Mar 31, 2015
1 Corporate Information
Surana Industries Limited ("the Company") is a public company
domiciled in India and incorporated under the provisions of the
Companies Act, 1956. The Company is into the business of manufacturing
/ trading of iron and steel products.
2 Owing to a number of factors such as non-availability of raw
materials, depreciation in rupee, power curtail- ment, high interest
burden, labour agitation and delay in time and cost overrun of its
projects, the Raichur plant of the Company has not been operated since
April 2013 and the water and electricity connection have been severed
by the service providers. The Company had approached the lead lender
(IDBI Bank) for a Corpo- rate Debt Restructuring ("CDR") Proposal which
was approved by the CDR Empowered Group ("CDR EG") on 7th March, 2014
and Letter of Approval issued on 13th March, 2014. The Master
Restructuring Agree- ment ("MRA") between the Company, the Monitoring
Institution (IDBI Bank) and the CDR lenders was ex- ecuted on 24th
March, 2014 effective 1st June, 2013. Subsequent to the CDR, the
Company is negotiating with its bankers for release of working capital
for re- commencement of its operations at Raichur.
3 As part of the restructuring exercise, the Company has also planned
to divest its non core assets and its sub- sidiaries (Surana Power
Limited, Surana Green Power Limited, Surana Mines and Mineral Limited)
to raise fi- nances. The Company is into advanced negotiations
with prospective buyers for divestment of these sub- sidiaries in the
year 2015-16.
4 Subsequent to the Balance Sheet date, the Company has planned to
shelve its Pelletisation and Benefication ("P&B") Project at Raichur
and a separate techno-eco- nomic viability of the operations at Raichur
without the above project is being considered by its bankers. The
assessment of readiness of the Raichur plant has also been carried out
by an external agency who have re- ported that the plant is in working
order subject to re- furbishment, mechanical and electrical
overhauling.
5 The Raichur Integral Steel Plant was not operational for the entire
financial year 2014-15 due to labour dis- putes and paucity of working
capital. The Company has been successful in resolving the labour
disputes towards the end of the financial year 2014-15 and is also
confident of arranging the required level of work- ing capital within
first quarter of the financial year 2015- 16. The operations at Raichur
is expected to be re- sumed in the financial year 2015-16.
i) There is no movement in equity share capital during the current and
previous year.
ii) Rights preference and restrictions attached to the shares
The Company has only one class of equity shares having a par value of
Rs.10 per share. All these shares have the same rights and preferences
with respect to payment of dividend, repayment of capital and voting.
The dividend proposed by the Board of Directors is subject to the
approval of the shareholders in the ensuing Annual General Meeting,
except in the case of interim dividend.
In the event of liquidation, the equity shareholders are eligible to
receive the remaining assets of the Company after distribution of all
preferential amounts, in proportion to their shareholding.
ii) Security
I. Term Loans (including WCTL and FITL) from banks and financial
institution are secured by way of :
a) First charge on all movable and immovable fixed assets of the
Company (present and future) on pari passu basis.
b) Second charge on entire current assets of the Company including raw
materials, stock in progress, finished goods and receivables on
pari-passu basis.
c) Non disposal undertaking from the promoters to the effect that their
equity shareholding in the Company remains at least 30% during the
currency of the facility.
d) Pledge of 100% of promoter and promoter group holdings in the
Company in favour of lending institutions.
e) Personal Guarantee of the promoters
f) Priority loan to have priority share on the Pre Trust & Retention
Account ("TRA")/ TRA cash flows of the Company
g) First pari passu charge on the commercial property held in the name
of the Company located at Basavangadi, Bangalore on pari passu basis
with term loan and working capital lenders in lieu of release of the
equitable mortgage of certain agricultural land belonging to the
promoters and a wind mill property belonging to the subsidiary company.
The additional security provided to a Financial Institution are as
follows:
a) Pledge of 60 Million equity shares of Surana Power Limited, a
subsidiary
b) Mortgage of 29.12 acres of agricultural land belonging to a
shareholder
c) Corporate Guarantee given by a shareholder
d) Pledge of 16,072,526 number of equity shares of Surana Mines and
Minerals Limited, a subsidiary During the year, certain banks have
enhanced the working capital limits (both fund based and non fund
based) extended to the Company. The Company is yet to create a charge
for Rs. 22.07 crores towards the said facility as at the balance sheet
date.
a) The repayments as per iii(A) and iii(B) above are to be made in
structured quarterly instalments.
b) The above repayment schedules are after considering the moratorium
periods allowed under the CDR package, wherever applicable.
iv) The Company is negotiating the interest payable for the pre-CDR
dues with a financial institution (IFCI) for which the member banks
have allowed time until 30th June, 2015 to resolve the issue and
release of additional securities held by the financial institution to
the common pool. Pending negotiations, the Company has not paid the
interest of Rs.48,700,000, which has fallen due in June 2014.
v) The unsecured loans are repayable after one year and the repayment
dates thereafter are under negotiation.
i) Security details:
Working capital loans are secured by way of:
a) First charge on the entire current assets of the Company (present
and future) on pari-passu basis.
b) Second charge on all movable and immovable fixed assets of the
Company, present and future on pari-passu basis.
c) Pledge of 100% of promoter and promoter group holdings in the
Company in favour of lending institutions.
d) Personal Guarantee of the promoters
e) Priority loan to have priority share on the Pre TRA / TRA cash flows
of the Company
f) First pari passu charge on the commercial property held in the name
of the Company located at Basavangadi, Bangalore on pari passu basis
with term loan and working capital lenders in lieu of release of the
equitable mortgage of certain agricultural land belonging to the
promoters and a wind mill property belonging to the subsidiary company.
6 FIXED ASSETS
Notes:
i) Freehold land represents land at Raichur purchased from Karnataka
Industrial Area Development Board for which title is yet to be
transferred to the Company.
ii) Represents land at Gummidipoondi taken on lease from SIPCOT for a
period of 99 years
iii) Building includes superstructures constructed on land owned by the
promoters and on leasehold land
iv) a) Capital work in progress represents the expenditure incurred on
Pelletisation and Benefication ("P&B") project at Raichur. Subsequent
to the Balance Sheet date, the Company has planned to shelve its P&B
Project and a separate techno- economic viability of the operations at
Raichur without the above project is being considered by its bankers.
Accordingly, the Company is evaluating alternate use of the assets
relating to the P&B project and intends capitalizing the said assets
upon re-commencement of operations at Raichur. The Management is of the
opinion that no impairment is considered necessary for the carrying
value of the CWIP.
b) Capital work in progress includes
i. interest capitalized amounting to Rs. 655,436,190 (Previous Year -
Rs. 432,049,871), including Rs. 223,386,319 for the year (Previous Year
- Rs. 237,966,792)
ii. pre-operative expenditure amounting to Rs. 88,977,915 (Previous
Year - Rs. 86,995,865) including Rs. 1,982,051 for the year (Previous
Year - Rs. 7,057,944).
This interest and pre-operative expenditure capitalised as mentioned
above includes Rs. 407,645,055 and pre-operative expenditure amounting
to Rs. 6,835,660 relating to the periods for which the project was
stalled. Considering the excep- tional nature of this industry and
prolonged project implementation period and is being retained under
capital work in progress as per the CDR package.
v) Refer to Note 5 for security and charge on fixed assets
ii) The Company's Board of Directors passed a resolution on 14th
February 2015 to dispose the investments in the subsid- iaries namely
Surana Mines and Minerals Limited (SMML), Surana Power Limited (SPL)
and Surana Green Power Limited (SGPL) due to continuing adverse market
scenario which is affecting the Company. Accordingly, the above
investments are classified as current investments as at 3134 March,
2015. The Company is into advanced negotiations with prospective buyers
and is seeking best alternatives for maximizing the value of the
investments. In the opinion of the management, the Company will be able
to realize the carrying value of the said investments and hence no
adjustments to the carrying values of these investments is considered
necessary.
iii) During the year, SPL has alloted 27,500,000 shares of Rs. 10 each
to the Company on 19th December 2014 for consid- eration other than
cash.
iv) Also refer to Note 5 for the details of shares pledged.
(i) The Company has carry forward losses and unabsorbed depreciation,
which give rise to a deferred tax asset. In the absence of virtual
certainty supported by convincing evidence that sufficient future
taxable income will be available against which such deferred tax assets
can be realized, the deferred tax asset that can be recognized is
restricted to the deferred tax liability. Accordingly, there is no
deferred tax asset or liability as at 31st March 2015 to be recognized.
(ii) The net deferred tax asset arising on account of unabsorbed
business loss / depreciation recognised in earlier years amounting to
Rs. 25,591,242 has been reversed during the year.
7 Employee Benefit Plans
Defined contribution plans
The Company makes payment to Provident Fund, a defined contribution
plan for qualifying employees. Under the Scheme, the Company is
required to contribute a specified percentage of the payroll costs to
fund the benefits. The Company recognised Rs.2,163,259 (31 March, 2014:
Rs.9,737,849) for Provident Fund contributions in the Statement of
Profit and Loss. The contribution payable by the Company are at rates
specified in the rules of the scheme.
8 Contingent Liabilities and commitments in respect of which no
provision is considered necessary A. Commitments
Estimated Amount of Contracts remaining to be executed and not
provided for:
Particulars As at 31st March, As at 31st March,
2015 2014
Rs. Rs.
On Capital Account -
Refer Note below - -
As the P&B Project has been shelved there are no further capital
commitements (Refer Note 12(iv)).
B Contingent Liabilities
Particulars As at 31st March, As at 31st March,
2015 2014
Rs. Rs.
(a) Claims against the
Company not acknowledged
as debt
(Refer note (i) below)
Central Excise 329,515,493 23,889,948
Customs 2,868,511 26,697,511
Central Sales Tax 69,999,902 15,446,506
VAT 181,929,268 427,289
(b) Corporate Guarantees
given to banks / financial
institutions 1,466,700,000 1,466,700,000
on behalf of subsidiary
companies
Notes:
i) Against the above demands, the Company has paid Rs. 11,453,941 under
protest to the various authorities.
ii) In respect of the above demands disputed by the Company, appeals
filed are pending before respective appellate authorities. The Company
is of the view that there are reasonable chances of successful outcome
of the appeals and accordingly no provision is considered necessary.
9 Earning and Expenditures in Foreign Currency
There are no foreign exchange earning or expenditure incurred by the
Company during the current and previous financial year.
10 Related party transactions A. Details of related parties:
Description of relationship Names of related parties
(i) Subsidiaries Surana Power Limited
Surana Green Power Limited
Surana Mines and Minerals
Limited, Singapore
Uday Energy Pvt Limited
Surana Holdings Pte Limited
(ii) Step Down Subsidiaries PT Borneo Mines and Minerals
Limited, Indonesia
Surana Green Energy Limited
Power India Pte Limited
(iii) Key Managerial Personnel Shri G.R Surana - Chairman
Shri Dineshchand Surana
Diluted EPS:
As per the MRA, the CDR lenders shall have a right to convert:
a. Entire / part of WCTL / FITL and / or entire defaulted interest and
entire / part of defaulted principal into equity at par in the event of
default.
b. Upto 20% of the term debt outstanding beyond seven years as per
SEBI guidelines / loan covenants whichever is applicable, into equity
c. The entire WCTL / FITL into equity at any time during the
restructuring period.
As at the Balance Sheet date, the conditions that relate to the
conversion of the loans into equity do not exist and no shares have
been converted during the year
11 Dues to Micro Small and Medium enterprises
There are no dues to enterprises as defined under Micro, Small and
Medium enterprises Development Act, 2006, as at 31st March 2015 as well
as 31st March 2014, which is on the basis of such parties having been
identified by the management and relied upon by the auditors.
Pursuant to the transition provisions prescribed in Schedule II to the
Companies Act, 2013, the Company has fully depreciated the carrying
value of assets, net of residual value, where the remaining useful life
of the asset was deter- mined to be nil as on April 1,2014, and has
adjusted an amount of Rs.64,465,025 against the opening Surplus balance
in the Statement of Profit and Loss under Reserves and Surplus.
The depreciation expense in the Statement of Profit and Loss for the
year is higher Rs.9,094,588 consequent to the change in the useful life
of the assets.
12 Segment Reporting
The Company is engaged in a single business segment i.e. dealing with
iron and steel products primarily in one geographical segment.
Accordingly, there are no separate reportable segments as per the
Accounting Standard 17 on Segment reporting.
13 Previous year's figures have been regrouped / reclassified wherever
necessary to correspond with the current year's classification /
disclosure.
Mar 31, 2013
1. SEGMENT REPORTING:
The company is p rincipally engaged in single business segment Viz.,
Iron and Steel Products and o perates in one geographical segment
as per Accounting Standard 17 on Segment Reporting. Accordingly
no seg ment reporting has been made by the company.
2. RELATED PARTY DISCLOSURE:
As Per Accounting Standard -18 issued by the Institute of Chartered
Accountants of India, the disclosures of transaction s with related
parties as defned in the Accounting Standard are given below:-
a. Subsidiaries, step down subsidiaries, associates and joint
ventures : Subsiidiaries :
Surana Power Limited
Surana Green Power Limited
Surana Mines and Minerals Limited, Singapore
Uday Energy Pvt. Ltd
Surana Holdings Pte Ltd
Step down Subsidiaries:
PT Borneo Mines and Minerals Limited, Indonesia Sura n a G reen Energy
Limited
b. key Managerial Persons
Shri. G.R. S u rana Chairman
S hri. Dineshchand Surana Managing Director
Shri. V.M. Swami Whole Time Director
Shri. Krishna Udupa Director Projects
Shri. V.Aranganathan Director - Finance & Accounts
Shri. Rajesh Surana Director - Commercial
S hri. Rajiv Surana Executive Director
3. DISCLOSURE AS PER CLAUSE 32 OF THE LISTING AGREEMENT:
Loans and advances in the nature of loans given by subsidiaries.
Name of the Company : SuranaPowerL imited
Relationship : Subsidiary
Amount outstanding as on 31/03/2013 : Rs.12,77,49,243 Dr balance
Name of the Company : Surana Green Power Limited
Relationship : Subsidiary
Amount outstanding as on 31/03/2013 : Rs.4,58,53,838 Cr balance
Name of the Company : Surana Mines and Minerals Ltd
Relationship : Subsidiary
Amount outstanding as on 31/03/2013 : Rs.2,31,67,500 Dr balance
4. OTHERS
a. Figures in financial statements and notes have been rounded off to
nearest rupee. Quantity figures have been rounded off to the nearest
metric tonne.
b. Previous yearÂs figures have been regrouped, recast and re arranged
wherever found necessary.
c. Balances of trade receivables / Payable, Advances given / Advance
received are subject to confrmation & reconciliation with the parties.
5. The Ministry of Corporate Affairs, Government of India, vide
General Circular 2 & 3 dt 8th February 2011 & 21st February 2011 resp,
has granted a general exemption from compliance with section 212 of the
Companies Act 1956, subject to fullfllment of condition stipulated in
the circular. The company has satisfed the necessary condi- tion and is
entitled to the exemption. Necessary information relating to the
subsidiaries has been included in the consolidated Financial
Statements.
Mar 31, 2012
1. SEGMENT REPORTING:
The company is principally engaged in single business segment Viz.,
Iron and Steel Products and operates in one geographical segment as per
Accounting Standard 17 on Segment Reporting. Accordingly no segment
reporting has been made by the company.
2. RELATED PARTY DISCLOSURE:
As Per Accounting Standard -18 issued by the Institute of Chartered
Accountants of India, the disclosures of transactions with related
parties as defined in the Accounting Standard are given below:-
a. Subsidiaries, step down subsidiaries, associates and joint
ventures:
Subsidiaries:
Surana Power Limited
Surana Green Power Limited
Surana Mines and Minerals Limited, Singapore
Uday Energy India Pvt. Ltd.
b. Step down Subsidiaries:
1). PT Borneo Mines and Minerals Limited, Indonesia
3. The Company has so far not received information from vendors
regarding their status under the Micro, Small and Medium Enterprises
Development Act, 2006 and hence disclosure relating to amounts unpaid
as at the year-end together with interest paid / payable under this Act
have not been given.
4. As per Accounting Standard (AS-15) "Employee Benefits, the
disclosure of employee benefits as defined in the Accounting Standard
is given below:
5. Figures in financial statements and notes have been rounded off to
nearest rupee. Quantity figures have been rounded off to the nearest
metric tons.
6. Previous year's figures have been regrouped, recast and re
arranged wherever found necessary.
Mar 31, 2011
A. CONTINGENT LABILITIES NOT PROVIDED FOR:
(Rs. In Lakhs)
No Nature of Contingent Liabilities 2010-11 2009-10
1 Bank Guarantee 202.50 348.90
2 Disputed Excise Duty Liability 1905.87* 210.90
3 Disputed Income Tax Liability 66.50 66.50
4 Customs duty on import 100.00 100.00
5 Export obligation Duty 1989.69** 105.02
6 Customs duty on import of scrap 138.29 138.29
7 Karnataka VAT disputed liabilities Nil 734.00
8 Civil Cases 103.00 103.00
Note:
In case of disputed excise duty liability Rs. 33,48,742 is paid as
deposit to the department during the year 2004-05 and Rs. 88,32,710
was paid during the year 2007-08.
In case of disputed income tax liability Rs. 32,31,967 paid during the
year 2006-07.
Management Stand:
*Disputed Central Excise duty liability includes a demand of Rs. 11.76
crores raised by the Department of Central Excise reversing the CENVAT
credit taken on Steel and cements used for factory shed and fabrication
of equipments. The management has preferred an appeal before CESTAT,
Bengalore and is expecting favourable order.
** The customs duty is payable if export obligation is not completed on
or before 2016 mainly on account of duty saved on import of Capital
machineries for our Integrated Steel Plant, Raichur.
b. Secured Loan
(i) Term loan from IDBI towards setting up of steel plant and for
modernization project is secured by first charge on Fixed Assets
situated at Gummidipoondi and also guaranteed by two directors.
(ii) Term loan obtained from various banks including IDBI Bank Limited
for setting up an Integrated Steel Complex at Raichur, Karnataka State
is secured by the first charge on fixed assets located at Raichur. Two
promoter directors have extended their personal guarantee for the said
loan.
(iii) Cash credit facilities from various banks are secured by
hypothecation of raw material, stock in process, finished goods, stores
and consumables and book debts and also secured by second charge on
block of assets. These loans are also guaranteed by two directors.
(iv) Corporate loan received from IFCI is secured by the pledge of
equity shares of Surana Industries Limited held by the promoter
directors, equity shares of Surana Power Limited held by the company as
investment and also by the personal guarantee of two directors.
c. Unsecured Loan
(i) Unsecured loan includes Foreign Currency Convertible Bonds (FCCB)
issued for USD 25 Million on 15th June 2007 carrying interest at the
rate of 2% pa payable half yearly with an option to convert them into
equity shares. As per the terms of the offer the Maturity Date is 20th
June 2012. The Bonds are convertible into Equity Shares at any time
before the maturity date at the option of the Bondholders. Further as
per the terms of the offer if any Bonds are not converted the same will
have to be redeemed on maturity at 129.4253% of the principal amount in
USD. Pending exercise of conversion by the Bondholders the company has
provided the premium upto 31st March 2011.
(ii) Unsecured Loan from others - ICD includes Rs. 20 crores availed
from subsidiary company viz Surana Power Limited.
d. Issue of Shares on Preferential Basis
As per the approval of share holders, the company has received the
share application money of Rs. 38.13 crores during the year 2009-10 for
issuing 7,40,000 equity chares to select group of persons on
preferential basis at a price of Rs.500 per equity share (Rs. 10/- paid
up and premium of Rs. 490/- per share). The total amount received was
repaid during the year, as the allotment was delayed due to open offer
procedures and approval from RBI is awaited for such repayment of share
application money.
e. Revaluation Reserve
The Company has during the year 2000 - 2001 revalued certain assets and
the resultant surplus aggregating to Rs. 18.07 crores was credited to
Revaluation Reserve Account. Depreciation on such revalued amount is
reduced from the revaluation reserve amount each year. During the year
depreciation amounting to Rs.65.89 lacs was reduced from Revaluation
Reserve.
During the year 2010-11, the company has revalued the wind mill assets
and the resultant surplus of Rs. 9.64 crores was credited to the
Revaluation Reserve Account. During the year, the Depreciation
amounting to Rs. 0.38 crores on such revalued amount is reduced from
the Revaluation Reserve Amount. On sale of windmill, the balance amount
of Rs. 9.26 crores lying in the Revaluation Reserve Account is
transferred to Capital Reserve Account.
f. Sale of Assets
The Company during the year with the consent of the members under Asset
Transfer Agreement dated 1st January 2011 between the Company and M/s
Surana Green Power Limited (Subsidiary Company) has transferred the
assets relating to Windmill for a total consideration of Rs.70.11
crores. Out of the total consideration due to the company consideration
amounting to Rs. 44.90 crores was settled by the subsidiary company by
way of allotment of equity shares of Rs.44.90 crores comprising
4,49,00,000 shares of Rs. 10 each at par. The profit on transfer of
Power Plant aggregating to Rs.3.73 crores is reflected as an
Exceptional Item.
i. ADDITIONAL INFORMATIONS PURSUANT TO PARAS 3, 4C, AND 4D OF PART II
OF SCHEDULE VI TO THE COMPANIES ACT 1956. i. Licensed and Installed
Capacities:
(As certified by the Management and accepted by the Auditors, being a
technical matter)
Name of the Product manufactured : TMT/CTD Bars, MS Rounds,
Structurals, Sponge iron,
MS Billets
Licensed Capacity : Not Applicable
j. SEGMENT REPORTING:
The company is principally engaged in single business segment Viz.,
Iron and Steel Products and operates in one geographical segment as per
Accounting Standard 17 on Segment Reporting. Accordingly no segment
reporting has been made by the company.
k. RELATED PARTY DISCLOSURE:
As Per Accounting Standard -18 issued by the Institute of Chartered
Accountants of India, the disclosures of transactions with related
parties as defined in the Accounting Standard are given below:-
Subsidiaries, step down subsidiaries, associates and joint ventures:
Subsidiaries:
Surana Power Limited
Surana Green Power Limited
Surana Mines and Minerals Limited, Singapore
Step down Subsidiaries:
PT Borneo Mines and Minerals Limited, Indonesia
Key Managerial Persons
Shri. G.R. Surana Chairman
Shri. Dineshchand Surana Managing Director
Shri. V.M. Swami Wholetime Director
Shri. Krishna Uduppa Director Projects
Shri. Rajesh Surana Director - Commercial
Shri. Mahaveer Surana Executive Director
Shri. Rajiv Surana Executive Director
Shri. Deepak Surana Executive Director
n. In the opinion of the Board, Current Assets, Loans and Advances have
a value on realisation in the ordinary course of business at least
equal to the amount at which they are stated and provision for all
known liabilities has been made.
o. The Company has so far not received information from vendors
regarding their status under the Micro, Small and Medium Enterprises
Development Act, 2006 and hence disclosure relating to amounts unpaid
as at the year-end together with interest paid / payable under this Act
have not been given.
q. Disclosure as per Clause 32 of the Listing Agreement:
Loans and advances in the nature of loans given to subsidiaries.
Name of the Company : Surana Power Limited
Relationship : Subsidiary
Amount outstanding
as on 31/03/2011 : Rs.10,45,76,827 Cr balance in current account.
Amount outstanding
as on 31/03/2011 : Rs.20,00,00,000 Cr balance in loan account.
Name of the Company : Surana Green Power Limited
Relationship : Subsidiary
Amount outstanding
as on 31/03/2011 : Rs.2,19,02,799 Dr balance
Name of the Company : Surana Mines and Minerals Limited
Relationship : Subsidiary
Amount outstanding
as on 31/03/2011 : Rs.11,89,158 Dr balance
s. Figures in financial statements and notes have been rounded off to
nearest rupee. Quantity figures have been rounded off to the nearest
metric tonne.
t. Previous years figures have been regrouped, recast and re arranged
wherever found necessary.
Mar 31, 2010
(Rs. In Lakhs)
CONTINGENT LIABILITIES NOT PROVIDED FOR: 2009-2010 2008-2009
1 Bank Guarantee 348.90 376.59
2 Disputed Excise Duty Liability 210.90 210.90
3 Disputed Income Tax Liability 66.50 66.50
4 Customs duty on import 100.00 100.00
5 Customs Duty on export obligation 105.02 105.02
6 Customs duty on import of scrap 138.29 138.29
7 Karnataka VAT disputed liabilities 734.00 -
8 Civil Cases 103.00 103.00
Note:
In case of disputed excise duty liability, Rs. 33,48,742 is paid as
deposit to the department during the year 2004-05.
In case of disputed excise duty liability, the company has paid Rs.
88,32,710 during the year 2007-08. In case of disputed income tax
liability Rs. 32,31,967 was paid during the year 2006-07.
b. Secured Loan
(i) Term loan from IDBI towards setting up of steel plant and for
modernization project is secured by first charge on Fixed Assets
situated at Gummidipoondi and also guaranteed by two directors.
(ii) Term loan from various banks towards setting up windmill is
secured by first charge on the fixed assets pertaining to windmill and
also guaranteed by two directors.
(iii) Term loan obtained from various banks for setting up an
Integrated Steel Complex at Raichur, Karnataka State is secured by the
first charge on fixed assets located at Raichur. Two directors have
extended their personal guarantee for the said loan.
(iv) Cash credit facilities from various banks are secured by
hypothecation of raw material, stock in process, finished goods, stores
and consumables and book debts and also secured by second charge on
block of assets. These loans are also guaranteed by two directors.
c. Unsecured Loan
(i) Unsecured loan represents Foreign Currency Convertible Bonds (FCCB)
issued for USD 25 Million on 15th June 2007 carrying interest at the
rate of 2% pa payable half yearly with an option to convert them into
equity shares. As per the terms of the offer, the Maturity Date is 20th
June 2012. The Bonds are convertible into Equity Shares at any time
before the maturity date at the option of the Bondholders. Further as
per the terms of the offer, if any Bonds are not converted, the same
will have to be redeemed on maturity at 129.4253% of the principal
amount in USD. Pending exercise of conversion by the Bondholders, the
company has provided the premium upto 31st March 2010.
(ii) Corporate loan received from IFCI is secured by the pledge of
equity shares of Surana Industries Limited held by the promoter,
directors and also by the personal guarantee of two directors.
d. Equity Share Warrants
In terms of the approval of the shareholders of the Company and as per
the applicable statutory provisions including Securities and Exchange
Board of India (Disclosure and Investor Protection) Guidelines 2000,
the Company, on 29th August 2008 had issued and allotted 70,00,000
warrants on preferential basis to Promoters entitling them to apply for
equivalent number of fully paid up equity shares of Rs. 10/- each of
the Company, at a price of Rs.300/- per equity share on the following
terms and conditions.
An amount equivalent to 10% of the exercise price arising out of the
share warrants shall be payable on or before the date of allotment of
share warrants which will be kept by the Company as a deposit to be
adjusted and appropriated against the price of the equity shares
payable by the share warrant holder at the time of exercising the
option. The warrants shall be compulsorily convertible into equity
shares of the Company on or before 18 months from the date of allotment
of the share warrants. The warrants proposed to be allotted shall be
subject to a lock-in to be determined in accordance with the provisions
of the SEBI guidelines.
The holder of the warrants have to pay the balance amount of 90% of the
Issue price for conversion of the share warrants into equity shares of
the Company on or before expiry of 18 Months from the date of allotment
of the warrants.
If the option of conversion is not exercised by the allottee of
warrants on or before 18 months from the date of allotment, the total
amount paid by such allottee shall be forfeited.
The Company during the year on receipt of balance 90% of the
consideration has converted the warrants into 70,00,000 equity shares
on 28th February 2010.
e. Issue of Shares on Preferential Basis
As per the approval of share holders, the company has during the year
issued 7,40,000 equity shares to select group of persons on
preferential basis at a price of Rs.500 per equity share (Rs. 10 paid
up and premium of Rs. 490 per share). The total amount received
aggregating to Rs.38.13 crores is yet to be allotted in account of open
offer. Pending allotment of shares the amount received is reflected
under Share Application Money.
f. Revaluation Reserve
The Company has during the year 2000 - 2001 revalued certain assets and
the resultant surplus aggregating to Rs.18.07 crores was credited to
Revaluation Reserve Account. Depreciation on such revalued amount is
reduced from the revaluation reserve amount each year. During the year,
depreciation amounting to Rs.65.89 lacs was reduced from Revaluation
Reserve.
g. Sale of Assets
The Company during the year with the consent of the members under Asset
Transfer Agreement dated 13lh November 2009 between the Company and M/s
Surana Power Limited (Subsidiary Company) has transferred the assets
relating to 35MW Power Plant for a total consideration of Rs.236.52
crores. Out of the total consideration due to the company,
consideration amounting to Rs. 67.77 crores was settled by the
subsidiary company by way of allotment of equity shares of Rs.67.77
crores comprising 6,77,00,000 shares of Rs. 10 each at par. The profit
on transfer of Power Plant aggregating to Rs.38.71 crores is reflected
as an Exceptional Item. Further the company during the year sold
leasehold rights in respect of 149.50 acres of land to M/s Surana Power
Limited (Subsidiary Company) for a consideration of Rs.15 lacs per
acre. The profit on sale of such leasehold rights aggregating to Rs.
16.82 crores is reflected as an exceptional item.
j. ADDITIONAL INFORMATIONS PURSUANT TO PARAS 3, 4C, AND 4D OF PART II
OF SCHEDULE VI TO THE
COMPANIES ACT 1956. /. Licensed and Installed Capacities:
(As certified by the Management and accepted by the Auditors, being a
technical matter)
Name of the Product manufactured
: TMT/CTD Bars, MS Rounds, Structurals, Sponge iron, MS Billets
Licensed Capacity : Not Applicable
k. SEGMENT REPORTING:
The company is principally engaged in single business segment Viz.,
Iron and Steel Products and operates in one geographical segment as per
Accounting Standard 17 on Segment Reporting. Accordingly, no segment
reporting has been made by the company.
I. RELATED PARTY DISCLOSURE:
As Per Accounting Standard -18 issued by the Institute of Chartered
Accountants of India, the disclosures of transactions with related
parties as defined in the Accounting Standard are given below:-
Subsidiaries, step down subsidiaries, associates and joint ventures:
Subsidiaries:
Surana Power Limited Surana Green Power Limited
Step down Subsidiaries:
Surana Mines and Minerals Limited, Singapore
Associates and Joint Ventures:
PTAgate Resources, Indonesia
Key Managerial Persons
Shri. G.R. Surana Chairman
Shri. Dineshchand Surana Managing Director
Shri. V.M. Swami Director Finance
Shri. Krishna Uduppa Director Projects
Shri. M. Ramasubramanian Director operations (Ceased on 14/05/2009)
Shri. Rajesh Surana Executive Director
Shri. Mahaveer Surana President Finance
Shri. Rajiv Surana Sr. Vice President - Project
Shri. Deepak Surana Sr. Vice President - Marketing
o. In the opinion of the Board, Current Assets, Loans and Advances have
a value on realisation in the ordinary course of business at least
equal to the amount at which they are stated and provision for all
known liabilities has been made.
p. The Company has so far not received information from vendors
regarding their status under the Micro, Small and Medium Enterprises
Development Act, 2006 and hence disclosure relating to amounts unpaid
as at the year-end together with interest paid / payable under this Act
have not been given.
r. Disclosure as per Clause 32 of the Listing Agreement:
Loans and advances in the nature of loans given to subsidiaries. Name
of the Company : Surana Power Limited
Relationship : Subsidiary
Amount outstanding as on 31/03/2010 : Rs.8,61,83,185 Dr balance
Name of the Company : Surana Green Power Limited
Relationship : Subsidiary
Amount outstanding as on 31/03/2010 : Rs. 15,53,750 Dr balance
t. Figures in financial statements and notes have been rounded off to
nearest rupee. Quantity figures have been rounded off to the nearest
metric tonne.
u. Previous years figures have been regrouped, recast and re arranged
wherever found necessary.
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