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Directors Report of Surana Corporation Ltd.

Mar 31, 2015

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

REVENUE FROM OPERATIONS 1115.90 4126.26

PROFIT/(LOSS) BEFORE TAX AND DEPRECIATION (13.70) (348.95)

PROFIT/(LOSS) BEFORE TAX (PBT) (291.13) (364.75)

PROVISION FOR CURRENT TAX - -

TAX EXPENSE 04.06 (04.43) PROFIT/(LOSS) AFTER TAX (287.07) (360.33)

1.1 FINANCIAL PERFORMANCE

The Company has achieved a Net Revenue of Rs. 1115.90 Crores for the year ended 31st March, 2015 as compared to Rs. 4126.26 Crores in the previous year recording a major dip of 26.97%. This drop in turnover has been mainly due to the restrictions imposed by Reserve Bank of India on bullion since May 2013. These restrictions imposed by RBI on bullion trading, to control the country's Current Account Deficit (CAD) has virtually made the company's status as Nominated Agency as ornamental, and consequently the company could not do any Bullion turnover as Nominated Agency. The impact of the restrictions had been very huge. Similarly, the non availability of material on SBLC basis also restricted the company's ability to do exports. In fact, the company had not made any exports during the current financial year as against Rs.53.79 Crores during the previous financial year. Another reason leading to this fall in exports is the overall recessionary trend in the international markets.

Revenues from wind power generation during the year amounted to Rs. 4.87 Crores as against Rs.6.61 Crores for the previous year. The fall in wind energy division has been mainly due to shutting down of grid for abnormal period during the peak season.

The Company has incurred a loss after tax of Rs.287.07 Crores as against a loss after taxes amounted to Rs.360.33 Crores for the previous year.

The financial year also has been very distressful for the company as the company suffered a double blow of fall in turnover due to RBI restrictions and also had to almost bear doubled financial costs due to the re-alignment of limits from Non Fund Based to Fund Based. The company further had to face a stretch in its working capital needs as the company's debtors stretched payments.

1.2 CORPORATE DEBT RESTRUCTURING (CDR)

The lenders have restructured the debts of the Company to the extent of Rs.1547.15 Crores under the CDR mechanism. The lenders vide the final approval letter dated 25th November, 2014 Issued by CDR-EG had agreed to an interest moratorium of Six months up to 30th September, 2014 for all the credit facility extended by consortium of banks. Further the banks have extended additional moratorium on WCTL till 31st March, 2016. The re-payments of all the loans have been re- scheduled over ten year period extending up to 2024. As part of the CDR the Company has additionally pledged with consortium banks, the properties belonging to sticky debtors. The promoters have pledged their entire shareholding to the consortium as part of CDR package. During the year, the promoters have brought in Rs.35.27 Crores as promoter contribution towards lender's sacrifice for implementation of CDR. This amounts received from promoters and their sources is reflected as Share Application money in the Balance Sheet dated 31st March, 2015.

2. SHARE CAPITAL

The paid up Equity Share Capital as on 31st March, 2015 was Rs. 24.36 Crores. During the year under report, the Company has not issued any shares with differential voting rights nor granted stock options nor sweat equity. On getting the shareholders approval through postal ballot, the Company shall be issuing additional equity to the promoters for share application money to the tune of Rs.35.27 Crores already received, as part of the CDR package.

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

4.1 BULLION OUTLOOK

India's official gold imports in 2014-15 stood at 900 tonnes — 36% higher than the previous year's 665 tonnes, indicating households' strong preference for the yellow metal as a savings option. Gold imports are believed to have more than doubled to 125 tonnes in March from 60 tonnes in the same period a year ago.

India had raised the import duty on gold to 10% and imposed the "80:20" import rule in August 2014 to stem dollar flight and contain the current account deficit (CAD) — the measure of the difference between the inflows and outflows of a foreign currency that hit a record high of 4.8% of GDP.

In November this year, the government eased import norms for gold by scrapping the rule that mandated traders to export 20% of all yellow metal imported into the country.

The so-called "80:20" import rule, which ties imports to exports, was introduced to discourage inward gold shipments, stem dollar outflows, narrow down CAD and help the rupee that had hit record lows.

Imports of the metal were $28.7 billion in the previous fiscal year (2013-14). Increase in gold imports impacts the country's trade deficit, which has reached $137 billion in 2014-15, and the current account deficit.

Gold imports surged 19.5 per cent to $34.32 billion in fiscal year 2014-15 due to declining prices and easing of restrictions by the Reserve Bank of India.

South India remains the largest consumer of gold in the country, with the increasing preference of retail jewelers for opening new stores in the region. Southern states of Kerala, Andhra, Tamilnadu and Karnataka account for 37% of the total domestic gold demand. The industry has witnessed emergence of many new players and expansion of existing players in the organized market. The penetration of organized Gems & Jewellery market is expected to cross 20-22% by FY 2017, driven by changing lifestyle patterns and mall culture in Tier II and Tier II cities. In the long term, key drivers for growth in this sector would be growing disposable income, rising young population having higher urge to spend, increasing number of working women and conscious marketing efforts by companies in this sector, including online jewellery retailing.

4.2 OPPORTUNITIES

The bullion sector, especially the Gold jewellery sector, is back in focus with the recent announcements made by the Government and the Reserve Bank of India (RBI).

The situation has changed since then and the huge inflows in the Indian markets have helped to bring down Current Account Deficit (CAD) considerably. CAD dropped sharply to 1.7% of GDP or $32.4 billion in 2013-14, primarily aided by plummeting gold imports.

RBI allowed imports of coins and medallions recently but the import duty on gold is still quite high and the government may slash it in this Budget. The government may consider a reduction of 2-4 per cent in import duty on gold in the forthcoming years, a move that could help boost exports and manufacturing of gems and jewellery.

In a latest move, RBI nominated banks has been allowed to import gold on "consignment basis" and lend it to local jewellers, enabling banks to earn good margin. FICCI has pointed out that gold metal loan facility provided by authorized bullion banks provides a natural hedge against both currency as well as the commodity price fluctuation.

This helps both the banks and the borrower. Further, banks are free to grant gold metal loans. While gold coin and medallion import, which was banned in August 2014, will no longer be prohibited, this move offers a high probability set up for a reduction in import duty on gold imports in the upcoming years.

- Expanding domestic markets.

- Growing middle class and upper middle class families with large disposable incomes.

- Emerging new markets in Tier II cities.

- Expected substantial increase in volume of imports owing to status of nominated agency.

5. OPERATIONS

5.1 MANUFACTURING

The Company has shifted its manufacturing facility from Tondiarpet to Madhavaram during December, 2014; this shift in factory operation has affected the manufacturing capacity of the Company for the year. The Company with a view to mitigate the loss of business on account of shift in factory has resorted to outsourcing of Jewellery manufacturing to a small set of trusted karigars.

5.2 WIND ENERGY DIVISION

The Wind energy division of your Company earned an income of Rs.4.86 Crores during the year 2014 - 2015 as compared to an income of Rs.6.61 Crores in the previous year. The fall in wind energy division has been mainly due to shutting down of grid for abnormal period during the peak season.

6. FUTURE OUTLOOK

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. SBI Ltd.

The Company with a view to augment the operational profitability has introduced certain concepts which will help in utilizing the full capacity and simultaneously 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.

The Company in the past few years had suffered severe liquidity crunch on account of negative market sentiments per se import of gold. 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.

7. RISK PERCEPTION

The Directors are constantly assessing the business risks pertaining to the performance of the Company. The following are the important risks perceptions:

- Volatility in gold and silver prices.

- Uncertain regulatory atmosphere.

- Current account deficit and more restrictions by the Government on import of gold.

- Increased customs duty.

- Customers Default

- Inadequacy of Finance Arrangement

- Statutory Policies

- Restriction of importing of Gold

- Events Due to Unforeseen Circumstances

- Uncertainties of global economy, impacting overall growth.

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.

8. SUBSIDIARIES:

SURANA PROJECTS PRIVATE LIMITED (SPPL)

Surana Projects Private Limited a 100% subsidiary of Surana Corporation Limited, the company has not commenced any commercial operations since inception and consequently it has been decided to strike off the company name from Registrar of Companies records, the process for the same is initiated during the year.

SURANA WIND ENERGY PRIVATE LIMITED (SWEPL)

Surana Wind Energy Private Limited, subsidiary of Surana Corporation Limited had operated with a capacity of 2.55 MW at Poigai Village, Tenkasi Taluk, Tirunelveli District. Surana Wind Energy Private Limited, an SPV through which the Company is availing the Group Captive Scheme (GCS), whereby Surana Wind Energy Private Limited is able to sell electricity to other captive users.

During the Financial Year 2014-15, the revenue from operation stood at Rs.0. 88 Crores as compared to Rs.0.66 Crores for the previous Financial Year 2013-14.

During the year Surana Wind Energy Private Limited has transferred its assets to its holding company M/s. Surana Corporation Limited and consequently the holding company has settled its term loan liabilities of Syndicate Bank with the approval of Working Capital Consortium Lenders.

GURUDEV WIND ENERGY PRIVATE LIMITED (GWEPL)

Gurudev Wind Energy Private Limited, subsidiary of Surana Corporation Limited had operated with a capacity of 1.70 MW at Poigai Village, Tenkasi Taluk, Tirunelveli District. Gurudev Wind Energy Private Limited, an SPV through which the Company is availing the Group Captive Scheme (GCS), whereby Gurudev Wind Energy Private Limited is able to sell electricity to other captive users.

During the Financial Year 2014-15, the revenue from operation stood at Rs. 0.84 Crores as compared to Rs.0.004 Crores for the previous Financial Year 2013-14.

During the year Gurudev Wind Energy Private Limited has transferred its assets to its holding company M/s. Surana Corporation Limited and consequently the holding company has settled its term loan liabilities of Syndicate Bank with the approval of Working Capital Consortium Lenders.

A statement pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of The 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"

9. INTERNAL CONTROL SYSTEM:

Your Directors are pleased to inform you that your Company has an adequate and sufficient internal controls as well as Internal Audit Systems manned by company officials commensurate with the size and nature of the Company's day to day operations. The Internal policies and controls do ensure efficient use of Company's productive assets. These internal guidelines also help protection of the assets of the Company. They also ensure that the activities of the Company are in accordance with the stated policies, guidelines and other statutes and regulations in force. Independent audit functions and compliances of the various stipulations of the Statutory Authorities are strictly adhered to by the Company and this aspect is monitored by the Audit Committee. The Internal Control Mechanism also provides for well documented policies and approved procedures for guiding the company's operations.

10. 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.

11. 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 50 employees. The Company is in the process of revamping the employer employee engagement program.

12. 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.

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.

13. 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. Swaminathan Ganesh as the Chairman and Shri. Devarajan.K.E and Shri. Vijayraj Surana as 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.

During the financial year 2012-13 and financial year 2013-14 the Company had achieved a Net Profit of Rs. 71.04 Crores, Net Loss of Rs. 364.75 Crores respectively, however the Company has achieved the net loss of Rs. 291.13 Crores during the financial year 2014-15. Due to subsequent liquidity crunch faced by the Company, the Company is not in a position to spend money pertaining to CSR activities. The Company during the last three financial years had an average net loss of Rs.194.95 Crores; hence the submission of a report on CSR activities does not apply.

14. 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. Swaminathan Ganesh as the Chairman and Shri.Devarajan.K.E and Shri. Vijayraj Surana as members.

15. 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.

16. 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.

17. 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 amounts lying with the Company as on 26th September, 2014 (date of last Annual General Meeting) on the Company's website (www.surancorp.com), as also on the Ministry of Corporate Affairs' website.

18. AUDITORS

STATUTORY AUDITORS

M/s. VDSR & Co, Chartered Accountants, Chennai having firm registration number 001626S has been appointed as Statutory auditors of the Company from the conclusion of this Annual General Meeting till the conclusion of twenty ninth Annual General Meeting of the Company as set out in Item No.3 of the Notice of Annual General Meeting.

M/s. VDSR & Co, Chartered Accountant, Chennai have conveyed their consent to be appointed as Statutory Auditors of the Company along with a confirmation that, their appointment, if made by the members, would be within the limits prescribed the Companies Act, 2013.

19. AUDITORS REPORT AND MANAGEMENT'S RESPONSE TO AUDITORS OBSERVATIONS ON STAND ALONE FINANCIAL STATEMENTS

The Auditors have emphasized certain matters in their report.

AUDITORS EMPHASIZE

The Accumulated losses at the end of the financial year are more than fifty percent of its net worth. The entire net worth of the Company as eroded due to the loss. The Company as incurred both non-cash loss and cash loss during the financial year covered by our audit. The cash loss is due to the financial expenditure on the loans taken. As per AS – 1 the going concern concept of the Company is doubtful. However as per the management statement all the financial loss of the Company has been converted into long-term loans as per the CDR package approved by the Banks. Hence the Company is confident of reviving its business.

MANAGEMENT'S RESPONSE

On 25th November, 2015 CDR packaging of the Company has been approved, consequent to which the moratorium extended by banks will help the Company to drastically cut down the cash outflows on account of financial expenses. Further with the relaxation in the Gold Import made by RBI, the Company expects to become viable in short period of time.

20. AUDITORS REPORT AND MANAGEMENT'S RESPONSE TO AUDITORS OBSERVATIONS ON CONSOLIDATED FINANCIAL STATEMENTS

The Auditors have emphasized certain matters in their report.

AUDITORS EMPHASIZE

The entire net worth of the Holding Company has eroded due to Loss. The Holding Company has incurred both Non Cash Loss and Cash Loss during the financial year covered by our audit. The Cash Loss is due to the financial expenditure on the Loans taken. As per AS 1, the going concern concept of the company is doubtful. However as per the Management statement all the financial loss of the company has been converted into long term loans as per the CDR package approved by the banks. Hence the company is confident of reviving its business.

MANAGEMENT'S RESPONSE

On 25th November, 2015 CDR packaging of the Company has been approved, consequent to which the moratorium extended by banks will help the Company to drastically cut down the cash outflows on account of financial expenses. Further with the relaxation in the Gold Import made by RBI, the Company expects to become viable in short period of time.

AUDITORS EMPHASIZE

The accumulated losses at the end of the financial year are more than fifty percent of its net worth. The Group has incurred cash loss during the financial year covered by our audit.

MANAGEMENT'S RESPONSE

On 25th November, 2015 CDR packaging of the Company has been approved, consequent to which the moratorium extended by banks will help the Company to drastically cut down the cash outflows on account of financial expenses. Further with the relaxation in the Gold Import made by RBI, the Company expects to become viable in short period of time.

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. Lakshmmi Subramanian & Associates, Practising Company Secretaries, Chennai to undertake the Secretarial Audit of the Company. The report of the Secretarial Audit Report is annexed herewith as "Annexure B".

MANAGEMENT RESPONSE TO SECRETARIAL AUDITOR'S OBSERVATION:

1. The Company has appointed Smt. Soundharya Panchapakesan as an Additional Director in the category of Independent on the Board with effect from 28th August, 2015 which shall serve the purpose of compliance with Section 149(1) of the Companies Act, 2013 regarding appointment of Woman Director.

2. During the audit period Shri. Guruswamy has resigned from his directorship, which had resulted in non-compliance of maintaining the minimum number of Independent Directors in the Board. However the Company has inducted two Independent Directors namely Shri. Swaminathan Ganesh and Smt. Soundharya Panchapakesan with effect from 30th May, 2015 and 28th August, 2015 respectively in addition to the existing Independent Director Shri. Jagadish Gopal, which shall ensure the Board composition of having atleast 1/3rd of the Independent Director in the Board. The Board has sought the approval of shareholders at the ensuing Annual General Meeting for confirming the appointment of aforesaid Independent Directors of the Company.

3. During the audit period Shri. Guruswamy has resigned from his directorship, which resulted in the shortfall in the composition of the Audit Committee falling below the minimum threshold limit. However the company has re-constituted the Audit Committee with effect from 28th August, 2015 in compliance with Section 177 of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

4. As per the Companies Act, 2013 and rules framed there under, the Company is required to obtain shareholders consent by way of postal ballot process for ratifying the earlier resolution passed by the shareholders under Section 293 (1) (a) of Companies Act, 1956, by getting fresh approval from shareholders under Section 180(1) (a) of Companies Act, 2013, which shall be taken by the Company during the financial year.

5. The Company has closed its foreign subsidiary during the last quarter of the financial year and the Company is already in the process of reporting the same to the Reserve Bank of India.

6. During the audit period, the Company had related party transactions with its subsidiary companies which are at arm's length basis and hence the requirement of complying with the provisions of Companies Act, 2013 and Listing Agreement does not arise; since the transactions were entered into by the Company prior to the notifications of the revised Clause 49 of the Listing Agreement. Similarly the Company had also provided the details of Related Party Transactions along with the justification for entering into such contract or arrangement in the Board's report.

7. The company is taking all the necessary acts and efforts to comply with the revised clause 49 of the listing agreement.

21. 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. DIRECTORS:

The following changes have occurred in the Board of Directors during the financial year 2014-15:

22.1 RESIGNATION OF DIRECTORS:

Shri. S. Guruswamy has resigned from the position of Director with effect from 29th September 2014; The Board had placed on record its appreciation for the outstanding contributions made by Shri. S. Guruswamy during his tenure of office with the Company.

Smt. Visalakshi Vasanthan, Nominee of IDBI ceased to be a Director with effect from 30th January, 2015 due to withdrawal of Nomination by IDBI from the Board of Surana Corporation Limited.

22.2 APPOINTMENT OF DIRECTOR:

Shri. Swaminathan Ganesh was appointed as an Independent Director of the Company with effect from 30th May, 2015 and Smt. Soundharya Panchapakesam (DIN: 07220601) was appointed as an Independent Director with effect from 28th August, 2015.

Shri. Devarajan. K.E. (DIN: 07228715) was appointed as a Non-Executive Director of the Company with effect from 03rd July, 2015.

23. 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. Vijayraj Surana, Managing Director of the Company is liable to retire by rotation and being eligible offer himself for re-appointment. The Board recommends his re-appointment.

Re-appointment of Shri.Vijayraj Surana as Managing Director for a period of three years with effect from 15th November, 2014 to 14th November, 2017 as per the terms and conditions specified in Item No.8 of the notice of Annual General Meeting.

24. 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.

25. 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.

26. REMUNERATION POLICY

The Board on 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.

27. DIRECTORS' RESPONSIBILITY STATEMENT:

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) the directors had selected such 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 systems were adequate and operating effectively.

28. CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION

A statement containing the particulars relating to conservation of energy, research and development 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 are given in "Annexure C"

29. 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.

30. 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.

31. DEPOSITS

Your Company has not accepted any deposits from the public during the year under review.

32. MEETINGS

During the year Six (6) Board Meetings and Four (4) 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 as prescribed under the Companies Act, 2013.

33. 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

d) CSR Committee

e) Risk Management Committee

f) Share Transfer & Transmission 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.

34. 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:

Name of the Director Category Status

Shri. Swaminathan Ganesh Non-Executive Independent Director Chairman

Shri. Jagadish Gopal Non-Executive Independent Director Member

Shri. Devarajan.K.E Non-Executive Director Member

The Board has accepted all the recommendations provided by the Audit Committee.

35. VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Company has a vigil mechanism/whistle blower Policy to deal with instance of fraud and mismanagement, 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.

36. 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 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 approval. The Company is in the process of developing a Related Party Transactions Manual, Standard Operating Procedures for purpose of identification and monitoring of such transactions. None of the Directors has any pecuniary relationships or transactions vis-à-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.

37. 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".

38. 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.suranacorp.com.

Electronic copies of the Annual Report 2014-15 and Notice of the 24th Annual General Meeting are proposed to be 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.

39. 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/-

Vijayraj Surana Deverajan. K.E

Date : 28th August, 2015 Managing Director Director

Place : Chennai (DIN: 00007313) (DIN: 07228715)


Mar 31, 2014

Dear Members,

The Directors hereby present the Twenty Third Annual Report on the Business Operations of your Company along with Audited Balance Sheet as on 31st March, 2014 and Profit and Loss Account for the year ended 31st March, 2014.

FINANCIAL RESULTS (Rs in Lakhs)

PARTICULARS 31.03.2014 31.03.2013

Profit Before Tax (36,475.37) 7,104.12

Less: Provision for Tax

Current Tax -- 367.17

Deferred Tax Liability (442.86) 1,421.09

Profit after Tax (36,032.50) 5,315.85

Add: Balance in P & L account Brought Forward from Previous Year 25,289.85 20,308.34

MAT credit entitlement account -- 563.42

Interim Dividend with Dividend Tax -- -- Proposed Dividend with

Dividend Tax -- 512.97

Transfer to General Reserve -- 531.58

Amalgamation Reserve Write Back** -- 146.79

Balance Carried to Balance Sheet (10,742.66) 25,289.85

OPERATIONS - BUSINESS PERFORMANCE

Your company''s total turnover during the year ended 31st March, 2014, was at Rs. 4,126.95 Crores as against Rs.8,471.24 Crores for the previous year, recording a major dip of around 51%. This drop in turnover has been mainly due the restrictions imposed by Reserve Bank of India on bullion since May 2013. These restrictions imposed by RBI on bullion trading, to control the country''s current Account Deficit (CAD) has virtually made the company''s status as Nominated Agency as ornamental, and consequently the company could not do any Bullion turnover as Nominated Agency. The impact of the restrictions had been so huge that the company had to shut down its Nominated Agency Operations and also close down the branches which it had opened in the previous year. The company could achieve Sales of only Rs.16.74 crores under Nominated Agency as against Rs.543.75 crores in the previous year. Similarly, the non availability of material on SBLC basis also restricted the company''s ability to do exports. In fact, the company during the year had made exports of Rs.53.79 crores only against Rs.1,550.55 crores in the previous year. Another reason leading to this fall in exports is the overall recessionary trend in international markets.

Revenues from wind energy during the year amounted to Rs.6.61 crores as against Rs.11.95 crores. The company''s Loss after Tax was at Rs. 360.33 Crores in the current year as against a profit of Rs. 53.16 Crores for the Previous Year.

The financial year has been very distressful for the company as the company suffered a double blow of fall in turnover due to RBI restrictions and also had to almost bear a two fold increase financial costs due to the re-alignment of limits from Non Fund Based to Fund Based. The company further had to face a squeeze in its working capital as the company''s debtors overstretched repayments. Further, the company keeping in perspective the export market had to make a Provision for Rs. 136.02 Crores as the realization from these debtors have been getting delayed. Similarly, the company during the year as matter of abundant caution had to securitize domestic debtors of around Rs.200.00 Crores.

In light of the restrictions on the trade and the losses incurred, mainly due to increase in finance costs, the company towards the end of the financial year 2013- 2014 has made request to its consortium of banks to consider restructuring of the account, so as to help the company turnaround faster and recover sooner.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217 (2AA) of the Companies Act 1956 the Board of Directors hereby confirm:-

That in the preparation of the Annual Accounts of the Company for the year ended 31st March, 2014, the applicable accounting standards have been followed along with proper explanations and that no material departures have been made from the same.

That the Directors have taken such 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 as at the end of the financial year as on 31st March, 2014 and of the Profit and Loss Account for the year ended 31st March, 2014.

That the Directors of the Company have taken proper and sufficient care for the maintenance of the accounting records in accordance with the provisions of the Companies Act, 1956 for the safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities if any.

That the Directors of the Company have prepared the Annual Accounts for the financial year ended 31st March, 2014 on a going concern basis.

MANAGEMENT DISCUSSION AND ANALYSIS

India''s fancy for gold has transcended the ages. Gold is considered the only saving instrument in rural regions of India. The estimated gold holdings in India would be about 20,000 tonnes valued more than USD 1 trillion. India accounted for 27% of the global gold demand during FY 2013. Besides, the industry is largely dependent on gold imports for meeting its raw material requirements. India''s net imports of gold available for domestic consumption stood at 700 tonnes during FY 2013-14, declined by 40% Year on Year primarily due to various regulatory measures.

Gold is the second largest contributor to India''s imports, accounting for 11% of the total imports by the country during FY 2013-14. In light of the burgeoning CAD, tough regulatory measures were introduced by Government of India and Reserve Bank of India, to curtail increasing gold imports. These measures included increase in import duty on gold bullion to 10% and 15% on import of Gold Jewellery. RBI also prohibited Gold on lease and export of gold coins and medallions. Further, RBI introduced 20:80 scheme whereby import of gold was linked to the overall exports of finished products of gold. Further, RBI also directed that, gold will be made available to only jewelers, bullion dealers, banks involved in gold deposit scheme after payment of upfront cash and credit lines were banned.

Due to the above measures the CAD significantly contracted by 55.4%. However, these regulations adversely impacted the Industry and also the company, by increasing the working capital requirements of players, impacting the gold supply in the short term and thereby rising Gold prices.

The various measures resulted in lack of clarity for imports meant for gold jewellery exports. The Indian gold jewellery exports witnessed a declining trend (-32% year on year) during April 2013 - March 2014. Decline in the exports of gold jewellery was significant (-69.8% year on year) during June-September 2013, mainly due to supply issues on account of government restrictions on gold imports to curb the rising CAD and lack of operational clarity of the regulations. Overall exports in Gem and Jewellery sector dropped by 13% during 2013-14.

South India remains the largest consumer of gold in the country, with the increasing preference of retail jewelers for opening new stores in the region. Southern states of Kerala, Andhra, Tamilnadu and Karnataka account for 37% of the total domestic gold demand. The industry has witnessed emergence of many new players and expansion of existing players in the organized market. The penetration of organized Gems & Jewellery market is expected to cross 20- 22% by FY 2017, driven by changing lifestyle patterns and mall culture in Tier II and Tier III cities. In the long term, key drivers for growth in this sector would be growing disposable income, rising young population having higher urge to spend, increasing number of working women and conscious marketing efforts by companies in this sector, including online jewellery retailing.

DEMATERIALISATION OF SHARES

Your Company had already entered into a tripartite agreement with National Securities Depository Limited (NSDL) Mumbai and Central Depository Services (India) Mumbai along with M/s Cameo Corporate Services Limited, Chennai for providing electronic connection for dematerialization of shares facilitating the investors to hold their shares in electronic form

and trade in those shares. Your Company has appointed M/s Cameo Corporate Services Limited as the Registrar & Transfer Agents both for physical and electronic transfer of shares from 1st April, 2003.

AUDIT COMMITTEE

Consequent upon the introduction of Section 292 A of the Companies Act 1956 by the Companies (Amendment) Act 2000 your Company has already constituted an Audit Committee of the Board consisting of three Directors, as follows;

Shri. Vijayraj Surana.

Shri. S. Guruswamy &

Shri. Jagadish Gopal

Shri. Jagadish Gopal has been appointed as Chairman of the Audit Committee. The Audit Committee reviews the audit findings regularly and it also oversees the adequacy and efficacy of the Internal Control Systems.

WIND ENERGY DIVISION

The Wind energy division of your Company earned an income of Rs.6.61crores during the year 2013 - 2014 as compared to an income of Rs.11.95crores in the previous year. The fall in wind energy division has been mainly due to shutting down of grid for abnormal period during the peak season.

DIVIDEND

As the company, during the year has incurred huge losses and also keeping in view the liquidity position of the company, the Directors have to inform you that no dividend is being declared for the year. This would be the first instance of the company not paying dividend after 9 years. We hope with the new government installed, restriction on gold shall be removed and the company will soon gain sufficient financial strength to declare dividends in future.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Your Directors are pleased to inform you that your Company has an adequate and sufficient internal controls as well as Internal Audit Systems commensurate with the size and nature of the Company''s day to day operations. The Internal policies and controls do ensure efficient use of Company''s productive assets. These internal guidelines also help protection of the assets of the Company. They also ensure that the activities of the Company are in accordance with the stated policies, guidelines and other statutes and regulations in force.

Independent audit functions and compliances of the various stipulations of the Statutory Authorities are strictly adhered to by the Company and this aspect is monitored by the Audit Committee. The Internal Control Mechanism also provides for well documented policies and approved procedures for guiding the company''s operations.

As a part of the efforts to evaluate the effectiveness of the Internal Control Systems, your Company''s internal audit system reviews all the control measures periodically and recommends improvements wherever appropriate. All the systems are being reviewed regularly by the Audit Committee.

HUMAN RESOURCES

Your Company attaches utmost importance to the continuous development of Human Resources. Human Resources are the backbone for the welfare and growth of the Company. High priority is being given for imparting good training to the personnel and updating their knowledge and skills along with automation. Personnel are being sent for intensive training programmes outside. These developmental programmes for the Executives, Officers and Staff Members would bring improved efficiency in future.

CORPORATE GOVERNANCE

The Securities and Exchange Board of India (SEBI) had constituted a Committee on the Corporate Governance to promote and raise the standard of Corporate Governance in respect of all the Listed Companies. Your Company has been complying with all the guidelines issued by the SEBI in respect of Corporate Governance. A Certificate from the Statutory Auditors of the Company regarding compliance of the conditions of the Corporate Governance is also attached to this Report.

CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION

Your Directors are pleased to state that your Company has taken adequate steps in the matter of Conservation of Energy and Technology Absorption during the year under Review. The information in accordance with the Provisions of Section 217 (1)(e) of the Companies Act 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988 are given below:

CONSERVATION OF ENERGY

Particulars 2013-2014 2012-2013

Electricity Purchased (units) 171,436 288,849

Total amount (Rs.) 1,210,142 1,742,890

Rate per unit (Rs.) 7.06 6.03

FOREIGN EXCHANGE EARNINGS AND OUTGO

During the period under Review your Company earned Foreign Exchange to the extent of Rs.53.79 Crores on account of export of Gold Jewellery. Your Company has also incurred expenditure in foreign exchange to the tune of Rs.51.06 Crores for import of Gold for manufacture of Jewellery.

PARTICULARS OF EMPLOYEES

During the year ended 31.03.2014, in terms of the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of the employees are set out in the annexure to the Directors'' Report. Having regard to the provisions of Section 219(1)(b)(iv) of the said Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary at the registered office of the Company.

DIRECTORS

Shri. Shri. Jagadish Gopal and S. Guruswamy retire by rotation and being eligible for reappointment as directors.

AUDITORS

Messrs C.S.P Jain & Co., Chartered Accountants, Chennai, Auditors of the Company retire at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

CORPORATE GOVERNANCE AND SHAREHOLDERS INFORMATION

Your Company has taken adequate steps to adhere to all the stipulations laid down in Clause 49 of the Listing Agreement. A report on Corporate Governance is included as a part of this Annual Report.

Certificate from the Statutory Auditors of the company M/s CSP Jain & Co., Chartered Accountants confirming the compliance with the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is attached to this report. VIGIL MECHANISM

In pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013, a vigil mechanism for directors and employees to report genuine concerns has been established.

ACKNOWLEDGEMENTS

The Board of Directors of your Company wish to place on record their deep sense of appreciation for the excellent support received from the esteemed Shareholders of the Company for its various activities. Their valuable suggestions given to us from time to time have indeed helped the Company to plan its growth and improve its Profitability.

The Board of Directors also would like to thank all the valuable Customers, both domestic and international, and Suppliers, domestic as well as international for their abiding support to the company and for their services in making available imported gold and silver to meet the company''s requirements from time to time. We value our customers'' suggestions for further improvement in the quality of our products and services.

The Board would also like to express its sincere thanks to all the esteemed Bankers, including its Present and Past members of the consortium for their valuable support to the Company.

Further the Board would also like to place on record their deep sense of appreciation to the excellent work put forward by all the Executives, Officers, Staff Members, all the Artisans and other Workers in the factory and other establishments for their dedicated and loyal work.

For & On Behalf of the Board of Directors SURANA CORPORATION LIMITED

VIJAYRAJ SURANA MANAGING DIRECTOR

Place : Chennai Date : 27.05.2014


Mar 31, 2013

The Directors have great pleasure in presenting the Twenty Second Annual Report on the Business Operations of your Company along with Audited Balance Sheet as on 31st March, 2013 and Profit and Loss Account for the year ended 31st March, 2013.

PARTICULARS 31.03.2013 31.03.2012

Profit Before Tax 7,104.12 7,749.34

Less: Provision for Tax Current Tax 367.1 7 577.66

Deferred Tax Liability 1,421.09 401.96

Profit after Tax 5,315.85 6,769.71

Add: Balance in P&L account

Brought Forward from Previous Year 20,308.34 13,786.43

MAT credit entitlement account 563.42 393.57

Interim Dividend with Dividend Tax -- 255.73

Proposed Dividend with Dividend Tax 512.97 255.74

Transfer to General Reserve 531.58 676.97

Amalgamation Reserve Write Back** 146.79 547.07

Balance Carried to Balance Sheet 25,289.85 20,308.34

** Rs.146.79 lakhs being loss on sale of assets acquired on amalgamation has been offset against the amalgamation reserves as all the assets on amalgamation have been sold off.

OPERATIONS – BUSINESS PERFORMANCE

Your company''s total turnover during the year ended 31st March, 2013, in spite of adverse circumstances, was at Rs. 8,471.24 Crores as against Rs.8,666.02 Crores for the previous year, recording a marginal dip of just 2%.

Your company achieved a commendable performance of Rs.543.75 crores of Bullion sales under Nominated Agency as against Rs.471.22 crores in the previous year. The Export turnover of your company decreased by 23% to Rs.1,550.55 crores in 2012-2013 as against Rs.1,910.73crores in the previous year. The decrease in export turnover has been due to the overall recessionary trend in international markets. Similarly, domestic sales during the year decreased by 5% to Rs.6,365.00 crores as against Rs.6,755.29 crores in the previous year. Revenues from wind energy during the year amounted to Rs.11.95 crores as against Rs.5.68 crores. The company''s Profit after Tax was at Rs.53.16 Crores in the current year as against Rs. 67.70 Crores for the Previous Year.

The company even in these testing times could maintain its overall performance due to the better management of the resources available, control on overheads and deeper understanding of the market behavior. During the year, Gold Prices witnessed a steady uptrend.

ACHIVEMENTS

During the year, following were the important achievements of your company

l As per the ranking of Business India ( December 2012), on the basis of the Net sales for the year ending 2012, your company secured all India 85th rank as against the previous years'' rank of 527

l Has been ranked 3rd as per Total Income in Gem &Jewellery sector for 2011 by Dun & Bradstreet.

l 24/7 web site screen display of SURANA gold and silver buy and sale rates;

l Introduction of system of online payments to all major suppliers;

l Approval of the audited accounts of the company by the board in the month of April, 2013 itself;

l Opening of a subsidiary company at Dubai for business growth;

l Almost doubled the revenues from the old wind turbine generators by entering into Group captive arrangement and immediate cash realization;

l Bullion ERP system introduced for gold pricing and payments

l "Brickwork" has assigned rating of ''BWR A'' (Pronounced BWR single A) for the long term bank facilities.

l Brickwork" has also assigned rating of ''BWR A1'' (Pronounced BWR A One) for the short term bank facilities.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217 (2AA) of the Companies Act 1956 the Board of Directors hereby confirm:- That in the preparation of the Accounts of the Company for the year ended 31st March, 2013, the applicable accounting standards have been followed along with proper explanations and that no material departures have been made from the same.

That the Directors have taken such 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 as at 31st March, 2013 and of the Profit and Loss Account for the year ended 31st March, 2013.

That the Directors of the Company have taken proper and sufficient care for the maintenance of the accounting records in accordance with the provisions of the Companies Act, 1956 for the safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities.

That the Directors of the Company have prepared the Annual Accounts for the financial year ended 31st March, 2013 on a going concern basis.

MANAGEMENT DISCUSSION AND ANALYSIS

The domestic jewellery industry has performed excellently well during the year. Consumption of jewellery by the domestic consumers has been steadily growing. Sale of jewellery in the domestic market and export are the mainstay of your company''s business operations. Though there were pockets of ups and downs in the market during the year owing to fluctuation in the international prices of gold, the overall scenario has been healthy. Jewellery segment in the overall consumption of gold in the country is still a robust 80%. The year under review witnessed opening of new showrooms in Chennai and other cities in Tamil Nadu, indicating growth in demand for jewellery. Festive season and important days like Akshya Trithiya attracted huge sales.

Your company keeps a close watch on the market through its network of jewellers in Tamil Nadu and other States for assessing any shift in consumer preference regarding designs and prices.

Our country''s export of jewellery during the year 2012-13 registered an increase of 8.94% over the previous year. The jewellery exports were valued at USD 18.3 (Provisional) billion during 2012-13, as against USD 16.8 billion in the year 2011-12. The increase in the volume of exports from the country indicates a growing international market for Indian jewellery. Your company is on the look out for adding to its export destinations in the years to come. It was with this strategy, your company has opened a wholly owned subsidiary in Dubai during the year under review. This subsidiary, Surana Overseas DMCC, functions within a Free Zone in Dubai and has started looking for markets for export of jewellery in and around UAE.

The domestic price of gold during the year registered a slight increase over the previous year, while the value of Indian Rupee against USD depreciated by about 7% during the year. Normally, any fluctuation in the value of Indian Rupee vis-à- vis USD impacts the domestic prices. The price of Silver fell slightly compared with the previous year.

On the global front, the price of Gold registered a downtrend during the year, breaking the continuous yearly uptrend in the past 12 years. This is attributed to better global economic conditions during the year, encouraging investors to opt for other avenues rather than gold. The year under review also witnessed huge offloading of inventories by individuals and institutions owing to drop in prices. But the overall demand and supply trends globally remained more or less at the same level, as the previous year, at about 4500 tons per annum.

Your company continues to encourage transactions through its electronic platform of National Spot Exchange Limited, which facilitates faster delivery of product and services to its customers.

Your company has increased its footprint in the domestic market during the year under review by opening branches in other States like Andhra Pradesh, Bihar, Rajasthan, Gujarat and Delhi in order to serve the customers and jewelers enrolled by the Indian Bullion Market Association.

DEMATERIALISATION OF SHARES

Your Company had already entered into a tripartite agreement with National Securities Depository Limited (NSDL) Mumbai and Central Depository Services (India) Mumbai along with M/s Cameo Corporate Services Limited, Chennai for providing electronic connection for dematerialization of shares facilitating the investors to hold their shares in electronic form and trade in those shares. Your Company has appointed M/s Cameo Corporate Services Limited as the Registrar & Transfer Agents both for physical and electronic transfer of shares from 1st April, 2003.

AUDIT COMMITTEE

Consequent upon the introduction of Section 292 A of the Companies Act 1956 by the Companies (Amendment) Act 2000 your Company has already constituted an Audit Committee of the Board consisting of the following Directors, as follows;

Shri. V.M. Swami Shri. S Guruswamy & Shri. K.L. Tilakchand

Shri. V.M. Swami has been appointed as Chairman of the Audit Committee. The Audit Committee reviews the audit findings regularly and it also oversees the adequacy and efficacy of the Internal Control Systems.

WIND ENERGY DIVISION

The Wind energy division of your Company earned an income of Rs.11.95crores during the year 2012 – 2013 as compared to an income of Rs.5.68crores in the previous year. The company with view to further augment the revenues from wind energy has availed the benefits under Group Captive Scheme (GCS). This is expected to contribute substantially to the company''s earnings from wind energy division.

DIVIDEND

Your Directors are pleased to recommend payment of a dividend of 18% on the Paid up Equity Share Capital of the Company as on 31st March, 2013 for the Financial year 2012-2013 as compared to total dividend of 20% declared in the previous year. The dividend, if approved, will be Rs.1.80 per share.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Your Directors are pleased to inform you that your Company has an adequate and sufficient internal controls as well as Internal Audit Systems commensurate with the size and nature of the Company''s day to day operations. The Internal policies and controls do ensure efficient use of Company''s productive assets. These internal guidelines also help protection of the assets of the Company. They also ensure that the activities of the Company are in accordance with the stated policies, guidelines and other statutes and regulations in force.

Independent audit functions and compliances of the various stipulations of the Statutory Authorities are strictly adhered to by the Company and this aspect is monitored by the Audit Committee. The Internal Control Mechanism also provides for well documented policies and approved procedures for guiding the company''s operations.

As part of the efforts to evaluate the effectiveness of the Internal Control Systems, your Company''s internal audit system reviews all the control measures periodically and recommends improvements wherever appropriate. All the systems are being reviewed regularly by the Audit Committee.

HUMAN RESOURCES

Your Company attaches utmost importance to the continuous development of Human Resources. Human Resources are the backbone for the welfare and growth of the Company. High priority is being given for imparting good training to the personnel and updating their knowledge and skills along with automation. Personnel are being sent for intensive training programmes outside. These developmental programmes for the Executives, Officers and Staff Members would bring improved efficiency in future.

CORPORATE GOVERNANCE

The Securities and Exchange Board of India (SEBI) had constituted a Committee on the Corporate Governance to promote and raise the standard of Corporate Governance in respect of all the Listed Companies. Your Company has been complying with all the guidelines issued by the SEBI in respect of Corporate Governance. A Certificate from the Statutory Auditors of the Company regarding compliance of the conditions of the Corporate Governance is also attached to this Report.

CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION

Your Directors are pleased to state that your Company has taken adequate steps in the matter of Conservation of Energy and Technology Absorption during the year under Review. The information in accordance with the Provisions of Section 217 (1)(e) of the Companies Act 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988 are given below:

CONSERVATION OF ENERGY

Particulars 2012-2013 2011-2012

Electricity Purchased (units) 288,849 304,585

Total amount (Rs.) 1,742,890 1393,937

Rate per unit (Rs.) 6.03 4.57

FOREIGN EXCHANGE EARNINGS AND OUTGO

During the period under Review your Company earned Foreign Exchange to the extent of Rs.1,550.55 Crores on account of export of Gold Jewellery. Your Company has also incurred expenditure in foreign exchange to the tune of Rs.2,527.66 Crores for import of Gold for manufacture of Jewellery.

PARTICULARS OF EMPLOYEES

During the year ended 31.03.2013, in terms of the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of the employees are set out in the annexure to the Directors'' Report. Having regard to the provisions of Section 219(1)(b)(iv) of the said Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary at the registered office of the Company.

DIRECTORS

Shri. K L Tilakchand and Shri. Jagadish Gopal retire by rotation, being eligible for reappointment as Independent Directors and seeks re-election.

AUDITORS

M/s. C.S.P Jain & Co., Chartered Accountants, Chennai, Auditors of the Company retire at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

ACKNOWLEDGEMENTS

The Board of Directors of your Company wish to place on record their deep sense of appreciation for the excellent support received from the esteemed Shareholders of the Company for its various activities. Their valuable suggestions given to us from time to time have indeed helped the Company to plan its growth and improve its Profitability.

The Board of Directors also would like to thank all the valuable Customers, both domestic and international, and Suppliers, domestic as well as international for their abiding support to the company for their services in making available imported gold and silver to meet the company''s requirements from time to time. We value our customers'' suggestions for further improvement in the quality of our products and services.

The Board would also like to express its sincere thanks to all the esteemed Bankers of the Company including its Present and Past members of the consortium for their valuable support to the Company.

Further the Board would also like to place on record their deep sense of appreciation to the excellent work put forward by all the Executives, Officers, Staff Members, all the Artisans and other Workers in the factory and other establishments but for whose dedicated and loyal work these results would not have been possible.

For & On Behalf of the Board of Directors

SURANA CORPORATION LIMITED

Place: Chennai SHANTILAL SURANA

Date: 30.04.2013 CHAIRMAN


Mar 31, 2012

The Directors have great pleasure in presenting the Twenty First Annual Report on the Business Operations of your Company along with Audited Balance Sheet as on 31st March, 2012 and Profit and Loss Account for the year ended 31st March, 2012.

FINANCIAL RESULTS (Rs in Lakhs)

PARTICULARS 31.03.2012 31.03.2011

Profit Before Tax 7,749.34 6,124.88

Less: Provision for Tax

Current Tax 577.66 347.99

Deferred Tax Liability 401.96 (45.06)

Profit after Tax * 6,769.71 5,821.95

Add: Balance in P & L account Brought Forward from

Previous Year 13,786.43 9,006.99

MAT credit entitlement account 393.57 -

Interim Dividend with Dividend Tax 255.73 Proposed Dividend with

Dividend Tax 255.74 460.33

Transfer to General Reserve 676.97 582.19 Amalgamation Reserve

Write Back** 547.07 -

Balance Carried to

Balance Sheet 20,308.34 13,786.43

* Profit after tax does not include the MAT Credit of Rs.14.45 lakhs (Rs.41.68 lakhs forFY2010-2011) availed during FY 2011-12.

** Rs.547.07 lakhs being loss on sale of assets acquired on amalgamation has been offset against the amalgamation reserves.

OPERATIONS - BUSINESS PERFORMANCE

We are happy to inform that your company's total turnover during the year ended 31st March, 2012 increased to Rs.

8,666.02 Crores as against Rs.5,319.78 Crores for the previous year, recording a jump of 63%.

The Export turnover of your company has increased by 31% to Rs.1,910.73 crores in 2011-2012 as against Rs.1,451.48 crores in last year. Similarly, domestic sales during the year have increased by 75% to Rs.6,755.29 crores as against Rs.3,865.29 crores in the previous year. The increase in domestic turnover has been due to the business generated as Nominated Agency. Revenues from wind energy during the year amounted to Rs.5.68 crores as against Rs.3.01 crores. As a result of this the company

was able to earn its highest Profit after Tax ever amounting to Rs.67.70 Crores in the current year which was Rs 58.21 Crores for the Previous Year.

This all round improvement in performance and profits came from better management of the resources of your company, control on overheads and deeper understanding of the market behaviour. During the year, Gold Prices witnessed a steady uptrend.

ACHIVEMENTS

During the year, your company has won the following achievements / laurels;

- Export Excellence Award for the Financial year 2010-2011 for achieving Highest Turnover among manufacturing units of MEPZ.

- Continuity of Designation as Nominated Agency by the Government of India.

- Awarded ISO 9001:2008 during the year.

- Business World, one of India's top Business Magazines, in its issue dated 24th Oct 2011, has ranked Surana Corporation Limited at 196 out of India's top 500 companies, in terms of total Income & total assets, for the year 2010-11.

- Business Standard, one of India's top Business Magazines, in its March 2012 issue, has ranked Surana Corporation Limited at 116 out of India's top 1000 companies, in terms of Net Sales for the year 2010-11.

- Dun & Bradstreet, India, a leading global business information and rating agency, has included your company in their Directory of India's Top 500 Companies 2011.

- ICRA Rating of ICRA A (pronounced as ICRA A minus) which means the long term outlook is stable. The rating has been improved from BBB- to A-.

- ICRA has also assigned ICRA A2 (pronounced as ICRA A Two Plus) for the short term outlook. The rating has been improved from A2 to A2

FUTURE OUTLOOK

Gold continues to be one of the major investment options for the general public, as the commodity continued to register year on year increase in price for the 10th year in a row. During 2011, gold registered a price increase of 28% in the global market over the previous year. In the domestic market, gold registered a whopping 37% increase in price during 2011-12. Such increase, which is not seen in equity markets and bank rates, obviously draws more investment in gold. However, Silver continued to fare badly both in terms of demand as well as price and thus Silver was not an option for investment.

The demand for gold for India fell from 1006 tons in 2010 to 933 tons in 2011. This drop is due to market vagaries, mostly due to volatility of the rupee vis-a-vis US Dollar. Normally, when the rupee becomes weak, the domestic price tends to move higher, pulling the demand down. The rupee dropped in value by 16% during 2011.

The demand for jewellery remains robust. This segment accounts for about 80% of the gold consumption in the country. While the overall size of the jewellery market in the country hovers around Rs. 150000 crores annually, major cities like Chennai, Coimbatore, Madurai etc. in Tamil Nadu continue to witness entry of new volume players every year. This trend establishes the growing demand for jewellery in the cities. Your Directors are confident that the growing demand for jewellery will boost the company's business prospects.

Your company has recorded a brilliant performance on the export front during the year under review. From Rs.1451 Crores during 2010-11, the export of jewellery touched Rs.1910 Crores during the financial year 2011-

12, posting an increase of 32% over the previous year. This remarkable increase is in line with the growth trend in the country's export of jewellery. From USD 12.9 billion in 2010-11, the country's export of jewellery reached the level of USD 15.80 billion (Provisional) during 2011-12, which is a 22.5% increase. Major export markets for the country are UAE, Hong Kong and USA. Your company will continue its focus on this growing export market.

As reported in our previous report, your company is an authorized Nominated Agency of the Government of India. The import of gold and silver is done by the company directly from the overseas markets to service its customers and meet its own requirements for exports and manufacture of jewellery. The import of gold by the company rose by 23% over the previous year. The increase in Silver import is 10% over last year. Your Directors are continually engaged in efforts to diversify the sources of international supply in order to ensure competitive imports.

It is proposed to commence production of jewellery in the newly acquired land measuring 14000 sq.ft in the Ambattur Industrial Area (as reported by us in our previous report) during the current financial year. The existing Factory at Tondiarpet will be phased out thereafter. Our new showroom at NSC Bose Road has become fully functional in the premises which was acquired last year.

Your company has launched trading of bullion through NSEL in order to reach a wider circle of clientele through electronic trading platform. It has entered into an agreement with NSEL to launch various categories of product contracts for online bullion commodity trading.

Your Directors continued their efforts during the year to extend customer reach for delivery of bullion to more cities. In addition to Coimbatore, Madurai, Trichy and Mumbai, a new branch was opened in Ahmadabad to serve customers in the State of Gujarat. The company has also opened a branch in Patna and Jodhpur. Plans are under way to open more such centres. These delivery centres, in close proximity to the customers of the region, would add volumes in future.

WIND ENERGY DIVISION

The Wind energy division of your Company earned an income of Rs. 5.68 crores during the year 2011 -2012 as compared to an income of Rs. 3.01 crores in the previous year.

During the last year, an order for 20.50 MW of wind mills was placed. During March 2012, we have commissioned all the windmills thereby taking our power generation capacity to 24.75 MW.

Out of the 20.50 MW, 10 MW has been registered under the REC scheme. Renewable Energy Certificates has been a very booming market. In the last 6 months, the average price at which REC's have been traded is Rs. 2900/- (One REC = 1,000 electricity units).

15 MW project has also been registered under the GBI scheme. Generation Based Incentive (GBI) are paid by the Central Government at Rs. 0.50 per unit. The GBI can be claimed for the maximum amount of Rs. 62.50 lakhs per MW.

In the near future, we expect the wind energy division to contribute substantially to the bottom line of the company especially if Group Captive scheme is implemented. Your company has programmed to expand its capacity in this sector.

PREFERENTIAL ALLOTMENT OF SHARES

During the last quarter of FY 2011-2012, your company has successfully completed the raising of Rs.75.00 crores of additional capital by making a preferential allotment of 25 lakh shares. It may be appreciated that this additional capital has improved the net worth of the company considerably by extinguishing the Interoperate Deposits of Rs.52.23 crores and providing additional funds to meet the other business development plans. We expect to complete the process of allocation of shares in due course of time after receiving necessary approvals from stock exchanges.

DIVIDEND

Your Directors are pleased to recommend payment of final dividend of 10% on the Paid up Equity Share Capital of the Company as on 31st March, 2012. Your Company had already paid 10% interim dividend for the half year ended 30.09.2011 making the overall payment of dividend of 20% for the Financial year 2011-2012 as compared to 18% dividend paid for the previous year. The dividend, if approved, will be Rs.1.00 per share.

DEMATERIALISATION OF SHARES

Your Company had already entered into a tripartite agreement with National Securities Depository Limited (NSDL) Mumbai and Central Depository Services (India) Mumbai along with M/s Cameo Corporate Services Limited, Chennai for providing electronic connection for dematerialization of shares facilitating the investors to hold their shares in electronic form and trade in those shares. Your Company has appointed M/s Cameo Corporate Services Limited as the Registrar & Transfer Agents both for physical and electronic transfer of shares from 1st April, 2003.

AUDIT COMMITTEE

Consequent upon the introduction of Section 292 A of the Companies Act 1956 by the Companies (Amendment) Act 2000 your Company has constituted an Audit Committee of the Board consisting of three Directors, as follows;

Shri. V.M. Swami Shri. S. Guruswamy &

Shri. K.L. Tilakchand

Shri. V.M. Swami has been appointed as Chairman of the Audit Committee. The Audit Committee reviews the audit findings regularly and it also oversees the adequacy and efficacy of the Internal Control Systems.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217 (2AA) of the Companies Act 1956 the Board of Directors hereby confirm:-

That in preparation of the Annual Accounts of the Company for the year ended 31st March, 2012, the applicable accounting standards have been followed along with proper explanations and that no material departures have been made from the same.

That the Directors have taken such 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 as at the end of the financial year as on 31st March, 2012 and of the Profit and Loss Account for the year ended 31st March, 2012.

That the Directors of the Company have taken proper and sufficient care for the maintenance of the accounting records in accordance with the provisions of the Companies Act, 1956 for the safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities if any.

That the Directors of the Company have prepared the Annual Accounts for the financial year ended 31st March, 2012 on a going concern basis.

CORPORATE SOCIAL RESPONSIBILITY

Your company has given a donation of Rs. 5.00 lakhs to a Senior Citizen Home in Karnataka.

CORPORATE GOVERNANCE

The Securities and Exchange Board of India (SEBI) had constituted a Committee on the Corporate Governance to promote and raise the standard of Corporate Governance in respect of all the Listed Companies. Your Company has been complying with all the guidelines issued by the SEBI in respect of Corporate Governance. A Certificate from the Statutory Auditors of the Company regarding compliance of the conditions of the Corporate Governance is also attached to this Report.

CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION

Your Directors are pleased to state that your Company has taken adequate steps in the matter of Conservation of Energy and Technology Absorption during the year under Review. The information in accordance with the Provisions of Section 217 (1)(e) of the Companies Act 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988 are given below:

CONSERVATION OF ENERGY

Particulars 2011-2012 2010-2011

Electricity Purchased (units) 304,585 203,825

Total amount (Rs.) 1,393,937 1,146,735

Rate per unit (Rs.) 4.57 5.63

FOREIGN EXCHANGE EARNINGS AND OUTGO

During the period under Review your Company earned Foreign Exchange to the extent of Rs. 1,910.73/- Crores on account of export of Gold Jewellery. Your Company has also incurred expenditure in foreign exchange to the tune of Rs 4,183.42/- Crores for import of Gold for manufacture of Jewellery.

PARTICULARS OF EMPLOYEES

During the year ended 31.03.2012, In terms of the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of the employees are set out in the annexure to the Directors' Report. Having regard to the provisions of Section 219(1 )(b)(iv) of the said Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary at the registered office of the Company.

DIRECTORS

Shri. V M Swami and Shri. Harish P Rajdev retire by rotation and being eligible for reappointment and seek re-election.

AUDITORS

Messrs C.S.P Jain & Co., Chartered Accountants, Chennai, Auditors of the Company retire at the ensuing Annual General Meeting and being eligible offer themselves for reappointment.

ACKNOWLEDGEMENTS

The Board of Directors of your Company wish to place on record their deep sense of appreciation for the excellent support received from the esteemed Shareholders of the Company for its various activities. Their valuable suggestions given to us from time to time have indeed helped the Company to plan its growth and improve its Profitability.

The Board of Directors also would like to thank all the valuable Customers and Suppliers, domestic as well as international, for their abiding support to the company for their services in making available imported gold and silver to meet the company's requirements from time to time. As a result of this support, the Company could show better results. We value our customers' suggestions for further improvement in the quality of our products and services.

The Board would also like to express its sincere thanks to all the esteemed Bankers (Present and Past members of the consortium) of the Company for their valuable support to the Company.

Further the Board would also like to place on record their deep sense of appreciation to the excellent work put forward by all the Executives, Officers, Staff Members, all the Artisans and other Workers in the factory and other establishments but for whose dedicated and loyal work these results would not have been possible.

For & On Behalf of the Board of Directors

SURANA CORPORATION LIMITED

SHANTILAL SURANA

CHAIRMAN

Place : Chennai

Date : 22/05/2012


Mar 31, 2010

The Report on the Business Operations of your Company along with Audited Balance Sheet as on 31st March, 2010 and Profit and Loss Account for the year ended 31st March, 2010.

FINANCIAL RESULTS (Rs in Lacs) PARTICULARS 31.03.2010 31.03.2009

Profit Before Tax 4,930.47 2,543.61 Less: Provision for Tax Current Tax 883.82 291.97 Deferred Tax Liability Nil 1.63 Profit after Tax * 4,046.65 2,250.01 Add: Balance in P & L account Brought Forward from Previous Year 4,934.58 3,216.44 MAT credit entitlement account (814.03) Nil Proposed Dividend 327.88 262.30 Dividend Tax 55.72 44.57 Transfer to General Reserve 404.67 225.00 Deferred Tax Asset Nil Nil Balance Carried to Balance Sheet 9,006.99 4,934.58

* Profit after tax does not include the MAT Credit availed during FY 2009-10. MAT Credit availed during FY 2009-10 was Rs. 578.56 Lacs.

OPERATIONS - BUSINESS PERFORMANCE

I am happy to inform that your companys total turnover during the year ended 31st March, 2010 increased to Rs. 4,062.00/- crores from Rs 2,285.34/- crores for the previous year, recording an increase of 78%.

The Export performance of your company improved considerably. The domestic sales of gold jewellery increased substantially from Rs 1,846/- Crores in the year 2008-09 to Rs 3,306/- Crores during the current year. As a result of this the company was able to earn its highest Profit after Tax ever amounting to Rs 40.47 Crores in the current year which was Rs 22.50 Crores for the Previous Year.

This all round improvement in performance and profits came from better management of the resources of your company, stabilized overheads cost and in depth understanding of market dynamics. During the year, Gold Prices witnessed a steady uptrend.

ACHIVEMENTS

During the year, your company has posted the following achievements;

- Commenced SEZ operations at MEPZ, Chennai.

- ICRA rating of LBBB (pronounced as L triple B ) means moderate credit quality and these instruments carry higher than average credit risk.

- ICRA has also assigned A2 (pronounced as A two) for the companies non fund credit facilities enjoyed and it means these instruments qualify average credit quality risk.

FUTURE OUTLOOK

Gem and Jewellery Exports are one of the most important sectors of foreign exchange generation for the country. Your Company has taken a number of measures to improve its export sales including establishment of a unit in SEZ MEPZ - Chennai. Two new markets have been added for exports. This has resulted in increased sales turnover for the Company.

Your Company is poised for further growth. Your Directors are confident that in the next financial year 2010- 2011 the exports will increase further paving the way to obtain the status of "Nominated Agency". Once recognized as a nominated agency, your company will be permitted to import bullion directly and supply to all other traders, jewellers, and exporters like MMTC, STC etc., This will boost the bottom line of the company. Your Company is targeting export sales of around Rs. 1,000/- Crores during 2010-2011 as compared to export sales of Rs.755/- Crores during 2009-2010.

WIND ENERGY DIVISION

Your Directors are pleased to state that the Company had embarked on a diversified portfolio of wind energy by starting a WIND MILL DIVISION during the year 2006- 2007. During the year ended 31st March, 2010 the Wind Mill Division of your Company generated an income of Rs. 3.44/- crores as against 3.056/- crores during the previous year. The entire power generated is sold to TNEB.

DIVIDEND

Your Directors are pleased to recommend payment of a dividend of 15% on the Paid up Equity Share Capital of the Company as on 31st March, 2010 for the financial year 2009 - 10 as compared to 12% dividend paid for the previous year. The dividend so recommended by your Directors, if approved by you will be Rs 1.50/- per share.

DEMATERIALISATION OF SHARES

Your Company had already entered into a tripartite agreement with National Securities Depository Limited (NSDL) Mumbai and Central Depository Services (India) Mumbai along with M/s Cameo Corporate Services Limited, Chennai for providing electronic connection for dematerialization of shares facilitating the investors to hold their shares in electronic form and trade in those shares. Your Company has appointed M/s Cameo Corporate Services Limited as the Registrar and Transfer Agents both for physical and electronic transfer of shares from 1st April, 2003.

AUDIT COMMITTEE

Consequent upon the introduction of Section 292 A of the Companies Act 1956 by the Companies (Amendment) Act 2000 your Company has already constituted an Audit Committee of the Board consisting of three Non Executive Directors, as follows;

Sh. V. M. Swami Sh. S. Guruswamy & Sh. K. L. Tilakchand

Sh. V. M. Swami has been appointed as Chairman of the Audit Committee. The Audit Committee reviews the audit findings regularly and it also oversees the adequacy and efficacy of the Internal Control Systems.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217 (2AA) of the Companies Act 1956 the Board of Directors hereby confirm:-

That in preparation of the Annual Accounts of the Company for the year ended 31st March, 2010, the applicable accounting standards have been followed along with proper explanations that no material departures have been made from the same.

That the Directors have taken such 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 as at the end of the financial year as on 31st March, 2010 and of the Profit and Loss Account for the year ended 31st March, 2010.

That the Directors of the Company have taken proper and sufficient care for the maintenance of the accounting records in accordance with the provisions of the Companies Act, 1956 for the safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities if any.

That the Directors of the Company have prepared the Annual Accounts for the financial year ended 31 st March, 2010 on a going concern basis.

MANAGEMENT DISCUSSION AND ANALYSIS

Export of gems and jewellery from the country has recorded a 16% growth in the year 2009-10, taking the performance of this sector to $ 28 billion from $ 24 billion during 2008-09. This overall performance of the gems and jewellery sector has been contributed by the sub- sectors, viz., Cut and Polished Diamonds, Gold Jewellery, Coloured Gem Stones and Synthetic Jewellery & Stones. Export of gold jewellery in 2009-10 was $ 9.42 billion, representing an increase of 9.28% over the previous year performance of $ 8.62 billion.

Your company exports gold jewellery, including gold medallions. This industry which went through a severe recession during 2008-09 owing to the financial sector meltdown in the US has made a fast recovery in 2009-10. USA continues to be the largest importer of Indian jewellery, followed by Dubai, Hong Kong, Singapore & Europe. However, more than 90% of plain gold jewellery is exported to UAE, particularly Dubai. Your company has added Dubai as export destination during 2009-10. With the industry getting into the growth trajectory, your company is set to scale new heights of performance in the years to come.

The domestic market for jewellery is growing steadily. The volume of gold jewellery trade in the country is said to be Rs. 100,000 crores. With steadily increasing disposable income with the middle class segment, domestic consumption is recording growth year after year. There is better awareness among the public of quality and finish. Apart from jewellery, the demand for gold medallions is growing at a fast pace. Another significant feature of the domestic market is the perception of gold as a store of value. With prices increasing, people with investible incomes opt to buy gold. This explains the improved performance of exchange traded gold funds. Your company is alive to these emerging trends in the domestic market and will take steps to encash such opportunities for future growth.

Your companys investment in the wind energy sector is helping improve profitability and sale of certified carbon credits will add to the profits.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Your Directors are pleased to inform you that your Company has an adequate and sufficient internal control procedures as well as Internal Audit Systems commensurate with the size and nature of the Companys day to day operations. The Internal policies and controls do ensure efficient use of Companys productive assets. These internal guidelines also help protection of the assets of the Company. They also ensure that the activities of the Company are in accordance with the stated policies, guidelines and other statutes and regulations in force.

Independent audit function and compliance of the various stipulations of the Statutory Authorities is strictly adhered to by the Company and this aspect is monitored by the Audit Committee. The Internal Control Mechanism also provides for well documented policies and approved procedures for guiding the companys operations.

As part of the efforts to evaluate the effectiveness of the Internal Control Systems, your Companys internal audit system reviews all the control measures periodically and recommends improvements wherever appropriate.

All the systems are being reviewed regularly by the Audit Committee.

HUMAN RESOURCES

Your Company attaches utmost importance to the continual development of Human Resources. Human Resources are the backbone for the welfare and growth of the Company. High priority is being given for imparting good training to the personnel and updating their knowledge and skills. Personnel are being sent for intensive training programmes outside. These developmental programmes for the Executives, Officers and Staff Members would bring improved efficiency in future.

The revenues of the company per employee has increased to Rs 26.35/- Crores during 2009-10 from Rs 14.54/- crores during the previous year.

CORPORATE GOVERNANCE

The Securities and Exchange Board of India (SEBI) had constituted a Committee on the Corporate Governance to promote and raise the standard of Corporate Governance in respect of all the Listed Companies. Your Company has been complying with all the guidelines issued by the SEBI in respect of Corporate Governance. A Certificate from the Statutory Auditors of the Company regarding compliance of the conditions of the Corporate Governance is also attached to this Report.

CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION

Your Directors are pleased to state that your Company has taken adequate steps in the matter of Conservation of Energy and Technology Absorption during the year under Review. The information in accordance with the Provisions of Section 217 (1)(e) of the Companies Act 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988 are given below:

CONSERVATION OF ENERGY

Particulars 2009-2010 2008-2009

Electricity Purchased (Units) 161,285 151,661 Total amount(Rs.) 804,596 763,057 Rate per unit (Rs.) 4.99 5.03

AUDITORS

Messrs C.S.P. Jain & Co., Chartered Accountants, Chennai, Auditors of the Company retire at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

ACKNOWLEDGEMENTS

The Board of Directors of your Company wishes to place on record their deep sense of appreciation for the excellent support received from the esteemed Shareholders of the Company for its various activities. Their valuable suggestions given to us from time to time have indeed helped the Company to plan its growth and improve its Profitability.

The Board of Directors also would like to thank all the valuable Customers, domestic as well as international for their abiding support to the company. Similarly the company is thankful to MMTC for their services in making available imported gold to meet the companys equirements from time to time. As a result of this support, the Company could show better results. We value our customers suggestions for further improvement in the quality of our Products and services.

The Board would also like to express its sincere thanks to all the esteemed Bankers (Present and Past members of the consortium) of the Company for their valuable support to the Company.

Further the Board would also like to place on record their deep sense of appreciation to the excellent work put forward by all the Executives, Officers, Staff Members, all the Artisans and other Workers in the factory and other establishments BUT for their dedicated and loyal work these results would not have been possible.

For & On Behalf Board of Directors SURANA CORPORATION LIMITED

SHANTILAL SURNA

CHAIRMAN

Place: Chennai

Date : 10.05.2010

 
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