board to effectively and
reasonably perform its duties.
17.1. FAMILIARIZATION PROGRAMME /
INDUCTION TRAINING
The Familiarization Programme (''the
Programme") for Independent Directors of the
Company familiarizes their roles, rights, respon-
sibilities in the Company, nature of the industry in
which the Company operates, business model of
the Company, etc., through various programmes.
The Company circulates news and articles related
to the industry on a regular basis and may pro-
vide specific regulatory updates and provide an
opportunity to the Independent Directors to inter-
act with the senior leadership team of the Com-
pany and help them to understand the Company's
strategy, business model, operations, service,
markets, organisation structure, finance, human
resources, technology, quality, facilities and risk
management and such other areas as may arise
from time to time. The Company further follows a
system of 'Orientation Programme' for any new
Director who joins the Company's Board. The con-
cerned Director is taken through an orientation
process, which includes detailed presentation of
the process and business of the Company, meet-
ing with unit level and Senior Management team.
The information / details about the Company from
its date of incorporation, its growth, corporate ac-
tions, corporate acquisitions etc to understand
better the operational activities are presented to
the newly inducted Board members.
18. POLICY FOR SELECTION AND APPOINT-
MENT OF DIRECTORS AND THEIR REMU-
NERATION
The Nomination and Remuneration (N&R)
Committee has adopted a Charter which, inter alia,
deals with the manner of selection of Board of
Directors and CEO & Managing Director and their
remuneration. This Policy is accordingly
derived from the said Charter.
CRITERIA OF SELECTION OF NON
EXECUTIVE DIRECTORS
a. The Non Executive Directors shall be of high
integrity with relevant expertise and experience
so as to have a diverse Board with Direc-
tors having expertise in the fields of manufac-
turing, marketing, finance, taxation, law, gov-
ernance and general management.
b. In case of appointment of Independent
Directors, the N&R Committee shall satisfy it-
self with regard to the independent nature of
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ANNUAL REPORT 2014-15
80 |
the Directors vis-a-vis the Company so as to
enable the Board to discharge its function and
duties effectively.
c. The N&R Committee shall ensure that the
candidate identified for appointment as a
Director is not disqualified for appointment
under Section 164 of the Companies Act,
2013.
d. The N&R Committee shall consider the
following attributes / criteria, whilst recom-
mending to the Board the candidature for
appointment as Director.
i. Qualification, expertise and experience of
the Directors in their respective fields;
ii. Personal, Professional or business standing;
iii. Diversity of the Board.
e. In case of re-appointment of Non Executive
Directors, the Board shall take into
consideration the performance evaluation of
the Director and his engagement level.
19. REMUNERATION
The Non Executive Directors shall be entitled to
receive remuneration by way of sitting fees,
reimbursement of expenses for participation in
the Board / Committee meetings as detailed here-
under:
i. A Non Executive Director shall be entitled
to receive sitting fees for each meeting of
the Board or Committee of the Board
attended by him, of such sum as may be
approved by the Board of Directors within
the overall limits as prescribed under the
Companies Act, 2013 and The Companies
(Appointment and Remuneration of
Managerial Personnel) Rules, 2014;
ii. A Non Executive Director will also be
entitled to receive commission if any on
an annual basis, of such sum as may be
approved by the Board on the
recommendation of the N&R Committee;
iii. The N&R Committee may recommend to
the Board, the payment of commission on
uniform basis, to reinforce the principles
of collective responsibility of the Board.
iv. The N&R Committee may recommend a
higher commission for the Chairman of the
Board of Directors, taking into consideration
his overall responsibility;
v. In determining the quantum of commission
payable to the Directors, the N&R
Committee shall make its recommendation
after taking into consideration the overall
performance of the Company and the
onerous responsibilities required to be
shouldered by the Director.
vi. The Independent D i rec tors o f the
Company shall not be entitled to participate
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ANNUAL REPORT 2014-15
| 81
in the Stock Option Scheme of the Company, if
any, introduced by the Company.
19.1 REMUNERATION POLICY FOR THE
SENIOR MANAGEMENT EMPLOYEES
I. In determining the remuneration of the
Senior Management Employees (i.e. KMPs and
Executive Committee Members) the N&R
Committee shall ensure / consider the following:
i. the relationship of remuneration and
performance benchmark is clear;
ii. the balance between fixed and incentive
pay reflecting short and long term
performance objectives, appropriate to the
working of the Company and its goals;
iii. the remuneration is divided into two
components viz. fixed component
comprising salaries, perquisites and
retirement benefits and a variable component
comprising performance bonus;
iv. the remunerat ion including annual
increment and performance bonus is
decided based on the criticality of the roles
and responsibilities, the Company's
performance vis-à-vis the annual budget
achievement, individuals performance
vis-à-vis KRAs/ KPIs, industry benchmark
and current compensation trends in the
market.
II. The Managing Director will carry out the
individual performance review based on the stan-
dard
appraisal matrix and shall take into account
the appraisal score card and other factors
mentioned herein-above, whilst recommend-
ing the annual increment and performance
incentive to the N & R Committee for its re-
view and approval.
19.2 PERFORMANCE EVALUATION
Pursuant to the provisions of the Companies Act,
2013 and Clause 49 of the Listing Agreement, the
Board has carried out the annual performance
evaluation of its own performance, the Directors
individually as well as the evaluation of the work-
ing of its Audit, Nomination and Remuneration
Committees.
Performance evaluation is done after taking into
consideration inputs received from the Directors,
covering various aspects of the Board's function-
ing such as adequacy of the composition of the
Board and its Committees, Board culture, execu-
tion and performance specific duties, obligations
and governance. Directors including the Chairman
of the Board are evaluated on parameters such
as level of engagement and contribution, indepen-
dence of judgment safeguarding the interest of
the Company and its minority shareholders etc.
The Directors expressed their satisfaction with the
evaluation process.
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ANNUAL REPORT 2014-15
82 |
20. MEETINGS
20.1 TENTATIVE CALENDAR FOR FY 2015-16
20.2 DETAILS OF THE LOCATION, DATE AND TIME OF THE LAST 3 ANNUAL GENERAL MEET-
INGS (AGM) AND THE DETAILS ARE GIVEN BELOW:
20.3 SPECIAL RESOLUTION PASSED IN THE PREVIOUS THREE ANNUAL GENERAL MEETINGS
❖ At the 21st AGM held on 10th July 2012, no special resolutions were passed.
❖ At the 22nd AGM held on 29th July 2013, no special resolutions were passed.
❖ At the 23rd AGM held on 18th July 2014 the following special resolution was passed:
Quarter Quarter Ending Date of Board Meeting
Q1
Q2
Q3
Q4
June 30, 2015
September 30, 2015
December 31, 2015
March 31, 2016
August 10, 2015
November 14, 2015
February 14, 2016
May 30, 2016
Year
2013 -14
2012-13
2011-12
Meeting Location Day/Date Time
23rdAGM
22ndAGM
21stAGM
The Music Academy,
"Kasturi Srinivasan Hall"
No.168, TTK Road,
Royapettah, Chennai- 600 014.
The Music Academy,
"Kasturi Srinivasan Hall"
No.168, TTK Road,
Royapettah, Chennai- 600 014.
GRT Grand, No. 120, Thiyagara
Road, T.Nagar, Chennai - 600017
18.07.2014
Friday
29.07.2013
Monday
10.07.2012
Thursday
09.30 am
11.00 am
10.15 am
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ANNUAL REPORT 2014-15
| 83
a) The approval of the shareholders was obtained for exercising the borrowing powers of the
company pursuant to the provisions of section 180(1)(c) of the Companies Act, 2013 for an
aggregate limit of up to Rs. 10,000/- Crores.
20.4 DETAILS OF PREVIOUS EXTRAORDINARY GENERAL MEETINGS (LAST 3 YEARS)
During the fiscal 2015, An Extraordinary General Meeting of the Company was held on 30th September
2014, for the purpose of filling up the casual vacancy in the office of statutory auditors and appointment
of independent directors as ordinary resolution, however no special resolutions was passed.
20.5 POSTAL BALLOT
During the fiscal 2015, the company passed the following special resolutions by postal ballot
The Company successfully completed the process of obtaining approval of its shareholders for special
resolutions on the items detailed above, vide postal ballot.
POSTAL BALLOT
Date of Declaration of Results : 6th February 2015
Special Resolutions Passed
Votes Cast in Favour
Votes Cast inFavour
No of Votes % %No of Votes
Mortgaging/Charging of the properties of
the Company
Amendment of the Liability Clause of
Memorandum of Association
Ratification of Corporate Debt Restructur-
ing Mechanism
Revision in Remuneration payable to Shri.
G.R. Surana, Executive Chairman
Revisions in Remuneration payable to
Shri. Dineshchand Surana, Managing
Director
2,38,13,771
2,38,13,746
2,38,08,746
2,38,13,520
2,38,13,521
99.99
99.99
99.98
99.99
99.99
103
128
5,128
353
353
00.01
00.01
00.02
00.01
00.01
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ANNUAL REPORT 2014-15
84 |
20.6 PROCEDURE FOR POSTAL BALLOT
In compliance with Clause 35B of the Listing
Agreement and Sections 108, 110 and other ap-
plicable provisions of the Companies Act, 2013,
read with the related rules, the company provides
electronic voting facility to all its members, to en-
able them to cast their votes electronically. The
company engages the services of CDSL for the
purpose of providing e-voting facility to all its
members. The members have the option to vote
either physical ballot or e-voting.
The Company dispatches the postal ballot notices
and forms along with postage prepaid business
reply envelopes to its members whose names
appear in the register of members/list of benefi-
ciaries as on a cut-off date. The postal ballot no-
tice is sent to members in electronic form to the
email addresses registered with their depository
participants (in case of electronic shareholding)/
the Company's registrar and share transfer agents
(in case of physical shareholding). The Company
also publishes a notice in the newspaper declar-
ing the details of completion of dispatch and other
requirements as mandated under the Act and ap-
plicable Rules.
Voting rights are reckoned on the paid-up value
of the shares registered in the names of the
members as on the cut-off date. Member desiring
to exercise their votes by physical postal ballot
forms are requested to return the forms duly
completed and signed, to the scrutinizer on or
before the close of the voting period. Members
desiring to exercise their votes by electronic mode
are requested to vote before close of business
hours on the last date of e-voting.
The scrutinizer submits his report to the Chairman,
after the completion of scrutiny, and the
consolidated results of the voting by postal ballot
are then announced by the Chairman/authorised
office, The results are also displayed on the
website of the company, www.suranaind.com,
besides being communicated to the stock
exchanges, depository and registrar and share
transfer agent. The date of declaration of the
results by the Company is deemed to be the date
of passing of the resolutions.
21. SUBSIDIARY COMPANIES
The Company has one material subsidiary
namely M/s. Surana Power Limited (SPL) whose
net worth exceeds 20% of the consolidated net
worth of the holding company in the immediately
preceding accounting year. Accordingly, a policy
on determination of material subsidiaries
has been formulated by the company and same
was approved by the Board at its meeting
held on 14th November, 2014, which is also dis-
played on the website of the company.
22. DISCLOSURES
There were no materially significant related party
transactions during the year having conflict with
the interests of the Company.
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ANNUAL REPORT 2014-15
| 85
There has been no non-compliance by the Com-
pany or penalty or stricture imposed on the Com-
pany by the Stock Exchange or any statutory au-
thority, on any matter related to capital markets,
during the last three years except SEBI had im-
posed a penalty to a tune of Rs. 10 Lakhs vide its
Adjudication order dated September 26, 2014
which was received by the company on October
3, 2014.
FACTS OF THE CASE:
It was held that SIL had allegedly not intimated
the decision with regard to the preferential issue
taken in the Board Meeting dated January 18,
2010 within 15 minutes of the closure of the
meeting and also delayed dissemination of price
sensitive information to the stock exchanges on
an urgent basis. It was also revealed that SIL with-
drew the proposed preferential allotment on two
occasions citing reasons which in fact existed at
the time of making the corporate announcement
regarding those preferential allotments and hence
it had no intention to proceed with the
preferential issues.
ORDER:
After taking into consideration all the facts and
circumstances of the case, the Adjudicating
Officer had imposed a monetary penalty on the
Company and its Directors jointly or severally as
detailed below:
1) 5 Lakhs in terms of section 15HA of SEBI Act.
2) 3 Lakhs in terms of section 15HB of SEBI Act.
3) 2 Lakhs in terms of section 23E of Securities
Contract Regulation Act (SCRA) for violation of
provisions of Clause 22(a) of Listing Agreement
read with section 21 of SCRA.
The aforesaid penalty aggregating to Rs. 10 Lakhs
to be paid in favour of "SEBI - Penalties Remit-
table to Government of India" within 45 days of
receipt of this order.
ACTION TAKEN BY THE COMPANY
The Company had gone for an Appeal against the
Adjudication Order and had filed the necessary
memorandum of appeal (MOA) with the Securities
Appellate Tribunal (SAT) on February 16, 2015.
The SEBI had scheduled the first hearing on May
8, 2015, however the hearing was adjourned to
July 14, 2015 by the Hon'ble Board.
Meanwhile we had engaged a senior counsel to
file the revised Memorandum of Appeal with SAT
along with some more additional grounds stating
all the relevant and material facts in support of
our appeal to the Hon'ble Board in a more
specific manner than the earlier application. And
the management is confident that, the grounds of
appeal are in favour of the company and our
company will definitely succeed in this appeal.
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ANNUAL REPORT 2014-15
86 |
❖ National Stock Exchange of India Limited and
Bombay Stock Exchange Ltd had imposed a
penalty of Rs. 50,000/- for non compliance
with the provisions of Clause 49 of the Listing
Agreement with respect to appointment of
Woman Director on the Board of the Com-
pany.
The company has complied with all mandatory
requirements. Adoptions of non-mandatory
requirements are provided under item no.25 of
this report.
23. DETAILS OF DIRECTORS SEEKING
APPOINTMENT/RE-APPOINTMENT IN THE
FORTHCOMING ANNUAL GENERAL MEETING
(IN PURSUANCE OF CLAUSE 49 OF THE
LISTING AGREEMENT)
The details are provided in the Explanatory State-
ment to the Notice of 24th AGM of the Company.
24. CEO/CFO CERTIFICATION
As required under Clause 49 of the Listing Agree-
ment a certificate duly signed by Shri.
Dineshchand Surana, Managing Director and
Shri. Anil Gupta, Group CFO of the Company was
placed at the meeting of the Board of Directors
held on May 30, 2015.
25. MEANS OF COMMUNICATION
The quarterly, half yearly unaudited financial
results and the annual audited financial results of
the company are sent to the stock exchanges
immediately after they are approved by the Board
of Directors. The results are normally published
in one English daily and one Tamil daily newspa-
per. The official announcements are posted at
BSE and NSE websites. The financial results and
communications to investors are posted on the
Company's website www.suranaind.com.
26. MANAGEMENT DISCUSSIONS AND
ANALYSIS REPORT
Management Discussion and Analysis report is
annexed.
27. NON MANDATORY REQUIREMENTS
27.1 NOMINATION & REMUNERATION
COMMITTEE
The Board has constituted a Nomination &
Remuneration Committee, which is composed of
two independent Directors and one Non-execu-
tive Director. The Committee also discharges the
duties and responsibilities as described under
non-mandatory requirement of Clause 49. The
details of the Committee and its powers have
been discussed in this section of the Annual
Report.
27.2 SHAREHOLDERS RIGHTS
The quarterly/annual results, after the Board of
Directors takes them on record, are forthwith sent
to the Stock Exchanges with whom the company
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ANNUAL REPORT 2014-15
| 87
has listed. The results, in the prescribed format, are published in One English daily and One Tamil daily
newspaper.
27.3 AUDIT QUALIFICATION
The Auditors qualifications and the management's response to such qualifications and observations are
covered in the Director Report.
27.4 WHISTLE BLOWER POLICY
The company has a Whistle Blower/Vigil Mechanism and framed a policy for the same to deal with the
instance of fraud and mismanagement. The policy is stated elsewhere in the report. The Audit Commit-
tee has not received any complaints from its employees during the fiscal year 2015.
28. GENERAL SHAREHOLDERS INFORMATION
❖ REGISTERED OFFICE OF THE COMPANY
No. 29, II Floor, Whites Road,
Royapettah, Chennai - 600 014
Tel : +91 44 28526336/5127
Fax: +91 44 28520713
E-mail: [email protected]
❖ FORTHCOMING ANNUAL GENERAL MEETING
10th August 2015
New Door No. 01, Ambedkar Nagar, GNT Road, Madhavaram, Chennai- 600 060.
❖ FINANCIAL YEAR
1st April 2014 to 31st March 2015.
❖ BOOK CLOSURE DATES
From 31st July, 2015 to 10th August, 2015 (both days inclusive)
❖ DIVIDEND
Due to the continuing losses incurred by the Company, the Board of Directors has not recommended
any dividend for the financial year 2014-15.
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ANNUAL REPORT 2014-15
88 |
❖ UNCLAIMED DIVIDEND
Under the Transfer of Unclaimed Dividend Rules, it would not be possible to claim the dividend
amount once deposited in Investors' Education and Protection Fund (IEPF). Shareholders are,
therefore, again requested to claim their unpaid dividend, if not already claimed.
Unclaimed and unpaid dividends are transferred to the Investor Education & Protection Fund of the
Central Government. The Unpaid and unclaimed dividend balances for the year 2006-07 were duly
transferred to the IEPF within the due dates. The details of Unpaid and unclaimed dividend bal-
ances are provided hereunder:
DETAILS OF UNPAID/UNCLAIMED DIVIDEND
FinancialYear
31.05.200804.09.200910.06.201010.06.201110.07.2012
Date ofDeclaration
Date for Transferto Unpaid
Dividend Account
Last Date forClaiming Unpaid
Dividend
Last Date forClaiming Unpaid
Dividend
Amount ofUnclaimed
Dividend (Rs.)
30.06.200802.08.200917.07.201017.07.201117.08.2012
30.06.201503.08.201616.07.201716.07.201816.08.2019
30.06.201503.08.201617.07.201717.07.201817.08.2019
1,88,1631,35,2462,94,2863,04,5341,03,094
2007-082008-092009-102010-112011-12
Members may view the shareholder wise details which are available on the Company's website
www.suranaind.com.
INSTRUCTION TO SHAREHOLDERS
❖ SHAREHOLDERS HOLDING SHARES IN PHYSICAL FORM
Please notify the change in your address if any, to the Company's registrar M/s. Cameo Corporate
Services Limited, immediately and not later than 31st July 2015 to enable them to forward the
annual report(s) and notice(s) to your present address.
❖ SHAREHOLDERS HOLDING SHARES IN DEMAT FORM
If there is any change in your address kindly advice your DPs immediately about the change.
❖ LISTING ON STOCK EXCHANGES AND STOCK CODE
Stock Exchange
National Stock Exchange of India Ltd,Exchange Plaza, Bandra -Kurla Complex,Bandra (E), Mumbai 400 051
BSE LimitedPhiroze Jeejeebhoy Towers,Dalal Street, Mumbai 400 001
Stock Code
Symbol: SURANAINDSeries: EQ
Scrip Code: 513597Scrip Id: SURANAIND
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ANNUAL REPORT 2014-15
| 89
❖ LISTING FEES
Annual Listing Fees for the year 2014-15 have been duly paid to all the stock exchanges where the
company's shares are listed. The listing fees for the financial year 2015-16 has also been paid with
all the stock exchanges within the due date.
❖ DEPOSITORIES CONNECTIVITY
Annual Custodial Fee for the financial year 2014-15 have been duly paid by the Company with both
the depositories viz., NSDL and CDSL within the due date.
National Securities Depository Ltd. (NSDL)
Central Depository Services (India) Ltd. (CDSL)
ISIN: INE659D01019
❖ SHARE TRANSFER PROCESS
1. Cameo Corporate Services Ltd processes the physical transfers and other requests from the
Shareholders.
2. The Board delegated the power to approve the transfers to the Share Transfer& Transmission
Committee and the transfers are approved as and when necessary.
3. A Practising Company Secretary carries out the Reconciliation of Share Capital Audit, pertaining
to the share transfers every six months and necessary certificate to that effect are issued and the
same are filed with the Stock Exchanges on a quarterly basis.
4. As per SEBI's instructions, the Company's Shares can be sold through stock exchange only in
dematerialized form.
The Contact details of Registrar and Share Transfer Agent:
M/s. Cameo Corporate Services Limited
No.1, Club House Road, 5th Floor,
Subramaniam Building, Chennai - 600 002
Tel: +91-44-28460390, Fax: +91-44-28460129
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ANNUAL REPORT 2014-15
❖ DEMATERIALIZATION OF SHARES AS ON 31ST MARCH 2015
1. The Company entered into agreements with National Securities Depository Limited
(NSDL),Mumbai and Central Depository Services (India) Limited (CDSL), Mumbai facilitating
the Electronic Transfer through dematerialization of Company's Shares and holding shares in
dematerialized form.
2. A qualified practicing Company Secretary carried out a Secretarial Audit to reconcile the
total admitted capital with National Securities Depository Limited (NSDL) and Central Deposi-
tory Services (India) Limited (CDSL) and the total issued and listed capital. The audit confirms
that the total issued/paid up capital is in agreement with the total number of shares in physical
form and the total number of dematerialized shares held with NSDL and CDSL.
3. As on 31st March 2015 4,36,00,911 equity shares constituting 97.94% of the total paid up capital
of the company have been dematerialized. All the equity shares except the locked in shares if
any are freely tradable.
❖ MARKET PRICE DATA& PERFORMANCE IN COMPARISON WITH BSE AND NSE INDICES
MARKET PRICE DATA
90 |
B.S.E N.S.E
Month High Low Traded Volume(No. of shares)
Traded Volume(No. of shares)
LowHigh
Apr-14
May-14
Jun-14
Jul-14
Aug-14
Sep-14
Oct-14
Nov-14
Dec-14
Jan-15
Feb-15
Mar-15
60.00
67.60
66.15
69.15
65.60
68.25
66.45
57.30
56.95
47.10
39.60
39.15
49.60
57.10
60.00
62.40
52.50
53.40
55.30
49.90
46.35
39.00
31.25
31.80
1,717
10,7551
579
1,167
2,848
3,385
5,07,055
989
2,482
1,116
774
16,245
60.25
63.50
68.75
69.05
62.00
64.90
58.85
62.95
57.55
50.85
38.20
33.15
43.20
55.00
59.00
60.10
55.20
55.95
55.00
53.30
47.00
39.25
30.55
31.50
1266
7204
3025
4260
107671
2186
367
903
2345
1239
1390
1231
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ANNUAL REPORT 2014-15
| 91
❖ PERFORMANCE IN COMPARISON WITH BSE SENSEX
* The closing value for April '14 is taken as 100. The values for the months, from April' 14 to Mar' 15, are
worked out as a percentage, keeping the Base Value for Apr' 14 as 100.
❖ PERFORMANCE IN COMPARISON WITH NSE NIFTY
* The closing value for April is taken as 100. The values for the months, from April' 14 to Mar' 15, are
worked out as a percentage, keeping the Base Value for Apr' 14 as 100.
SHAREHOLDING PATTERN/ DISTRIBUTION
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ANNUAL REPORT 2014-15
92 |
❖ SHAREHOLDING PATTERN AS ON 31.03.2015
❖ DISTRIBUTION OF SHAREHOLDING AS ON 31.03.2015
SHARES INDEMAT
I. Promoters and Promoter Group
II. Public Shareholding
1. Foreign Institutional Investors
2. Bodies Corporate
III. Individual Shareholders
IV. Foreign Corporate Bodies
V. Non Resident Indians
VI. Directors & Relatives
(Other than those mentioned above)
VII. Clearing Members
VIII. HUF's
Total
2,03,07,502
11,88,665
91,62,357
8,39,913
1,10,69,067
18,66,037
32,507
99
52,920
4,45,19,067
CATEGORY NO.OFSHARES
% HOLD-ING
2,03,07,502
11,88,665
91,61,557
7,01,457
1,03,69,067
17,87,137
32,507
99
52,920
4,36,00,911
45.62
2.67
20.58
1.89
24.86
4.19
0.07
0.00
0.12
100
1-5000
5001-10000
10001-20000
20001-30000
30001-40000
4000-50000
50001-100000
100001 and Above
Total
AmountCATEGORY % to total % to total
0.32
0.12
0.16
0.24
0.15
0.14
0.42
98.45
100.00
No. ofHolders
NO.OFSHARES
1421470
553070
699920
1053720
654670
642560
1871610
438293650
445190670
142147
55307
69992
105372
65467
64256
187161
43829365
44519067
86.35
3.77
2.40
2.24
1.04
0.76
1.37
2.08
100.00
1581
69
44
41
19
14
25
38
1831
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ANNUAL REPORT 2014-15
| 93
SUMMARY OF SHAREHOLDING
❖ OUTSTANDING GDRS/ADRS etc.
The Company has not issued any GDR, ADR or any convertible instruments pending conversion or anyother instrument likely to impact equity share capital of the company.
❖ LOCATION OF PLANTS
a) FACTORIES:
1. F-67, 68 & 69, SIPCOT Industrial Complex,Gummidipoondi, Chennai - 601201
2. Plot No. 231-234, Raichur Growth Centre,KIADB, Raichur District, Raichur - 584102. Karnataka. (Integrated Steel Complex)
❖ COMPLIANCE OFFICER
Shri. D. Hem Senthil Raj,Company Secretary,Surana Industries LimitedNo. 29, II Floor, Whites Road, Royapettah, Chennai - 600 014.Tel: +91 44 28526336/5127 Fax: +91 44 28520713E-mail: [email protected]: www.suranaind.com
❖ REGISTRARS AND SHARE TRANSFER AGENTS
M/s Cameo Corporate Services LimitedNo.1, Club House Road, 5th Floor,Subramaniam Building, Chennai - 600 002Tel: +91-44-28460390, Fax: +91-44-28460129.
For and on behalf of the Board-Sd-
Dineshchand SuranaDate: June 29, 2015 Managing DirectorPlace: Chennai (DIN: 0007032)
Physical Form
NSDL
CDSL
Total
Mode of Holding % of No of SharesNo. of Holders
2.06
77.71
20.23
100
9,18,156
3,45,93,435
90,07,476
4,45,19,067
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ANNUAL REPORT 2014-15
94 |
Auditors Certificate on Compliance with the conditions of Corporate Governance under Clause 49 of the ListingAgreement(s) to the Members of Surana Industries Limited
1. We have examined the compliance of conditions of Corporate Governance by Surana Industries Limited ("theCompany") for the year ended March 31, 2015 as stipulated in Clause 49 of the Listing Agreement of the said Company withStock Exchanges.
2. The compliance of conditions of Corporate Governance is the responsibility of the Management. Our examination hasbeen limited to review of procedures and implementation thereof, adopted by the Company for ensuring the compliance of theconditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of theCompany.
3. Based on our examination as stated in paragraph 2 above, we report as follows:
a. Upon resignation of an independent director on October 14, 2014 from the Company's Board of Directors ("the Board"),the number of independent directors on the Board was reduced to less than 50% of the Boardwhich is not in compli-ance with clause 49(II)(A)(2) of the Listing Agreement, and remained less than 50% during the period from October14,2014 to March 31, 2015, which is beyond the period allowed for filling up vacancies in the office of independentdirectors under clause 49(II)(D)(4) of the Listing Agreement.
b. The terms and conditions of appointment of the independent directors have not been disclosed on the website of theCompany as required by clause 49(II)(B)(4)(b) of the Listing Agreement.
c. The Company has not incorporated the duties of the independent directors as laid down in the Companies Act, 2013 inthe Code of Conduct framed by the Company, as required by clause 49(II)(E)(3) of the Listing Agreement.
d. As per clause 49(III)(A)(1) of the Listing Agreement, the Audit Committee is required to have 3 directors as members.During the period from October 14, 2014 to November 14, 2014andthe period from December 1, 2014to March 31,2015, the Audit Committee had only 2 membersconsequent to resignation of an independent director.
e. The Audit Committee meeting held on February 14, 2015 did not have the required quorum as required by clause49(III)(B) of the Listing Agreement.
f. As per clause 49(IV)(A)of the Listing Agreement, the Nomination and Remuneration Committee is required to have 3directors as members. During the period from December 1, 2014 to March 31, 2015, the number of members in theNomination and Remuneration Committee was reduced to 2 membersconsequent to the resignation of anindependent director.
g. Clause 49(V)(A)of the Listing Agreement requires atleast one independent director on the Board of the HoldingCompany shall be a director on the Board of a material non listed Indian subsidiary company. During the year, none ofthe independent directors on the Board of Directors of the Company was on the Board of Directors of the materialnon-listed Indian Subsidiary Company, Surana Power Limited.
4. In our opinion and to the best of our information and according to the explanations given to us by the Directors and theManagement, subject to our comments in paragraphs 3 above, we certify that the Company has complied with theconditions of Corporate Governance as stipulated in Clause 49 of the above mentioned Listing Agreement.
5. We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiencyor effectiveness with which the Management has conducted the affairs of the Company.
For DELOITTE HASKINS & SELLS LLPChartered Accountants
(Firm's Registration No. 117366W/W-100018)-Sd-
Geetha SuryanarayananPartner
(Membership No. 29519)Date: May 30, 2015
Place: Chennai
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ANNUAL REPORT 2014-15
| 95
CODE OF
PRACTICES AND
PROCEDURES
FOR FAIR
DISCLOSURE OF
UNPUBLISHED
PRICE
SENSITIVE
INFORMATION
VERSION : 1.0
SURANA INDUSTRIES LIMITED
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ANNUAL REPORT 2014-15
Background:
The Securities and Exchange Board of India
(SEBI), in its endeavour to put in place a
framework for prohibition of insider trading in
securities, has notified the SEBI (Prohibition of
Insider Trading) Regulations, 2015 (Regulations).
These Regulations are applicable to all
companies whose securities are listed on stock
exchanges. In terms of Regulation (8) (1) of the
Regulations, the Board of Directors of these
Companies are required to formulate and
publish on its official website, a code of practices
and procedures for fair disclosure of unpublished
pricesensitive information that it would follow in
order to adhere to each of the principles set out
in Schedule A to the Regulations.
Objective:
The Company endeavours to preserve the
confidentiality of unpublished price sensitive
information and to prevent the misuse of such
information. Accordingly, this Code of Practices
and Procedures for Fair Disclosure of
Unpublished Price Sensitive Information has been
formulated with a view to maintain uniformity,
transparency and fairness in dealing with all
stakeholders and to ensure timely, fair and
adequate disclosure of unpublished price
sensitive information to the investor community
by the Company to enable them to take informed
investment decisions with regard to the
Company's securities.
96 |
Definitions:
"Unpublished price sensitive information (UPSI)"
means any information, relating to a company or
its securities, directly or indirectly, that is not
generally available which upon becoming
generally available, is likely to materially affect
the price of the securities and shall, ordinarily
including but not restricted to, information
relating to financial results, dividends, change in
capital structure, mergers, de-mergers,
acquisitions, de listings, disposals and expansion
of business and such other transactions, changes
in key managerial personnel and material events
in accordance with the listing agreement.
"Generally available information" means
information that is accessible to the public on a
nondiscriminatory basis.
Code:
The Company will adhere to the following so as
to ensure fair disclosure of events and occurrence
that could impact price discovery in the market
for its securities:
1. The Company will make prompt disclosure to
the stock exchange of any UPSI that would
impact price discovery no sooner than credible
and concrete information comes into being, in
order to make such information generally
available. The Company may, in appropriate
circumstances, also simultaneously disclose the
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ANNUAL REPORT 2014-15
| 97
UPSI in such manner as it deems fit including on
the Company's website, print or electronic media
or social media.
2. The Company will make uniform and universal
dissemination of UPSI to avoid selective /
speculative disclosure which could have an
adverse impact on the market and the price
discovery process.
3. The Company Secretary of the Company shall
act as the Chief Investor Relations officer to deal
with dissemination of information and disclosure
of UPSI.
4. The Company will make prompt dissemination
of UPSI that gets disclosed selectively, inadvertently
or otherwise to make such information
generally available.
5. The Company will provide appropriate and fair
response to queries on news reports and requests
for verification of market rumours by regulatory
authorities.
6. Research and analysis should be done on the
basis of generally available information. The
Company will ensure that information, if any,
shared with analysts and research personnel
during meetings/discussions/conferences, is not
UPSI.
7. As a means of following best practices in
respect of meetings with analysts and other
investor relations conferences and to ensure
official confirmation and documentation of
disclosures made, the Company shall:
a. Make transcripts or records of proceedings
of meetings with analysts and other investor
relations conference, where the Company
considers necessary;
b. Endeavour that at least 2 company
representatives be present at meetings with
analysts, brokers, institutional investors and
research personnel;
c. In appropriate circumstances, consider
posting of relevant information on its website
or issuing a press release or disseminating
information in any other mode it deems
appropriate in relation to meeting with ana-
lysts.
8. The Company will disclose all UPSI on a need
to-know basis i.e. unpublished price sensitive
information may be disclosed where such
disclosure is in furtherance of legitimate purposes,
discharge of legal obligations or to those within
the company who need the information to
discharge their duty and whose possession of
such information will not give rise to a conflict of
interest or appearance of misuse of such
information.
Disclosure
This Code, including any amendment thereto,
shall be published on the Company's official
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ANNUAL REPORT 2014-15
website and shall be promptly intimated to the stock exchanges where the securities are listed. The
Board of Directors may lay down further principles, rules and procedures, from time to time, to
ensure fair disclosure of unpublished price sensitive information.
Date: May 30, 2015
Place: Chennai
Confirmation on Code of Conduct
To
The Members of Surana Industries Limited
This is to inform that the Board has laid down a code of conduct for all Board members and senior
management of the Company.
It is further confirmed that all Directors and Senior Management Personnel of the Company have
affirmed compliance with the Code of Conduct of the Company as at 31st March 2015, as envisaged in
Clause 49 of the Listing Agreement with Stock Exchanges.
On behalf of the Board
-Sd-
Place: Chennai Dineshchand Surana
Date: May 30, 2015 Managing Director
(DIN: 00007032)
98 |
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ANNUAL REPORT 2014-15
CEO/CFO CERTIFICATION
We the undersigned, in our respective capacities as Managing Director and Chief Financial Officer ofSurana Industries ("the Company") to the best of our knowledge and belief certify that:
a. We have reviewed financial statements and the cash flow statement for the financial yearended 31st March 2015 and that to the best of our knowledge and belief, we state that :
i. These statements do not contain any materially untrue statement or omit any materialfact or contain any statements that might be misleading;
ii. These statements together present a true and fair view of the Company's affairs and are incompliance with existing accounting standards, applicable laws and regulations.
b. We further state that to the best of our knowledge and belief, there are no transactions enteredinto by the Company during the year, which are fraudulent, illegal or violative of the Company'sCode of Conduct.
c. We are responsible for establishing and maintaining internal controls for financial reportingand that we have evaluated the effectiveness of internal control systems of the Companypertaining to financial reporting of the Company and have disclosed to the Auditors and AuditCommittee, deficiencies in the design or operation of internal controls, if any, of which we areaware and the steps we have taken or proposed to take to rectify these deficiencies.
d. We have indicated, based in our most recent evaluation, wherever applicable, to the Auditorsand the Audit Committee :
i. Significant changes, if any, in internal control over financial reporting during the year ;
ii. Significant changes, if any, in the accounting policies during the year and that the same hasbeen disclosed in the notes to the financial statements ; and
iii. Instances of significant fraud of which we have become aware and the involvement therein,if any, of the management or an employee having significant role in the Company's internalcontrol system over the financial reporting.
Yours faithfully,
-Sd- -Sd-
Dineshchand Surana Anil Gupta Managing Director Group - Chief Financial Officer
(DIN: 00007032)
Date: May 30, 2015
Place: Chennai
| 99
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ANNUAL REPORT 2014-15
100 |
INDEPENDENT AUDITOR'S REPORT
To the Members of Surana Industries Limited
Report on the Standalone Financial Statements
We have audited the accompanying standalone
financial statements of Surana Industries Limited
("the Company"), which comprise the Balance
Sheet as at March 31, 2015, the Statement of
Profit and Loss and Cash Flow Statement for the
year then ended, and a summary of significant
accounting policies and other explanatory infor-
mation.
Management's Responsibility for the
Standalone Financial Statements
The Company's Board of Directors is responsible
for the matters stated in Section 134(5) of the
Companies Act, 2013 ("the Act") with respect to
the preparation of these standalone financial
statements that give a true and fair view of the
financial position, financial performance and cash
flows of the Company in accordance with the
accounting principles generally accepted in India,
including the Accounting Standards specified
under Section 133 of the Act, read with Rule 7 of
the Companies (Accounts) Rules, 2014. This
responsibility also includes maintenance of
adequate accounting records in accordance with
the preparation of the Act for safeguarding the
assets of the Company and for preventing and
detecting frauds and other irregularities;
selection and application of appropriate
accounting policies; making judgments and
estimates that are reasonable and prudent; and
design, implementation and maintenance of
adequate internal financial controls, that were
operating effectively for ensuring the accuracy
and completeness of the accounting records,
relevant to the preparation and presentation of
the financial statements that give a true and fair
view and are free from material misstatement,
whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on
these standalone financial statements based on
our audit.
We have taken into account the provisions of the
Act, the accounting and auditing standards and
matters which are required to be included in the
audit report under the provisions of the Act and
the Rules made thereunder.
We conducted our audit in accordance with the
Standards on Auditing specified under Section
143(10) of the Act. Those Standards require that
we comply with ethical requirements and plan and
perform the audit to obtain reasonable assurance
about whether the financial statements are free
from material misstatement.
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ANNUAL REPORT 2014-15
| 101
An audit involves performing procedures to
obtain audit evidence about the amounts and the
disclosures in the financial statements. The
procedures selected depend on the auditor's
judgment, including the assessment of the risks
of material misstatement of the financial
statements, whether due to fraud or error. In
making those risk assessments, the auditor
considers internal financial control relevant to the
Company's preparation of the financial statements
that give a true and fair view in order to design
audit procedures that are appropriate in the
circumstances, but not for the purpose of
expressing an opinion on whether the Company
has in place an adequate internal financial
control system over financial reporting and the
operating effectiveness of such controls. An
audit also includes evaluating the appropriateness
of the accounting policies used and the
reasonableness of the accounting estimates
made by the Company's Directors, as well as
evaluating the overall presentation of the
financial statements.
We believe that the audit evidence we have
obtained is sufficient and appropriate to provide
a basis for our qualified audit opinion on the
standalone financial statements.
Basis for Qualified Opinion
1. Capital work in progress relating to the
Pelletisation and Beneficiation ("P&B")
Project, stated in note 12 includes:
(a) Interest on borrowings aggregating to
Rs. 407,645,055 (including Rs.
223,386,319 for the year) relating to the
periods during which the project has been
stalled, which is a departure from
Accounting Standard 16 (AS-16) on
"Borrowing Costs". Had the interest
capitalized during the period in which the
project was stalled been charged to the
Statement of Profit & Loss, the loss for
the year and, the Deficit in the Statement
of Profit and Loss, will be higher by Rs.
407,645,055 and Capital Work in
Progress will be lower by Rs.
407,645,055.
(b) Preoperative expenses incurred in
relation to the project aggregating to
Rs.6,835,660 (including Rs.1,982,051 for
the year) relating to the periods during
which the project has been stalled, which
is a departure from Accounting Standard
10 (AS-10) on "Fixed Assets". Had such
expenditure capitalized during the period
in which the project was stalled been
charged to the Statement of Profit & Loss,
the loss for the year and the Deficit in the
Statement of Profit and Loss, will be
higher by Rs.6,835,660and Capital Work
in Progress will be lower by Rs.
6,835,660.
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ANNUAL REPORT 2014-15
102 |
2. Current investments include investments
made in :
a. Surana Power L imi ted ( "SPL") , a
subsidiary, amounting to Rs.
4,185,000,000 valued at cost, in respect
of which no operations have been
carried out since August 2013 and its
ongoing 2 X 210 MW power project has
been stalled for want of additional funds.
b. Surana Mines and Minerals Limited
("SMML"), a wholly owned subsidiary
based in Singapore, amounting to Rs.
584,826,430 valued at cost, in respect
of which no financial statements or other
information is available after March 31,
2014.
c. Surana Green Power Limited ("SGPL"),
a wholly owned subsidiary amounting to
Rs. 561,536,000 valued at cost.
As stated in note No. 13, the Company
is planning to dispose these investments,
which are stated at cost without
assessment of their net realizable value.
As per Accounting Standard 13 -
Accounting for Investments, these
investments should be valued at the
lower of cost and net realizable value.
In the absence of the net realizable value,
we are unable to comment on the ad-
justments, if any, that may be required
to the carrying value of the investments
as at March 31, 2015.
3. Attention is invited to note 16 relating to
inventory aggregating to Rs. 2,586,942,410,
the quantity, quality and realizable value of
which were not assessed and determined. As
per Accounting Standard 2- Inventories, these
inventories should be valued at the lower of
cost and net realizable value. In the absence
of the net realizable value, we are unable to
comment on the adjustments that may be
required to the carrying values of these
inventories as at March 31, 2015.
Qualified Opinion
In our opinion and to the best of our information
and according to the explanations given to us,
except for the effects of the matters described in
paragraphs1 (a) and 1 (b), and the possible
effects of the matters described paragraphs 2 and
3 in the Basis for Qualified Opinion paragraph
above, the aforesaid standalone financial
statements give the information required by the
Act in the manner so required and give a true
and fair view in conformity with the accounting
principles generally accepted in India, of the state
of affairs of the Company as at March 31, 2015,
and its loss and its cash flows for the year ended
on that date.
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ANNUAL REPORT 2014-15
| 103
Report on Other Legal and Regulatory
Requirements
1. As required by the Companies (Auditor's
Report) Order, 2015 ("the Order") issued by
the Central Government in terms of Section
143(11) of the Act, we give in the Annexure a
statement on the matters specified in
paragraphs 3 and 4 of the Order.
2. As required by Section 143 (3) of the Act, we
report that:
(a) We have sought and except for the
matters described in the Basis for
Qualified Opinion paragraph, obtained all
the information and explanations which
to the best of our knowledge and belief
were necessary for the purposes of our
audit.
(b) Except for the effects of the matters
described in paragraphs1 (a) and 1 (b),
and the possible effects of the matters
described in paragraphs 2 and 3 in the
Basis for Qualified Opinion paragraph
above, in our opinion, proper books of
account as required by law have been
kept by the Company so far as it appears
from our examination of those books.
(c) The Balance Sheet, the Statement of
Profit and Loss, and the Cash Flow
Statement dealt with by this Report are
in agreement with the books of account.
(d) Except for the effects of the matters
described in paragraphs1 (a) and 1 (b),
and the possible effects of the matters
described in paragraphs 2 and 3 in the
Basis for Qualified Opinion paragraph
above, in our opinion, the aforesaid
standalone financial statements comply
with the Accounting Standards specified
under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts)
Rules, 2014.
(e) The matters described in the Basis for
Qualified Opinion paragraph above read
with the matters stated in clauses (i), (ii),
(iv) and (ix)of the Annexure to the
Auditor's Report referred to in paragraph
1 under 'Report on Other Legal and
Regulatory Requirements' section of our
report, in our opinion, may have an
adverse effect on the functioning of the
Company.
(f) O n t h e b a s i s o f t h e w r i t t e n
representations received from the
directors as on March 31, 2015 taken on
record by the Board of Directors, none of
the directors is disqualified as on March
31, 2015 from being appointed as a
director in terms of Section 164 (2) of the
Act.
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ANNUAL REPORT 2014-15
104 |
(g) The qua l i f i ca t ion re la t ing to the
maintenance of accounts and other
matters connected therewith are as
stated in the Basis for Qualified Opinion
paragraph above.
(h) With respect to the other matters to be
included in the Auditor's Report in
accordance with Rule 11 of the
Companies (Audit and Auditors) Rules,
2014, in our opinion and to the best of
our information and according to the
explanations given to us:
i. The Company has disclosed the
impact of pending litigations on its fi-
nancial position in its financial
statements(Refer to Note 27B to the
financial statements);
ii. The Company did not have any
long-term contracts including
derivative contracts for which there
were any material foreseeable
losses.
iii. T h e r e h a s b e e n n o d e l a y i n
transferring amounts, required to be
transferred, to the Investor
Education and Protection Fund by
the Company.
For DELOITTE HASKINS & SELLS LLP
Chartered Accountants
(Firm's Registration No. 117366W/W-100018)
Sd/-
Geetha Suryanarayanan
Partner
(Membership No. 29519)
Date : May 30, 2015
Place : Chennai
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ANNUAL REPORT 2014-15
| 105
ANNEXURE TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 1 under 'Report on Other Legal and Regulatory Requirements'
section of our report of even date)
(i) In respect of its fixed assets:
a) The Company has maintained proper
records showing full particulars,
including quantitative details and
situation of fixed assets.
b) During the year, the Company has not
carried out a physical verification of its
fixed assets. The Company does not
have a regular programme for
verification of its fixed assets.
(ii) In respect of its inventories:
a) As explained to us and read with our
observations in paragraph 3 of the
Basis for Qualified Opinion paragraph,
the inventories were not physically
verified / weighed during the year by the
Management.
b) In our opinion and according to the
information and explanations given to us
and read with our observations in
paragraph 3 of the Basis for Qualified
Opinion paragraph, the procedures of
physical verification of inventories
followed by the Management were not
reasonable and adequate and needs to
be improved further taking into account
the size of the Company and the nature
of its business.
c) In our opinion and according to the
information and explanations given to us,
the Company has maintained records of
its inventories. For the reasons stated in
paragraphs (ii) (a) and (ii) (b)above and
read with our observation in paragraph 3
of the Basis for Qualified Opinion
paragraph we are unable to comment on
the discrepancies noticed on physical
verification of inventories and updation of
inventory records.
(iii) The Company has not granted any loans,
secured or unsecured, to companies, firms or
other parties covered in the Register
maintained under Section 189 of the
Companies Act, 2013.
(iv) In our op in ion and accord ing to the
information and explanations given to us, the
internal control systems need to be
strengthened to make it commensurate with
the size of the Company and the nature of its
business for the purchase of inventory and
fixed assets and for the sale of goods and
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ANNUAL REPORT 2014-15
106 |
services and during the course of the audit, we have not observed any continuing failure to correct
majorweaknesses in such internal control system.
(v) In our opinion and according to the information and explanations given to us, the Company has not
accepted deposits from public during the year.
(vi) We have broadly reviewed the cost records maintained by the Company pursuant to the
Companies (Cost Records and Audit) Rules, 2014, as amended and prescribed by the Central
Government under sub-section (1) of Section 148 of the Companies Act, 2013 and are of the
opinion that, prima facie, the prescribed cost records have been made and maintained. We have,
however, not made a detailed examination of the cost records with a view to determine whether
they are accurate or complete.
(vii)According to the information and explanations given to us in respect of statutory dues:
(a) The Company has not been generally regular in depositing undisputed dues, including
Provident Fund, Employees' State Insurance, Income Tax, Sales Tax, Service Tax, Customs
Duty, Value Added Tax, Excise Duty, Cess and other material statutory dues applicable to it
with the appropriate authorities and there were inordinate delays in a number of cases in
respect of Provident Fund, Tax Deducted at Source, Service Tax and Value Added Tax.
(b) There were no undisputed amounts payable in respect of Provident Fund, Employees' State
Insurance, Income Tax, Sales Tax, Service Tax, Customs Duty, Value Added Tax, Excise Duty,
Cess and other material statutory dues in arrears as at March 31, 2015 for a period of more
than six months from the date they became payable, other than those disclosed below:
Provident Fund
Income Tax Act, 1961
Income Tax Act, 1961
Income Tax Act, 1961
Finance Act, 1994
Finance Act, 1994
Total
Period to which theAmount Relates
Name of StatuteAmount
Involved (Rs.)Due DateNature of Dues
Provident Fund
Tax deducted at Source
Tax deducted at Source
Tax collected at Source
Service Tax
Service Tax
1,445,879
1,276,094
54,499
211,466
1,787,824
1,792,951
6,568,713
Before March 31, 2014
Before March 31, 2014
April 2014 to August 2014
Before March 31, 2014
Before March 31, 2014
April 2014 to August 2014
Before March 31, 2014
Before March 31, 2014
May 2014 to September 2014
Before March 31, 2014
Before March 31, 2014
May 2014 to September 2014
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ANNUAL REPORT 2014-15
| 107
(c) Details of dues of Employees' State Insurance, Excise Duty, Customs Duty, Value Added Tax and
Central Sales Tax which have not been deposited as on March 31, 2015 on account of disputes are
given below:
Honourable HighCourt of Chennai
Commissioner ofCentral Excise, Com-missioner II, Chennai
Honourable HighCourt of Chennai
Appeal will be filedbefore CESTAT,Bangalore
Honourable HighCourt of Chennai
Commissioner ofCentral Excise, Com-missioner II, Chennai
Commissioner ofCentral Excise, Com-missioner I, Chennai
CESTAT, Bangalore
Commissioner(Appeals)
Honourable High Courtof Chennai
Employees' StateInsurance Act, 1948
Central ExciseAct, 1944
Central ExciseAct, 1944
Central ExciseAct, 1944
Central ExciseAct, 1944
Central ExciseAct, 1944
Central ExciseAct, 1944
Central Excise Act, 1944
Central ExciseAct, 1944
Customs Act, 1962
Name of Statute
Period towhich theamount
relates to
Forum whereDispute is Pending
Amount Involved
(Rs.)
Nature ofDues
Employee StateInsurance
Central Excise
Central Excise
Central Excise
Central Excise
Central Excise
Central Excise
Central Excise
Central Excise
Customs Duty
2010-11
2006
1999-2000
2013
1997-2000
2010
2010
2011
2012-13
1999-2000
6,111,988
13,832,710
2,868,511
2,800,000
9,388,727
50,359,737
15,000,000
235,265,808
56,756,116
2,086,066
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ANNUAL REPORT 2014-15
108 |
(d) The Company has been regular in transferring amounts to the Investor Education and
Protection Fund in accordance with the relevant provisions of the Companies Act 1956 (1 of
1956) and Rules made thereunder within time.
Customs Act, 1962
Customs Act, 1962
Customs Act, 1962
Various states(Sales Tax Acts)
Various states(Sales Tax Acts)
Various states(Sales Tax Acts) andCentral Sales Tax, 1956
Various states(Sales Tax Acts)
Various states(Sales Tax Acts)
Various states(Sales Tax Acts)
Various states(Sales Tax Acts)
Various states(Sales Tax Acts)
Various states(Sales Tax Acts)
Total
Customs Duty
Customs Duty
Customs Duty
ValueAdded Tax
ValueAdded Tax
ValueAdded Tax
ValueAdded Tax
ValueAdded Tax
ValueAdded Tax
ValueAdded Tax
ValueAdded Tax
ValueAdded Tax
Honourable High Courtof Chennai
Honourable High Courtof Chennai
Honourable SupremeCourt
Honourable High Courtof Chennai
Honourable High Courtof Chennai
Writ filed beforeHonourable High Courtof Chennai
Pending before SalesTax Tribunal Gulbarga
Pending before SalesTax Tribunal, Gulbarga
Honourable High Courtof Chennai
Honourable High Courtof Chennai
Honourable High Courtof Chennai
Honourable High Courtof Chennai
1998-1999
2000-03
2005-06
2008-09
2009-10
2006-07 to2010-11
2007-08 &2008-09
2010-11
2010-11
2011-12
2012-13
2013-14
782,445
10,000,000
13,829,000
192,742
234,547
181,785,401
10,867,454
858,052
28,454,281
5,950,109
7,535,500
4,597,143
659,556,337
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ANNUAL REPORT 2014-15
| 109
(viii) After considering the effect of our audit qualifications reported in paragraphs (1)(a) and (1)(b) of the
Basis for Qualified Opinion of our Audit Report and without considering the possible effects of our
audit qualifications reported in paragraphs (2) and (3) of the Basis for Qualified Opinion of our Audit
Report which is not quantifiable, the accumulated losses of the Company at the end of the financial
year are less than fifty per cent of its net worth and the Company has incurred cash losses during
the financial year covered by our audit and in the immediately preceding financial year.
(ix) In our opinion and according to the information and explanations given to us, the Company has not
defaulted in repayment of dues to banks and financial institutions, as stipulated in the Master Re-
structuring Agreement (MRA) (refer to note 5(i) of the financial statements) except that there has
been a default in repayment of interest amounting to Rs.48,700,000 outstanding as at March 31,
2015 payable to a financial institution (refer to note 5 (iv) of the financial statements). The Company
has not issued any debentures.
(x) In our opinion and according to the information and explanations given to us, the terms and
conditions of the guarantees given by the Company for loans taken by others from banks and finan-
cial institutions are not, prima facie, prejudicial to the interest of the Company.
(xi) In our opinion and according to the information and explanations given to us, the term loans have
been applied by the Company during the year for the purposes for which they were obtained, other
than temporary deployment pending application.
(xii)To the best of our knowledge and according to the information and explanations given to us, no fraud
by the Company and no material fraud on the Company has been noticed or reported during the
year.
For DELOITTE HASKINS & SELLS LLP
Chartered Accountants
(Firm's Registration No. 117366W/W-100018)
Sd/-
Geetha Suryanarayanan
Partner
(Membership No. 29519)Date : May 30, 2015
Place : Chennai
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ANNUAL REPORT 2014-15
110 |
ANIL GUPTAGroup Chief Financial
Officer
GURUDEV
SURANA INDUSTRIES LIMITED
CIN : L27104TN1991PLC020533
Balance Sheet as at 31st March, 2015
In terms of our report attachedFOR DELOITTE HASKINS & SELLS LLPChartered Accountants
GEETHA SURYANARAYANANPartner
Date : May 30, 2015Place : Chennai
For and an Behalf of the Board of Directors
BABU SRINIVASANChairman
(DIN : 06608264)
As at 31st March 2014 Rs.
EQUITY AND LIABILITIES
SHAREHOLDERS’ FUNDSShare capitalReserves and surplus
NON-CURRENT LIABILITIES
Long term borrowingsOther long term liabilitiesLong term provisions
CURRENT LIABILITIES
Short term borrowingsTrade payablesOther current liabilitiesShort term provisions
TOTAL
ASSETSNON-CURRENT ASSETS
Fixed assetsTangible assetsCapital work in progress
Non-current investmentsDeferred tax assets (net)Long term loans and advances
CURRENT ASSETSCurrent investmentsInventoriesTrade receivablesCash and cash equivalentsShort term loans and advances
TOTALSee accompanying notes forming part of the financial statements
34
567
891011
12
13 A1415
13 B16171819
445,190,670 6,291,362,980
6,736,553,650
8,556,608,825 587,764,461 848,208,739
9,992,582,025
3,981,338,870 1,164,438,703 574,944,851 10,305,450
5,731,027,874
22,460,163,549
6,122,763,802 2,492,735,910 309,300
- 1,957,424,833
10,573,233,845
5,342,413,090 2,586,942,410 3,360,273,339 277,751,400 319,549,465
11,886,929,704
22,460,163,549
445,190,670 8,983,715,984
9,428,906,654
9,005,903,831 69,180,157 339,727,282
9,414,811,270
3,359,323,043 1,698,855,763 30,290,305 77,037,507
5,165,506,618
24,009,224,542
6,800,453,603 2,287,183,347 5,068,011,354 25,591,242 2,503,180,079
16,684,419,625
99,960 2,997,126,041 3,644,401,805 72,255,925 610,921,186
7,324,804,917
24,009,224,542
DINESHCHAND SURANAManaging Director(DIN : 00007032)
D HEM SENTHIL RAJCompany Secretary
M.No. A25451
As at 31st March 2015 Rs.
NoteParticulars
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ANNUAL REPORT 2014-15
| 111
GURUDEV
SURANA INDUSTRIES LIMITED
CIN : L27104TN1991PLC020533
Statement of Profit and Loss for the year ended 31st March, 2015
In terms of our report attachedFOR DELOITTE HASKINS & SELLS LLPChartered Accountants
GEETHA SURYANARAYANANPartner
Date : May 30, 2015Place : Chennai
For and an Behalf of the Board of Directors
31st March, 2014Rs.
REVENUERevenue from operations (gross)Less: Excise duty
Revenue from operations (net)
Other incomeTOTAL REVENUE
EXPENSESCost of materials consumedPurchases of stock-in-tradeChanges in inventories of finished goods andstock-in-tradeEmployee benefits expenseFinance costsDepreciation expenseOther expenses
TOTAL EXPENSES
LOSS BEFORE TAX
TAX EXPENSEProvision for tax relating to earlier years no longer
required written backReversal of MAT credit recognized in earlier yearsReversal / (Recognition) of deferred tax asset
LOSS FOR THE YEAR
Earnings per share (of Rs. 10 each):BasicDiluted
See accompanying notes forming part of thefinancial statements
20
21
22A22B22C
23241225
1914
3131
6,558,917,595(137,155,352)6,421,762,243
79,739,4676,501,501,710
987,163,0095,010,140,136
414,899,465
45,640,5861,363,577,776
618,335,833406,688,167
8,846,444,972
(2,344,943,262)
(55,620,538)
312,974,01325,591,242
282,944,717
(2,627,887,979)
(59.03) (59.03)
5,818,254,042(266,193,696)5,552,060,346
30,250,8615,582,311,207
4,378,860,0141,075,591,156
259,686,753
129,332,4261,480,615,824
319,279,168277,698,430
7,921,063,771
(2,338,752,564)
-
-(784,139,970)
(784,139,970)
(1,554,612,594)
(34.92) (34.92)
31st March, 2015Rs.NoteParticulars
ANIL GUPTAGroup Chief Financial
Officer
BABU SRINIVASANChairman
(DIN : 06608264)
DINESHCHAND SURANAManaging Director(DIN : 00007032)
D HEM SENTHIL RAJCompany Secretary
M.No. A25451
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ANNUAL REPORT 2014-15
112 |
GURUDEV
SURANA INDUSTRIES LIMITED
CIN : L27104TN1991PLC020533
Cash Flow Statement for the year ended 31st March, 2015
For the Year Ended 31st March 2014 Rs. Rs.
A. Cash flow from operating activitiesProfit / (Loss) before taxAdjustments for:
Depreciation expenseFinance costsInterest incomeDividend incomeLiabilities no longer required written backProvision for doubtful trade receivables, loans and advancesWrite off of investmentsTrade receivables written offWrite off of Capital work in progressProvision for dimunition in value of investmentsProvision for contingenciesProvision for employee benefitsLoss on sale of fixed assets
Operating profit / (loss) before working capital changesChanges in working capital:
Adjustments for (increase) / decrease in operating assets:InventoriesTrade receivablesShort term loans and advancesLong term loans and advancesOther Current Asset
Adjustments for increase / (decrease) in operating liabilities :Trade payablesOther current liabilitiesOther long term liabilitiesLong term provisions
Cash generated from operationsNet income tax (paid) / refundsNet cash flow from / (used in) operating activities (A)
B. Cash flow from investing activitiesCapital expenditure on fixed assets, including capital
advancesProceeds from sale of fixed assetsPurchase of non current investmentMovement in Bank deposits (See Note 1 below)Interest received from banksDividend received from investmentsNet cash flow from / (used in) investing activities (B)
618,335,8331,363,577,776
(3,643,700) (12,000) (70,031,257)
78,902,48299,960
16,890,37619,815,807
288,96480,000,000
(5,479,294) -
410,183,631 (988,533,492) (33,307,288) (11,504,197)
-
76,104,571 (245,740) 503,984,304 (2,844,505)
(49,324,040)
--
(67,430,319)3,643,700
12,000
(2,338,752,564)
1,773,157,847 (565,594,717)
(542,787,532)
(300,095,446) (1,408,477,695) 7,102,104 (1,401,375,591)
(326,703,809)
For the Year Ended 31st March 2015 Rs. Rs.Particulars
(2,344,943,262)
2,098,744,947(246,198,315)
(623,161,346)
576,998,630 (292,361,031) (5,983,135) (298,344,166)
(113,098,659)
319,279,1681,480,615,824 (3,910,142)
- (25,676,701)
--
7,343,031---
(4,748,843)255,510
(9,382,375) (538,404,887)
2,548,6112,551,079
(99,960)
510,700,783 (604,417,894) (525,302,494)
318,924,159
(388,449,585)
68,786,334 (10,950,700)
- 3,910,142
-
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ANNUAL REPORT 2014-15
| 113
GURUDEV
SURANA INDUSTRIES LIMITED
CIN : L27104TN1991PLC020533
Cash Flow Statement for the year ended 31st March, 2015
In terms of our report attachedFOR DELOITTE HASKINS & SELLS LLPChartered Accountants
GEETHA SURYANARAYANANPartner
Date : May 30, 2015Place : Chennai
For and an Behalf of the Board of Directors
For the Year Ended 31st March 2014 Rs. Rs.
For the Year Ended 31st March 2015 Rs. Rs.Particulars
C. Cash flow from financing activitiesProceeds from long-term borrowingsProceeds from other long-term borroNet increase / (decrease) in working capital borrowingsDividend paidFinance costs (includes borrowing costs capitalisedNet cash flow from / (used in) financing activities (C)
Net increase / (decrease) in Cash and cashequivalents (A+B+C)
Cash and cash equivalents at the beginning of the yearCash and cash equivalents at the end of the year
Notes1. Reconciliation of Cash and cash equivalents with the Balance Sheet:
Cash and cash equivalents (Refer Note 18)Less: Bank balances not considered as Cash andcash equivalents as defined in AS 3 Cash FlowStatements (Refer Note 18)Cash and cash equivalents at the end of the year
2. Disclosure of non cash adjustments:(a) Unsecured long term borrowings adjusted
agains trade receivables(b) Unsecured long term borrowings adjusted
against trade payable(c) Unsecured long term borrowings adjusted
against other long term liabilities(d) Long term capital advances adjusted against
trade payable(e) Conversion of interest into borrowings(f) Capitalization of interest(g) Purchase of investments without payment of
consideration in cash
See accompanying notes forming part of thefinancial statements
126,476,837 132,435,000 622,015,827 (193,597) (331,226,086)
549,507,981
138,065,156
57,016,013 195,081,169
277,751,400 82,670,231
195,081,169
907,865,210
59,000,000
14,600,000
599,490,374
818,352,251 223,386,319 275,000,000
--
(77,828,974)
1,623,327,7231,545,498,749
(182,580,651)
239,596,664 57,016,013
72,255,925 15,239,912
57,016,013
-
-
-
3,341,910,339
237,966,792--
ANIL GUPTAGroup Chief Financial
Officer
BABU SRINIVASANChairman
(DIN : 06608264)
DINESHCHAND SURANAManaging Director(DIN : 00007032)
D HEM SENTHIL RAJCompany Secretary
M.No. A25451
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ANNUAL REPORT 2014-15
1 Corporate Information
1.1 Surana Industries Limited (“the Company”) is a public
company domiciled in India and incorporated under the
provisions of the Companies Act, 1956. The Company
is into the business of manufacturing / trading of iron
and steel products.
1.2 Owing to a number of factors such as non-availability
of raw materials, depreciation in rupee, power curtail-
ment, high interest burden, labour agitation and delay
in time and cost overrun of its projects, the Raichur
plant of the Company has not been operated since April
2013 and the water and electricity connection have been
severed by the service providers. The Company had
approached the lead lender (IDBI Bank) for a Corpo-
rate Debt Restructuring (“CDR”) Proposal which was
approved by the CDR Empowered Group (“CDR EG”)
on 7th March, 2014 and Letter of Approval issued on
13th March, 2014. The Master Restructuring Agree-
ment (“MRA”) between the Company, the Monitoring
Institution (IDBI Bank) and the CDR lenders was ex-
ecuted on 24th March, 2014 effective 1st June, 2013.
Subsequent to the CDR, the Company is negotiating
with its bankers for release of working capital for re-
commencement of its operations at Raichur.
1.3 As part of the restructuring exercise, the Company has
also planned to divest its non core assets and its sub-
sidiaries (Surana Power Limited, Surana Green Power
Limited, Surana Mines and Mineral Limited) to raise fi-
nances. The Company is into advanced negotiations
114 |
GURUDEV
SURANA INDUSTRIES LIMITED
CIN : L27104TN1991PLC020533
NOTES FORMING PART OF FINANCIAL STATEMENTS
with prospective buyers for divestment of these sub-
sidiaries in the year 2015-16.
1.4 Subsequent to the Balance Sheet date, the Company
has planned to shelve its Pelletisation and Benefication
(“P&B”) Project at Raichur and a separate techno-eco-
nomic viability of the operations at Raichur without the
above project is being considered by its bankers. The
assessment of readiness of the Raichur plant has also
been carried out by an external agency who have re-
ported that the plant is in working order subject to re-
furbishment, mechanical and electrical overhauling.
1.5 The Raichur Integral Steel Plant was not operational
for the entire financial year 2014-15 due to labour dis-
putes and paucity of working capital. The Company
has been successful in resolving the labour disputes
towards the end of the financial year 2014-15 and is
also confident of arranging the required level of work-
ing capital within first quarter of the financial year 2015-
16. The operations at Raichur is expected to be re-
sumed in the financial year 2015-16.
2 SIGNIFICANT ACCOUNTING POLICIES
2.1 Basis of accounting and preparation of financial
statements
The financial statements of the Company have been
prepared in accordance with the Generally Accepted
Accounting Principles in India (Indian GAAP) to com-
ply with the Accounting Standards specified under Sec-
tion 133 of the Companies Act, 2013, read with Rule 7
of the Companies (Accounts) Rules, 2014 and the rel-
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ANNUAL REPORT 2014-15
| 115
evant provisions of the Companies Act, 2013 (“the 2013
Act”)/ Companies Act, 1956 (“the 1956 Act”), as appli-
cable. The financial statements have been prepared
on accrual basis under the historical cost convention
except for categories of fixed assets acquired in the
year 2000-01, that are carried at revalued amounts.
The accounting policies adopted in the preparation of
the financial statements are consistent with those fol-
lowed in the previous year.
2.2 Use of Estimates
The preparation of the financial statements in confor
mity with Indian GAAP requires the Management to
make estimates and assumptions considered in the re-
ported amounts of assets and liabilities (including con-
tingent liabilities) and the reported income and expenses
during the year. The Management believes that the
estimates used in preparation of the financial state-
ments are prudent and reasonable. Future results could
differ due to these estimates and the differences be-
tween the actual results and the estimates are
recognised in the periods in which the results are known
/ materialise.
2.3 Inventories
Inventories are valued at the lower of cost determined
on weighted average basis and net realisable value af-
ter providing for obsolescence and other losses, where
considered necessary. Cost includes all direct costs and
applicable production overheads incurred in bringing
such inventories to their present location and condi-
tion. Cost includes all charges incurred in bringing the
goods to the point of sale including Octroi and other
levies, transit insurance and receiving charges. Work
in progress and finished goods include appropriate pro-
portion of overheads and where applicable, excise duty.
2.4 Cash and Cash Equivalents ( for purposes of Cash
Flow Statement)
Cash comprises cash on hand and demand deposits
with banks. Cash equivalents are short term balances
(with an original maturity of three months or less from
the date of acquisition), highly liquid investments that
are readily convertible into known amounts of cash and
which are subject to insignificant risk of changes in value.
2.5 Cash Flow Statement
Cash flows are reported using the indirect method,
whereby loss before extraordinary items and tax is ad-
justed for the effects of transactions of non-cash nature
and any deferrals or accruals of past or future cash re-
ceipts or payments. The cash flows from operating, in-
vesting and financing activities of the Company are seg-
regated based on the available information.
2.6 Depreciation
Depreciable amount for assets is the cost of an asset,
or other amount substituted for cost, less its estimated
residual value.
Depreciation on tangible fixed assets has been
provided on the straight-line method as per the useful
life prescribed in Schedule II to the Companies Act, 2013.
Leasehold land is amortised over the duration of the
lease.
Refer to Note 33 for change in estimate of useful life of
fixed assets.
2.7 Revenue Recognition
Sale of Goods
Sales are recognised, net of returns and trade
discounts, on transfer of significant risks and rewards
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ANNUAL REPORT 2014-15
116 |
of ownership to the buyer, which generally coincides
with the delivery of goods to customers. Sales include
excise duty but exclude sales tax and value added tax.
Other Income
Interest income is accounted on accrual basis.
Dividend Income is accounted for when the right to
receive it is established.
2.8 Fixed Assets
Fixed assets are carried at cost less accumulated
preciation and impairment losses, if any. The cost of
fixed assets comprises its purchase price net of any
trade discounts and rebates, any import duties and other
taxes (other than those subsequently recoverable from
the tax authorities), any directly attributable expendi-
ture on making the asset ready for its intended use,
other incidental expenses and interest on borrowings
attributable to acquisition of qualifying fixed assets up
to the date the asset is ready for its intended use. Sub-
sequent expenditure on fixed assets after its purchase
/ completion is capitalised only if such expenditure re-
sults in an increase in the future benefits from such
asset beyond its previously assessed standard of per-
formance.
The Company revalued certain assets during the year
2000-2001. The revalued assets are carried at the re-
valued amounts less accumulated depreciation until
March 31, 2014 and impairment losses, if any. Increase
in the net book value on such revaluation is credited to
“Revaluation reserve account” except to the extent such
increase is related to and not greater than a decrease
arising from a revaluation / impairment that was previ-
ously recognised in the Statement of Profit and Loss,
in which case such amount is credited to the State-
ment of Profit and Loss. Decrease in book value on
revaluation is charged to the Statement of Profit and
Loss except where such decrease relates to a previ-
ously recognised increase that was credited to the Re-
valuation reserve, in which case the decrease is
charged to the Revaluation reserve to the extent the
reserve has not been subsequently reversed / utilised.
Capital work-in-progress
Projects under which tangible fixed assets are not yet
ready for their intended use are carried at cost,
comprising direct cost, related incidental expenses and
attributable interest.
2.9 Foreign currency transactions and translations
Transactions in foreign currencies entered into by the
Company are accounted at the exchange rates pre-
vailing on the date of the transaction or at rates that
closely approximate the rate at the date of the transac-
tion. Foreign currency monetary items of the Company,
outstanding at the balance sheet date are restated at
the year-end rates. Non-monetary items of the Com-
pany are carried at historical cost. Exchange differences
arising on settlement / restatement of foreign currency
monetary assets and liabilities of the Company are
recognised as income or expense in the Statement of
Profit and Loss.
2.10 Investments
Long-term investments, are carried individually at cost
less provision for diminution, other than temporary, in
the value of such investments. Current investments are
carried individually, at the lower of cost and fair value.
Cost of investments include acquisition charges such
as brokerage, fees and duties.
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ANNUAL REPORT 2014-15
| 117
2.11 Employee Benefits
Employee benefits include provident fund, employee
state insurance scheme, gratuity and compensated
absences.
i) Defined Contribution Plan
The Company’s contribution to provident fund and
employee state insurance scheme are considered
as defined contribution plans and are charged as
an expense based on the amount of contribution
required to be made and when services are ren-
dered by the employees.
ii) Defined Benefit Plan
The liability for Gratuity to employees as at Balance
Sheet date is determined on the basis of actuarial
valuation based on Projected Unit Credit method.
Actuarial gains and losses are recognised in the
Statement of Profit and Loss in the period in which
they occur. Past service cost is recognised imme-
diately to the extent that the benefits are already
vested and otherwise is amortised on a straight-
line basis over the average period until the benefits
become vested. The retirement benefit obligation
recognised in the Balance Sheet represents the
present value of the defined benefit obligation as
adjusted for unrecognised past service cost. Any
asset resulting from this calculation is limited to past
service cost.
iii) Short-term employee benefits
The undiscounted amount of short-term employee
benefits expected to be paid in exchange for the
services rendered by employees are recognised
during the year when the employees render the ser-
vice. These benefits include compensated absences
which are expected to occur within twelve months
after the end of the period in which the employee
renders the related service.
The cost of short-term compensated absences is
accounted as under :
(a) in case of accumulated compensated absences, when
employees render the services that increase their
entitlement of future compensated absences; and
(b) in case of non-accumulating compensated absences,
when the absences occur.
iv) Long Term Employee Benefits
Compensated absences which are not expected to
occur within twelve months after the end of the period
in which the employee renders the related service are
recognised as a liability at the present value of the de-
fined benefit obligation as at the balance sheet date.
2.12 Borrowing Cost
Borrowing costs include interest, amortisation of
ancillary costs incurred and exchange differences
arising from foreign currency borrowings to the extent
they are regarded as an adjustment to the interest cost.
Costs in connection with the borrowing of funds to the
extent not directly related to the acquisition of qualifying
assets are charged to the Statement of Profit and Loss
over the tenure of the loan. Borrowing costs, allocated
to and utilised for qualifying assets, pertaining to the
period from commencement of activities relating to con-
struction / development of the qualifying asset up to the
date of capitalisation of such asset are added to the
cost of the assets. Capitalisation of borrowing costs is
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ANNUAL REPORT 2014-15
suspended and charged to the Statement of Profit and
Loss during extended periods when active development
activity on the qualifying assets is interrupted.
2.13 Leases
Lease arrangements where the risks and rewards
incidental to ownership of an asset substantially vest
with the lessor are recognised as operating leases.
Lease rentals under operating leases are recognised
in the Statement of Profit and Loss on a straight-line
basis over the lease term.
2.14 Earning per Share
Basic earnings per share is computed by dividing the
profit / (loss) after tax (including the post tax effect of
extraordinary items, if any) by the weighted average
number of equity shares outstanding during the year.
Diluted earnings per share is computed by dividing the
profit / (loss) after tax (including the post tax effect of
extraordinary items, if any) as adjusted for dividend,
interest and other charges to expense or income (net
of any attributable taxes) relating to the dilutive poten-
tial equity shares, by the weighted average number of
equity shares considered for deriving basic earnings
per share and the weighted average number of equity
shares which could have been issued on the conver-
sion of all dilutive potential equity shares. Potential
equity shares are deemed to be dilutive only if their
conversion to equity shares would decrease the net
profit per share from continuing ordinary operations.
Potential dilutive equity shares are deemed to be con
verted as at the beginning of the period, unless they
have been issued at a later date. The dilutive potential
equity shares are adjusted for the proceeds receivable
had the shares been actually issued at fair value (i.e.
118 |
average market value of the outstanding shares).
Dilutive potential equity shares are determined inde-
pendently for each period presented. The number of
equity shares and potentially dilutive equity shares are
adjusted for share splits / reverse share splits and bo-
nus shares, as appropriate.
2.15 Taxes on Income
Current tax is the amount of tax payable on the
taxable income for the year as determined in accor-
dance with the applicable tax rates and the provisions
of the Income Tax Act, 1961 and other applicable tax
laws.
Minimum Alternate Tax (MAT) paid in accordance with
the tax laws, which gives future economic benefits in
the form of adjustment to future income tax liability, is
considered as an asset if there is convincing evidence
that the Company will pay normal income tax. Accord-
ingly, MAT is recognised as an asset in the Balance
Sheet when it is highly probable that future economic
benefit associated with it will flow to the Company.
Deferred tax is recognised on timing differences,
being the differences between the taxable income and
the accounting income that originate in one period and
are capable of reversal in one or more subsequent pe-
riods. Deferred tax is measured using the tax rates
and the tax laws enacted or substantively enacted as
at the reporting date. Deferred tax liabilities are
recognised for all timing differences. Deferred tax as-
sets are recognised for timing differences of items other
than unabsorbed depreciation and carry forward losses
only to the extent that reasonable certainty exists that
sufficient future taxable income will be available against
which these can be realised. However, if there are un-
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ANNUAL REPORT 2014-15
| 119
absorbed depreciation and carry forward of losses and
items relating to capital losses, deferred tax assets are
recognised only if there is virtual certainty supported by
convincing evidence that there will be sufficient future
taxable income available to realise the assets. Deferred
tax assets and liabilities are offset if such items relate
to taxes on income levied by the same governing tax
laws and the Company has a legally enforceable right
for such set off. Deferred tax assets are reviewed at
each balance sheet date for their realisability.
2.16 Impairment of assets
The carrying values of assets / cash generating units
at each balance sheet date are reviewed for impair-
ment. The recoverable amount is the greater of the
net selling price and their value in use. Value in use is
arrived at by discounting the future cash flows to their
present value based on an appropriate discount factor.
If the carrying amount of the assets exceed the
estimated recoverable amount, an impairment is
recognised for such excess amount. The impairment
loss is recognised as an expense in the Statement of
Profit and Loss, unless the asset is carried at revalued
amount, in which case any impairment loss of the re-
valued asset is treated as a revaluation decrease to
the extent a revaluation reserve is available for that
asset.
When there is indication that an impairment loss
recognised for an asset (other than a revalued asset)
in earlier accounting periods no longer exists or may
have decreased, such reversal of impairment loss is
recognised in the Statement of Profit and Loss, to the
extent the amount was previously charged to the State-
ment of Profit and Loss. In case of revalued assets
such reversal is not recognised.
2.17 Provisions and contingencies
A provision is recognised when the Company has a
present obligation as a result of past events and it is
probable that an outflow of resources will be required to
settle the obligation in respect of which a reliable esti-
mate can be made. Provisions (excluding retirement
benefits) are not discounted to their present value and
are determined based on the best estimate required to
settle the obligation at the balance sheet date. These
are reviewed at each balance sheet date and adjusted
to reflect the current best estimates. Contingent liabili-
ties are disclosed in the Notes. Contingent assets are
not recognised in the financial statements.
2.18 Service tax input credit
Service tax input credit is accounted for in the books in
the period in which the underlying service received is ac-
counted and when there is reasonable certainty in availing /
utilising the credits.
2.19 Operating Cycle
Based on the nature of products / activities of the Com-
pany and the normal time between acquisition of assets and
their realisation in cash or cash equivalents, the Company
has determined its operating cycle as 12 months for the pur-
pose of classification of its assets and liabilities as current
and non-current.
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ANNUAL REPORT 2014-15
120 |
GURUDEV
SURANA INDUSTRIES LIMITED
CIN : L27104TN1991PLC020533
Notes forming part of the financial statementsNOTE 3 Share Capital
(Refer Notes (i) to (iii) below)
Notes :
i) There is no movement in equity share capital during the current and previous year.
ii) Rights preference and restrictions attached to the shares
The Company has only one class of equity shares having a par value of Rs.10 per share. All these shares have the samerights and preferences with respect to payment of dividend, repayment of capital and voting. The dividend proposed by theBoard of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in the caseof interim dividend.
In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company afterdistribution of all preferential amounts, in proportion to their shareholding.
iii) Shareholders holding more than five percent shares in the Company:
As at 31st March 2014
(a) Authorised
Equity shares of Rs. 10 each
(b) Issued, subscribed and fully paid up
Equity shares of Rs.10 each
Total
70,000,000
44,519,067
44,519,067
700,000,000
445,190,670
445,190,670
As at 31st March 2015
Particulars
700,000,000
445,190,670
445,190,670
70,000,000
44,519,067
44,519,067
Number ofshares
Rs. Number of
shares Rs.
As at 31st March 2014
G.R Surana
Shantilal Surana
Vijayraj Surana
Dineshchand Surana
Indiastar (Mauritus) Ltd
BLS Power Solution Ltd
Vinayaga Infra Ltd
5,076,875
5,076,875
5,076,876
5,076,876
9,669,067
3,200,000
2,578,311
9.90%
10.15%
9.39%
8.96%
21.72%
7.19%
5.67%
As at 31st March 2015
Name of shareholders
11.40%
11.40%
11.40%
11.40%
21.72%
7.19%
5.79%
4,407,775
4,519,725
4,182,521
3,989,736
9,669,067
3,200,000
2,523,311
Number ofshares held
% holding Number ofshares held
% holding
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ANNUAL REPORT 2014-15
| 121
GURUDEV
SURANA INDUSTRIES LIMITED
CIN : L27104TN1991PLC020533
Notes forming part of the financial statementsNOTE 4 Reserves and Surplus
As at 31st March 2014
Rs.
Capital reserve
Securities premium account
Revaluation reserve
Opening Balance
Less: Transferred / Utilized during the year
General reserve
(Deficit) / Surplus in Statement of Profit and Loss
Opening Balance
Less: Depreciation on transition to Schedule II of the
Companies Act, 2013 on Tangible Fixed Assets with nil
remaining useful life (Refer Notes 12 and 33)
Less: Loss for the year
Add: Reversal of Proposed Dividend relating to 2012-13
Reversal of Tax on the above
Total
92,600,801
7,999,711,599
58,063,103
-
58,063,103
284,318,734
549,021,747
(64,465,025)
(2,627,887,979)
-
-
(2,143,331,257)
6,291,362,980
92,600,801
7,999,711,599
64,651,679
6,588,576
58,063,103
284,318,734
2,067,174,783
-
(1,554,612,594)
31,163,347
5,296,211
549,021,747
8,983,715,984
As at 31st March 2015
Rs.Particulars
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ANNUAL REPORT 2014-15
122 |
GURUDEV
SURANA INDUSTRIES LIMITED
CIN : L27104TN1991PLC020533
Notes forming part of the financial statementsNOTE 5 Long-term Borrowings
As at 31st March 2014
Rs.
Secured BorrowingsTerm loans - Refer Notes (i) to (iv) belowFrom BanksFrom Financial Institution
Unsecured BorrowingsLoans and advancesInterest free loan from a promoter towards priority debt andlender’s sacrifice as per CDR packageInterest free unsecured inter-corporate deposits from other parties
Total
6,384,245,3771,789,928,4488,174,173,825
132,435,000
250,000,000382,435,000
8,556,608,825
5,865,477,3721,908,961,2487,774,438,620
-
1,231,465,2111,231,465,211
9,005,903,831
As at 31st March 2015
Rs.Particulars
Notes:i) The Master Restructuring Agreement (MRA) was executed between the Company, the Monitoring Institution (IDBI Bank)and the CDR Lenders on 24th March, 2014 in order to give effect to the Corporate Debt Restructuring Package (CDRPackage) as approved by the CDR Empowered Group (CDR EG) on 7th March, 2014 and Letter of Approval (LOA) wasissued on 13th March, 2014. (Also refer Note 1). Pursuant to the MRA, all loans carry an interest of 11% per annum (Previousyear 11% per annum).
The terms of restructuring as per Letter of Approval referred to in Note above are as follows,
Term Loan I
Term Loan IFCI
Term Loan II (PelletProject Loan)
Principal and interest moratorium25 months i.e., from June 1, 2013to June 30, 2015. Interest to beconverted to Funded InterestTerm Loan (“FITL”) - II.
Principal and interest moratorium25 months i.e., from June 1, 2013to June 30, 2015. Interest to beconverted into Term Loan - II.
Principal and interest moratorium6 months from revised Date ofCommencement of CommercialOperations (“DCCO”) i.e., April 1,2016 to FITL VI. Interest to beserviced post DCCO.
31 Structured Quarterly installmentsfrom September 2015 to March 2023.
31 Structured Quarterly installmentsfrom September 2015 to March 2023.
26 Structured Quarterly installmentsfrom December 2016 to March 2023.
156.37
53.33
184.77
PeriodMoratoriumFacilitiesOutstanding asat June 1, 2013
(in Crores)
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ANNUAL REPORT 2014-15
| 123
PeriodMoratoriumFacilitiesOutstanding asat June 1, 2013
(in Crores)
Principal moratorium 25 monthsfrom Cut off Date (“COD”) and in-terest to be converted into FITLIII for the period of 25 months i.e.from June 1, 2013 to June 30,2015.
Principal moratorium 25 monthsfrom COD and interest to be con-verted into FITL IV for the periodof 25 months i.e. from June 1,2013 to June 30, 2015.
Principal moratorium 25 monthsfrom June 1, 2013 to June 30,2015. Interest to be paid as andwhen due. (refer to note (iv) be-low).
Principal moratorium 25 monthsfrom June 1, 2013 to June 30,2015. Interest to be paid as andwhen due.
Principal moratorium 25 monthsfrom June 1, 2013 to June 30,2015. Interest to be paid as andwhen due.
Principal moratorium 25 monthsfrom June 1, 2013 to June 30,2015. Interest to be paid as andwhen due.
Principal moratorium 25 monthsfrom June 1, 2013 to June 30,2015. Interest to be paid as andwhen due.
Principal moratorium 34 monthsfrom COD till March 31, 2016.
Principal moratorium 34 monthsfrom COD till March 31, 2016.
20 Structured Quarterly installmentsfrom September 2015 to March 2020.
20 Structured Quarterly installmentsfrom September 2015 to March 2020.
2 Structured Annual installments inJune 2014 and June 2015.
19 Structured Quarterly installmentsfrom September 2015 to March 2020.
19 Structured Quarterly installmentsfrom September 2015 to March 2020.
19 Structured Quarterly installmentsfrom September 2015 to March 2020.
19 Structured Quarterly installmentsfrom September 2015 to March 2020.
16 Structured Quarterly installmentsfrom June 2016 to March 2020.
24 Structured Quarterly installmentsfrom June 2016 to March 2022.
Working Capital TermLoan - I (Principaloverdue of IFCI)
WCTL - II (LC devolved+ Post COD devolved +CC irregularity)
FITL - I (pre CODinterest of IFCI)
FITL II - Interest on TL Iand IFCI loan
FITL III - Interestfunding on WCTL I
FITL IV - Interestfunding on WCTL II
FITL V - Interestfunding on workingcapital
FITL VI - Interest onPellet Project loan
Priority Loan
103.08
175.95
12.17
48.06
23.62
37.53
35.86
57.59
41.72
Other conditions:1. Working capital (Fund based and Non-Fund based) of Rs. 401.58 crores - Reduction in margin stock and book debts to15% and increase in cover period of receivables from 120 days to 180 days.
2. Balance requirement of Rs. 474.91 crores for pellet project loan - this amount is to be tied up with lenders by December2014 or promoters to induct a Joint Venture partner to fund it. Refer to note 1.4 on the status of the P&B project and thedecision taken by the Company to shelve the project.
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ANNUAL REPORT 2014-15
124 |
ii) SecurityI. Term Loans (including WCTL and FITL) from banks and financial institution are secured by way of :
a) First charge on all movable and immovable fixed assets of the Company (present and future) on pari passu basis.b) Second charge on entire current assets of the Company including raw materials, stock in progress, finished goods and
receivables on pari-passu basis.
c) Non disposal undertaking from the promoters to the effect that their equity shareholding in the Company remains at least30% during the currency of the facility.
d) Pledge of 100% of promoter and promoter group holdings in the Company in favour of lending institutions.
e) Personal Guarantee of the promotersf) Priority loan to have priority share on the Pre Trust & Retention Account (“TRA”)/ TRA cash flows of the Company
g) First pari passu charge on the commercial property held in the name of the Company located at Basavangadi, Bangalore
on pari passu basis with term loan and working capital lenders in lieu of release of the equitable mortgage of certainagricultural land belonging to the promoters and a wind mill property belonging to the subsidiary company.
The additional security provided to a Financial Institution are as follows:a) Pledge of 60 Million equity shares of Surana Power Limited, a subsidiary
b) Mortgage of 29.12 acres of agricultural land belonging to a shareholder
c) Corporate Guarantee given by a shareholderd) Pledge of 16,072,526 number of equity shares of Surana Mines and Minerals Limited, a subsidiary
During the year, certain banks have enhanced the working capital limits (both fund based and non fund based) extended tothe Company. The Company is yet to create a charge for Rs. 22.07 crores towards the said facility as at the balance sheet
date.
iii) Terms of repayment
A) Repayment Schedule of Term Loan from Banks (Amount in Rs.)
2015-16
2016-17
2017-182018-19
2019-20
2020-212021-22
2022-23
Less: Current
Maturities of Long Term
Debt (Refer Note 10(a))
TOTAL
62,600,000
167,355,425
278,692,988340,779,910
377,892,431
511,169,865817,871,783
851,436,696
3,407,799,098
62,600,000
3,345,199,098
WCTLFITLYear Term Loan Priority Loan Total
87,500,000
117,833,975
225,616,696413,809,448
534,604,708
- -
-
1,379,364,827
87,500,000
1,291,864,827
140,800,000
140,920,369
264,225,692440,376,154
440,376,154
334,806,246 -
-
1,761,504,615
140,800,000
1,620,704,615
-
7,525,740
18,981,55818,981,558
25,308,744
25,308,74430,370,493
-
126,476,837
-
126,476,837
290,900,000
433,635,509
787,516,9341,213,947,070
1,378,182,037
871,284,855848,242,276
851,436,696
6,675,145,377
290,900,000
6,384,245,377
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ANNUAL REPORT 2014-15
| 125
2015-162016-17
2017-18
2018-192019-20
2020-21
2021-222022-23
Less: CurrentMaturities of Long Term
Debt (Refer Note 10(a))
TOTAL
21,333,440 32,000,160
32,000,160
53,333,600 53,333,600
80,000,400
128,000,640 133,334,000
533,336,000
21,333,440
512,002,560
WCTLFITLYear Term Loan Total
150,395,542 28,662,495
53,742,179
107,484,357139,690,500
-
--
479,975,073
150,395,542
329,579,531
82,464,901 82,464,901
154,621,689
257,702,814257,702,814
195,854,139
- -
1,030,811,258
82,464,901
948,346,357
254,193,883 143,127,556
240,364,028
418,520,771 450,726,914
275,854,539
128,000,640 133,334,000
2,044,122,331
254,193,883
1,789,928,448
B) Repayment Schedule of Term Loan from Financial Institutions (Amount in Rs.)
a) The repayments as per iii(A) and iii(B) above are to be made in structured quarterly instalments.
b) The above repayment schedules are after considering the moratorium periods allowed under the CDR package, wherever
applicable.
iv) The Company is negotiating the interest payable for the pre-CDR dues with a financial institution (IFCI) for which the
member banks have allowed time until 30th June, 2015 to resolve the issue and release of additional securities held by the
financial institution to the common pool. Pending negotiations, the Company has not paid the interest of Rs.48,700,000, which
has fallen due in June 2014.
v) The unsecured loans are repayable after one year and the repayment dates thereafter are under negotiation.
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ANNUAL REPORT 2014-15
126 |
GURUDEV
SURANA INDUSTRIES LIMITED
CIN : L27104TN1991PLC020533
Notes forming part of the financial statementsNOTE 6 Other Long Term Liabilities
NOTE 7 Long Term Provisions
As at 31st March 2014
Rs.
Provision - OthersRecompense Interest (Refer Note below)Provision for Contingencies (Refer Note 35)
Provision for Employee Benefits (Refer Note 26)Provision for GratuityProvision for Compensated absences
Total
763,028,30180,000,000
843,028,301
5,180,438 -
5,180,438
848,208,739
325,642,543-
325,642,543
13,569,946514,793
14,084,739
339,727,282
As at 31st March 2015
Rs.Particulars
Note:Recompense Interest is payable after the Company repays all loans and interest within the stipulated period, as per theterms of the CDR package.
As at 31st March 2014
Rs.
Trade Payables
Total
587,764,461
587,764,461
69,180,157
69,180,157
As at 31st March 2015
Rs.Particulars
As at 31st March 2014
Rs.
Loans repayable on demandWorking Capital Loan from banks - Secured
Total
3,981,338,870
3,981,338,870
3,359,323,043
3,359,323,043
As at 31st March 2015
Rs.Particulars
NOTE 8 Short Term Borrowings
Note:i) Security details:Working capital loans are secured by way of:a) First charge on the entire current assets of the Company (present and future) on pari-passu basis.b) Second charge on all movable and immovable fixed assets of the Company, present and future on pari-passu basis.c) Pledge of 100% of promoter and promoter group holdings in the Company in favour of lending institutions.d) Personal Guarantee of the promoterse) Priority loan to have priority share on the Pre TRA / TRA cash flows of the Companyf) First pari passu charge on the commercial property held in the name of the Company located at Basavangadi, Bangaloreon pari passu basis with term loan and working capital lenders in lieu of release of the equitable mortgage of certainagricultural land belonging to the promoters and a wind mill property belonging to the subsidiary company.
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ANNUAL REPORT 2014-15
| 127
GURUDEV
SURANA INDUSTRIES LIMITED
CIN : L27104TN1991PLC020533
Notes forming part of the financial statementsNOTE 9 Trade Payables
NOTE 10 Other Current Liabilities
As at 31st March 2014
Rs.
Current maturities of long-term debt (Refer Note 5 for detailsof security, interest and terms of repayment)
Other Payables - Statutory Liabilities
Unpaid Dividend
Total
545,093,883
28,825,644
1,025,324
574,944,851
-
29,071,384
1,218,921
30,290,305
As at 31st March 2015
Rs.Particulars
As at 31st March 2014
Rs.
Other than Acceptances (Refer Note 32)
Total
1,164,438,703
1,164,438,703
1,698,855,763
1,698,855,763
As at 31st March 2015
Rs.Particulars
NOTE 11 Short Term Provisions
As at 31st March 2014
Rs.
Provision - Others(i) Provision for income tax
Provision for Employee Benefits (Refer Note 26)(i) Gratuity(ii) Compensated Absences
Total
9,724,948
119,464461,038
10,305,450
77,037,507
- -
77,037,507
As at 31st March 2015
Rs.Particulars
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ANNUAL REPORT 2014-15
128 | | 129
GURUDEV
SURANA INDUSTRIES LIMITED
CIN : L27104TN1991PLC020533
Notes forming part of the financial statementsNOTE 12 FIXED ASSETS
GROSS BLOCK ACCUMULATED DEPRECIATION
Adjustmenton account
of revaluation
Balance as at31st
March,2015
Balance asat 1st April,
2014
Depreciationexpense for
the year
Eliminationon disposal
of assetsDisposals
Adjustmentarising on
reclassificationof assets
Transition adjustmentrecorded against (Deficit) /Surplus balance in State-ment of Profit and Loss
Adjustmentarising on
reclassificationof assets
Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs.
-
-
-
-
-
(19,856,166)
--
-(96,100)
-(28,430,160)
- -
-
(48,382,426)
-
-
-
-
909,350,732
-
(313,077,904)-
398,626 -
(497,175,456) -
(99,495,998) -
-
-
28,634,772
(28,634,772)
11,633,676
(11,633,676)
1,400,218,187
(490,867,455)
7,103,252,345(7,412,398,951)
8,833,573(8,434,947)
24,407,571 (520,601,201)
24,119,632 (123,417,697)
8,601,099,756
(8,595,988,699)
-
-
-
-
163,293,733
(116,205,433)
1,217,661,108 (1,013,894,404)
2,197,888 (1,759,328)
313,656,972 (267,803,153)
98,725,395 (84,660,006)
1,795,535,096
(1,484,322,324)
-
-
2,073,013
-
47,050,774
(46,984,332)
558,484,704(211,937,070)
1,199,322(438,559)
5,662,309.86(45,853,819)
3,865,710 (14,065,389)
618,335,833
(319,279,169)
-
-
-
-
-
(103,968)
- (6,484,608)
- -
- -
--
-
(6,588,576)
-
-
-
-
-
-
-(14,656,974)
--
--
--
-
(14,656,974)
-
-
-
-
57,152,429
-
3,578,172 -
7,329 -
431,382 -
3,295,713-
64,465,025
-
-
-
-
-
23,156,400
-
364,371,451 -
(52,458)-
(302,836,696) -
(84,638,697) -
-
-
GURUDEV
SURANA INDUSTRIES LIMITED
CIN : L27104TN1991PLC020533
Notes forming part of the financial statementsNOTE 12 FIXED ASSETS
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ANNUAL REPORT 2014-15
Tangible Assets(a) Freehold Land - Refernote (i) below(Previous year)
(b) Leasehold Land - Re-fer note (ii) below(Previous year)
(c) Buildings - Refer note(iii) below(Previous year)
(d) Plant and equipment(Previous year)
(e) Furniture and fixtures(Previous year)
(f) Vehicles(Previous year)
(g) Computers(Previous year)
Total
(Previous year)
Capital Workin Progress
FIXED ASSETBalance asat 1st April,
2014ADDTIONS
28,634,772
(28,634,772)
11,633,676
(11,633,676)
490,867,455
(510,723,621)
7,412,398,951 (7,039,218,483)
8,434,947 (8,531,047)
520,601,201 (549,031,361)
123,417,697 (123,325,865)
8,595,988,699
(8,271,098,825)
Balance asat 31st
March,2015
NET BLOCK
Balance asat 31st
March,2014
Balance asat 31st
March,2015
Rs.(Owned unless other-wise stated)
Rs. Rs. Rs. Rs.
-
-
-
-
-
-
3,931,298(373,180,468)
- -
981,826-
197,933 (91,832)
5,111,057
(373,272,300)
-
-
2,073,013
-
290,653,336
(163,293,733)
2,144,095,435 (1,217,661,108)
3,352,081(2,197,888)
16,913,968 (313,656,972)
21,248,121 (98,725,395)
2,478,335,954
(1,795,535,096)
28,634,772
(28,634,772)
9,560,663
(11,633,676)
1,109,564,851
(327,573,722)
4,959,156,910 (6,194,737,843)
5,481,492 (6,237,059)
7,493,603 (206,944,229)
2,871,511 (24,692,302)
6,122,763,802
(6,800,453,603)
2,492,735,910
28,634,772
(28,634,772)
11,633,676
(11,633,676)
327,573,722
(394,518,188)
6,194,737,843(6,025,324,079)
6,237,059 (6,771,719)
206,944,229 (281,228,208)
24,692,302 (38,665,859)
6,800,453,603
(6,786,776,501)
2,287,183,347
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ANNUAL REPORT 2014-15
130 |
GURUDEV
SURANA INDUSTRIES LIMITED
CIN : L27104TN1991PLC020533
Notes forming part of the financial statementsNOTE 12 FIXED ASSETS (Continued)
Notes:
i) Freehold land represents land at Raichur purchased from Karnataka Industrial Area Development Board for which title isyet to be transferred to the Company.
ii) Represents land at Gummidipoondi taken on lease from SIPCOT for a period of 99 years
iii) Building includes superstructures constructed on land owned by the promoters and on leasehold land
iv) a) Capital work in progress represents the expenditure incurred on Pelletisation and Benefication (“P&B”) project atRaichur. Subsequent to the Balance Sheet date, the Company has planned to shelve its P&B Project and a separate techno-economic viability of the operations at Raichur without the above project is being considered by its bankers. Accordingly, theCompany is evaluating alternate use of the assets relating to the P&B project and intends capitalizing the said assets uponre-commencement of operations at Raichur. The Management is of the opinion that no impairment is considered necessaryfor the carrying value of the CWIP.
b) Capital work in progress includes
i. interest capitalized amounting to Rs. 655,436,190 (Previous Year - Rs. 432,049,871), including Rs. 223,386,319 for theyear (Previous Year - Rs. 237,966,792)
ii. pre-operative expenditure amounting to Rs. 88,977,915 (Previous Year - Rs. 86,995,865) including Rs. 1,982,051 for theyear (Previous Year - Rs. 7,057,944).
This interest and pre-operative expenditure capitalised as mentioned above includes Rs. 407,645,055 and pre-operativeexpenditure amounting to Rs. 6,835,660 relating to the periods for which the project was stalled. Considering the excep-tional nature of this industry and prolonged project implementation period and is being retained under capital work in progressas per the CDR package.
v) Refer to Note 5 for security and charge on fixed assets
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ANNUAL REPORT 2014-15
| 131
GURUDEV
SURANA INDUSTRIES LIMITED
CIN : L27104TN1991PLC020533
Notes forming part of the financial statements
NOTE 13 INVESTMENTSA. NON CURRENT INVESTMENTS
As at 31st March 2014
Non Trade Investment (at cost)Investment in equity shares(a) Subsidiaries
309,149,200 equity shares of Rs. 10 each fullypaid up in Surana Power Limited
56,153,600 equity shares of Rs. 10 each fullypaid up in Surana Green Power Limited
5,201 (5,201) equity shares of S $ 1 each fullypaid up in Surana Holding PTE Ltd
16,072,526 equity shares of S $ 1 each fullypaid up in Surana Mines and Minerals Limited
Less: Provision for diminution in value ofinvestments (Refer Note 25)Total
Share Allotment pending in Surana Mines andMinerals Limited
(b) Other Entities13,333 (13,333) equity shares of Rs.10 eachfully paid up in PNB Gilts Ltd
1,500 (300) equity shares of Rs. 10 each fullypaid up in Punjab National Bank (PNB)(including bonus shares issued during the year)
Total - Non Trade
(Refer Notes (i) to (iv) below)
3,910,000,000
561,536,000
288,964
584,826,4305,056,651,394
-
5,056,651,394
11,050,660
300,000
9,300
309,300
5,068,011,354
As at 31st March 2015
Particulars Quoted Rs.
TotalRs.
Unquoted Rs.
Quoted Rs.
TotalRs.
Unquoted Rs.
-
-
-
-
-
-
300,000
9,300
309,300
309,300
-
-
288,964
288,964(288,964)
-
-
-
-
-
-
-
-
288,964
288,964(288,964)
-
-
300,000
9,300
309,300
309,300
-
-
-
-
-
-
300,000
9,300
309,300
309,300
3,910,000,000
561,536,000
288,964
584,826,4305,056,651,394
-
5,056,651,394
-
-
-
-
5,056,651,394
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ANNUAL REPORT 2014-15
GURUDEV
SURANA INDUSTRIES LIMITED
CIN : L27104TN1991PLC020533
Notes forming part of the financial statementsB. Current Investments
132 |
As at 31st March 2014
Non Trade Investments (at cost)Investment in equity instruments(a) Subsidiaries
336,649,200 equity shares of Rs. 10 each fullypaid up in Surana Power Limited
56,153,000 equity shares of Rs. 10 each fully paidup in Surana Green Power Limited
16,072,526 equity shares of S $ 1 each fully paidup in Surana Mines and Minerals Limited
9,996 (9,996) equity shares of Rs. 10 each fullypaid up in Uday Energy Pvt Ltd
Less: Written off during the year (Refer Note 25)
Share Allotment pending in Surana Mines and Minerals Limited
Total - Non Trade
-
-
-
-
99,960
99,960
-
99,960
As at 31st March 2015
Particulars Quoted INR
TotalINR
UnquotedINR
Quoted INR
TotalINR
UnquotedINR
-
-
-
-
-
-
-
4,185,000,000
561,536,000
584,826,430
99,960
(99,960)
5,331,362,430
11,050,660
5,342,413,090
4,185,000,000
561,536,000
584,826,430
99,960
(99,960)
5,331,362,430
11,050,660
5,342,413,090
-
-
-
-
-
-
-
-
-
-
-
99,960
99,960
-
99,960
(Refer Notes (i) to (iv) below)Notes:i) Carrying Value of Quoted Investment - As at 31st March 2015
PNB Gilts LtdPunjab National Bank (PNB)
Description No. ofShares
Cost Price(Rs.)
Market Value(Rs.)
13,3331,500
300,0009,300
29.80 144.40
397,323216,600
Market Valueper Unit (Rs.)
ii) The Company’s Board of Directors passed a resolution on 14th February 2015 to dispose the investments in the subsid-iaries namely Surana Mines and Minerals Limited (SMML), Surana Power Limited (SPL) and Surana Green Power Limited(SGPL) due to continuing adverse market scenario which is affecting the Company. Accordingly, the above investments areclassified as current investments as at 31st March, 2015. The Company is into advanced negotiations with prospective buyersand is seeking best alternatives for maximizing the value of the investments. In the opinion of the management, the Companywill be able to realize the carrying value of the said investments and hence no adjustments to the carrying values of theseinvestments is considered necessary.
iii) During the year, SPL has alloted 27,500,000 shares of Rs. 10 each to the Company on 19th December 2014 for consid-eration other than cash.
iv) Also refer to Note 5 for the details of shares pledged.
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ANNUAL REPORT 2014-15
| 133
GURUDEV
SURANA INDUSTRIES LIMITED
CIN : L27104TN1991PLC020533
Notes forming part of the financial statements
NOTE 14 Deferred Tax
As at 31st March 2014
Rs.
Tax effect of items constituting deferred tax liabilitiesDepreciation
Tax effect of items constituting deferred tax assets
Brought forward business losses and unabsorbed depreciation,restricted to deferred tax liabilities
Deferred tax (liabilities) / assets (net) (Refer Note below)
971,448,961
971,448,961
1,030,410,823
1,056,002,065
25,591,242
As at 31st March 2015
Rs.Particulars
Notes:
(i) The Company has carry forward losses and unabsorbed depreciation, which give rise to a deferred tax asset. In theabsence of virtual certainty supported by convincing evidence that sufficient future taxable income will be available againstwhich such deferred tax assets can be realized, the deferred tax asset that can be recognized is restricted to the deferredtax liability. Accordingly, there is no deferred tax asset or liability as at 31st March 2015 to be recognized.
(ii) The net deferred tax asset arising on account of unabsorbed business loss / depreciation recognised in earlier yearsamounting to Rs. 25,591,242 has been reversed during the year.
NOTE 15 LONG TERM LOANS AND ADVANCES
As at 31st March 2014
Rs.
Capital AdvancesUnsecured, considered good (Refer Note below)
Security depositsSecured, considered good
Disputed Sales tax amount deposited under protest
Total
1,919,816,083
26,154,809
11,453,941
1,957,424,833
2,477,075,526
26,104,553
-
2,503,180,079
As at 31st March 2015
Rs.Particulars
Note:
Long term advance as at March 31, 2015 includes an amount paid towards construction of the P&B project of Rs 1,877,585,152.Subsequent to the Balance Sheet date, the Company has planned to shelve the P&B Project. Management is taking stepsto secure the amount paid for the P&B project and recover the said balances in the normal course of business. The manage-ment is of the opinion that the dues are collectable in the normal course of the business and no provision is necessary for thesame.
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ANNUAL REPORT 2014-15
134 |
Note:Further to the matters referred to in Note 1, the Company has not weighed its inventory during its annual stock take. In theabsence of production and for the reasons stated in note 1.2, there has been no issue or consumption of inventories until theyear end at its Raichur plant. The Company had also stored its raw material and stores and spares in a common facilityshared with its subsidiary (Surana Power Limited) at Raichur without segregation and for which efforts are currently beingmade to segregate the raw material and stores and spares with that of its subsidiary. Inventories lying at the facilities will bephysically weighed on resumption of production and blended with fresh materials purchased for use in production / sales.Hence management is of the view that any adjustment arising out of such physical verification, segregation and blending willnot be material and will be dealt with in the normal course of business.
NOTE 17 TRADE RECEIVABLES
As at 31st March 2014
Rs.
Trade receivables outstanding for a period exceeding sixmonths from the date they were due for paymentUnsecured, considered goodConsidered doubtful
Less: Provision for bad and doubtful trade receivables
OthersUnsecured, considered good
Total
450,750,56372,906,372
523,656,935(72,906,372)450,750,563
2,909,522,776
3,360,273,339
192,145,164 -
192,145,164 -
192,145,164
3,452,256,641
3,644,401,805
As at 31st March 2015
Rs.Particulars
NOTE 16 INVENTORIES
As at 31st March 2014
Rs.
Raw materials
Finished goods (other than those acquired for trading)
Stock-in-trade (acquired for trading)
(e) Stores and spares
Total
963,604,622
185,666,668
757,262,698
680,408,422
2,586,942,410
964,561,926
988,378,614
369,450,217
674,735,284
2,997,126,041
As at 31st March 2015
Rs.Particulars
NOTE 18 CASH AND CASH EQUIVALENTS
As at 31st March 2014
Rs.
Cash on handBalances with banks
(i) In current accounts(ii) Unpaid Dividend
Earmarked balances with BanksTotal
Of the above, the balances that meet the definition of Cashand cash equivalents as per AS 3 Cash Flow Statements is
53,541
195,027,6281,025,324
81,644,907277,751,400
195,081,169
297,042
56,718,9711,218,921
14,020,99172,255,925
57,016,013
As at 31st March 2015
Rs.Particulars
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ANNUAL REPORT 2014-15
| 135
As at 31st March 2014
Rs.
Loans and advances to SuppliersUnsecured, considered good
Loans and advances to Related PartiesUnsecured, considered goodLess: Provision for doubtful advances
MAT Credit Entitlement (Refer Note below)
Tax Deducted at Source
Prepaid Expenses, Unsecured considered good
Balance with Government authoritiesUnsecured, considered good(i) CENVAT credit receivable(ii) VAT credit receivable(iii) Service Tax credit receivable
Total
103,436,442
5,996,110(5,996,110)
-
-
-
93,836,281 19,714,956 102,561,786 216,113,023
319,549,465
-
- 60,912,071
60,912,071
312,974,013
5,708,886
101,752,279 29,520,578100,053,359231,326,216
610,921,186
As at 31st March 2015
Rs.Particulars
NOTE 19 SHORT TERM LOANS AND ADVANCES
Note: MAT Credit Entitlement has been re-assessed and in the absence of convincing evidence that the Company will earnsufficient taxable profits to utilise the MAT credit, the balance of Rs. 312,974,013 has been written off during the year.
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ANNUAL REPORT 2014-15
136 |
GURUDEV
SURANA INDUSTRIES LIMITED
CIN : L27104TN1991PLC020533
Notes forming part of the financial statements
NOTE 20 REVENUE
For the year ended31st March, 2014
Rs.
Sale of products (manufactured)Sale of products (traded)Sale of servicesRevenue from operations (Gross)Less:Excise dutyTotal
1,165,103,1795,388,754,616
5,059,8006,558,917,595
(137,155,352)6,421,762,243
2,867,375,3602,950,878,682
-5,818,254,042
(266,193,696)5,552,060,346
For the year ended31st March, 2015
Rs.Particulars
(ii) Other non-operating income comprises:For the year ended
31st March, 2014Rs.
Sale of productsManufactured goodsTMT BarsSponge IronOthers
Total - Sale of manufactured goodsTraded goodsMS StructuralsMS ScrapMS RoundsMS AngleTMT BarsRebarsCoalOthers
Total - Sale of traded goods
Total - Sale of productsSale of servicesJob work charges on manufacture of TMT bars
Total - Sale of services
1,141,247,733-
23,855,4461,165,103,179
1,232,202,5241,109,789,532
529,895,080499,661,996446,134,006139,205,41747,441,761
1,384,424,3005,388,754,616
6,553,857,795
5,059,8005,059,800
2,235,299,272521,295,304110,780,784
2,867,375,360
145,533,580349,493,735296,560,925
4,143,960696,573,362419,426,222373,907,056665,239,842
2,950,878,682
5,818,254,042 - -
For the year ended31st March, 2015
Rs.Particulars
Note:
Purchases and sales of traded goods comprising 84% of total purchases and 82% of total sales are conducted on a spottrading basis, in the normal course of business, and are concentrated with certain parties. Transactions of sales and pur-chases of traded goods occur between the same parties, at purchase prices which may be higher than sales prices, basedon the market conditions prevailing at the time of trading.
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ANNUAL REPORT 2014-15
| 137
GURUDEV
SURANA INDUSTRIES LIMITED
CIN : L27104TN1991PLC020533
Notes forming part of the financial statements
NOTE 21 OTHER INCOME
For the year ended31st March, 2014
Rs.
Interest income on bank deposits
Dividend income from long- term investments
Other non-operating income (Refer Note below)
Total
3,643,700
12,000
76,083,767
79,739,467
3,910,142
-
26,340,719
30,250,861
For the year ended31st March, 2015
Rs.Particulars
NoteNon-operating income
For the year ended31st March, 2014
Rs.
Liabilities no longer required written back
Rebates and Allowances
Profit on sale of asset
Rental Income
Provision for employee benefits written back
Total
70,031,257
223,216
-
350,000
5,479,294
76,083,767
25,676,701
-
255,510
-
408,508
26,340,719
For the year ended31st March, 2015
Rs.Particulars
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ANNUAL REPORT 2014-15
138 |
GURUDEV
SURANA INDUSTRIES LIMITED
CIN : L27104TN1991PLC020533
Notes forming part of the financial statements
NOTE 22.A COST OF MATERIALS CONSUMED
For the year ended31st March, 2014
Rs.
Opening stockAdd: Purchases
Less: Closing stockCost of materials consumed (Refer Note 28(a))
Materials consumed comprise:Iron BilletsOthersTotal
964,561,926986,205,705
1,950,767,631963,604,622987,163,009
967,233,29919,929,710
987,163,009
876,795,3614,466,626,5795,343,421,940
964,561,9264,378,860,014
1,568,932,3602,809,927,6544,378,860,014
For the year ended31st March, 2015
Rs.Particulars
NOTE 22.B Purchases of Stock in Trade
For the year ended31st March, 2014
Rs.
Traded GoodsMS StructuralsMS ScrapMS RoundsMS AngleOthersTotal
1,105,579,466967,157,862491,657,371490,434,694
1,955,310,743 5,010,140,136
209,759,942146,376,50454,056,30178,865,422
586,532,987 1,075,591,156
For the year ended31st March, 2015
Rs.Particulars
NOTE 22.B CHANGES IN INVENTORIES OF FINISHED GOODS AND STOCK-IN-TRADE
For the year ended31st March, 2014
Rs.
Inventories at the beginning of the year:
Finished goods
Stock-in-trade
Inventories at the end of the year:
Finished goods
Stock-in-trade
Net decrease
988,378,614 369,450,217
1,357,828,831
185,666,668 757,262,698
942,929,366
414,899,465
241,497,029 1,376,018,555
1,617,515,584
988,378,614 369,450,217
1,357,828,831
259,686,753
For the year ended31st March, 2015
Rs.Particulars
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ANNUAL REPORT 2014-15
| 139
For the year ended31st March, 2014
Rs.
Salaries and wagesContributions to provident fund (Refer Note 26)Staff welfare expenses
Total
42,158,6542,163,2591,318,673
45,640,586
118,227,8149,737,8491,366,763
129,332,426
For the year ended31st March, 2015
Rs.Particulars
NOTE 24 FINANCE COSTS
For the year ended31st March, 2014
Rs.
Interest expense on:(i) Bank Borrowings - Refer Note below(ii) Others
Other borrowing costForeign currency loss treated as finance cost
Total
1,305,340,06012,793,352
45,444,364-
1,363,577,776
1,445,983,93716,846,427
18,117,850(332,390)
1,480,615,824
For the year ended31st March, 2015
Rs.Particulars
Note:
Finance cost includes recompense interest recorded for the year ended 31st March, 2015 amounting to Rs.437,385,758(31st March, 2014 - Rs. 325,642,543) in terms of CDR package approved by CDR EG vide letter dated 13th March, 2014,reference no. CDR (SSA)/No.1127/ 2013-14. The payment of recompense interest is subject to the Company repaying allloans and interest within the stipulated period as defined in CDR package.
GURUDEV
SURANA INDUSTRIES LIMITED
CIN : L27104TN1991PLC020533
Notes forming part of the financial statements
NOTE 23 EMPLOYEE BENEFITS EXPENSE
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ANNUAL REPORT 2014-15
140 |
GURUDEV
SURANA INDUSTRIES LIMITED
CIN : L27104TN1991PLC020533
Notes forming part of the financial statements
NOTE 25 OTHER EXPENSES
For the year ended31st March, 2014
Rs.
Consumption of stores and consumables (Refer Note 28(b))Contract Labour expensesPower and FueRepairs and Maintenance - BuildingRepairs and Maintenance - Vehicle MaintenanceRepairs and Maintenance - OthersInsuranceRentRates and TaxesCommunicationTravelling and ConveyancePrinting and StationaryAdvertisement and Business PromotionDiscount / Commission on SalesFreight and ForwardingLegal and Professional ChargesPayment to auditors (Refer Note below)Director RemunerationProvision for Doubtful Trade receivables, Loans and advancesProvision for diminution in the value of investment (Refer Note 13)Provision for Contingencies (Refer Note 35)Trade receivables written offCapital work in progress written offInvestments written off (Refer Note 13)Miscellaneous expenses
Total
51,991,76930,829,93838,203,11211,362,8461,028,6063,376,7025,786,1094,533,496
13,730,0701,398,319
362,444164,284619,03985,359
16,486,0402,867,3353,100,000
-78,902,482
288,96480,000,00016,890,37619,815,807
99,96024,765,110
406,688,167
88,129,71015,853,67756,839,348
-4,940,8187,467,0249,318,7175,844,9486,346,5392,108,5626,485,447
730,0912,028,8344,829,106
25,185,8078,041,830
674,1604,565,000
- - -
7,343,031 - -
20,965,781
277,698,430
For the year ended31st March, 2015
Rs.Particulars
For the year ended31st March, 2014
Rs.
Payments to statutory auditors comprise (net of service taxinput credit, where applicable):To statutory auditors
For auditOther Services
2,100,0001,000,000
3,100,000
600,00074,160
674,160
For the year ended31st March, 2015
Rs.Particulars
Notes:
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ANNUAL REPORT 2014-15
| 141
Defined contribution plans
The Company makes payment to Provident Fund, a defined contribution plan for qualifying employees. Under the Scheme,the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Companyrecognised Rs.2,163,259 (31 March, 2014: Rs.9,737,849) for Provident Fund contributions in the Statement of Profit andLoss. The contribution payable by the Company are at rates specified in the rules of the scheme.
Defined benefit plansThe Company offers the following em-
ployee benefit schemes to its employees:
Gratuity (Unfunded):
GURUDEV
SURANA INDUSTRIES LIMITED
CIN : L27104TN1991PLC020533
Notes forming part of the financial statements
NOTE 26 Employee Benefit Plans
For the year ended31st March, 2014
Rs.
Components of employer expenseCurrent service costInterest costActuarial losses/(gains)Total expense/(Income) recognised in the Statement of Profit and Loss
Change in defined benefit obligations (DBO) during the yearPresent value of DBO at beginning of the yearCurrent service costInterest costActuarial (gains) / lossesBenefits paidPresent value of DBO at the end of the year
Actuarial assumptionsDiscount rateExpected return on plan assetsSalary escalationAttrition
Experience Adjustments (Disclosed to the extent data is available)Actuarial (Gains) / Losses on Obligations
1,276,917 1,301,518
(7,184,233) (4,605,798)
13,979,785 1,276,917 1,301,518
(7,184,233) (4,074,085) 5,299,902
7.94%NA
7.00%2.00%
(5,030,901)
2,680,581 1,344,851
(6,267,824) (2,242,392)
16,810,639 2,680,581 1,344,851
(6,267,824) (588,462) 13,979,785
9.31%NA
7.00%-
-
For the year ended31st March, 2015
Rs.Particulars
Notes:
i) The discount rate is based on the prevailing market yields of Government of India securities as at the balance sheet datefor the estimated term of the obligations.
ii) The estimate of future salary increases considered, takes into account the inflation, seniority, promotion, incrementsand other relevant factors.
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ANNUAL REPORT 2014-15
142 |
Actuarial assumptions for long-term compensated absences:
For the year ended31st March, 2014
Discount rateExpected return on plan assetsSalary escalationAttrition
7.94%NA
7.00%2.00%
9.31%NA
7.00%
For the year ended31st March, 2015
Particulars
As at 31st March, 2014 Rs.
On Capital Account - Refer Note below - -
As at 31st March, 2015 Rs.
Particulars
NOTE 27 Contingent Liabilities and commitments in respect of which no provision is considered necessaryA. CommitmentsEstimated Amount of Contracts remaining to be executed and not provided for:
As the P&B Project has been shelved there are no further capital commitements (Refer Note 12(iv)).
As at 31st March, 2014 Rs.
(a) Claims against the Company not acknowledged as debt(Refer note (i) below)Central ExciseCustomsCentral Sales TaxVAT
(b) Corporate Guarantees given to banks / financial institutionson behalf of subsidiary companies
329,515,4932,868,511
69,999,902181,929,268
1,466,700,000
23,889,94826,697,51115,446,506
427,289
1,466,700,000
As at 31st March, 2015 Rs.
Particulars
B Contingent Liabilities
Notes:i) Against the above demands, the Company has paid Rs. 11,453,941 under protest to the various authorities.ii) In respect of the above demands disputed by the Company, appeals filed are pending before respective appellateauthorities. The Company is of the view that there are reasonable chances of successful outcome of the appeals andaccordingly no provision is considered necessary.
NOTE 28 Imported and Indigenous Materials Consumed(a) Consumption of raw materials:
For the year ended31st March, 2014
Imported (Amount in Rs)PercentageIndigenous (Amount in Rs.)Percentage
- -
987,163,009100%
- -
4,378,860,014100%
For the year ended31st March, 2015
Particulars
(b) Consumption of stores and consumables:
For the year ended31st March, 2014
Imported (Amount in Rs)PercentageIndigenous (Amount in Rs.)Percentage
- - 51,991,769
100%
- -
88,129,710100%
For the year ended31st March, 2015
Particulars
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ANNUAL REPORT 2014-15
| 143
GURUDEV
SURANA INDUSTRIES LIMITED
CIN : L27104TN1991PLC020533
Notes forming part of the financial statements
NOTE 29 Earning and Expenditures in Foreign CurrencyThere are no foreign exchange earning or expenditure incurred by the Company during the current and previous financial year.
(i) Subsidiaries
(ii) Step Down Subsidiaries
(iii) Key Managerial Personnel
Surana Power LimitedSurana Green Power LimitedSurana Mines and Minerals Limited, SingaporeUday Energy Pvt LimitedSurana Holdings Pte Limited
PT Borneo Mines and Minerals Limited, IndonesiaSurana Green Energy LimitedPower India Pte Limited
Shri G.R Surana - ChairmanShri Dineshchand Surana
Names of related partiesDescription of relationship
NOTE 30 Related party transactionsA. Details of related parties:
B Details of related party transactions during the year Amount in INR
For the year ended31st March, 2014
Surana Power LimitedSalesPurchasesReimbursement of ExpensesSale of stores and consumables
Surana Green Power LimitedPurchase of power
Surana Mines and Minerals LtdProvision for bad and doubtful debts
Surana Holding Pte.LtdProvision for diminution in the value of investments
Uday energy LimitedWrite off of investments
Remuneration to Key Managerial PersonnelShri G.R Surana - ChairmanShri Dineshchand Surana
Promoters’ Contribution as per the CDR package (Refer Note 5)Shri Dineshchand Surana
- - - -
-
28,365,045
288,964
99,960
- -
132,435,000
12,936,23819,412,14811,531,928
321,927
3,950,331
-
-
-
2,400,000 2,400,000
-
For the year ended31st March, 2015
Particulars
Related parties are as identified by the management and relied upon by the auditors
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ANNUAL REPORT 2014-15
144 |
C. Balances outstanding at the end of the year
As at 31st March, 2014INR
Surana Power LimitedInvestmentsLoans and Advances
Surana Green Power LimitedInvestmentsPayables
Surana Mines and Minerals LtdInvestmentsReceivablesProvision for bad and doubtful debts
Uday Energy LimitedInvestments
Surana Holding Pte.LtdInvestmentsProvision for diminution in the value of investments
Shri Dineshchand SuranaInterest free unsecured loan
Corporate Guarantee givenSurana Power LimitedSurana Green Power Limited
4,185,000,000 -
561,536,000 -
595,877,09028,365,045
(28,365,045)
-
288,964(288,964)
132,435,000
1,000,000,000125,000,000
3,910,000,000242,137,899
561,536,00023,825,134
595,877,09023,310,495
-
99,960
288,964 -
-
1,000,000,000125,000,000
As at 31st March, 2015INR
Particulars
The term loans from banks and financial institutions have also been secured by thepersonal guarantee provided by the promoters (Refer Note 5(ii)).
31 Earnings Per Share
Earnings per share is computed by dividing the profit / (loss) after tax (including the post-tax effect of extraordinary items,if any) by the weighted average number of equity shares outstanding during the year.
Diluted EPS:As per the MRA, the CDR lenders shall have a right to convert:a. Entire / part of WCTL / FITL and / or entire defaulted interest and entire / part of defaulted principal into equity at par in theevent of default.b. Upto 20% of the term debt outstanding beyond seven years as per SEBI guidelines / loan covenants whichever isapplicable, into equityc. The entire WCTL / FITL into equity at any time during the restructuring period.As at the Balance Sheet date, the conditions that relate to the conversion of the loans into equity do not exist and no shareshave been converted during the year
As at 31st March, 2014
Profit /(Loss ) after Tax (Rs.)Weighted average number of shares outstanding during the yearFace Value of Share (Rs.)Basic and Diluted Earnings per share (Rs.)
(2,627,887,979)44,519,067
10 (59.03)
(1,554,612,594)44,519,067
10 (34.92)
As at 31st March, 2015Particulars
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ANNUAL REPORT 2014-15
| 145
Revised useful lifebased on SLM
Factory BuildingsComputers and Data Processing EquipmentGeneral Plant and MachineryFurniture and FixturesVehicles
3.34% ~ 30 Years4.75% - 21 Years4.75% ~ 21 Years4.75% - 21 Years9.5% - 10 Years
30 years6 years
5-20 years10 years10 years
Previous depreciation rate/ useful life
Previous deprecia-tion method
Asset category
Straight line Method (“SLM”)- do -- do -- do -
-
Pursuant to the transition provisions prescribed in Schedule II to the Companies Act, 2013, the Company has fullydepreciated the carrying value of assets, net of residual value, where the remaining useful life of the asset was deter-mined to be nil as on April 1, 2014, and has adjusted an amount of Rs.64,465,025 against the opening Surplus balancein the Statement of Profit and Loss under Reserves and Surplus.
The depreciation expense in the Statement of Profit and Loss for the year is higher Rs.9,094,588 consequent to thechange in the useful life of the assets.
NOTE 32 Dues to Micro Small and Medium enterprisesThere are no dues to enterprises as defined under Micro, Small and Medium enterprises Development Act, 2006, as at 31stMarch 2015 as well as 31st March 2014, which is on the basis of such parties having been identified by the management andrelied upon by the auditors.
NOTE 33 DepreciationPursuant to the notification of Schedule II to the Companies Act, 2013 with effect from April 1, 2014, the Company revised theestimated useful life of its fixed assets to align the useful life with those specified in Schedule II. Further, assets individuallycosting Rs. 5,000 or less that were depreciated fully in the year of purchase are now depreciated based on the useful lifeconsidered by the Company for the respective category of assets. The details of previously applied depreciation / useful lifeare as follows:
NOTE 34 Segment ReportingThe Company is engaged in a single business segment i.e. dealing with iron and steel products primarily in one geographicalsegment. Accordingly, there are no separate reportable segments as per the Accounting Standard 17 on Segment reporting.
NOTE 35 Provisions for contingenciesThe Company has made provision for various disputed liabilities based on its assessment of the amount it estimates to incurto meet such liabilities, as follows
As at 31st March,2015 (Rs.)
Provision for contigencies - disputed liabilities
(Figures in bracket relates to the previous year)
80,000,000
(-)
80,000,000
(-)
Additions (Rs.)As at 1st April, 2014
(Rs.)Particulars
-
(-)
NOTE 36Previous year’s figures have been regrouped / reclassified wherever necessary to correspond with the current year’sclassification / disclosure.
For and on behalf of the Board of Directors
BABU SRINIVASAN DINESHCHAND SURANA Chairman Managing Director (DIN : 06608264) (DIN : 00007032)
ANIL GUPTAGroup Chief Financial
Officer
D HEM SENTHIL RAJCompany Secretary
M.No A25451
Date : 30 May 2015 Place : Chennai
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ANNUAL REPORT 2014-15
146 |
INDEPENDENT AUDITOR'S REPORT
To the Members of Surana Industries Limited
Report on the Consolidated Financial Statements
We have audited the accompanying consolidated
financial statements of Surana Industries Limited
(here in after referred to as "the Holding
Company") and its subsidiaries (the Holding
Company and its subsidiaries to get her referred
to as "the Group"), comprising the Consolidated
Balance Sheet as at March 31, 2015, and the Con-
solidated Statement of Profit and Loss and Con-
solidated Cash Flow Statement for the year then
ended, and a summary of significant accounting
policies and other explanatory information (here
in after referred to as "the consolidated financial
statements").
Management's Responsibility for the
Consolidated Financial Statements
The Holding Company's Board of Directors is
responsible for these consolidated financial
statements interms of the requirements of the
Companies Act, 2013 (here in after referred to as
"the Act") that give a true and fair view of the
consolidated financial position, consolidated
financial performance and consolidated cash flow
soft he Group in accordance with the accounting
principles generally accepted in India, including
the Accounting Standards specified under
Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014. The respective
Board of Director soft he companies included in
the Group are responsible for maintenance of
adequate accounting records in accordance with
the provision soft he Act for safeguarding the
asset soft he Group and for preventing and
detecting frauds and other irregularities; the
selection and application of appropriate accounting
policies; making judgements and estimates that
are reasonable and prudent; and the design,
implementation and maintenance of adequate
internal financial controls, that were operating
effectively for ensuring the accuracy and
completeness soft he accounting records,
relevant to the preparation and presentation of
the financial statements that give a true and fair
view and are free from material misstatement,
whether duet of raud or error, which have been
used for the purpose of preparation of the
consolidated financial statements by the
Directors of the Holding Company, as aforesaid.
Auditor's Responsibility
Our responsibility is to express an opinion on the
second soli dated financial statements based on
our audit. While conducting the audit, we have
taken into account the provision soft he Act, the
accounting and auditing stand a rds and matters
which are required to be included in the audit
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ANNUAL REPORT 2014-15
| 147
report under the provisions of the Act and the
Rules made the re under.
We conducted our audit in accordance with the
Standards on Auditing specified under Section
143(10) of the Act. Those Standards require that
we comply with ethical requirements and plan and
perform the audit to obtain reasonable assurance
about whether the consolidated financial
statements are free from material misstatement.
An audit involves performing procedures to
obtain audit evidence about the amounts and the
disclosures in the consolidated financial
statements. The procedures selected depend on
the auditor's judgment, including the assessment
of the risks of material misstatement of the
consolidated financial statements, whether due
to fraud or error. In making those risk assessments,
the auditor considers internal financial control
relevant to the Holding Company's preparation
of the consolidated financial statements that give
a true and fair view in order to design audit
procedures that are appropriate in the
circumstances, but not for the purpose of expressing
an opinion on whether the Holding Company has
in place an adequate internal financial control
system over financial reporting and the operating
effectiveness of such controls. An audit also
includes evaluating the appropriateness of the
accounting policies used and the reasonableness
of the accounting estimates made by the Holding
Company's Directors, as well as evaluating the
overall presentation of the consolidated financial
statements.
We believe that the audit evidence obtained by
us, is sufficient and appropriate to provide a basis
for our qualified audit opinion on the consolidated
financial statements.
Basis for Qualified Opinion
1. Capital work in progressstated in note 13 includes:
(a) Interest on borrowings aggregating to Rs.
4,853,499,659 (including Rs.
2,287,228,844 for the year) relating to the
periods during which the projectshave
been stalled, which isa departure from
Accounting Standard 16 (AS-16) on
"Borrowing Costs". Had the interest
capitalized during the period in which the
projectswere stalled been charged to the
Statement of Profit & Loss, the loss for
the year and, the Deficit in the Statement
of Profit and Loss, will be higher by Rs.
4,853,499,659and Capital Work in
Progress will be lower by Rs.
4,853,499,659.
(b) Preoperative expenses incurred in relation
to the project aggregating to Rs.
547,515,081(including Rs.44,851,075 for
the year) relating to the periods during
which the projects have been stalled,
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ANNUAL REPORT 2014-15
which isa departure from Accounting
Standard 10 (AS-10) on "Fixed Assets".
Had such expenditure capitalized dur-
ing the period in which the projects were
stalled been charged to the Statement
of Profit & Loss, the loss for the year
and the Deficit in the Statement of Profit
and Loss, will be higher by Rs.
547,515,081 and Capital Work in
Progress will be lower by Rs.
547,515,081.
2. Attention is invited to note 16 relating to
inventory aggregating to Rs. 2,872,506,243,
the quantity, quality and realizable value of
which were not assessed and determined.As
per by Accounting Standard 2 - Inventories
these inventories should be valued at the
lower of cost and net realizable value. In the
absence of the net realizable value, we are
unable to comment on the adjustmentsthat
may be required to the carrying values of
these inventories as at March 31, 2015.
3. Long term loans and advances given in note
15 (B) (iii) include dues from subcontractors
aggregating to Rs. 403,437,995, represent-
ing the amounts taken over from the EPC
contractors as stated in that Note which are
considered good and recoverable by the
management. In the absence of any
confirmation / agreement from these parties,
we are unable to comment on the adjust-
ments that may be required on the carrying
value of these advances.
4. Trade payables stated in note 10(ii) and
referred to in note 15(B) (iii) include amounts
payable to subcontractors aggregating to Rs.
314,147,212 and retention monies payable
aggregating to Rs 66,132,136. In the absence
of details or confirmations from the parties,
we are unable to comment on the completeness
of these liabilities.
Qualified Opinion
In our opinion and to the best of our information
and according to the explanations given to us,
except for the effects of the matters described in
paragraphs1 (a) and 1 (b), and the possibleeffects
of the matters described paragraphs 2, 3and 4 in
the Basis for Qualified Opinion paragraph above,
the aforesaid consolidated financial statements
give the information required by the Act in the
manner so required and give a true and fair view
in conformity with the accounting principles
generally accepted in India, of the consolidated
state of affairs of the Group as at March 31, 2015,
and their consolidated loss and their consolidated
cash flows for the year ended on that date.
Emphasis of matter
We draw attention to Note 27 to the consolidated
financial statements regarding the conclusion of
the Management regarding the carrying value of
the 35 MW power plant and the 2 X 210 MW
148 |
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ANNUAL REPORT 2014-15
power project based on the independent
valuation obtained by a subsidiary.
Our opinion is not qualified in respect of the above
matter.
Other Matters
We did not audit the financial information of 8
subsidiaries as stated in Note 2.2 (vi), whose
financial information reflect total assets of Rs.
1,391,644,629 as at 31 March 2015, total
revenues of Rs. 82,107,881 and net cash outflows
amounting to Rs. 323,825 for the year ended on
that date, as considered in the consolidated
financial statements. These financial information
are unaudited, and have been furnished to us by
the management, and our opinion on the
consolidated financial statements, in so far as it
re latest the amounts and disclosures included in
respect of these subsidiaries and our report in
terms of sub-sections (3) and (11) of Section143of
the Act, in so far as it relates the fore said
subsidiaries, is based solely on such unaudited
financial information. In our opinion and according
to the information and explanations provided to
us, these financial information are not material to
the Group.
Our opinion on the consolidated financial
statements, and our report on Other Legal and
Regulatory Requirements below, is not modified
in respect of the above matters with respect to
the financial information certified by the Manage-
ment.
Report on Other Legal and Regulatory
Requirements
1. As required by the Companies (Auditor's
Report) Order, 2015 ("the Order") issued by
the Central Government in terms of sub-sec-
tion (11) of Section 143 of the Act, based on
the comments in the auditors' reports of the
Holding company and a subsidiary company
we give in the Annexure a statement on the
matters specified in paragraphs 3 and 4 of
the Order to the extent applicable.
2. As required by Section 143 (3) of the Act, we
report, to the extent applicable, that:
(a) We have sought and except for the
matters described in the Basis for Qualified
Opinion paragraph, obtained all the
information and explanations which to
the best of our knowledge and belief were
necessary for the purposes of our audit.
(b) Except for the effects of the matters
described in paragraph 1 and the
possible effects of the matters described
in paragraphs 2,3 and 4 of the Basis for
Qualified Opinion paragraph above, in
our opinion, proper books of account as
required by law relating to the preparation
of the aforesaid consolidated financial
| 149
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ANNUAL REPORT 2014-15
statements have been kept so far as it
appears from our examination of those
books.
(c) The Consolidated Balance Sheet, the
Consolidated Statement of Profit and
Loss, and the Consolidated Cash Flow
Statement dealt with by this Report are
in agreement with the relevant books of
account maintained for the purpose of
preparation of the consolidated financial
statements.
(d) Except for the effects of the matters
described in paragraph 1 and the
possible effects of the matters described
in paragraphs 2, 3 and 4 of the Basis for
Qualified Opinion paragraph above, in
our opinion, the aforesaid consolidated
financial statements comply with the Ac-
counting Standards specified under Sec-
tion 133 of the Act, read with Rule 7 of
the Companies (Accounts) Rules, 2014.
(e) The matters described in the Basis for
Qualified Opinion paragraph above read
with the matters stated in clauses (i), (ii),
(iv) and (ix) of the Annexure to the
Auditor's Report referred to in paragraph
1 under 'Report on Other Legal and
Regulatory Requirements' section of our
report, in our opinion, may have an
adverse effect on the functioning of the
Group.
(f) On the basis of the written representations
received from the directors of:
i. the Ho ld ing Company and a
subsidiary company incorporated in
India ("Surana Power Limited") as
at March 31, 2015 taken on record
by the Board of Directors; and
ii. 3 subsidiaries incorporated in India
namely. Surana Green Energy
Limited, Surana Green Power
Limited and Uday Energy Private
Limited, in respect of which financial
information are unaudited, and
have been furnished to us by the
management, we have obtained
and verified the written representa-
tions received from the directors of
said companies as at March 31,
2015
none of the directors of the Holding Company
and the above-said subsidiary companies
incorporated in India, is disqualified as on
March 31, 2015 from being appointed as a
director in terms of Section 164 (2) of the Act.
(g) The qualification relating to the maintenance
of accounts and other matters con-
nected therewith are as stated in the
150 |
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ANNUAL REPORT 2014-15
Basis for Qualified Opinion paragraph
above.
(h) With respect to the other matters to be
included in the Auditor's Report in accordance
with Rule 11 of the Companies (Audit and
Auditors) Rules, 2014, in our opinion and
read with the matters stated in Other
Matters paragraph of our report, and to
the best of our information and according
to the explanations given to us:
i. The consolidated financial statements
disclose the impact of pending litigations
on the consolidated financial position
of the Group (Refer Note 29B to the
Consolidated Financial Statements) in
respect of the Holding Company and
a subsidiary company incorporated in
India ("Surana Power Limited");
ii. the Holding Company and a subsidiary
company incorporated in India
("Surana Power Limited") did not have
any long-term contracts including
derivative contracts for which there
were any material foreseeable losses.
iii. There has been no delay in transferring
amounts, required to be transferred,
to the Investor Education and Protection
Fund by the Holding Company. In
respect of a subsidiary company incor-
porated in India("Surana Power
Limited"), there were no amounts which
were required to be transferred to the
Investor Education and Protection
Fund.
For DELOITTE HASKINS & SELLS LLP
Chartered Accountants
(Firm's Registration No. 117366W/W-100018)
Sd/-
Geetha Suryanarayanan
Partner
(Membership No. 29519)
Date : May 30, 2015
Place : Chennai,
| 151
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ANNUAL REPORT 2014-15
152 |
ANNEXURE TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 1 under 'Report on Other Legal and Regulatory Requirements'
section of our report of even date)
Our reporting on the Order includes the Holding
Company and a subsidiary company incorporated
in India("Surana Power Limited"), to which the Or-
der is applicable. In respect of 2 subsidiary
companies incorporated in India, namely. Surana
Green Energy Limited, and Surana Green Power
Limited which have been included in the consolidated
financial statements based on unaudited financial
information of such entities provided to us by the
Management. In our opinion, and according to
the information and explanations given to us,
reporting under the Order is applicable in respect
of these entities. Since these entities are unaudited,
the possible effects of the same on our reporting
under the Order in the case of these consolidated
financial statements has not been considered.
(i) In respect of its fixed assets of the Holding
Company and a subsidiary company incor-
porated in India("Surana Power Limited"):
a) The respective entities have maintained
proper records showing full particulars,
including quantitative details and situation
of fixed assets.
b) During the year, the respective entities
have not carried out physical verification
of their fixed assets. The respective
entities do not have a regular programme
for verification of theirfixed assets.
(ii) In respect of its inventories of the Holding
Company and a subsidiary company incor-
porated in India("Surana Power Limited"):
a) As explained to us and read with our
observations in paragraph 2 of the Basis
for Qualified Opinion paragraph, the
inventories were not physically verified /
weighed during the year by the
Management of the respective entities.In
respect of inventories of a subsidiary
company ("Surana Power Limited"), held
at port, confirmation has been received
from the Clearing & Forwarding Agent.
b) In our opinion and according to the
information and explanations given to us
and read with our observations in para-
graph 2 of the Basis for Qualified Opin-
ion paragraph, the procedures of physi-
cal verification of inventories followed by
the Management of the respective enti-
ties were not reasonable and adequate
and needs to be improved further taking
into account the size of the respective
entities and the nature of its business.
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ANNUAL REPORT 2014-15
| 153
c) In our opinion and according to the
information and explanations given to us,
the respective entities have maintained
records of its inventories. For reasons
stated in paragraphs (ii) (a) and (ii) (b)
above and read with our observation in
paragraph 2 of the Basis for Qualified
Opinion paragraph, we are unable to
comment on the discrepancies noticed
on physical verification of inventories and
up dation of the inventory records.
(iii) The Holding Company and a subsidiary
company incorporated in India ("Surana
Power Limited"), have not granted any loans,
secured or unsecured, to companies, firms
or other parties covered in the Register
maintained under Section 189 of the Companies
Act, 2013 by the respective entities.
(iv) In our opinion and according to the information
and explanations given to us, the internal
control systems need to be strengthened in
respect of the Holding Company and a
subsidiary company incorporated in India
("Surana Power Limited"), to make it commen-
surate with the size of the respective entities
and the nature of their business for the
purchase of inventory and fixed assets and
for the sale of goods and services and during
the course of the audit, we have not observed
any continuing failure to correct major
weaknesses in such internal control system.
The subsidiary company does not have any
sale of services.
(v) According to the information and explanations
given to us, the Holding Company and a
subsidiary company incorporated in India
("Surana Power Limited"), have not accepted
deposits from public during the year.
(vi) According to the information and explanations
given to us, in our opinion, the Holding Com-
pany and a subsidiary company incorporated
in India ("Surana Power Limited"), have, prima
facie, made and maintained the prescribed
cost records pursuant to the Companies (Cost
Records and Audit) Rules, 2014, as amended
prescribed by the Central Government under
subsection (1) of Section 148 of the Compa-
nies Act, 2013.We have, however, not made
a detailed examination of the cost records with
a view to determine whether they are accu-
rate or complete.
(vii)According to the information and explanations
given to us, in respect of statutory dues of the
Holding Company and a subsidiary company
incorporated in India ("Surana Power Limited"):
a. The respective entities not been regu-
lar indepositing undisputed dues, including Provi-
dent Fund,
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ANNUAL REPORT 2014-15
154 |
Employees' State Insurance, Income-tax, Value Added Tax, Service Tax, Customs duty, Excise
duty, Cess and other material statutory dues applicable to it with the appropriate authorities and
there were inordinate delays in a number of cases in respect of Provident Fund, Tax Deducted at
Source, Service Tax and Value Added Tax.
b. Dues of Employees State Insurance amounting to Rs. 390,120, Income Tax, amounting to Rs. 9,618,478,
Provident Fund amounting to Rs. 1,445,879, and Service Tax amounting to Rs. 3,580,775 were due
by the Holding Company and a subsidiary company incorporated in India ("Surana Power Limited"),for
a period of more than six months from the date they became payable. There were no undisputed
amounts payable by the respective entities in respect of Value Added Tax, Customs Duty, Excise
Duty and Cess and other material statutory dues in arrears as at March 31, 2015 for a period of
more than six months from the date they became payable.
c. Details of dues of Employees' State Insurance, Excise Duty, Customs Duty, Value Added Tax and
Central Sales Tax which have not been deposited as on March 31, 2015 on account of disputes by
the Holding Company and a subsidiary company incorporated in India ("Surana Power Limited"),are
given below:
Honourable High Courtof Chennai
Commissioner ofCentral Excise, Com-missioner II, Chennai
Honourable High Courtof Chennai
Appeal will be filedbefore CESTAT,Bangalore
Honourable High Courtof Chennai
Commissioner ofCentral Excise, Com-missioner II, Chennai
Employees' State Insur-ance Act, 1948
Central Excise Act, 1944
Central Excise Act, 1944
Central Excise Act, 1944
Central Excise Act, 1944
Central Excise Act, 1944
Name of Statute
Period towhich theamount
relates to
Forum whereDispute is Pending
Amount Involved
(Rs.)
Nature ofDues
Employee StateInsurance
Central Excise
Central Excise
Central Excise
Central Excise
Central Excise
2010-11
2006
1999-2000
2013
1997-2000
2010
6,111,988
13,832,710
2,868,511
2,800,000
9,388,727
50,359,737
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ANNUAL REPORT 2014-15
| 155
Commissioner of Cen-tral Excise, Commis-sioner I, Chennai
CESTAT, Bangalore
Commissioner(Appeals)
Honourable High Courtof Chennai
Honourable High Courtof Chennai
Honourable High Courtof Chennai
Honourable SupremeCourt
Commissioner of Cus-toms
Honourable High Courtof Chennai
Honourable High Courtof Chennai
Writ filed beforeHonourable High Courtof Chennai
Pending before SalesTax Tribunal Gulbarga
Pending before SalesTax Tribunal, Gulbarga
Honourable High Courtof Chennai
Honourable High Courtof Chennai
Honourable High Courtof Chennai
Honourable High Courtof Chennai
2010
2011
2012-13
1999-2000
1998-1999
2000-03
2005-06
2012-13
2008-09
2009-10
2006-07 to2010-11
2007-08 &2008-09
2010-11
2010-11
2011-12
2012-13
2013-14
15,000,000
235,265,808
56,756,116
2,086,066
782,445
10,000,000
13,829,000
21,606,868
192,742
234,547
181,785,401
10,867,454
858,052
28,454,281
5,950,109
7,535,500
4,597,143
681,163,205
Central Excise
Central Excise
Central Excise
Customs Duty
Customs Duty
Customs Duty
Customs Duty
Customs duty on mis-classification of Bitumi-nous Coal as Steam Coal
Value Added Tax
Value Added Tax
Value Added Tax
Value Added Tax
Value Added Tax
Value Added Tax
Value Added Tax
Value Added Tax
Value Added Tax
Central Excise Act, 1944
Central Excise Act, 1944
Central Excise Act, 1944
Customs Act, 1962
Customs Act, 1962
Customs Act, 1962
Customs Act, 1962
Customs Act, 1962
Various states(Sales Tax Acts)
Various states(Sales Tax Acts)
Various states (Sales TaxActs) and Central SalesTax, 1956
Various states (Sales TaxActs)
Various states (Sales TaxActs)
Various states (Sales TaxActs)
Various states (Sales TaxActs)
Various states (Sales TaxActs)
Various states (Sales TaxActs)
Total
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ANNUAL REPORT 2014-15
(d. The Holding Company has been regular in
transferring amounts to the Investor
Education and Protection Fund in accordance
with the relevant provisions of the Companies
Act 1956 (1 of 1956) and Rules made there
under within time. With respect to a
subsidiary company incorporated in India
("Surana Power Limited"), there are no
amounts that are due to be transferred to the
Investor Education and Protection Fund in
accordance with the relevant provisions of the
Companies Act, 1956 (1 of 1956) and Rules
made there under.
(viii)After considering the effect of our audit
qualifications reported in paragraphs (1)(a)
and (1)(b) of the Basis for Qualified Opinion
of our Audit Report and without considering
the possible effects of our audit qualifications
reported in paragraphs 2, 3 and 4 of the
Basis for Qualified Opinion of our Audit
Report which is not quantifiable, the accumulated
losses of the Group at the end of the financial
year are more than fifty per cent of its net worth
and the Group has incurred cash losses
during the financial year covered by our audit
and in the immediately preceding financial
year.
(ix) In our opinion and according to the information
and explanations given to us:
156 |
i. the Holding Company incorporated in India
has not defaulted in repayment of dues to
banks and financial institutions, as stipulated
in the Master Restructuring Agreement
(refer to note 5.1 of the consolidated financial
statements) except that there has been a de-
fault in repayment of interest amounting to
Rs.48,700,000 outstanding as at March 31,
2015 payable to a financial institution (refer
to note 5.4 of the consolidated financial
statements).
ii. the subsidiary company incorporated in India
("Surana Power Limited"),has defaulted in the
repayment of principal to a financial
institution aggregating to Rs. 44,093,182 and
in the payment of interest to financial institu-
tions and banks aggregating to Rs.
676,406,750. (Refer to notes5.6 3 and 5.6.4
of the consolidated financial statements).
The Holding Company and a subsidiary company
incorporated in India ("Surana Power Limited"),
have not issued any debentures.
(x) According to the information and explanations
given to us, the Holding Company and a
subsidiary company incorporated in India
("Surana Power Limited"),have not given
guarantees for loans taken by others outside
of the Group from banks and financial
institutions.
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ANNUAL REPORT 2014-15
| 157
(xi) In our opinion and according to the information and explanations given to us, the term loans have
been applied by the Holding Company and a subsidiary company incorporated in India ("Surana
Power Limited"),during the year for the purposes for which they were obtained, other than temporary
deployment pending application.
(xii)To the best of our knowledge and according to the information and explanations given to us, no fraud
by the Holding Company and a subsidiary company incorporated in India ("Surana Power Limited"),and
no material fraud on the Holding Company and a subsidiary company incorporated in India ("Surana
Power Limited"),has been noticed or reported during the year.
For DELOITTE HASKINS & SELLS LLP
Chartered Accountants
(Firm's Registration No. 117366W/W-100018)
Sd/-
Geetha Suryanarayanan
Partner
(Membership No. 29519)
Date : May 30, 2015
Place : Chennai
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ANNUAL REPORT 2014-15
158 |
GURUDEV
SURANA INDUSTRIES LIMITED
CIN : L27104TN1991PLC020533
Consolidated Balance Sheet as at 31st March, 2015
In terms of our report attachedFOR DELOITTE HASKINS & SELLS LLPChartered Accountants
GEETHA SURYANARAYANANPartner
Date : May 30, 2015Place : Chennai
For and an Behalf of the Board of Directors
BABU SRINIVASANChairman
(DIN : 06608264)
As at 31st March 2014 Rs.
EQUITY AND LIABILITIES
SHAREHOLDERS’ FUNDSShare capitalReserves and surplus
Minority Interest
NON-CURRENT LIABILITIESLong term borrowingsOther long term liabilitiesLong term provisionsDeferred Tax Liability
CURRENT LIABILITIESShort term borrowingsTrade payablesOther current liabilitiesShort term provisions
TOTALASSETSNON-CURRENT ASSETS
Fixed assets(i) Tangible and Intangible assets(ii) Capital work in progressGoodwill
Non-current investmentsDeferred tax assets (net)Long term loans and advances
CURRENT ASSETSInventoriesTrade receivablesCash and cash equivalentsShort term loans and advances
TOTAL
34
5678
9101112
13
14815
16171819
445,190,670 3,492,187,485 3,937,378,155 355,503,468
24,755,755,607 587,764,461 951,777,229 131,389,725 26,426,687,022
4,136,221,6103,650,073,7291,613,313,662
15,330,166 9,414,939,167 40,134,507,812
8,417,036,498 21,789,394,283 97,395,598
309,300 - 2,365,840,393 32,669,976,072
2,936,861,213 3,393,695,475 281,444,043 852,531,009 7,464,531,740
40,134,507,812
445,190,670 8,084,959,265 8,530,149,935
59,145,455
23,198,536,213 265,710,157 335,411,709 - 23,799,658,079
3,469,319,115 4,575,793,644 1,257,549,992 94,145,406 9,396,808,157 41,785,761,626
9,184,431,598 19,342,091,361 97,395,598
-309,300
127,155,8514,622,598,599
33,373,982,307
3,439,370,4973,734,547,160
148,399,820 1,089,461,842 8,411,779,319
41,785,761,626
DINESHCHAND SURANAManaging Director(DIN : 00007032)
D HEM SENTHIL RAJCompany Secretary
M.No. A25451
As at 31st March 2015 Rs.
NoteParticulars
ANIL GUPTA Group Chief Financial
Officer
See accompanying notes forming part of the financial statements
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ANNUAL REPORT 2014-15
| 159
GURUDEV
SURANA INDUSTRIES LIMITED
CIN : L27104TN1991PLC020533
Consolidated Statement of Profit and Loss for the year ended 31st March, 201531st March, 2014
Rs.
REVENUERevenue from operations (gross)Less: Excise duty
Revenue from operations (net)
Other incomeTOTAL REVENUE
EXPENSESCost of materials consumedPurchases of stock-in-tradeChanges in inventories of finished goods andstock-in-tradeEmployee benefits expenseFinance costsDepreciation expenseOther expensesAdvances written off
TOTAL EXPENSESLOSS BEFORE PRIOR PERIOD ITEMS AND TAX
Prior Period ExpenditureLOSS BEFORE TAX
TAX EXPENSEProvision for tax relating to earlier years no longerrequired written backReversal of MAT credit recognized in earlier yearsReversal / (Recognition) of deferred tax asset
LOSS FOR THE YEAR
(Add) / Less: Share of profit / (loss) attributable to Minority interest
(Loss) for the year attributable to the shareholdersof the Company
Earnings per share (of Rs.10 each):BasicDiluted
20
21
22A
22B
2324132515
26
198
3131
6,691,140,278(137,155,352)6,553,984,926
82,261,8996,636,246,825
1,145,227,7305,010,140,136
414,899,465
61,714,5741,666,120,943
741,652,878623,448,203862,402,591
10,525,606,520 (3,889,359,695)
151,650,000 (4,041,009,695)
(55,620,538)324,690,825117,408,801386,479,088
(4,427,488,783)
(39,384,140)
(4,388,104,643)
(99.45) (99.45)
6,577,399,683(266,193,696)6,311,205,987
39,893,3056,351,099,292
4,617,593,3101,437,331,810
259,303,784
146,976,1161,762,778,989
486,626,831306,878,367
-9,017,489,207
(2,666,389,915)
- (2,666,389,915
- -
(948,955,921) (948,955,921)
(1,717,433,994)
-
(1,717,433,994)
(38.58) (38.58)
31st March, 2015Rs.NoteParticulars
In terms of our report attachedFOR DELOITTE HASKINS & SELLS LLPChartered Accountants
GEETHA SURYANARAYANANPartner
Date : May 30, 2015Place : Chennai
For and an Behalf of the Board of Directors
BABU SRINIVASANChairman
(DIN : 06608264)
DINESHCHAND SURANAManaging Director(DIN : 00007032)
D HEM SENTHIL RAJCompany Secretary
M.No. A25451
ANIL GUPTA Group Chief Financial
Officer
See accompanying notes forming part of the financial statements
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ANNUAL REPORT 2014-15
160 |
GURUDEV
SURANA INDUSTRIES LIMITED
CIN : L27104TN1991PLC020533
Consolidated Cash Flow Statement for the year ended 31st March, 2015
For the Year Ended 31st March 2014 Rs. Rs.
A. Cash flow from operating activitiesProfit / (Loss) before taxAdjustments for:Depreciation expenseFinance costsInterest incomeDividend incomeLiabilities no longer required written backProvision for doubtful trade receivables, loans and advancesTrade receivables written offWrite off of Capital work in progressProvision for contingenciesProvision for employee benefitsAdvances written offLoss on sale of investmentsLoss on sale / write off of assets
Operating profit / (loss) before working capital changesChanges in working capital:Adjustments for (increase) / decrease in operatingassets:InventoriesTrade receivablesShort term loans and advancesLong term loans and advances
Adjustments for increase / (decrease) in operatingliabilities:Trade payablesShort term provisionsOther current liabilitiesOther long term liabilitiesLong term provisions
Cash generated from operationsNet income tax (paid) / refundsNet cash flow from / (used in) operating activities(A)
B. Cash flow from investing activitiesCapital expenditure on fixed assets, including capital advancesProceeds from sale of investmentsMovement in Bank deposits (See Note 1 below)Interest received from banksDividend received from investmentsNet cash flow from / (used in) investing activities(B)
741,652,878 1,666,120,943
(4,218,294)(12,000)
(70,331,560)44,541,32717,435,13019,815,807
121,700,000(5,027,278)
862,402,591170,256,394
-
495,926,589(956,954,038)(33,591,945)(11,361,197)
708,001,310(2,012,929)
(565,792)503,984,304(3,296,519)
(184,547,958) -
(54,971,529)4,218,294
12,000
(2,666,389,915)
2,219,059,003(447,330,912)
(265,254,591)
(790,102,165)(1,502,687,668) 7,032,683
(1,495,654,985)
(1,251,835,282)
For the Year Ended 31st March 2015 Rs. Rs.Particulars
(4,041,009,695)
3,564,335,938(476,673,757)
(505,980,591)
1,206,110,374223,456,026(6,035,173)
217,420,853
(235,289,193)
486,626,8311,762,778,989
(11,349,129) -
(25,676,701) - 7,343,031 - -
(408,508) - -
(255,510)
50,775,039(112,217,313)
4,159,413(207,971,730)
10,405,312 -(594,129,142)(525,302,494)
318,924,159
(1,340,399,493) 69,297,354 7,996,013 11,270,844
-
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ANNUAL REPORT 2014-15
| 161
For the Year Ended 31st March 2014 Rs. Rs.
For the Year Ended 31st March 2015 Rs. Rs.Particulars
C. Cash flow from financing activitiesProceeds from long-term borrowingsProceeds from other long-term borrowingsNet increase / (decrease) in working capital borrowingsDividend paidProceeds / (Repayment) from Bank BorrowingsFinance costs (includes borrowing costs capitalised)Net cash flow from / (used in) financing activities(C)Net increase / (decrease) in Cash and cashequivalents (A+B+C)Cash and cash equivalents at the beginning of the yearCash and cash equivalents at the end of the year
Notes1. Reconciliation of Cash and cash equivalents withthe Balance Sheet:Cash and cash equivalents (Refer Note 18)Less: Bank balances not considered as Cash and cashequivalents as defined in AS 3 Cash Flow Statements(Refer Note 18)Cash and cash equivalents at the end of the year
2. Disclosure of non cash adjustments:(a) Unsecured long term borrowings adjusted againsttrade receivables(b) Unsecured long term borrowings adjusted againsttrade payable(c) Unsecured long term borrowings adjusted againstother long term liabilities(d) Long term capital advances adjusted against tradepayable(e) Conversion of interest into borrowings(f) Capitalization of interest(g) Sale of investments without consideration in cash(h) Exchange fluctuation loss on long term borrowingadjusted against capital work in progress
1,467,339,470132,435,000666,902,493
(193,597)(278,736,437)
(1,891,805,895)
95,941,034
78,072,694119,770,198197,842,892
281,444,043
83,601,151197,842,892
907,865,210
425,700,000
14,600,000
1,447,999,780
995,798,668 223,386,319 346,000,000 62,275,000
2,553,995,597 -
(77,828,974) -(431,030,367) 93,387,730
2,138,523,986
(608,966,281) 728,736,479 119,770,198
148,399,820
28,629,622119,770,198
-
-
-
-
3,341,910,339 368,776,859
- 142,787,241
In terms of our report attachedFOR DELOITTE HASKINS & SELLS LLPChartered Accountants
GEETHA SURYANARAYANANPartner
Date : May 30, 2015Place : Chennai
For and an Behalf of the Board of Directors
BABU SRINIVASANChairman
(DIN : 06608264)
DINESHCHAND SURANAManaging Director(DIN : 00007032)
D HEM SENTHIL RAJCompany Secretary
M.No. A25451
ANIL GUPTA Group Chief Financial
Officer
See accompanying notes forming part of the financial statements
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ANNUAL REPORT 2014-15
162 |
GURUDEV
SURANA INDUSTRIES LIMITED
CIN : L27104TN1991PLC020533
CONSOLIDATED NOTES FORMING PART OF FINANCIAL STATEMENTS
1 CORPORATE INFORMATION
1.1 Surana Industries Limited (“the Company”) is a public company domiciled in India and incorporated under the provisionsof the Companies Act, 1956. The Company is into the business of manufacturing / trading of iron and steel products.
1.2 Owing to a number of factors such as non-availability of raw materials, depreciation in rupee, power curtailment, highinterest burden, labour agitation and delay in time and cost overrun of its projects, the Raichur plant of the Company hasnot been operated since April 2013 and the water and electricity connection have been severed by the service providers.The Company had approached the lead lender (IDBI Bank) for a Corporate Debt Restructuring (“CDR”) Proposal whichwas approved by the CDR Empowered Group (“CDR EG”) on 7th March, 2014 and Letter of Approval issued on 13thMarch, 2014. The Master Restructuring Agreement (“MRA”) between the Company, the Monitoring Institution (IDBIBank) and the CDR lenders was executed on 24th March, 2014 effective 1st June, 2013. Subsequent to the CDR, theCompany is negotiating with its bankers for release of working capital for re-commencement of its operations at Raichur.
1.3 As part of the restructuring exercise, the Company has also planned to divest its non core assets and its subsidiaries(Surana Power Limited, Surana Green Power Limited, Surana Mines and Mineral Limited) to raise finance. The Com-pany is into advanced negotiations with prospective buyers for divestment of these subsidiaries in the year 2015-16.
1.4 Subsequent to the Balance Sheet date, the Company has planned to shelve its Pelletisation and Benefication (“P&B”)Project at Raichur and a separate techno-economic viability of the operations at Raichur without the above project isbeing considered by its bankers. The assessment of readiness of the Raichur plant has also been carried out by anexternal agency who have reported that the plant is in working order subject to refurbishment, mechanical and electricaloverhauling.
1.5 The Raichur Integral Steel Plant was not operational for the entire financial year 2014-15 due to labour disputes andpaucity of working capital. The Company has been successful in resolving the labour disputes towards the end of thefinancial year 2014-15 and is also confident of arranging the required level of working capital within first quarter of thefinancial year 2015-16. The operations at Raichur is expected to be resumed in the financial year 2015-16.
2 SIGNIFICANT ACCOUNTING POLICIES
2.1 Basis of accounting and preparation of consolidated financial statements
The consolidated financial statements of the Company and its subsidiaries (together the “Group”) have been prepared inaccordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the AccountingStandards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts)Rules, 2014 and the relevant provisions of the Companies Act, 2013 (“the 2013 Act”) / Companies Act, 1956 (“the 1956Act”), as applicable.The consolidated financial statements have been prepared on accrual basis under the historical costconvention except for categories of fixed assets acquired in the year 2000-01,that are carried at revalued amounts. Theaccounting policies adopted in the preparation of the consolidated financial statements are consistent with those fol-lowed in the previous year. Consolidated financial statements are prepared using uniform accounting policies except asstated in Note 2.6 of this Schedule; the adjustments arising out of the same are not considered material.
2.2 Principles of consolidation
The consolidated financial statements relate to Surana Industries Limited (the “Company”) and its subsidiaries. Theconsolidated financial statements have been prepared on the following basis:
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ANNUAL REPORT 2014-15
| 163
(i) The financial statements of the subsidiary companies used in the consolidation are drawn upto the same reporting dateas that of the Company i.e., 31st March, 2015.
(ii) The financial statements of the Company and its subsidiary companies have been combined on a line-by-line basis byadding together like items of assets, liabilities, income and expenses, after eliminating intra-group balances, intra-grouptransactions and resulting unrealised profits or losses, unless cost cannot be recovered.
(iii) The excess of cost to the Group of its investments in the subsidiary companies over its share of equity of the subsidiarycompanies, at the dates on which the investments in the subsidiary companies were made, is recognised as ‘Goodwill’being an asset in the consolidated financial statements and is tested for impairment on annual basis. On the other hand,where the share of equity in the subsidiary companies as on the date of investment is in excess of cost of investments ofthe Group, it is recognised as ‘Capital Reserve’ and shown under the head ‘Reserves & Surplus’, in the consolidatedfinancial statements. ‘Goodwill’ / ‘Capital Reserve’ is determined separately for each subsidiary company and suchamounts are not set off between different entities.
(iv) Minority Interest in the net assets of the consolidated subsidiaries consist of the amount of equity attributable to theMinority shareholders at the date on which investments in the subsidiary companies were made and further movementsin their share in the equity, subsequent to the dates of investments. Net profit / loss for the year of the subsidiariesattributable to minority interest is identified and adjusted against the profit after tax of the Group in order to arrive at theincome attributable to shareholders of the Company.
(v) Goodwill arising on consolidation is not amortised but tested for impairment.
(vi) The following subsidiary companies have been considered in the preparation of the consolidated financial statements.
The financial statements of SMML, SGPL, SGEL, SHPL, UEPL, and PISPL have been prepared and certified by theManagement. # The financial statements are consolidated into SMML.
(vii) The consolidated financial statements have been prepared using uniform accounting policies for like transactions andother events in similar circumstances and are presented to the extent possible, in the same manner as the Company’sseparate financial statements.
Name of the entity% of Holding and voting power
either directly or indirectly
Surana Power Limited (SPL)Surana Green Power Limited (SGPL)Surana Green Energy Limited (SGEL)(through a subsidiary company - SGPL)Surana Mines & Minerals Ltd (SMML)PT Borneo Mines & Minerals #(through a subsidiary company - SMML)PT Sassanga Banua Banjar (PTSBB) #(through a subsidiary company - SMML)Surana Holdings Pte Ltd (SHPL)Uday Energy Private Limited (UEPL)Power India (Singapore) Pte Ltd (PISPL)(through a subsidiary company - SHPL)
IndiaIndiaIndia
SingaporeIndenesia
Indenesia
SingaporeIndiaSingapore
31st March, 2015 31st March, 2014
Country ofIncorporation
100%100%73%
100%51%
100%
100%100%80%
100%100%73%
100%51%
100%
100%100%80%
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ANNUAL REPORT 2014-15
164 |
2.3 Use of Estimates
The preparation of the consolidated financial statements in conformity with Indian GAAP requires the Management tomake estimates and assumptions considered in the reported amounts of assets and liabilities (including contingentliabilities) and the reported income and expenses during the year. The Management believes that the estimates usedin preparation of the financial statements are prudent and reasonable. Future results could differ due to these esti-mates and the differences between the actual results and the estimates are recognised in the periods in which theresults are known / materialise.
2.4 Inventories
Inventories comprising raw materials, stores and spares, work in progress and finished goods are valued at the lowerof cost determined on weighted average basis and net realisable value after providing for obsolescence and otherlosses, where considered necessary. Cost includes all direct costs and applicable production overheads incurred inbringing such inventories to their present location and condition. Cost includes all charges incurred in bringing thegoods to the point of sale including Octroi and other levies, transit insurance and receiving charges. Work in progressand finished goods include appropriate proportion of overheads and where applicable, excise duty.
Inventory of Power with respect to subsidiary company M/s. Surana Green Power Limited
The units generated are shown as inventory until certified by TANGEDCO and sold to either TANGEDCO and/orSurana Industries Limited. The units exported to Grid are valued at Rs. 2.75 per unit, being the lowest price at whichthese can be sold to TANGEDCO.
2.4 Cash and Cash Equivalents (for purposes of Cash Flow Statement)
Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short term balances (with anoriginal maturity of three months or less from the date of acquisition), highly liquid investments that are readilyconvertible into known amounts of cash and which are subject to insignificant risk of changes in value.
2.5 Cash Flow Statement
Cash flows are reported using the indirect method, whereby loss before extraordinary items and tax is adjusted for theeffects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments.The cash flows from operating, investing and financing activities of the Company are segregated based on theavailable information.
2.6 Depreciation
A. Tangible Assets
Depreciable amount for assets is the cost of an asset, or other amount substituted for cost, less its estimated residualvalue. Depreciation on tangible fixed assets has been provided on the straight-line method as per the useful lifeprescribed in Schedule II to the Companies Act, 2013. Depreciation on additions and deletions are provided on pro-rata basis. Assets costing less than Rs.5,000 are written off in the year of purchase. Leasehold land is amortised overthe duration of the lease.
Refer to Note 34 for change in estimate of useful life of fixed assets.
With respect to subsidiary companies, Surana Green Power Limited and Surana Green Energy LimitedDepreciation on fixed assets is provided under straight line method with the following useful lives:
FIXED ASSET Useful life (in years)
Lease hold Land
Buildings
Plant and Equipment
Furniture and Fixtures
Vehicles
3 / 20
20
1 / 15
4
3 / 9
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ANNUAL REPORT 2014-15
| 165
B. Intangible Assets
Intangible assets are amortised over their estimated useful life on straight line method. The estimated useful life of theintangible assets and the amortisation period are reviewed at the end of each financial year and the amortisation periodis revised to reflect the changed pattern, if any.
2.7 Revenue RecognitionSale of Goods
Sales are recognised, net of returns and trade discounts, on transfer of significant risks and rewards of ownership to thebuyer, which generally coincides with the delivery of goods to customers. Sales include excise duty but exclude salestax and value added tax.
Sale of Power
Revenue from sale of power is recognised on transfer of significant risks and rewards of ownership to the buyer whichgenerally coincide with the delivery of goods to the customer. Sale of power is recognised net of sales tax and valueadded tax.
Other Income
Interest income is accounted on accrual basis. Dividend Income is accounted for when the right to receive it isestablished.
2.8 Fixed AssetsTangible Assets
Fixed assets are carried at cost less accumulated depreciation and impairment losses, if any. The cost of fixed assetscomprises its purchase price net of any trade discounts and rebates, any import duties and other taxes (other thanthose subsequently recoverable from the tax authorities), any directly attributable expenditure on making the assetready for its intended use, other incidental expenses and interest on borrowings attributable to acquisition of qualifyingfixed assets up to the date the asset is ready for its intended use. Subsequent expenditure on fixed assets after itspurchase / completion is capitalised only if such expenditure results in an increase in the future benefits from such assetbeyond its previously assessed standard of performance.
The Company revalued certain assets during the year 2000-2001. The revalued assets are carried at the revaluedamounts less accumulated depreciation until March 31, 2014 and impairment losses, if any. Increase in the net bookvalue on such revaluation is credited to “Revaluation reserve account” except to the extent such increase is related toand not greater than a decrease arising from a revaluation / impairment that was previously recognised in the Statementof Profit and Loss, in which case such amount is credited to the Statement of Profit and Loss. Decrease in book valueon revaluation is charged to the Statement of Profit and Loss except where such decrease relates to a previouslyrecognised increase that was credited to the Revaluation reserve, in which case the decrease is charged to the Revalu-ation reserve to the extent the reserve has not been subsequently reversed / utilised.
Exploration and evaluation expenditure
Exploration and evaluation activity involves the search for mineral resources, determination of technical feasibility andthe assessment of the commercial viability of an identified resource. Cost incurred before the group has obtained thelegal rights to explore an area are recognised in the income statement. Exploration and evaluation expenditure arecapitalised in respect of each area of interest for which the rights to tenure are current and where :
(i) The exploration and evaluation expenditures are expected to be recouped through successful development andexploitation of the area of interest; or alternatively, by its sale; or
(ii) Exploration and evaluation activities in the area of interest have not reached a stage which permits a reasonableassessment of the existence or otherwise of economically recoverable reserves, and active and significantoperations in, or in relation to, the areas of interest are continuing.
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Exploration and evaluation expenditure compromises costs that are directly attributable to : researching and analysingexisting exploration data, gathering exploration data through topographical, geochemical and geophysical studies,exploratory drilling, trenching and sampling, determining and examining the volume and the grade of the resource,examining and testing extraction and treatment methods, surveying transportation and infrastructure requirements,compiling pre-feasibility and feasibility studies and/or gaining access to areas of interest including occupancy andrelocation compensation.
General and administration costs are allocated to, and included in, the cost of an exploration and evaluation asset onlyto the extent that those costs can be related directly to the operational activities in the area of interest to which theexploration and evaluation asset relates. In all other cases, these costs are expensed as incurred.
Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that thecarrying amount of an exploration and evaluation asset may exceed its recoverable amount. Where a potentialimpairment is indicated, assessment is performed for each area of interest in conjunction with the group of operatingassets (representing a cash generating unit) to which the exploration and evaluation asset is attributable. To the extentthat capitalised exploration and evaluation expenditure is not expected to be recovered it is charged to the Statement ofProfit and Loss.
Cash flows associated with exploration and evaluation expenditure are classified as Investing activities in theconsolidated statement of cash flows.
Capital work-in-progress
Projects under which tangible fixed assets are not yet ready for their intended use are carried at cost, comprising directcost, related incidental expenses and attributable interest.
2.9 Foreign currency transactions and translations
Transactions in foreign currencies entered into by the Company are accounted at the exchange rates prevailing on thedate of the transaction or at rates that closely approximate the rate at the date of the transaction. Foreign currencymonetary items of the Company, outstanding at the balance sheet date are restated at the year-end rates. Non-mon-etary items of the Company are carried at historical cost. Exchange differences arising on settlement / restatement offoreign currency monetary assets and liabilities of the Company are recognised as income or expense in the Statementof Profit and Loss.
Non-integral foreign operations: Transactions of non-integral foreign operations are translated at the exchange ratesprevailing on the date of the transaction or at rates that closely approximate the rate at the date of the transaction. Allassets and liabilities of non-integral foreign operations are translated at the year-end rates. The exchange differenceson translation of balances relating to non-integral foreign operations are accumulated in a “Foreign currency translationreserve” until disposal of the operation, in which case the accumulated balance in “Foreign currency translationreserve” is recognised as income / expense in the same period in which the gain or loss on disposal is recognised.
2.10 Investments
Long-term investments, are carried individually at cost less provision for diminution, other than temporary, in the valuofsuch investments. Current investments are carried individually, at the lower of cost and fair value. Cost of investmentsinclude acquisition charges such as brokerage, fees and duties.
2.11 Employee Benefits
Employee benefits include provident fund, employee state insurance scheme, gratuity and compensated absences.
i) Defined Contribution PlanContribution to provident fund and employee state insurance scheme are considered as defined contribution plans andare charged as an expense based on the amount of contribution required to be made and when services are renderedby the employees.
i) Defined Benefit PlanThe liability under defined benefit plan such as Gratuity as at Balance Sheet date is determined on the basis of actuarial
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ANNUAL REPORT 2014-15
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valuation based on Projected Unit Credit method. Actuarial gains and losses are recognised in the Statement of Profitand Loss in the period in which they occur. Past service cost is recognised immediately to the extent that the benefitsare already vested and otherwise is amortised on a straight-line basis over the average period until the benefits becomevested. The retirement benefit obligation recognised in the Balance Sheet represents the present value of the definedbenefit obligation as adjusted for unrecognised past service cost. Any asset resulting from this calculation is limited topast service cost.
iii) Short-term employee benefits
The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services renderedby employees are recognised during the year when the employees render the service. These benefits include compen-sated absences which are expected to occur within twelve months after the end of the period in which the employeerenders the related service.
The cost of short-term compensated absences is accounted as under :
(a) in case of accumulated compensated absences, when employees render the services that increase theirentitlement of future compensated absences; and
(b) in case of non-accumulating compensated absences, when the absences occur.
iv) Long Term Employee Benefits
Compensated absences which are not expected to occur within twelve months after the end of the period in which theemployee renders the related service are recognised as a liability at the present value of the defined benefit obligationas at the balance sheet date.
2.12 Borrowing Cost
Borrowing costs include interest, amortisation of ancillary costs incurred and exchange differences arising from foreigncurrency borrowings to the extent they are regarded as an adjustment to the interest cost. Costs in connection with theborrowing of funds to the extent not directly related to the acquisition of qualifying assets are charged to the Statementof Profit and Loss over the tenure of the loan. Borrowing costs, allocated to and utilised for qualifying assets, pertainingto the period from commencement of activities relating to construction / development of the qualifying asset up to thedate of capitalisation of such asset are added to the cost of the assets. Capitalisation of borrowing costs is suspendedand charged to the Statement of Profit and Loss during extended periods when active development activity on thequalifying assets is interrupted.
2.13 Leases
Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest with the lessorare recognised as operating leases. Lease rentals under operating leases are recognised in the Statement of Profit andLoss on a straight-line basis over the lease term.
2.14 Earning per Share
Basic earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinaryitems, if any) by the weighted average number of equity shares outstanding during the year. Diluted earnings per shareis computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) asadjusted for dividend, interest and other charges to expense or income (net of any attributable taxes) relating to thedilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earn-ings per share and the weighted average number of equity shares which could have been issued on the conversion ofall dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equityshares would decrease the net profit per share from continuing ordinary operations.
Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have beenissued at a later date. The dilutive potential equity shares are adjusted for the proceeds receivable had the shares beenactually issued at fair value (i.e. average market value of the outstanding shares). Dilutive potential equity shares aredetermined independently for each period presented. The number of equity shares and potentially dilutive equityshares are adjusted for share splits / reverse share splits and bonus shares, as appropriate.
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ANNUAL REPORT 2014-15
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2.15 Taxes on IncomeCurrent tax is the amount of tax payable on the taxable income for the year as determined in accordance with theapplicable tax rates and the provisions of the Income Tax Act, 1961 and other applicable tax laws.
Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the formof adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Companywill pay normal income tax. Accordingly, MAT is recognised as an asset in the Balance Sheet when it is highly probablethat future economic benefit associated with it will flow to the Company.
Deferred tax is recognised on timing differences, being the differences between the taxable income and the accountingincome that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax ismeasured using the tax rates and the tax laws enacted or substantively enacted as at the reporting date. Deferred taxliabilities are recognised for all timing differences. Deferred tax assets are recognised for timing differences of itemsother than unabsorbed depreciation and carry forward losses only to the extent that reasonable certainty exists thatsufficient future taxable income will be available against which these can be realised. However, if there are unabsorbeddepreciation and carry forward of losses and items relating to capital losses, deferred tax assets are recognised only ifthere is virtual certainty supported by convincing evidence that there will be sufficient future taxable income available torealise the assets. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by thesame governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets arereviewed at each balance sheet date for their realisability.
2.16 Impairment of assetsThe carrying values of assets / cash generating units at each balance sheet date are reviewed for impairment. Therecoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discountingthe future cash flows to their present value based on an appropriate discount factor.
If the carrying amount of the assets exceed the estimated recoverable amount, an impairment is recognised for suchexcess amount. The impairment loss is recognised as an expense in the Statement of Profit and Loss, unless the assetis carried at revalued amount, in which case any impairment loss of the revalued asset is treated as a revaluationdecrease to the extent a revaluation reserve is available for that asset.
When there is indication that an impairment loss recognised for an asset (other than a revalued asset) in earlieraccounting periods no longer exists or may have decreased, such reversal of impairment loss is recognised in theStatement of Profit and Loss, to the extent the amount was previously charged to the Statement of Profit and Loss. Incase of revalued assets such reversal is not recognised.
2.17 Provisions and contingenciesA provision is recognised when the Company has a present obligation as a result of past events and it is probable thatan outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made.Provisions (excluding retirement benefits) are not discounted to their present value and are determined based on thebest estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheetdate and adjusted to reflect the current best estimates. Contingent liabilities are disclosed in the Notes. Contingentassets are not recognised in the financial statements.
2.18 Service tax input creditService tax input credit is accounted for in the books in the period in which the underlying service received is accountedand when there is reasonable certainty in availing / utilising the credits.
2.19 Operating CycleBased on the nature of products / activities of the Company and the normal time between acquisition of assets and theirrealisation in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purposeof classification of its assets and liabilities as current and non-current.
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GURUDEV
SURANA INDUSTRIES LIMITED
CIN : L27104TN1991PLC020533
Notes forming part of the Consolidated financial statementsNOTE 3 Share Capital
(Refer Notes (i) to (iii) below)
Notes:
i) There is no movement in the number of equity shares during the year and during the previous year.
ii) Rights preference and restrictions attached to the shares
The Company has only one class of equity shares having a par value of Rs.10 per share. All these shares have the samerights and preferences with respect to payment of dividend, repayment of capital and voting. The dividend proposed by theBoard of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in the caseof interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of theCompany after distribution of all preferential amounts, in proportion to their shareholding.
iii) Shareholders holding more than 5 percent shares in the Company:
As at 31st March 2014
(a) Authorised
Equity shares of Rs.10 each
(b) Issued, subscribed and fully paid up
Equity shares of Rs. 10 each
Total
70,000,000
44,519,067
44,519,067
700,000,000
445,190,670
445,190,670
As at 31st March 2015
Particulars
700,000,000
445,190,670
445,190,670
70,000,000
44,519,067
44,519,067
Number ofshares
Rs. Number of
shares Rs.
As at 31st March 2014
G.R Surana
Shantilal Surana
Vijayraj Surana
Dineshchand Surana
Indiastar (Mauritus) Ltd
BLS Power Solution Ltd
Vinayaga Infra Ltd
5,076,875
5,076,875
5,076,876
5,076,876
9,669,067
3,200,000
2,578,311
9.90%
10.15%
9.39%
8.96%
21.72%
7.19%
5.67%
As at 31st March 2015
Name of shareholders
11.40%
11.40%
11.40%
11.40%
21.72%
7.19%
5.79%
4,407,775
4,519,725
4,182,521
3,989,736
9,669,067
3,200,000
2,523,311
Number ofshares held
% holding Number ofshares held
% holding
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ANNUAL REPORT 2014-15
170 |
GURUDEV
SURANA INDUSTRIES LIMITED
CIN : L27104TN1991PLC020533
Notes forming part of the Consolidated financial statementsNOTE 4 Reserves and Surplus
As at 31st March 2014
Rs.
Securities premium account
Revaluation reserveOpening BalanceLess: Transferred / Utilized during the year
General reserve
(Deficit) / Surplus in Statement of Profit and LossOpening BalanceLess: Depreciation on transition to Schedule II of theCompanies Act, 2013 on Tangible Fixed Assets with Nilremaining useful life (Refer Note 13 & 34)Less: Loss for the yearAdd: Reversal of Proposed Dividend relating to 2012-13Add: Reversal of Tax on the above
Adjustments on consolidation:Add: Minority Interest in Subsidiary CompanyLess: Share of losses (including deferred tax liability of Rs.141,136,775 relating to prior years) of a subsidiary companydebited to Minority interest absorbed by the HoldingCompany (refer Note 8)Add: Share of pre-acquisition losses of subsidiary companytransferred to Minority interest on sale of shares
Foreign Currency Translation Reserve
Total
7,999,711,599
58,063,103-
58,063,103
284,318,734
(367,939,189)
(64,682,057) (4,388,104,643) - -
-
(128,274,627)
4,257,759
(4,944,742,757)
94,836,806
3,492,187,485
7,999,711,599
64,651,679(6,588,576)
58,063,103
284,318,734
1,312,840,674
- (1,717,433,994) 31,163,347 5,296,211
194,573
-
-
(367,939,189)
110,805,018
8,084,959,265
As at 31st March 2015
Rs.Particulars
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GURUDEV
SURANA INDUSTRIES LIMITED
CIN : L27104TN1991PLC020533
Notes forming part of the Consolidated financial statementsNOTE 5 Long-term Borrowings
As at 31st March 2014
Rs.
Secured BorrowingsTerm loansFrom BanksFrom Financial InstitutionForeign Currency Term Loan from Financial Institutions
Unsecured BorrowingsLoans and advancesInterest free loan from a promoter towards priority debt andlender’s sacrifice as per CDR packageInterest free unsecured inter-corporate deposits from other partiesIntercorporate loansLoans from financial institution
Total
18,538,483,441 4,048,344,622 1,564,770,000 24,151,598,063
132,435,000 250,000,000 113,770,660 107,951,884 604,157,544
24,755,755,607
16,215,759,773 3,945,133,978 1,412,946,298 21,573,840,049
- 1,231,465,211
366,700,000 26,530,953 1,624,696,164
23,198,536,213
As at 31st March 2015
Rs.Particulars
Notes:5.1 The Master Restructuring Agreement (MRA) was executed between the Holding Company, the Monitoring Institution(IDBI Bank) and the CDR Lenders on 24th March, 2014 in order to give effect to the Corporate Debt Restructuring Package(CDR Package) as approved by the CDR Empowered Group (CDR EG) on 7th March, 2014 and Letter of Approval (LOA)was issued on 13th March, 2014. (Also refer Note 1). Pursuant to the MRA, all loans carry an interest of 11% per annum(Previous year 11% per annum).
The terms of restructuring as per Letter of Approval referred to in Note above are as follows:
Term Loan I
Term Loan IFCI
Principal and interest moratorium25 months i.e., from June 1, 2013to June 30, 2015. Interest to beconverted to Funded InterestTerm Loan (“FITL”) - II.
Principal and interest moratorium25 months i.e., from June 1, 2013to June 30, 2015. Interest to beconverted into Term Loan - II.
31 Structured Quarterly installmentsfrom September 2015 to March 2023.
31 Structured Quarterly installmentsfrom September 2015 to March 2023
156.37
53.33
PeriodMoratoriumFacilitiesOutstanding asat June 1, 2013
(in Crores)
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ANNUAL REPORT 2014-15
172 |
Term Loan II (PelletProject Loan)
Working Capital TermLoan - I (Principal over-due of IFCI)
WCTL - II (LC devolved+ Post COD devolved +CC irregularity)
FITL - I (pre COD inter-est of IFCI)
FITL II - Interest on TL Iand IFCI loan
FITL III - Interest fund-ing on WCTL I
FITL IV - Interest fund-ing on WCTL II
FITL V - Interest fund-ing on working capital
FITL VI - Interest onPellet Project loan
Priority Loan
Principal and interest moratorium6 months from revised Date ofCommencement of CommercialOperations (“DCCO”) i.e., April 1,2016 to FITL VI. Interest to beserviced post DCCO.
Principal moratorium 25 monthsfrom Cut off Date (“COD”) andinterest to be converted into FITLIII for the period of 25 months i.e.from June 1, 2013 to June 30,2015.
Principal moratorium 25 monthsfrom COD and interest to be con-verted into FITL IV for the periodof 25 months i.e. from June 1,2013 to June 30, 2015.
Principal moratorium 25 monthsfrom June 1, 2013 to June 30,2015. Interest to be paid as andwhen due. (refer to note (iv) be-low).
Principal moratorium 25 monthsfrom June 1, 2013 to June 30,2015. Interest to be paid as andwhen due.
Principal moratorium 25 monthsfrom June 1, 2013 to June 30,2015. Interest to be paid as andwhen due.
Principal moratorium 25 monthsfrom June 1, 2013 to June 30,2015. Interest to be paid as andwhen due.
Principal moratorium 25 monthsfrom June 1, 2013 to June 30,2015. Interest to be paid as andwhen due.
Principal moratorium 34 monthsfrom COD till March 31, 2016.
Principal moratorium 34 monthsfrom COD till March 31, 2016.
26 Structured Quarterly installmentsfrom December 2016 to March 2023.
20 Structured Quarterly installmentsfrom September 2015 to March 2020.
20 Structured Quarterly installmentsfrom September 2015 to March 2020.
2 Structured Annual installments inJune 2014 and June 2015.
19 Structured Quarterly installmentsfrom September 2015 to March 2020.
19 Structured Quarterly installmentsfrom September 2015 to March 2020.
19 Structured Quarterly installmentsfrom September 2015 to March 2020.
19 Structured Quarterly installmentsfrom September 2015 to March 2020.
16 Structured Quarterly installmentsfrom June 2016 to March 2020.
24 Structured Quarterly installmentsfrom June 2016 to March 2022.
184.77
103.08
175.95
12.17
48.06
23.62
37.53
35.86
57.59
41.72
PeriodMoratoriumFacilitiesOutstanding asat June 1, 2013
(in Crores)
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ANNUAL REPORT 2014-15
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Other conditions:1. Working capital (Fund based and Non-Fund based) of Rs. 401.58 crores - Reduction in margin stock and book debts to15% and increase in cover period of receivables from 120 days to 180 days.
2. Balance requirement of Rs. 474.91 crores for pellet project loan - this amount is to be tied up with lenders by December2014 or promoters to induct a Joint Venture partner to fund it. Refer to note 1.4 on the status of the P&B project and thedecision taken by the Company to shelve the project.
5.2 SecurityI. Term Loans (including WCTL and FITL) from banks and financial institution are secured by way of :a) First charge on all movable and immovable fixed assets of the Company (present and future) on pari passu basis.b) Second charge on entire current assets of the Company including raw materials, stock in progress, finished goods andreceivables on pari-passu basis.c) Non disposal undertaking from the promoters to the effect that their equity shareholding in the Company remains at least30% during the currency of the facility.d) Pledge of 100% of promoter and promoter group holdings in the Company in favour of lending institutions.e) Personal Guarantee of the promoters.f) Priority loan to have priority share on the Pre Trust & Retention Account (“TRA”)/ TRA cash flows of the Company.g) First pari passu charge on the commercial property held in the name of the Company located at Basavangadi, Bangaloreon pari passu basis with term loan and working capital lenders in lieu of release of the equitable mortgage of certainagricultural land belonging to the promoters and a wind mill property belonging to a subsidiary company.
The additional security provided to a Financial Institution is as follows:a) Pledge of 60 Million equity shares of Surana Power Limited, a subsidiaryb) Mortgage of 29.12 acres of agricultural land belonging to a shareholderc) Corporate Guarantee given by a shareholderd) Pledge of 16,072,526 number of equity shares of Surana Mines and Minerals Limited, a subsidiary
During the year, certain banks have enhanced the working capital limits (both fund based and non fund based) extended tothe Company. The Company is yet to create additional charge for Rs. 22.07 crores towards the said facility as at thebalance sheet date.
5.3 Terms of repayment
A) Repayment Schedule of Term Loan from Banks (Amount in Rs.)
2015-162016-17
2017-18
2018-192019-20
2020-21
2021-222022-23
Less: CurrentMaturities of Long Term
Debt (Refer Note 11)
TOTAL
62,600,000167,355,425
278,692,988
340,779,910377,892,431
511,169,865
817,871,783851,436,696
3,407,799,098
(62,600,000)
3,345,199,098
WCTLFITLYear Term Loan Priority Loan Total
87,500,000117,833,975
225,616,696
413,809,448534,604,708
-
- -
1,379,364,827
(87,500,000)
1,291,864,827
140,800,000140,920,369
264,225,692
440,376,154440,376,154
334,806,246
- -
1,761,504,615
(140,800,000)
1,620,704,615
-7,525,740
18,981,558
18,981,55825,308,744
25,308,744
30,370,493 -
126,476,837
-
126,476,837
290,900,000433,635,509
787,516,934
1,213,947,0701,378,182,037
871,284,855
848,242,276851,436,696
6,675,145,377
(290,900,000)
6,384,245,377
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ANNUAL REPORT 2014-15
174 |
2015-16
2016-172017-18
2018-19
2019-202020-21
2021-22
2022-23
Less: Current
Maturities of Long TermDebt (Refer Note 11)
TOTAL
21,333,440
32,000,160 32,000,160
53,333,600
53,333,600 80,000,400
128,000,640
133,334,000 533,336,000
(21,333,440)
512,002,560
WCTLFITLYear Term Loan Total
150,395,542
28,662,495 53,742,179
107,484,357
139,690,500-
-
-479,975,073
(150,395,542)
329,579,531
82,464,901
82,464,901154,621,689
257,702,814
257,702,814 195,854,139
-
- 1,030,811,258
(82,464,901)
948,346,357
254,193,883
143,127,556 240,364,028
418,520,771
450,726,914 275,854,539
128,000,640
133,334,000 2,044,122,331
(254,193,883)
1,789,928,448
5.3 Terms of repayment (continued)B) Repayment Schedule of Term Loan from Financial Institutions (Amount in Rs.)
a) The repayments as per 5.3 (A) and 5.3 (B) above are to be made in structured quarterly instalments.
b) The above repayment schedules are after considering the moratorium periods allowed under the CDR package, whereverapplicable.
5.4 The Company is negotiating the interest payable for the pre-CDR dues with a financial institution (IFCI) for which themember banks have allowed time until 30th June, 2015 to resolve the issue and release of additional securities held by thefinancial institution to the common pool. Pending negotiations, the Company has not paid the interest of Rs.48,700,000, whichhas fallen due in June 2014.
5.5 The unsecured loans are repayable after one year and the repayment dates thereafter are under negotiation.
5.6 With respect to Subsidiary M/s. Surana Power Limited
5.6.1 Secured Loans
As at 31st March, 2014Rs.
From BanksLess: Current maturities of term loans (Refer Note 11)
TOTAL
1,597,835,642(53,935,070)
1,543,900,572
1,420,376,136
-
1,420,376,136
As at 31st March, 2015Rs.
A. Term loans 35 MW power plant:
The Subsidiary had acquired a 35 MW power plant in Raichur from its holding company and the plant was in operation untilJune 2013. The 35 MW power plant remained closed from July 2013 due to labour unrest/strikes, unviable / uneconomicalpower tariff rates, and severing of power and water connections. The 35 MW plant is yet to re-commence operations. TheSubsidiary had approached the lender for a restructuring proposal which was approved by the lender vide Letter of Approvalissued on December 27, 2013. The Restructuring Agreement was executed between the Subsidiary and the lender onDecember 30, 2013 effective from August 1, 2013 for the term loan, and December 31, 2013 for the cash credit facilities. TheSubsidiary is evaluating the options for hive off of the 35 MW plant to the holding company or recommencing its operations
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ANNUAL REPORT 2014-15
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(i) Terms of repayment and interest:
Term loans from banks has been restructured in December 2013 by the lender and includes:
(a) Term Loan amounting to Rs. 1,089,579,158 (Previous year - 1,089,566,069) is repayable in 32 Structured quarterly
installments from August 2015.
(b) Working Capital Term Loan (WCTL) amounting to Rs. 200,000,000 (Previous year - Rs 200,000,000) repayable in 26
Structured quarterly installments from September 2015.
(c) interest amounting to Rs.308,256,484 (Previous year - Rs.130,810,067) converted into a Funded Interest Term Loan
Facility (FITL) as per the restructuring agreement and is repayable in 22 Structured quarterly installments commencing from
March 2016.
Term Loan and WCTL carry an interest rate of 12.50% per annum (Previous year - 12.50% per annum) and FITL carries on
interest of 12% per annum (Previous year 12% per annum).
5.6.1 Secured Loans (continued)
(ii) Security Details
Term Loans, WCTL, and FITL from Banks are secured by exclusive mortgage and hypothecation charge over the Land and
Building, Plant and Machinery and other fixed assets of the 35 MW power plant, and hypothecation of entire stocks of
inventory, receivables, and other current assets of said plant.
(iii) Repayment Schedule
2015-162016-172017-182018-192019-202020-212021-222022-232023-24
Sub-totalLess: Current maturitiesof long-term borrowings(Refer Note 11)
Total
44,687,375 111,166,333 162,749,499 162,749,499 162,749,499 168,749,499 160,749,499 250,603,206 65,374,749
1,289,579,158
(44,687,375)
1,244,891,783
FITL(Rs.)
YearTerm Loan and WCTL
(Rs.)Total(Rs.)
9,247,695 49,321,037 49,321,037 61,651,297 61,651,297 61,651,297 15,412,824 - -
308,256,484
(9,247,695)
299,008,789
53,935,070 160,487,370 212,070,536 224,400,796 224,400,796 230,400,796 176,162,323 250,603,206 65,374,749
1,597,835,642
(53,935,070)
1,543,900,572
As at 31st March 2015 (based on revised sanction terms)
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ANNUAL REPORT 2014-15
176 |
2015-162016-172017-182018-192019-202020-212021-222022-232023-24
Sub-totalLess: Current maturitiesof long-term borrowings(Refer Note 11)
Long-term borrowings
44,686,982 111,165,286 162,747,928 162,747,928 162,747,928 168,747,928 160,747,928 250,600,196 65,373,965
1,289,566,069
-
1,289,566,069
FITL(Rs.)
YearTerm Loan and WCTL
(Rs.)Total(Rs.)
3,924,302 20,929,611 20,929,611 26,162,013 26,162,013 26,162,013 6,540,504
- -
130,810,067
-
130,810,067
48,611,284 132,094,897 183,677,539 188,909,941 188,909,941 194,909,941 167,288,432 250,600,196 65,373,965
1,420,376,136-
1,420,376,136
As at 31st March 2014
As at 31st March, 2014 Rs.
B Term loans 2 X 210 MW project:From BanksLess: Current maturities of term loans (Refer Note 11)
From Financial InstitutionsLess: Current maturities of term loans (Refer Note 11)
Foreign Currency Term Loan from Financial Institutions
Less: Current maturities of term loans (Refer Note 11)
Total (D)
10,439,552,939 -
10,439,552,939
2,361,300,265
(102,884,091)2,258,416,174
1,564,770,000 -
1,564,770,000
14,262,739,113
9,386,592,190(639,994,922)
8,746,597,268
2,187,182,130
(149,126,054)2,038,056,076
1,502,495,000(89,548,702)
1,412,946,298
12,197,599,642
As at 31st March, 2015 Rs.
Particulars
5.6.1 Secured Loans (continued)(i) In 2009-2010, the Subsidiary had also commenced setting up a 2 X 210 MW coal based thermal power plant at Raichur.Due to delays in sanction / disbursement of funds by lenders and consequential delay in infusion of equity, the constructionof the 2 X 210 MW power plant has not progressed since September 2012. All the consortium lenders with the exceptionof a financial institution had agreed for rescheduling the date of completion of the project to March 31, 2016 and for resched-uling the repayment of the loans to commence from April 2017 to be repaid in 44 structured quarterly installments.
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ANNUAL REPORT 2014-15
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As the lenders are yet to sanction their full share of consortium allocation and disburse funds for 2 X 210 MW project, theCompany is exploring options to :a) complete the construction of the 2 X 210 MW project by raising finances from external investors, further infusion of equity,increasing the funding commitment from lenders; orb) sale of the project on as is where is basis.
(ii) Terms of repayment and interestThe Rupee term loan for the 2 X 210 MW project was originally scheduled to be repaid in 44 quarterly installments commenc-ing from July 2014. The Foreign Currency Term loan was originally scheduled to be repaid in 52 quarterly installments com-mencing from July 2014.
The rupee term loan originally carried an interest rate ranging between 13.75% to 14% (PY: 13.75% to 14%) and the ForeignCurrency Term Loan carried an interest rate of London Inter-Bank Offered Rate +4.75 basis points (PY: LIBOR +4.75 basispoints).
The consortium lenders for the 2 X 210 MW project (except for a financial institution) have agreed to revise the terms ofrepayment vide their sanction letters issued to the Subsidiary. The amended date of commencement of commercial opera-tions has been deferred to 31 March 2016. As per the revised terms, all the terms loans are repayable in 44 quarterlyinstallments commencing from April 2017. The date of commencement of commercial operations has also been deferred toMarch 31, 2016.
The formal agreement (including the security requirements) as per the revised sanction is yet to be executed.
(iIi) Security DetailsPrior to the revision in terms of repayment and rescheduling of loans, term Loans from banks and financial institutions (bothRupee Term loan and Foreign Currency Term Loan) are secured by way of :
a) First charge on all movable and immovable fixed assets (present and future) of the subsidiary on pari passu basis.b) Hypothecation of movable property and book debts, operating cash flows, intangible assets including goodwill on a paripassu basis.c) First charge on all the interests, rights and benefits in respect of the Major Project Documents (including contractor guaran-tees, liquidated damages, licences, permits, approvals, insurance contracts)d) Pledge of 30% of issued and paid up equity share capital of the Subsidiary.e) Personal Guarantee of the promoters of the Holding Company to the extent of the initial sanction amount of Rs.1,800crores.The securities as per the revised terms are as follows:
a) First charge on all movable and immovable fixed assets (present and future) of the 2 X 210MW power project on pari passubasis.b) First charge on the current assets operating cash flows receivables intangible assets including goodwill pertaining to 2 X210MW project on a pari passu basis.c) First charge on all the interests, rights and benefits in respect of the Major Project Documents (including contractor guaran-tees, liquidated damages, licences, permits, approvals, insurance contracts)d) Pledge of 40% of issued and paid up equity share capital of the Subsidiary.e) Personal Guarantee of the promoters of the Holding Company to the extent of the revised sanction amount.
The additional pledge of shares and personal guarantee of the promoters of the Holding Company for the additional sanctionis yet to be executed by the Subsidiary.
(iv) Details of revised terms of repayment of secured borrowings are as follows:
(a) Term Loans from Banks amounting to Rs. 10,439,552,939 (Previous year 2014 - Rs. 9,386,562,190) and from FinancialInstitutions amounting to Rs. 2,361,300,265 (Previous Year 2014 - Rs.2,187,182,130) carry an interest rate of 12% per annum(Previous year 13.75% to 14% per annum) and are repayable in 44 quarterly instalments as follows:
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ANNUAL REPORT 2014-15
5.6.1 Secured Loans (continued)Terms of repayment ofTerm Loans - Revised
178 |
2014-152015-162016-172017-182018-192019-202020-212021-222022-232023-242024-252025-262026-272027-28
Sub-totalLess: Current maturities oflong-term borrowings (ReferNote 11)*
Long-term borrowings
- -
-782,966,470
782,966,470 782,966,470 939,559,765 939,559,765 939,559,765 991,757,529 1,043,955,294 1,148,350,823 1,043,955,294 1,043,955,294
10,439,552,939
-
10,439,552,939
Foreign CurrencyTerm Loan (Rs.)
YearRupee Term Loan
(Rs.)Total(Rs.)
44,093,182 58,790,909 58,790,909 187,385,929 187,385,929 187,385,929 213,104,933 213,104,933 213,104,933 221,677,934 230,250,936 203,303,757 171,460,027 171,460,025
2,361,300,265
(102,884,091)
2,258,416,174
44,093,182 58,790,909 58,790,909 1,087,710,149 1,087,710,149 1,087,710,149 1,293,493,998 1,293,493,998 1,293,493,998 1,362,088,613
1,430,683,230 1,523,779,280 1,371,892,321 1,371,892,319
14,365,623,204
(102,884,091)
14,262,739,113
As at 31st March 2015
Loan from FinancialInstitution * (Rs.)
---
117,357,750 117,357,750 117,357,750 140,829,300 140,829,300 140,829,300 148,653,150 156,477,000 172,124,700 156,477,000 156,477,000
1,564,770,000
-
1,564,770,000
* As a financial institution has not agreed to the revised terms and schedule, the terms stated above are as per theoriginal repayment schedule.
2014-152015-162016-172017-182018-192019-202020-212021-222022-232023-242024-252025-262026-272027-28
Sub-totalLess: Current maturities oflong-term borrowings(Refer Note 11)
Long-term borrowings
639,994,922 853,326,563 853,326,563 853,326,563 853,326,563 853,326,563 853,326,563 853,326,563 853,326,563 853,326,563 853,326,563 213,331,638
9,386,592,190
(639,994,922)
8,746,597,268
Foreign CurrencyTerm Loan (Rs.)
YearRupee Term Loan
(Rs.)Total(Rs.)
149,126,054 198,834,739 198,834,739 198,834,739 198,834,739 198,834,739 198,834,739 198,834,739 198,834,739 198,834,739 198,834,739 49,708,686 - -
2,187,182,130
(149,126,054)
2,038,056,076
878,669,678 1,171,158,906 1,171,158,906 1,171,158,906 1,171,158,906 1,171,158,906 1,171,158,906 1,171,158,906 1,171,158,906 1,171,158,906 1,171,158,906 365,810,982 97,361,676 22,837,924
13,076,269,320
(878,669,678)
12,197,599,642
As at 31st March 2014
Loan from FinancialInstitution * (Rs.)
89,548,702 118,997,604 118,997,604 118,997,604 118,997,604 118,997,604 118,997,604 118,997,604 118,997,604
118,997,604 118,997,604 102,770,658 97,361,676 22,837,924
1,502,495,000
(89,548,702)
1,412,946,298
Terms of Repayment of Term Loans
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ANNUAL REPORT 2014-15
| 179
5.6.2 Unsecured BorrowingsNote: Details of interest and repayment terms
Unsecured inter-corporate loan is interest free and is repayable after one year.
Amount (Rs.)
Allahabad BankDena BankIndustrial Development Bank of India - Term LoanPunjab National BankState Bank of PatialaUCO BankIndia Infrastructure Finance Company (UK) LtdLife Insurance Corporation of IndiaL&T Infrastructure Finance Company LimitedPTC India Financial Services Limited
Total
January 2015 & February 2015January 2015 & February 2015January 2015 & February 2015January 2015 & February 2015January 2015 & February 2015January 2015 & February 2015July 2013 to February 2015July 2013 to February 2015November 2014 to February 2015January 2015 & February 2015
16,905,82335,866,717
64,057,801 36,099,583 28,648,630 34,588,502 222,851,864 168,771,266 33,533,465 35,083,099
676,406,750
Period of DelayName of the Bank / Financial Institution
5.6.4 The Subsidiary has defaulted in repayment of principal in respect of the following:
Amount (Rs.)
Life Insurance Corporation of India
Total
3 quarterly instalments starting from July 2014 44,093,182
44,093,182
Period of DelayName of the Bank / Financial Institution
5.7 With respect to a subsidiary, Surana Green Energy Limited:
(i) Term loans from a bank amounting to Rs. 170,784,553 (PY Rs. Nil) are secured by first charge on block of fixed assetson the subsidiary.
(ii) Unsecured Borrowings
As at 31st March, 2014 Rs.
Unsecured inter-corporate loan
Total
113,770,660
113,770,660
366,700,000
366,700,000
As at 31st March, 2015 Rs.
Particulars
As at 31st March, 2014 Rs.
Unsecured loan from IFCILess: Current maturities of long-term borrowings Rs75,000,000 (Refer Note 11)
Total
107,951,884 -
107,951,884
101,530,953(75,000,000)
26,530,953
As at 31st March, 2015 Rs.
Particulars
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ANNUAL REPORT 2014-15
180 |
GURUDEV
SURANA INDUSTRIES LIMITED
CIN : L27104TN1991PLC020533
Notes forming part of the Consolidated financial statementsNOTE 6 Other Long Term Liabilities
NOTE 7 Long Term Provisions
As at 31st March 2014
Rs.
Provision - OthersRecompense Interest (Refer Note below)Provision for Contingencies (Refer Note 35)
Provision for Employee Benefits (Refer Note 26)Provision for GratuityProvision for Compensated absences
Total
822,973,740 121,700,000
6,596,308 507,181
951,777,229
334,396,560 -
1,015,149 -
335,411,709
As at 31st March 2015
Rs.Particulars
Notes:(i) Recompense Interest amounting to Rs.763,028,301 is payable after the Company repaying all loans and interest withinthe stipulated period, as per the terms of the CDR package.(ii) With respect to a subsidiary Surana Power Limited, Recompense Interest on the 35 MW term loan amounting toRs. 59,945,439 is payable after the subsidiary repays all loans and interest within the period stipulated, as per the terms ofthe Restructuring Agreement dated 27th December 2013.
As at 31st March 2014
Rs.
Tax effect of items constituting deferred tax liabilitiesDepreciationTax effect of items constituting deferred tax assetsDepreciationBrought forward business lossesDeferred tax liabilities / (assets) (net)
152,345,641
(20,955,916) -
131,389,725
928,846,214
- (1,056,002,065) (127,155,851)
As at 31st March 2015
Rs.Particulars
NOTE 8 DEFERRED TAX
Notes:(i) The holding company and a subsidiary have carry forward losses and unabsorbed depreciation which give rise to adeferred tax asset. In the absence of virtual certainty supported by convincing evidence that sufficient future taxable incomewill be available against which such deferred tax assets can be realized, the deferred tax asset that can be recognized isrestricted to the deferred tax liability of Rs. 1,647,335,277. Accordingly, there is no deferred tax asset or liability as at 31stMarch 2015 to be recognized with respect to the Holding Company and a subsidiary company, Surana Power Limited. Thedeferred tax asset relating to the Holding Company and a subsidiary company recognized in earlier years amounting to Rs.106,199,935 has been reversed during the year.
As at 31st March 2014
Rs.
Trade Payables
Total
587,764,461
587,764,461
265,710,157
265,710,157
As at 31st March 2015
Rs.Particulars
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ANNUAL REPORT 2014-15
| 181
Rs.
Deferred tax asset as at the beginning of the yearLess: Debited to Statement of Profit and LossDeferred tax asset of the holding company written offDeferred tax asset of a subsidiary written offDeferred tax liability with respect to a subsidiaryLess: Deferred tax liability of a subsidiary relating to prior yearsdebited to Minority interest as per the management accounts ofthe said subsidiary absorbed by the Holding Company (referNote 4)
Deferred tax liability as at the end of the year
25,591,24280,608,69311,208,866
(127,155,851)
117,408,801141,136,775
131,389,725
Rs.(ii) Reconciliation of Deferred tax balances:
NOTE 9 SHORT TERM BORROWINGS
As at 31st March 2014
Rs.
Loans repayable on demand
Working Capital Loan from banks - Secured
Total
4,136,221,610
4,136,221,610
3,469,319,115
3,469,319,115
As at 31st March 2015
Rs.Particulars
Note:i) Security details:Working capital loans are secured by way of:a) First charge on the entire current assets of the Company (present and future) on pari-passu basis.b) Second charge on all movable and immovable fixed assets of the Company, present and future on pari-passu basis.c) Pledge of 100% of promoter and promoter group holdings in the Company in favour of lending institutions.d) Personal Guarantee of the promoterse) Priority loan to have priority share on the Pre TRA / TRA cash flows of the Companyf) First pari passu charge on the commercial property held in the name of the Company located at Basavangadi, Bangaloreon pari passu basis with term loan and working capital lenders in lieu of release of the equitable mortgage of certain agricul-tural land belonging to the promoters and a wind mill property belonging to a subsidiary company.
ii) With respect to Subsidiary Company M/s. Surana Power Limited
Working capital loans are secured by way of:a) hypothecation on stock and book debts and other assets of 35 MW power plant.b) extension of equitable mortgage and hypothecation of land and building, plant and machinery and other immovable fixedassets subsidiary of the Company of 35MW power plant.
The working capital facilities carry an interest rate of 12.50% per annum (Previous year 12.50% per annum).
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ANNUAL REPORT 2014-15
182 |
GURUDEV
SURANA INDUSTRIES LIMITED
CIN : L27104TN1991PLC020533
Notes forming part of the Consolidated financial statementsNOTE 10 Trade Payables
As at 31st March 2014
Rs.
AcceptancesOther than Acceptances (Refer Notes below)Creditors for Capital Supplies / Services
Total
- 3,650,073,729 -
3,650,073,729
- 1,743,782,726 2,832,010,918
4,575,793,644
As at 31st March 2015
Rs.Particulars
Notes:(i) There are no dues to Micro and Small Enterprises as determined on the basis of information collected by the Management.This has been relied upon by the auditors.
(ii) With respect to subsidiary company M/s. Surana Power LimitedTrade payables include amounts payable to EPC subcontractors amounting to Rs 314,147,212 and retention money due tothem aggregating to Rs 66,132,136. Also refer to Note 29 (B)(iv)).
NOTE 11 OTHER CURRENT LIABILITIES
As at 31st March 2014
Rs.
Current maturities of long term debt (Refer Note 5 for details of security,interest and terms of repayment)Interest Accrued but not due on BorrowingsInterest Accrued but due on Borrowings
To BanksTo Financial Institutions
Other Payables - Statutory LiabilitiesUnpaid DividendOthers
Total
701,913,0448,403,048
341,599,414496,867,155
50,419,849 1,025,324 13,085,828
1,613,313,662
953,669,678 -
-62,213,321
189,462,429 50,985,643 1,218,921
1,257,549,992
As at 31st March 2015
Rs.Particulars
Refer Note 5 - Long term borrowings for rate of interest and repayment terms.
NOTE 12 SHORT TERM PROVISIONS
As at 31st March 2014
Rs.
Provision - OthersProvision for income taxOthers
Provision for Employee Benefits (Refer Note 28)GratuityCompensated AbsencesBonus
Total
9,724,9482,323,409
,225,2922,056,517
-15,330,166
71,328,622 -
18,155,170 2,358,253 2,303,361
94,145,406
As at 31st March 2015
Rs.Particulars
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ANNUAL REPORT 2014-15
| 183
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ANNUAL REPORT 2014-15
(Owned unless otherwisestated)
Tangible Assets(a) Freehold Land - Refernote (i) below(Previous year)
(b) Leasehold Land - Refernote (ii) below(Previous year)
(c) Buildings - Refer note (iii)below(Previous year)
(d) Plant and equipment(Previous year)
(e) Furniture and fixtures(Previous year)
(f) Vehicles(Previous year)
(g) Computers(Previous year)
Intangible Assets(h) Development Cost -Exploration of Coal Mine(Previous year)
Total
(Previous year)
Capital Work in Progress
- Holding Company (referNotes (v) (a) & (b) below) - Subsidiaries (refer Note (vi)below)
Total
GURUDEV
SURANA INDUSTRIES LIMITED
CIN : L27104TN1991PLC020533
Notes forming part of the Consolidated financial statementsNOTE 13 FIXED ASSETS
GROSS BLOCK ACCUMULATED DEPRECIATION
FIXED ASSETBalance asat 1st April,
2014ADDTIONS
Adjustmenton account
of revaluation
Balance as at31st March,
2015
Balance asat 1st April,
2014
Depreciationexpense for
the year
Eliminationon disposal
of assets
68,152,441(68,152,441)
148,734,214(145,696,714)
703,015,434 (722,871,600)
9,688,408,145 (9,349,245,933)
10,839,388 (10,087,178)
521,676,242 (550,037,902)
124,247,688 (124,155,856)
152,320,074 (152,320,074)
11,417,393,626
(11,122,567,698)
Disposals
Adjustmentarising on
reclassificationof assets
Balance asat 31st
March,2015
NET BLOCK
Balance asat 31st
March,2014
Transition adjustmentrecorded against (Deficit) /
Surplus balance in Statementof Profit and Loss
Adjustmentarising on
reclassifica-tion of assets
Balance asat 31st
March,2015
Rs.(Owned unless other-wise stated)
Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs.
- -
-(3,037,500)
- -
18,964,614 (410,072,136)
14,272,167 (848,309)
5,755,603 (68,500)
3,538,250 (91,832)
---
42,530,634
(414,118,277)
(3,105,485) -
(563,600) -
- (19,856,166)
- (70,909,925)
- (96,100)
- (28,430,160)
- -
- -
- (3,669,085)
(119,292,351)
--
- -
909,350,732-
(313,077,904) -
398,626-
(497,175,456) -
(99,495,998) -
- - -
-
65,046,956(68,152,441)
148,170,614(148,734,214)
1,612,366,166 (703,015,434)
9,394,294,855 (9,688,408,144)
25,510,181 (10,839,387)
30,256,389 (521,676,242)
28,289,940 (124,247,688)
152,320,074 (152,320,074)
11,456,255,175
(11,417,393,624)
- -
68,494(4,500)
185,407,163 (816,057,359)
1,635,529,569(1,273,126,337)
2,410,665(1,801,572)
313,936,671 (267,986,417)
98,995,831 (84,822,191)
- -
2,236,348,393
(2,443,798,376)
--
8,457,812(63,994)
52,751,243 (53,555,645)
663,009,430 (372,274,205)
4,615,762 (609,093)
7,525,271 (45,950,254)
5,293,360 (14,173,640)
- -
741,652,878
(486,626,831)
--
- -
- (103,968)
- (6,484,608)
- -
- -
- -
- - -
(6,588,576)
- -
(78,286) -
-(684,101,873)
- -
- -
- -
- -
- -
(78,286)
(684,101,873)
- -
- -
57,152,429 -
3,578,172 -
7,329 -
431,382 -
3,512,745 -
- -
64,682,057
-
GURUDEV
SURANA INDUSTRIES LIMITED
CIN : L27104TN1991PLC020533
Notes forming part of the Consolidated financial statements
- -
- -
23,156,400 -
364,371,451 -
(52,458) -
(302,836,696) -
(84,638,697) -
- -
-
-
- -
8,448,020(68,494)
318,467,235 (185,407,163)
2,663,102,257 (1,635,529,569)
6,981,298 (2,410,665)
19,056,628 (313,936,671)
23,163,239 (98,995,831)
- -
3,039,218,677
(2,236,348,393)
65,046,956(68,152,441)
139,722,594(148,665,720)
1,293,898,931 (517,608,271)
6,731,192,598 (8,056,264,941)
18,528,883 (8,428,723)
11,199,761 (207,739,571)
5,126,701 (25,251,857)
152,320,074 (152,320,074)
8,417,036,498
(9,184,431,598)
2,492,735,910
19,296,658,373
21,789,394,283
68,152,441(68,152,441)
148,665,720(145,692,214)
517,608,271 (93,185,759)
8,056,264,941 (8,076,119,596)
8,428,723 (8,285,606)
207,739,571 (282,051,485)
25,251,857(42,720,034)
152,320,074 (152,320,074)
9,184,431,598
(8,868,527,209)
2,287,183,346
17,054,908,015
19,342,091,361
OtherAdjustments
- -
- -
- -
(3,386,365) (3,386,365)
- -
- -
- -
- -
(3,386,365)
(3,386,365)
184 | | 185
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ANNUAL REPORT 2014-15ANNUAL REPORT 2014-15
186 |
GURUDEV
SURANA INDUSTRIES LIMITED
CIN : L27104TN1991PLC020533
Notes forming part of the Consolidated financial statementsNOTE 13 FIXED ASSETS (Continued)
Notes:i) Freehold land represents land at Raichur purchased from Karnataka Industrial Area Development Board for which title isyet to be transferred to the Company.
ii) Represents land at Gummidipoondi taken on lease from SIPCOT for a period of 99 years.
iii) Building includes superstructures constructed on land owned by the promoters and on leasehold land.
iv) Refer to Note 5 for charge on fixed assets
v) a) Capital work in progress amounting to Rs. 2,492,735,910 (Previous year Rs. 2,287,183,346) represents the expendi-ture incurred on Pelletisation and Benefication (“P&B”) project at Raichur. Subsequent to the Balance Sheet date, the Com-pany has planned to shelve its P&B Project and a separate techno-economic viability of the operations at Raichur without theabove project is being considered by its bankers. Accordingly, the Company is evaluating alternate use of the assets relatingto the P&B project and intends capitalizing the said assets upon re-commencement of operations at Raichur. The Manage-ment is of the opinion that no impairment is considered necessary for the carrying value of the CWIP.
b) Capital work in progress includesin respect of Holding Companyi. interest capitalized amounting to Rs. 655,436,190 (Previous Year - Rs. 432,049,871), including Rs. 223,386,319 for theyear (Previous Year - Rs. 237,966,792)ii. pre-operative expenditure amounting to Rs. 88,977,915 (Previous Year - Rs. 86,995,865) including Rs. 1,982,051 for theyear (Previous Year - Rs. 7,057,944).The interest and pre-operative expenditure capitalised as mentioned above include interest amounting to Rs. 407,645,055and pre-operative expenditure amounting to Rs. 6,835,660 relating to the periods for which the project was stalled. Consid-ering the exceptional nature of this industry and prolonged project implementation period, these have been retained undercapital work in progress as per the CDR package.
(vi) With respect to a subsidiary, Surana Power Limited:Capital work in progress amounting to Rs. 19,296,658,373 (previous year Rs. 17,053,469,905) includes relating to periodsduring which the project has been stalled considering the exceptional nature of the industry and prolonged project implemen-tation period:a. interest capitalized aggregating to Rs. 4,445,854,604 (including Rs. 2,063,842,525 for the year), andb. pre-operative expenses incurred in relation to the project aggregating to Rs. 540,679,421 (including Rs. 42,869,024 for theyear).
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ANNUAL REPORT 2014-15
| 187
GURUDEV
SURANA INDUSTRIES LIMITED
CIN : L27104TN1991PLC020533
Notes forming part of the Consolidated financial statements
NOTE 14 INVESTMENTSNON CURRENT INVESTMENTS
Note:
Carrying Value of Quoted Investment - As at 31st March 2015
As at 31st March 2014
Non Trade Investment (at cost)
Investment in equity shares
Refer Note below
Total 309,300
As at 31st March 2015
Particulars Quoted Rs.
TotalRs.
Unquoted Rs.
Quoted Rs.
TotalRs.
Unquoted Rs.
309,300 - 309,300 309,300 -
PNB Gilts Ltd
Punjab National Bank (PNB)
Aggregate market value of quoted investments
397,323
216,600
613,923
Description No of SharesNos.
Market Valueper Unit
Rs.
Cost PriceRs.
Market ValueRs.
13,333
1,500
300,000
9,300
29.80
144.40
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ANNUAL REPORT 2014-15
GURUDEV
SURANA INDUSTRIES LIMITED
CIN : L27104TN1991PLC020533
Notes forming part of the Consolidated financial statements
NOTE 15 LONG TERM LOANS AND ADVANCES
As at 31st March 2014
Rs.
Capital Advances (Refer Notes (A) and (B) below)
Other Loans and advances, Unsecured, considered good
Security deposits, Secured, considered good
Advance Income Tax
Disputed Sales tax amount deposited under protest, Unsecuredconsidered good
Total
2,325,657,088
-
28,248,279
481,085
11,453,941
2,365,840,393
4,593,828,528
26,104,553
2,236,470
429,048
-
4,622,598,599
As at 31st March 2015
Rs.Particulars
Notes:(A) Long term advance as at March 31, 2015 includes an amount paid towards construction of the P&B project of Rs1,877,585,152. Subsequent to the Balance Sheet date, the Company has planned to shelve the P&B Project. Managementis taking steps to secure the amount paid for the P&B project and recover the said balances in the normal course ofbusiness. The management is of the opinion that the dues are collectable in the normal course of the business and noprovision is necessary for the same.
(B) With respect to Subsidiary Company M/s. Surana Power Limited(i) In November 2010, the subsidiary had entered into agreements with seven main contractors for Engineering, Procure-ment and Construction Contracts (“EPC contract”) for the construction of the 2 X 210 MW power plant. The main contrac-tors had in-turn entered into back to back contracts with other subcontractors for supply of materials, delivery, installationand erection services at the project site.
(ii) Pursuant to a recommendation by the lenders and as a result of proposed changes in commercial terms by the maincontractors, the subsidiary terminated EPC contracts with four main contractors vide settlement agreements dated 15December 2014. Consequent to this settlement, outstanding dues from these four main contractors amounting toRs.862,402,591 has been written off in the books of account as full and final settlement of claims arising on delays inimplementation of the project.
(iii) Consequent to the termination of the EPC contracts as mentioned above, the subsidiary took over the following balancesfrom the main contractors :a) mobilisation advances paid to sub contractors amounting to Rs. 403,437,995 - (disclosed as capital advances above;b) trade payables amounting to Rs.314,147,212 and retention money amounting to Rs 66,132,136 payable to sub contrac-tors - (disclosed under Trade Payables - Refer Note 10)
The subsidiary also initiated a process of direct negotiations and entering into agreements with the sub contractors toresume the project, for which formal contracts are yet to be executed. The subsidiary management is of the opinion that themobilisation advances are collectable / adjustable on resumption of 2 X 210 MW project, and no provision is considerednecessary for the said advances. In respect of trade payables and retention money payable, the subsidiary Management isof the view that there are no further amounts payable to subcontractors other than those given above. (Also refer Note 29 (B) (iv)
188 |
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ANNUAL REPORT 2014-15
| 189
NOTE 16 INVENTORIES
As at 31st March 2014
Rs.
Raw materialsFinished goods (other than those acquired for trading)Stock-in-tradeStores & spares
Total
1,211,126,624186,049,636757,262,698782,422,255
2,936,861,213
1,299,089,412 988,761,582 369,450,217 782,069,286
3,439,370,497
As at 31st March 2015
Rs.Particulars
Notes:(i) Further to the matters referred to in Note 1, the Company has not weighed its inventory whose carrying value as at March31, 2015 amounts to Rs. 2,586,942,410 during its annual stock take. In the absence of production and for the reasonsstated in note 1.2, there has been no issue or consumption of inventories until the year end at its Raichur plant. TheCompany had also stored its raw material and stores and spares in a common facility shared with its subsidiary (SuranaPower Limited) at Raichur without segregation and for which efforts are currently being made to segregate the raw materialand stores and spares with that of its subsidiary. Inventories lying at the facilities will be physically weighed on resumptionof production and blended with fresh materials purchased for use in production / sales. Hence management is of the viewthat any adjustment arising out of such physical verification, segregation and blending will not be material and will be dealtwith in the normal course of business.
(ii) with respect to Subsidiary Company M/s. Surana Power LimitedFurther to the matters referred to in Note 1.2, the Subsidiary had stored its raw material and stores and spares, whosecarrying value as at March 31, 2015 amounts to Rs. 285,563,833 in a common facility shared with its holding company -Surana Industries Limited without physical segregation. Due to lack of power connection, the Subsidiary was unable to usethe weighbridge and hence has also not weighed / measured its inventory during the year. In the absence of production atRaichur, there has been no movement of inventories of raw materials and stores and spares until the year end. Currently,efforts are being made to segregate the inventory at Raichur plant with those of its holding company, and physically verify theinventory of stores and spares. Raw Materials lying at the Raichur plant will be segregated and physically weighed onresumption of production and blended with fresh materials purchased for use in production. The extent of deterioration orobsolescence, if any on the above inventory will be assessed at the time of physical verification / resumption of productionand appropriate adjustments will be recorded in the books on completion of this exercise. In the opinion of the manage-ment, any such adjustment arising out of physical verification / assessment of the quality will not be material.
NOTE 17 TRADE RECEIVABLES
As at 31st March 2014
Rs.
Trade receivables outstanding for a period exceeding sixmonths from the date they were due for payment
Unsecured, considered goodConsidered doubtful
Less: Provision for bad and doubtful debts
OthersUnsecured, considered good
Total
484,172,69944,541,327
528,714,026 (44,541,327)
484,172,699
2,909,522,776
3,393,695,475
250,436,940 -
250,436,940 -
250,436,940
3,484,110,220
3,734,547,160
As at 31st March 2015
Rs.Particulars
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ANNUAL REPORT 2014-15
190 |
GURUDEV
SURANA INDUSTRIES LIMITED
CIN : L27104TN1991PLC020533
Notes forming part of the Consolidated financial statements
NOTE 18 CASH AND CASH EQUIVALENTS
As at 31st March 2014
Rs.
Cash on handBalances with banks
(i) In current accounts(ii) Unpaid Dividend(iii) Restricted bank balances (Refer Note below)
Earmarked balances with BanksTotal
Of the above, the balances that meet the definition of Cashand cash equivalents as per AS 3 Cash Flow Statements is
100,454
197,742,438 1,025,324 1,920 82,573,907 281,444,043
197,842,892
613,556
119,156,642 1,218,921 - 27,410,701 148,399,820
119,770,198
As at 31st March 2015
Rs.Particulars
Notes:With respect to subsidiary M/s. Surana Power Limited, the Income Tax authorities have issued a notice u/s Section 226 (3)of the Income Tax Act, 1961, demanding payment of tax deducted at source (TDS) due from the Company directly from oneof the bankers. Based on the said order, the bankers have restricted the use of the current accounts of the Company basedon the order and the bank accounts are being used only for the payment of income tax/ TDS dues to the authorities.Consequently, the balance of funds in the bank accounts amounting to Rs.1,920 have been considered as restricted bankbalances for the purposes of Cash Flow Statement.
As at 31st March 2014
Rs.
Loans and advances to SuppliersUnsecured, considered good
Loans and advances to Related PartiesUnsecured, considered goodLess: Provision for doubtful advances
MAT Credit Entitlement (Refer Note below)
Prepaid Expenses, Unsecured considered good
Balance with Government authoritiesUnsecured, considered good(i) CENVAT credit receivable(ii) VAT credit receivable(iii) Service Tax credit receivable
Others, Unsecured considered good
Total
103,436,442
--
-
557,707
93,836,281 19,714,955 102,561,786
216,113,022 532,423,838
852,531,009
-
21,000 -
21,000 324,690,825
-
101,752,279 29,520,576 100,053,359 231,326,214 533,423,803
1,089,461,842
As at 31st March 2015
Rs.Particulars
NOTE 19 SHORT TERM LOANS AND ADVANCES
Notes:(i) MAT Credit Entitlement has been re-assessed and in the absence of convincing evidence that the Company will earnsufficient taxable profits to utilise the MAT credit, the balance of Rs. 312,974,013 has been written off during the year.
(ii) with respect to subsidiary company M/s. Surana Power LimitedNote: MAT Credit Entitlement has been re-assessed and in the absence of convincing evidence that the Subsidiary will earnsufficient taxable profits to utilise the MAT credit, the balance of Rs.11,716,812 has been written off during the year.
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ANNUAL REPORT 2014-15
| 191
GURUDEV
SURANA INDUSTRIES LIMITED
CIN : L27104TN1991PLC020533
Notes forming part of the Consolidated financial statements
NOTE 20 REVENUE FROM OPERATIONS
For the year ended31st March, 2014
Rs.
Sale of products (manufactured)Sale of products (traded)Sale of servicesOther Operating IncomeRevenue from operations (Gross)Less:Excise duty
Total
1,245,554,779 5,388,754,616 5,059,800 51,771,083
6,691,140,278
(137,155,352)
6,553,984,926
3,016,419,156 3,474,927,681
90,000 85,962,846 6,577,399,683
(266,193,696)
6,311,205,987
For the year ended31st March, 2015
Rs.Particulars
Notes:Purchases and sales of traded goods comprising 84% of total purchases and 82% of total sales are conducted on a spottrading basis, in the normal course of business, and are concentrated with certain parties. Transactions of sales and pur-chases of traded goods occur between the same parties, at purchase prices which may be higher than sales prices, basedon the market conditions prevailing at the time of trading.NOTE 21 OTHER INCOME
For the year ended31st March, 2014
Rs.
Interest income (Refer Note below)Dividend income from long- term investmentsOther non-operating income (Refer Note below)
Total
4,218,294 12,000 78,031,605
82,261,899
11,349,129 - 28,544,176
39,893,305
Particulars
Notes:(i) Interest Income comprises:
For the year ended31st March, 2014
Rs.
Interest from banks on deposits
Total
4,218,294
4,218,294
11,349,129
11,349,129
For the year ended31st March, 2015
Rs.Particulars
(ii) Other non-operating income comprises:For the year ended
31st March, 2014Rs.
Liabilities no longer required written backRebates and AllowancesProfit on sale of assetRental IncomeProvision for employee benefits written back (Refer Note 28)
Others
Total
70,331,560223,216
-350,000
5,479,294
1,647,535
78,031,605
25,676,701 - 255,510 -
408,508
2,203,457
28,544,176
For the year ended31st March, 2015
Rs.Particulars
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ANNUAL REPORT 2014-15
For the year ended31st March, 2015
Rs.
GURUDEV
SURANA INDUSTRIES LIMITED
CIN : L27104TN1991PLC020533
Notes forming part of the Consolidated financial statements
NOTE 22.A COST OF MATERIALS CONSUMED
For the year ended31st March, 2014
Rs.
Opening stock
Add: Purchases
Less: Closing stock
Cost of materials consumed
1,299,089,412
1,057,264,942
2,356,354,354
1,211,126,624
1,145,227,730
1,275,532,662
4,641,150,060
5,916,682,722
1,299,089,412
4,617,593,310
For the year ended31st March, 2015
Rs.Particulars
NOTE 22.B CHANGES IN INVENTORIES OF FINISHED GOODS AND STOCK-IN-TRADE
For the year ended31st March, 2014
Rs.
Inventories at the beginning of the year:
Finished goods
Stock-in-trade
Inventories at the end of the year:
Finished goods
Stock-in-trade
Net decrease
988,761,582
369,450,217
1,358,211,799
186,049,636
757,262,698
943,312,334
414,899,465
241,497,029
1,376,018,554
1,617,515,583
988,761,582
369,450,217
1,358,211,799
259,303,784
For the year ended31st March, 2015
Rs.Particulars
192 |
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ANNUAL REPORT 2014-15
| 193
GURUDEV
SURANA INDUSTRIES LIMITED
CIN : L27104TN1991PLC020533
Notes forming part of the Consolidated financial statements
NOTE 23 EMPLOYEE BENEFITS EXPENSE
For the year ended31st March, 2014
Rs.
Salaries and wagesContributions to provident and other funds (Refer Note 28)Gratuity Expenses (Refer Note 28)Staff welfare expenses
Total
56,677,719 3,061,168 452,016 1,523,671
61,714,574
134,551,425 10,071,574
- 2,353,117
146,976,116
For the year ended31st March, 2015
Rs.Particulars
NOTE 24 FINANCE COSTS
For the year ended31st March, 2014
Rs.
Interest expense on:(i) Bank Borrowings - Refer Note below(ii) Others
Other borrowing costForeign currency loss treated as finance cost
Total
1,606,197,533 14,467,007
45,444,364 12,039
1,666,120,943
1,719,045,547 41,379,101
-2,354,341
1,762,778,989
For the year ended31st March, 2015
Rs.Particulars
Notes:
(i) Finance cost includes recompense interest recorded for the year ended 31st March, 2015 amounting to Rs.437,385,758
(31st March, 2014 - Rs. 325,642,543) in terms of CDR package approved by CDR EG vide letter dated 13th March, 2014,
reference no. CDR (SSA)/No.1127/ 2013-14. The payment of recompense interest is subject to the Company repaying allloans and interest within the stipulated period as defined in CDR package.
(ii) with respect to subsidiary company M/s. Surana Power Limited
Interest expense on bank borrowings includes recompense interest recorded for the year ended 31st March, 2015 amount-ing to Rs. 35,986,982 (Previous year Rs. 23,958,457), in terms of restructuring package approved by the lender (Refer
Note5 (iv)(a)). Recompense Interest is payable after the subsidiary repays all loans and interest within the stipulated period,
as per the terms of the Restructuring agreement dated 27th December 2013.
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ANNUAL REPORT 2014-15
GURUDEV
SURANA INDUSTRIES LIMITED
CIN : L27104TN1991PLC020533
Notes forming part of the Consolidated financial statements
NOTE 25 OTHER EXPENSES
For the year ended31st March, 2014
Rs.
Consumption of stores and consumablesContract Labour expensesPower and FuelOther Manufacturing ExpensesRepairs and MaintenanceWindmill operation and maintenance expensesInsuranceRentRates and TaxesCommunicationTravelling and ConveyancePrinting and StationeryAdvertisement and Business PromotionDiscount / Commission on SalesFreight and ForwardingTransportation & WeighmentLegal and Professional ChargesPayment to auditors (Refer Note below)Director RemunerationProvision for Doubtful Trade receivables, Loans and advancesProvision for Contingencies (Refer Note 35)Trade receivables written offCapital work in progress written offLoss on Sale of InvestmentMiscellaneous expenses Total
51,991,76930,829,93838,468,8424,654,877
16,991,65610,327,4118,609,3884,606,996
15,078,75913,139,8492,010,897
218,196959,08285,358
16,486,040-
6,528,8966,028,500
-44,541,327
121,700,00017,435,13019,815,807
170,256,39422,683,091
623,448,203
89,233,484 15,853,677 28,497,421 19,813,521 35,472,867 8,243,836 13,049,869 3,158,179 7,217,653
9,153,711 9,077,935 831,554 2,302,336 4,896,524 8,649,921 16,651,965 16,034,325 1,370,230 5,218,069 -
- 7,343,031 - - 4,808,259 306,878,367
For the year ended31st March, 2015
Rs.Particulars
For the year ended31st March, 2014
Rs.
Payments to statutory auditors comprise (net of service taxinput credit, where applicable):To statutory auditors
For auditOther Services
Total
5,028,5001,000,000
6,028,500
1,221,910148,320
1,370,230
For the year ended31st March, 2015
Rs.Particulars
Notes:
194 |
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ANNUAL REPORT 2014-15
| 195
GURUDEV
SURANA INDUSTRIES LIMITED
CIN : L27104TN1991PLC020533
Notes forming part of the Consolidated financial statements
26 Prior Period Itemswith respect to Subsidiary company M/s. Surana Power Limited
The Subsidiary had sold coal in December 2013 for Rs.151,650,000 which was rejected by the customer in March 2014as the materials were not meeting specifications. The sale was reversed during the year and has been disclosed as aprior period item in accordance with Accounting Standard 5 (AS 5) “Net Profit or Loss for the Period, Prior Period Itemsand Changes in Accounting Policies”.
27 Impairment Assessmentwith respect to Subsidiary company M/s. Surana Power Limited
Further to the matters stated in Note 5.6 (a) (A) and (B) relating to cessation of operations of the 35 MW plant and thestalling of the 2 X 210 MW project, the Management has carried out an independent technical valuation of the fixedassets of the 35 MW plant and the capital work in progress on the 2 X 210 MW project by an external valuer. Based onthe independant valuation, the Board of Directors of the subsidiary have concluded that carrying value is appropriateand that no provision / write down for impairment is required to the value of the fixed assets.
28 Employee Benefit Plans
Defined contribution plans
The Group makes payment towards Provident Fund, a defined contribution plan for qualifying employees . Under theScheme, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. TheGroup recognised Rs.3,061,168 (31 March, 2014: Rs. 10,071,574) for Provident Fund contributions in the Statementof Profit and Loss. The contribution payable by the Group are at rates specified in the rules of the scheme.
Defined benefit plans
The Group offers the following employee benefit schemes to its employees:
Gratuity:
For the year ended31st March, 2014
Rs.
Components of employer expenseCurrent service costInterest costActuarial losses/(gains)Total expense/(Income) recognised in the Statement of Profit and Loss
Change in defined benefit obligations (DBO) during the yearPresent value of DBO at beginning of the yearCurrent service costInterest costActuarial (gains) / lossesBenefits paidPresent value of DBO at the end of the year
Actuarial assumptionsDiscount rateExpected return on plan assetsSalary escalationAttrition
Experience Adjustments (Disclosed to the extent data is available)Actuarial (Gains) / Losses on Obligations
2,145,357 1,483,263
(7,431,591) (3,802,971)
15,931,928 2,145,357 1,483,263
(7,431,591) (4,850,975)
7,277,982
7.94% to 8%NA
7.00%2.00%
(5,030,901)
2,680,581 1,344,851
(6,267,824) (2,242,392)
18,762,782 2,680,581 1,344,851
(6,267,824) (588,462)
15,931,928
9.31%NA
7.00%
For the year ended31st March, 2015
Rs.Particulars
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ANNUAL REPORT 2014-15
196 |
Notes:i) The discount rate is based on the prevailing market yields of Government of India securities as at the balance sheet datefor the estimated term of the obligations.ii) The estimate of future salary increases considered, takes into account the inflation, seniority, promotion, increments andother relevant factors.
Actuarial assumptions for long-term compensated absences:
As at 31st March, 2014 Rs.
Estimated Amount of Contracts remaining to be executed andnot provided for (Refer Notes below) 9,803,591,219 9,645,600,000
As at 31st March, 2015 Rs.
Particulars
Notes:(i) A subsidiary of the Company had executed Engineering Procurement and Construction contracts (“EPC Contracts”)in respect of the 2 X 210 MW power project which has been stalled due to non-availability for funding. The EPCContracts with the main contractors have been terminated and the subsidiary is in the process of negotiating with thesub-contractors on price escalation and entering into contracts with the subcontractors.(ii) As the P&B Project has been shelved there are no further capital commitments (Refer Note 13(v)).
As at 31st March, 2014 Rs.
(a) Claims against the Company not acknowledged as debt(Refer note (i) below)Central ExciseCustoms (Refer Note (ii))Service Tax (Refer Note (v))Central Sales TaxVAT
(b) Claims towards interest on delayed payments by sub-con-tractors (Refer Note (iv))(c) Bank Guarantees(d) Corporate Guarantees given to banks / financial institutionson behalf of subsidiary companies
329,515,49324,475,37956,422,63169,999,902
181,929,268
18,011,268929,000
1,466,700,000
23,889,94826,697,51115,446,506
427,289
- -
1,466,700,000
As at 31st March, 2015 Rs.
Particulars
29-B. Contingent Liabilities
29-A. Commitments Capital commitments
For the year ended31st March, 2014
Discount rateExpected return on plan assetsSalary escalationAttrition
7.94% to 8%NA
7.00%2.00%
9.31%NA
7.00%
For the year ended31st March, 2015
Particulars
Note :The details of gratuity and compensated absences relating to the subsidiary companies, Surana Green Power Limitedand Surana Green Energy Limited have not been furnished as they have been consolidated based on unauditedfinancial statements as certified by the management.
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ANNUAL REPORT 2014-15
| 197
Notes:
i) Against the above demands, the Company has paid Rs. 11,453,941 under protest to the various authorities.
ii) In respect of the above demands disputed by the Company, appeals filed are pending before respective appellate authori-
ties. The Company is of the view that there are reasonable chances of successful outcome of the appeals and accordinglyno provision is considered necessary.
(iii) With respect to a subsidiary Surana Power Limited, an Order dated 25 July, 2014 has been received from the Commis-
sioner of Customs, Nellore, classifying the coal imported by the Company as Bituminous coal as against the classification asSteam Coal as declared by the Subsidiary. The authorities have levied additional duty of Rs.21,606,868 along with penalty
of an equal amount, and interest. The Subsidiary has not filed an appeal with the concerned authorities within the prescribed
time limit and is in the process of filing a writ petition in the Bangalore High Court for waiver of pre-deposit and for condona-tion of the delay in filing.
(iv) With respect to a subsidiary Surana Power Limited, Interest on overdue payments, inventory carrying costs and demur-
rage charges have been claimed by sub-contractors on the 2 X 210 power plant project Rs.18,011,268. Pending negotia-tions with the sub-contractors, these have not been acknowledged as debt by the Subsidiary. (Also refer Note 15)
(v) With respect to a subsidiary Surana Power Limited, during the year, the Subsidiary received notices dated 26 August
2014 and 18 September 2014 from service tax authorities for payment of service tax and works contract tax on behalf of theengineering, procurement and construction contractors (EPC Contractors) of the subsidiary, who were subject to investiga-
tion and had failed to pay service tax on the contract invoices raised on the Subsidiary for the 2 X 210 MW project.
With respect to a subsidiary Surana Power Limited, the service tax authorities demanded the differential tax from the
subsidiary amounting to Rs. 56,422,631 under Section 87(b)(i) of the Finance Act, 1994 to be recovered out of the amounts
payable to the EPC contractors. The Subsidiary does not have any amounts payable to the EPC Contractors and has onlyadvances that need to be recovered from these contractors and therefore, is not liable to remit any amounts towards the
differential tax.
(vi) Seizure of records by service tax authorities
With respect to a subsidiary Surana Power Limited, pursuant to requests for information and scrutiny of the EPC contrac-
tors’ payments by the service tax authorities, the subsidiary submitted the original invoices and other supporting documents
relating to these contractors during the year 2013-14 and therefore these documents which relate to Capital work in progresson the 2 X 210MW project are not in the possession of the Subsidiary.
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ANNUAL REPORT 2014-15
198 |
GURUDEV
SURANA INDUSTRIES LIMITED
CIN : L27104TN1991PLC020533
Notes forming part of the Consolidated financial statements
30 Related party transactionsA Details of related parties:
(i) Key Managerial Personnel (Key Managerial Personnel - KMP)
(ii) Relative of KMP
Shri G.R Surana - ChairmanShri Dineshchand Surana-Managing DirectorShri Shantilal Surana
Shri Rahul Dinesh Surana -Vice President - Projects
Names of related partiesDescription of relationship
Notes:(i) Related parties are as identified by the management and relied upon by the auditors(ii) No remuneration is paid by the Company to the Managing Director in accordance with the terms of his appointment.
(iii) Refer Note 5 - Long-term borrowings for guarantees given by promoters/ KMP towards term loans availed by theCompany and its subsidiaries from banks and financial institutions.
B Details of related party transactions during the year Amount in INR
For the year ended31st March, 2014
Remuneration to Key Managerial PersonnelShri G.R Surana - ChairmanShri Dineshchand Surana
Relative of Key Managerial PersonnelShri Rahul Dinesh Surana
Promoters’ Contribution as per the CDR package (Refer Note 5)Shri Dineshchand Surana
- -
1,216,500
132,435,000
2,400,000 2,400,000
1,200,000
-
For the year ended31st March, 2015
Particulars
As at 31st March, 2014INR
Shri Dineshchand SuranaInterest free unsecured loan 132,435,000 -
As at 31st March, 2015INR
Particulars
C. Balances outstanding at the end of the year
31 Earnings Per Share
As at 31st March, 2014INR
Profit /(Loss ) after Tax (Rs.)
Weighted average number of shares outstanding during the year
Face Value of Share (Rs.)
Basic and Diluted Earnings per share (Rs.)
(4,427,488,784)
44,519,067
10
(99.45)
(1,717,433,993)
44,519,067
10
(38.58)
As at 31st March, 2015INR
Particulars
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ANNUAL REPORT 2014-15
| 199
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(36,
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ANNUAL REPORT 2014-15
200 |
Earnings per share is computed by dividing the profit / (loss) after tax (including the post-tax effect of extraordinary items, ifany) by the weighted average number of equity shares outstanding during the year.
Diluted EPS:As per the MRA, the CDR lenders shall have a right to convert:a. Entire / part of WCTL / FITL and / or entire defaulted interest and entire / part of defaulted principal into equity at par in theevent of default.b. Upto 20% of the term debt outstanding beyond seven years as per SEBI guidelines / loan covenants whichever is appli-cable, into equityc. The entire WCTL / FITL into equity at any time during the restructuring period.As at the Balance Sheet date, the conditions that relate to the conversion of the loans into equity do not exist and no shareshave been converted during the year
33 Unhedged foreign currency exposureswith respect to subsidiary company M/s. Surana Power Limited :Unhedged foreign currency exposures
The year end foreign currency exposures that have not been hedged by a derivative instrument or otherwise are given below.
(Rs.) Equivalent
Principal portion of loans payable in foreign currency(Previous year)Interest payable in foreign currency on loans(Previous year)
24,964,900(25,123,234)
3,553,395(1,827,203)
1,564,770,000(1,502,495,000)
228,480,615(116,909,855)
US Dollar
34 Depreciation
Pursuant to the notification of Schedule II to the Companies Act, 2013 with effect from April 1, 2014, the Company anda subsidiary, Surana Power Limited revised the estimated useful life of their fixed assets to align the useful life withthose specified in Schedule II. Further, assets individually costing Rs. 5,000 or less that were depreciated fully in theyear of purchase are now depreciated based on the useful life considered by the Company and Surana Power Limitedfor the respective category of assets. The details of previously applied depreciation / useful life are as follows:
Revised useful lifebased on SLM
Factory BuildingsOther BuildingsComputers and Data Processing EquipmentPlant and machinery-Power generation equipmentGeneral Plant and MachineryFurniture and FixturesVehicles
3.34% ~ 30 Years3.34%/ ~28 years
4.75%-16.21% ~6- 21 Years5.28% / ~18 years4.75% ~ 21 Years
4.75%-6.33% ~15- 21 Years9.5%-15% ~6-10 Years
30 years60 years3-6 years40 years
5-20 years10 years
4-10 years
Previous depreciation rate/ useful life
Previous deprecia-tion method
Asset category
Straight line Method (“SLM”)- do -- do -- do -- do -- do -- do -
(i) Pursuant to the transition provisions prescribed in Schedule II to the Companies Act, 2013, the Company has fullydepreciated the carrying value of assets, net of residual value, where the remaining useful life of the asset was deter-mined to be nil as on April 1, 2014, and has adjusted an amount of Rs.64,465,025 against the opening Surplus balancein the Statement of Profit and Loss under Reserves and Surplus.The depreciation expense in the Statement of Profit and Loss for the year is higher Rs.9,094,588 consequent to thechange in the useful life of the assets.(ii) With respect to a subsidiary, Surana Power Limited, the Subsidiary has fully depreciated the carrying value ofassets, net of residual value, where the remaining useful life of the asset was nil as on April 1, 2014, and has adjustedan amount of Rs.217,032 against the opening balance in Statement of Profit and Loss under Reserves and Surplus.The depreciation expense in the Statement of Profit and Loss for the year is lower by Rs. Rs.44,504,852 consequentto the change in the useful life of the assets.
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ANNUAL REPORT 2014-15
| 201
35 Provisions for contingencies
The Company has made provision for various disputed liabilities based on its assessment of the amount it estimates to
incur to meet such liabilities, as follows
As at 31st March,2015 (Rs.)
Provision for contigencies - disputed liabilities
(Figures in bracket relates to the previous year)
121,700,000
(-)
121,700,000
(-)
Additions (Rs.)As at 1st April, 2014
(Rs.)Particulars
-
(-)
“This space is intentionally left blank”.
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ANNUAL REPORT 2014-15
202 |
Notes:(ii) The financial statements of Surana Green Energy Limited have been consolidated into Surana Green Power Limited.
(ii) The financial statements of PT Borneo Mines & Minerals and PT Sassanga Banua Banjar have been consolidated intoSurana Mines and Minerals Limited.
(iii) The financial statements of Power India (Singapore) PTE Limited have been consolidated into Surana Holdings PTELimited.
37 Previous year’s figures have been regrouped / reclassified wherever necessary to correspond with the current year’sclassification / disclosure.
For and on behalf of the Board of Directors
BABU SRINIVASAN DINESHCHAND SURANA Chairman Managing Director (DIN : 06608264) (DIN : 00007032)
ANIL GUPTAGroup Chief Financial
Officer
D HEM SENTHIL RAJCompany Secretary
M.No A25451
Date : 30 May 2015Place : Chennai
GURUDEV
SURANA INDUSTRIES LIMITED
CIN : L27104TN1991PLC020533
Notes forming part of the Consolidated financial statements
36 Additional information as required by Paragraph 2 of the General Instructions for Preparation of Consolidated Finan-cial Statements to Schedule III to the Companies Act, 2013
ParentSurana Industries Limited
Subsidiariesa) IndianSurana Power LimitedSurana Green Power Limited (Refer note (i) below)Uday Energy Private Limited
b) ForeignSurana Mines & Minerals Limited (Refer note (ii) below)Surana Holdings PTE Limited (Refer note (iii) below)
Minority Interest in all subsidiaries
Inter company eliminations
Total
1,394,140,560
2,752,887,755(602,720,786)
58,392
718,319,228(1,058,491)
(355,503,468)
31,254,966
3,937,378,156
Amount (Rs.)As % of
consolidatednet assets
Name of the entities
35.41
69.92(15.31)
0.00
18.22(0.03)
(9.00)
0.79
100.00
Net assets, i.e., total assetsminus total liabilities
Share in profit or loss
Amount (Rs.)As % of
consolidatednet assets
(2,627,887,975)
(1,600,764,276)(233,586,604)
-
--
-
-34,750,079
(4,427,488,776)
59.35
36.16 5.27 -
- - -
(0.78) 100.00
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ANNUAL REPORT 2014-15
| 203
ATTENDANCE SLIP
Surana Industries Limited
CIN: L27104TN1991PLC020533
Registered Office: No. 29, Whites Road, 2nd floor, Royapettah, Chennai- 600 014.
PLEASE FILL ATTENDANCE SLIP AND HAND IT OVER
AT THE ENTRANCE OF THE MEETING HALL
Joint shareholders may obtain additional slip at the venue of the meeting
GURUDEV
NAME AND ADDRESS OF THE SHAREHOLDER:
I hereby record my presence at the 24th ANNUAL GENERAL MEETING of the Company at
New Door No. 01, Ambedkar Nagar GNT Road, Madhavaram, Chennai - 600 060 Monday,
August 10, 2015 at 9.30 A.M.
*Applicable for investors holding shares in electronic form
___________________________
Signature of Shareholder/Proxy
DP ID*
Client ID*
Folio No.
No.of Shares
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ANNUAL REPORT 2014-15
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204 |
PROXY FORM
Surana Industries Limited
CIN: L27104TN1991PLC020533
Registered Office: No. 29, Whites Road, 2nd floor, Royapettah, Chennai- 600 014.
[Pursuant to section 105(6) of the Companies Act, 2013 and rule 19(3)
of the Companies (Management and Administration) Rules, 2014]
GURUDEV
Name of the member(s)
Registered Address
E-mail ID
Folio No/ Client ID
I/We, being the member(s) of ________________________________________ shares of
Surana Industries Limited, hereby appoint:
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ANNUAL REPORT 2014-15
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-Tea
r he
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| 205
1. _______________________ of__________________________ having e-mail id_____________or failing him;
2. _______________________ of__________________________ having e-mail id_____________or failing him;
3. _______________________ of__________________________ having e-mail id __________________;
and whose signature(s) are appended below as my/our proxy to attend and vote (on a poll) for me/us and on my/our behalf
at the 24th Annual General Meeting of the Company, to be held on Monday, August 10, 2015 at 9.30 a.m. at New Door No. 01,
Ambedkar Nagar GNT Road, Madhavaram, Chennai - 600 060 and at any adjournment thereof in respect of such resolutions
as are indicated below:
RESOLUTIONS FOR AGAINST
Signed this..................... day of..................2015 _____________________
Signature of shareholder
Affix a
15 paise
RevenueStamp
Ordinary business
Consider and adopt the Audited Financial Statements for the year ended31st March, 2015.
Re-appointment of Shri. Dineshchand Surana who retires by rotation.
Re-appointment of Shri. Biju George who retires by rotation.
Appointment of Statutory Auditors and fixing their remuneration.
Special business
Appointment of Shri. Babu Srinivasan (DIN: 06608264) as an Independent director
Appointment of Smt. Soundharya Panchapakesan (DIN: 07220601) as anIndependent Director
Ratification of remuneration payable to cost auditor for the financial year 2015-16
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ANNUAL REPORT 2014-15