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) Â 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 Â 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 Â 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-Ã -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 Â 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-Ã - 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 Â 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, 2011
The Directors have great pleasure in presenting the Twentieth Annual
Report on the Business Operations of your Company along with Audited
Balance Sheet as on 31 st March, 2011 and Profit and Loss Account for
the year ended 31st March, 2011.
FINANCIAL RESULTS (Rs. in Lacs)
PARTICULARS 31.03.2011 31.03.2010
Net Sales 5,31,977.86 4,06,200.46
Profit Before Tax 6,124.88 4,930.47
Less: Provision for Tax
Current Tax 347.99 883.82
Deferred Tax Liability (45.06) Nil
Profit after Tax * 5,821.95 4,046.65
Add: Balance in P & L account
Brought Forward from
Previous Year 9,006.99 4,934.58
MAT credit entitlement account à (814.03)
Proposed Dividend 393.46 327.88
Dividend Tax 66.87 55.72
Transfer to General Reserve 582.19 404.67
Deferred Tax Asset Nil Nil
Balance Carried to
Balance Sheet 13,786.43 9,006.99
* Profit after tax does not include the MAT Credit of Rs. 41.68 lakhs
availed during FY 2010-11.
OPERATIONS - BUSINESS PERFORMANCE
We are happy to inform that your companys total turnover during the
year ended 31 st March, 2011 increased to Rs. 5,319.78 crores as
against Rs. 4,062.01 crores for the previous year, recording a jump of
31%. The Export turnover of your company has increased by 92% to Rs.
1,451.48 crores in 2010-2011 as against Rs. 755.29 crores in last year.
Similarly, domestic sales during the year have increased by 17% to Rs.
3,865.29 crores as against Rs. 3,303.27 crores in the previous year.
The increased Export turnover and profitability of SEZ unit has
contributed to lower outflows on account of taxes. Revenues from wind
energy during the year amounted to Rs. 3.01 crores as against Rs. 3.44
crores. As a result of this the company was able to earn its highest
Profit after Tax ever amounting to Rs. 58.21 Crores in the current year
which was Rs. 40.46 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 cost
and deeper understanding of the market. During the year, Gold Prices
witnessed a steady uptrend.
ACHIVEMENTS
During the year, your company has won the following achievements /
laurels;
- EPCES Export Award for outstanding export performance, for the year
2008 - 2009 by Export Promotion Council of India.
- Designated as Nominated Agency by Government of India.
- Award of the status of STAR TRADING HOUSE by Government of India.
- ICRA Rating of LBBB+ (pronounced as L triple B plus) which means the
long term outlook is stable.
- ICRA has also assigned A2 for the short term outlook.
FUTURE OUTLOOK
Over the last few years, Gold as an investment destination has become
increasingly popular. Holding of Gold is an old tradition deeply
ingrained in Indian Culture and society. Traditionally, apart from
being an article of consumption in the form of jewellery, high demand
for gold stemmed from hedge against inflation and as a source of
savings. Consequently, India accounted for 32% of the global gold
purchase in 2010. The total annual consumer demand in India reached
963.10 tonnes in the year 2010.
Indias continued rapid growth which will have significant impact on
income and savings, will increase gold purchasing by almost three
percent per annum over the next decade. In view of this scenario a
shift away from gold, to other forms of savings is unlikely to happen
in a hurry. Indias fancy for gold is steadfast; hence, the demand for
gold and silver will continue unabated. During 2010- 2011, the
performance of silver was also aggressive, with the price registering
almost 100% increase on the previous year.
Your Directors are confident that during the year 2011 - 2012 exports
will remain buoyant, in pace with the countrys export performance,
which rose to USD 12.9 billion in 2010 - 2011 from USD 9.7 billion in
2009 - 2010 representing an increase of 33.27%
As a recognized Nominated Agency, your company is permitted to import
bullion directly and supply like MMTC, STC and other RBI nominated
banks. This will improve your companys volumes and working results
substantially.
Your company has completed the purchase of about 14,000 sq.ft of land
with existing factory building of about 11,000 sq.ft to set up a
state-of-the-art jewellery manufacturing unit at Ambattur Industrial
Estate, Chennai. It is proposed to commence production of jewellery in
this plant during this Financial year. The existing Factory at
Tondiarpet will be phased out thereafter. It may be noted
that we have during the year acquired space at NSC Bose Road, Chennai
for another showroom and the renovation work is in progress.
Further, keeping the larger goal of Pan - India presence in near
future, we have opened a branch at Mumbai and delivery centres at
Coimbatore, Madurai and Trichy for sales and service. This move will
help us in reaching out a larger customer base and consequently
increase our turnover.
WIND ENERGY DIVISION
The Wind energy division of your Company earned an income of Rs. 3.01
crores during the year 2010 - 2011 as compared to an income of Rs. 3.44
crores in the previous year. Due to not so good wind, the power
generation, which is sold to TNEB, was marginally low.
During the year under report, an order for 25MW of wind mills was
placed. Out of this, during March 2011, we have commissioned 22
windmills thereby adding to our power generation capacity by 5.5 MW. In
the near future, we expect the wind energy division to contribute
substantially to the bottom line of the company. The balance power
generation capacity will be commenced in the first quarter of 2011 -
2012. Your company has programmed to expand its capacity in this
sector.
RIGHTS ISSUE
Your company with a view to reward the sustained support of the
shareholders has decided to bring in a rights issue of the company. The
issue in one way will increase the stakes of the shareholders in the
growth of the company. The rights issue has been planned to meet the
future requirements of your company so as to put the company in the
fast track of growth. The details of the rights issue have been already
circulated to each of you for your favourable consideration. It is
hoped, with the approval of rights issue, the companys goal of
becoming a major player in bullion and jewellery market would be
achieved very soon.
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, 2011
for the Financial year 2010-2011 as compared to 15% dividend paid for
the previous year. The dividend, if approved, will be Rs. 1.80 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 1 st 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, 2011, 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, 2011
and of the Profit and Loss Account for the year ended 31 st March,
2011.
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, 2011 on a going concern basis.
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 2010-2011 2009-2010
Electricity Purchased
(units) 203,825 161,285
Total amount (Rs.) 1,146,735 804,596
Rate per unit (Rs.) 5.63 4.99
FOREIGN EXCHANGE EARNINGS AND OUTGO
During the period under Review your Company earned Foreign Exchange to
the extent of Rs. 1451.47/- Crores on account of export of Gold
Jewellery. Your Company has also incurred expenditure in foreign
exchange to the tune of Rs. 1679.69/- Crores for import of Gold for
manufacture of Jewellery.
PARTICULARS OF EMPLOYEES
During the year ended 31.03.2011 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 of the
Directors Report. Having regard to the provisions of Section 219(1)
(6) (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
Sh. KLTilakchand and Sh. S. Guruswamy retire by rotation and being
eligible for reappointment 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 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 and Suppliers, domestic as well as international for their
abiding support to the company. Similarly the company is thankful to
MMTC, STC for their services in making available imported gold and
silver to meet the companys 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 their 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 : 13.05.2011
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