SURANA INDUSTRIES TWENTY FIFTH ANNUAL REPORT FINAL …€¦ · Biju George, Director who retires by...

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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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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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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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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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."



resolution as Ordinary Resolution :

APPOINTMENT OF SMT. SOUNDHARYA

PANCHAPAKESAN (DIN: 07220601) AS

AN INDEPENDENT DIRECTOR:


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."



resolution as Ordinary Resolution:

RATIFICATION OF REMUNERATION

PAYABLE TO COST AUDITOR FOR THE

FINANCIAL YEAR 2015-16:


provisions of sections 141, 148 and other

applicable provisions, if any of the

Companies Act, 2013 and rules made there

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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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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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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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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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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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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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| 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.


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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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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| 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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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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| 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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14 |

Route Map to the venue of the AGM

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| 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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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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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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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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❖ 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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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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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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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

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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-

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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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| 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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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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| 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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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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| 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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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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| 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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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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| 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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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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| 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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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.


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.


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.


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.


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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| 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:


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.


Please refer our submission to our responses in

note I (a & b) above.


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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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.


Please refer our submission to our responses in

note III above.


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.


We submit that, the dues are collectable /

adjustable on resumption of project work, and no

provision is considered necessary.


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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| 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


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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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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| 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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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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| 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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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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| 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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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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| 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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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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| 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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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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| 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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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


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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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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Annexure to SECRETARIAL AUDIT REPORT

To,

The Members


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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| 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)


c) Rate Per Litre (Rs)

3. COAL

a) Total Consumption (Tonnes)


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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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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| 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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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


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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| 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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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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| 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


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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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


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


Cumulative Shareholdingduring the year

No.No. ofShares

% of totalShares of the

company

No. ofShares


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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| 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



S.No. No. of

Shares


company

No. ofShares


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



S.No. No. of

Shares


company

No. ofShares


company

1

2

3


Increase /Decrease in Pro-

moters Share holding during

the year specifying the rea-

sons for increase / decrease

:

Inter-Se Transfer


3989736

1087140

5076876

8.96

2.44

11.40

5076876

Nil

5076876

11.40

Nil

11.40

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(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



S.No. No. of

Shares


company

No. ofShares


company

1

2

3


Increase / Decrease in Pro-moters Share holding duringthe year specifying the rea-sons for increase/decrease :Inter-Se Transfer


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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| 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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66 |

B. Remuneration to other Directors:


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


S.No.

Name of Directors

G.A. Tadas UshaV

SubramanianBiju

GeorgeKrishnaUdupa

TotalAmount

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| 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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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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| 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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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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| 71

Name of the Director

Shri. G.R. Surana**

Shri. BabuSrinivasan***

Shri. DineshchandSurana


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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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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| 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. 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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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


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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| 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. 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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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. 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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| 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


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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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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| 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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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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| 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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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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| 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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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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| 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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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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| 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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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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| 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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❖ 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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| 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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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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| 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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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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| 95

CODE OF

PRACTICES AND

PROCEDURES

FOR FAIR

DISCLOSURE OF

UNPUBLISHED

PRICE

SENSITIVE

INFORMATION

VERSION : 1.0

SURANA INDUSTRIES LIMITED

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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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| 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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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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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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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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| 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


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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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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| 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


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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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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| 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


(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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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



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


April 2014 to August 2014



April 2014 to August 2014



May 2014 to September 2014



May 2014 to September 2014

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| 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


Appeal will be filedbefore CESTAT,Bangalore



Commissioner ofCentral Excise, Com-missioner I, Chennai

CESTAT, Bangalore

Commissioner(Appeals)

Honourable High Courtof Chennai

Employees' StateInsurance Act, 1948

Central ExciseAct, 1944






Central Excise Act, 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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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) andCentral Sales Tax, 1956







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 SupremeCourt



Writ filed beforeHonourable High Courtof Chennai

Pending before SalesTax Tribunal Gulbarga

Pending before SalesTax Tribunal, Gulbarga





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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| 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.




Sd/-


Partner

(Membership No. 29519)Date : May 30, 2015

Place : Chennai

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110 |

ANIL GUPTAGroup Chief Financial

Officer

GURUDEV


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


NoteParticulars

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| 111

GURUDEV


CIN : L27104TN1991PLC020533

Statement of Profit and Loss for the year ended 31st March, 2015





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


Officer


(DIN : 06608264)



M.No. A25451

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112 |

GURUDEV


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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| 113

GURUDEV


CIN : L27104TN1991PLC020533

Cash Flow Statement for the year ended 31st March, 2015







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--


Officer


(DIN : 06608264)



M.No. A25451

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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


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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| 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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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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| 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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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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| 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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120 |

GURUDEV


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


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.


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%


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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| 121

GURUDEV


CIN : L27104TN1991PLC020533

Notes forming part of the financial statementsNOTE 4 Reserves and Surplus


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


Rs.Particulars

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122 |

GURUDEV


CIN : L27104TN1991PLC020533

Notes forming part of the financial statementsNOTE 5 Long-term Borrowings


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


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.


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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| 123


(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 34 monthsfrom COD till March 31, 2016.




2 Structured Annual installments inJune 2014 and June 2015.





16 Structured Quarterly installmentsfrom June 2016 to March 2020.


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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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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| 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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126 |

GURUDEV


CIN : L27104TN1991PLC020533

Notes forming part of the financial statementsNOTE 6 Other Long Term Liabilities

NOTE 7 Long Term Provisions


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


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.


Rs.

Trade Payables

Total

587,764,461

587,764,461

69,180,157

69,180,157


Rs.Particulars


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


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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| 127

GURUDEV


CIN : L27104TN1991PLC020533

Notes forming part of the financial statementsNOTE 9 Trade Payables

NOTE 10 Other Current Liabilities


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


Rs.Particulars


Rs.

Other than Acceptances (Refer Note 32)

Total

1,164,438,703

1,164,438,703

1,698,855,763

1,698,855,763


Rs.Particulars

NOTE 11 Short Term Provisions


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


Rs.Particulars

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128 | | 129

GURUDEV


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



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


CIN : L27104TN1991PLC020533

Notes forming part of the financial statementsNOTE 12 FIXED ASSETS

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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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130 |

GURUDEV


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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| 131

GURUDEV


CIN : L27104TN1991PLC020533

Notes forming part of the financial statements

NOTE 13 INVESTMENTSA. NON CURRENT INVESTMENTS


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


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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GURUDEV


CIN : L27104TN1991PLC020533

Notes forming part of the financial statementsB. Current Investments

132 |


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


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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| 133

GURUDEV


CIN : L27104TN1991PLC020533


NOTE 14 Deferred Tax


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


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


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


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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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


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


Rs.Particulars

NOTE 16 INVENTORIES


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


Rs.Particulars

NOTE 18 CASH AND CASH EQUIVALENTS


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


Rs.Particulars

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| 135


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


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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136 |

GURUDEV


CIN : L27104TN1991PLC020533


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


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 - -


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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| 137

GURUDEV


CIN : L27104TN1991PLC020533


NOTE 21 OTHER INCOME


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


Rs.Particulars

NoteNon-operating income


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


Rs.Particulars

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138 |

GURUDEV


CIN : L27104TN1991PLC020533


NOTE 22.A COST OF MATERIALS CONSUMED


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


Rs.Particulars

NOTE 22.B Purchases of Stock in Trade


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


Rs.Particulars

NOTE 22.B CHANGES IN INVENTORIES OF FINISHED GOODS AND STOCK-IN-TRADE


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


Rs.Particulars

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| 139


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


Rs.Particulars

NOTE 24 FINANCE COSTS


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


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


CIN : L27104TN1991PLC020533


NOTE 23 EMPLOYEE BENEFITS EXPENSE

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140 |

GURUDEV


CIN : L27104TN1991PLC020533


NOTE 25 OTHER EXPENSES


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


Rs.Particulars


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


Rs.Particulars

Notes:

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| 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


CIN : L27104TN1991PLC020533


NOTE 26 Employee Benefit Plans


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%-

-


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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142 |

Actuarial assumptions for long-term compensated absences:


Discount rateExpected return on plan assetsSalary escalationAttrition

7.94%NA

7.00%2.00%

9.31%NA

7.00%


Particulars

As at 31st March, 2014 Rs.

On Capital Account - Refer Note below - -


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)).


(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


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:


Imported (Amount in Rs)PercentageIndigenous (Amount in Rs.)Percentage

- -

987,163,009100%

- -

4,378,860,014100%


Particulars

(b) Consumption of stores and consumables:


Imported (Amount in Rs)PercentageIndigenous (Amount in Rs.)Percentage

- - 51,991,769

100%

- -

88,129,710100%


Particulars

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| 143

GURUDEV


CIN : L27104TN1991PLC020533


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


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

-


Particulars

Related parties are as identified by the management and relied upon by the auditors

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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


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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| 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.


BABU SRINIVASAN DINESHCHAND SURANA Chairman Managing Director (DIN : 06608264) (DIN : 00007032)


Officer


M.No A25451

Date : 30 May 2015 Place : Chennai

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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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| 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


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


which the projects have been stalled,

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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


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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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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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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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.




Sd/-


Partner


Date : May 30, 2015

Place : Chennai,

| 151

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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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| 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


("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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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:




Appeal will be filedbefore CESTAT,Bangalore



Employees' State Insur-ance Act, 1948






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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| 155

Commissioner of Cen-tral Excise, Commis-sioner I, Chennai

CESTAT, Bangalore

Commissioner(Appeals)




Honourable SupremeCourt

Commissioner of Cus-toms



Writ filed beforeHonourable High Courtof Chennai

Pending before SalesTax Tribunal Gulbarga

Pending before SalesTax Tribunal, Gulbarga





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




Customs Act, 1962

Customs Act, 1962

Customs Act, 1962

Customs Act, 1962

Customs Act, 1962



Various states (Sales TaxActs) and Central SalesTax, 1956

Various states (Sales TaxActs)






Total

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(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


("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


("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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| 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.




Sd/-


Partner


Date : May 30, 2015

Place : Chennai

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158 |

GURUDEV


CIN : L27104TN1991PLC020533

Consolidated Balance Sheet as at 31st March, 2015






(DIN : 06608264)


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



M.No. A25451


NoteParticulars

ANIL GUPTA Group Chief Financial

Officer

See accompanying notes forming part of the financial statements

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| 159

GURUDEV


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






(DIN : 06608264)



M.No. A25451


Officer


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160 |

GURUDEV


CIN : L27104TN1991PLC020533

Consolidated Cash Flow Statement for the year ended 31st March, 2015


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)


(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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| 161



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






(DIN : 06608264)



M.No. A25451


Officer


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GURUDEV


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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(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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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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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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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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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


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:


(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


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.


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%


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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170 |

GURUDEV


CIN : L27104TN1991PLC020533

Notes forming part of the Consolidated financial statementsNOTE 4 Reserves and Surplus


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


Rs.Particulars

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| 171

GURUDEV


CIN : L27104TN1991PLC020533

Notes forming part of the Consolidated financial statementsNOTE 5 Long-term Borrowings


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


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

156.37

53.33


(in Crores)

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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).







26 Structured Quarterly installmentsfrom December 2016 to March 2023.



2 Structured Annual installments inJune 2014 and June 2015.







184.77

103.08

175.95

12.17

48.06

23.62

37.53

35.86

57.59

41.72


(in Crores)

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| 173

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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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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| 175

(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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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



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


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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| 177

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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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)*


- -

-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


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)


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


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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| 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


Unsecured inter-corporate loan

Total

113,770,660

113,770,660

366,700,000

366,700,000


Particulars


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


Particulars

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180 |

GURUDEV


CIN : L27104TN1991PLC020533

Notes forming part of the Consolidated financial statementsNOTE 6 Other Long Term Liabilities

NOTE 7 Long Term Provisions


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


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.


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)


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.


Rs.

Trade Payables

Total

587,764,461

587,764,461

265,710,157

265,710,157


Rs.Particulars

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| 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


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


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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182 |

GURUDEV


CIN : L27104TN1991PLC020533

Notes forming part of the Consolidated financial statementsNOTE 10 Trade Payables


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


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


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


Rs.Particulars

Refer Note 5 - Long term borrowings for rate of interest and repayment terms.

NOTE 12 SHORT TERM PROVISIONS


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


Rs.Particulars

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| 183

“This space is intentionally left blank”.

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(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


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



Balance asat 31st

March,2015

NET BLOCK

Balance asat 31st

March,2014

Transition adjustmentrecorded against (Deficit) /

Surplus balance in Statementof Profit and Loss


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


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


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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| 187

GURUDEV


CIN : L27104TN1991PLC020533


NOTE 14 INVESTMENTSNON CURRENT INVESTMENTS

Note:

Carrying Value of Quoted Investment - As at 31st March 2015


Non Trade Investment (at cost)

Investment in equity shares

Refer Note below

Total 309,300


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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GURUDEV


CIN : L27104TN1991PLC020533


NOTE 15 LONG TERM LOANS AND ADVANCES


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


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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| 189

NOTE 16 INVENTORIES


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


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


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


Rs.Particulars

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190 |

GURUDEV


CIN : L27104TN1991PLC020533


NOTE 18 CASH AND CASH EQUIVALENTS


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


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.


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


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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| 191

GURUDEV


CIN : L27104TN1991PLC020533


NOTE 20 REVENUE FROM OPERATIONS


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


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


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:


Rs.

Interest from banks on deposits

Total

4,218,294

4,218,294

11,349,129

11,349,129


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


Rs.Particulars

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Rs.

GURUDEV


CIN : L27104TN1991PLC020533


NOTE 22.A COST OF MATERIALS CONSUMED


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


Rs.Particulars

NOTE 22.B CHANGES IN INVENTORIES OF FINISHED GOODS AND STOCK-IN-TRADE


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


Rs.Particulars

192 |

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| 193

GURUDEV


CIN : L27104TN1991PLC020533


NOTE 23 EMPLOYEE BENEFITS EXPENSE


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


Rs.Particulars

NOTE 24 FINANCE COSTS


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


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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GURUDEV


CIN : L27104TN1991PLC020533


NOTE 25 OTHER EXPENSES


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


Rs.Particulars


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


Rs.Particulars

Notes:

194 |

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| 195

GURUDEV


CIN : L27104TN1991PLC020533


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:


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%


Rs.Particulars

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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:


Estimated Amount of Contracts remaining to be executed andnot provided for (Refer Notes below) 9,803,591,219 9,645,600,000


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)).


(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


Particulars

29-B. Contingent Liabilities

29-A. Commitments Capital commitments


Discount rateExpected return on plan assetsSalary escalationAttrition

7.94% to 8%NA

7.00%2.00%

9.31%NA

7.00%


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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| 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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198 |

GURUDEV


CIN : L27104TN1991PLC020533


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


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

-


Particulars


Shri Dineshchand SuranaInterest free unsecured loan 132,435,000 -


Particulars

C. Balances outstanding at the end of the year

31 Earnings Per Share


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)


Particulars

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| 199

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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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| 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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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.


BABU SRINIVASAN DINESHCHAND SURANA Chairman Managing Director (DIN : 06608264) (DIN : 00007032)


Officer


M.No A25451

Date : 30 May 2015Place : Chennai

GURUDEV


CIN : L27104TN1991PLC020533


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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| 203

ATTENDANCE SLIP


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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204 |

PROXY FORM


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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| 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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SURANA INDUSTRIES TWENTY FIFTH ANNUAL REPORT FINAL …€¦ · Biju George, Director who retires by...

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Transcript of SURANA INDUSTRIES TWENTY FIFTH ANNUAL REPORT FINAL …€¦ · Biju George, Director who retires by...