1. We have audited the attached Balance Sheet of SURANA INDUSTRIES
LIMITED, as at 31st March 2012, the Profit and Loss Account for the year
ended on that date and the Cash Flow Statement for the year ended on
11 date both annexed tinkered. These financial statements are the
responsibility of: the Company''s management. Our responsibility is to
express an opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reason Cie assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence sup porting the amounts
and disclosures in the financial statements. An audit also includes
assessing the account principles used and significant estimates made
by management, as well as evaluating the overall financial tenement
presentation. We believe that our audit provides a reasonable basis for
3. As required by the Companies (Auditor''s Report) Order, 2003
issued by the Central Government of Indie in terms or sub-section (4A)
of Section 227 of the Companies Act, 1956, we enclose in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the said
Order to the extent applicable.
4. Further to for comments in the Annexure referred to in paragraph
(3) above, we report that:
(a) We had 0xtell the information and explanations, which the
the best of our knowledge and belied were necessary for the purposes of
(b) In our opinion, proper books of account as required by law have
been kept fly the Company so for as appears from our examination of the
(c) The Balance Sheet, the Profit and Loss Account and Cash Flow
Statement dealt with by this report are in agreement with the books of
(d) In our opinion the Balance Sheet, the Profit and Loss Account and
Cash Flow Statement dealt with by tennis report comply with the
Accounting g Standards referred to in sub-section (3C) of Section 211
of the Companies Act, 1956;
(e) On the basis on written representations received from the
directors, as on 31st March, 2012 and taken on record by the Board of
Directors, we report that none of the directions is disqualified as on
31st March, 2012 from booing appointed as a director in terms of clause
(g) of7 sub-section (1) of Sedation 274 of the Companies Are 1056.
(f) In our opinion, and to the best of our information and according to
the explanations given to us, they said accounts give the information
required by the Companies Act, 1956, in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India:
(i) In the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2012;
(ii) In the case of the Profit and Loss Account, of the profit of the
Company for the year ended on that date; and
(iii) In the case the Cash Flow Statement, of the cast flews for the
year ended on that date.
M/s SURANA INDUSTRIES LIMITED
[Referred to in paragraph (3) of our report of even date]
The nature of the Company''s business/activities during the year is
such that clauses (xii), (xiii) and (xiv) of paragraph 4 of the
Companies (Auditor''s Project) Order, 2003 are not applicable to the
(i) (a) The Company is maintaining proper records
which is being 2pdated showing full particulars including) quantitative
details and situation of fixed assets.
(b) Fixed Assets have not been physically verified during the year by
the Management. The management is and the process of preparing a
programme for verification of all the fixed assets at reasonable
(c) During the Year, the company has not disposed consubstantial part of
Plant and Machinery.
(ii) (a) Accord to the information and explanations given to us, the
company has conducted physical verification of inventories at
reasonable intervals. No material discrepancies have been noticed on
such Physical verification.
(b) In our opinion and according to the information anti explanations
given to us, the procedures of ph mystical verification of inventories
followed by the management were reasonable and adequate in relate to
the size of the Company and the nature of7 its business.
(c) In our opinion and according to the information and explanations
given to us, the Company has maintained piper records of the its
(iii) (a) The company has granted loans to his subsidiary''s Mts.
Surana Power Limited, M/s. Surana Green Power Limited, M/s. Suraoa
Mines & Minerals Limited covered in the register maintained under
section 301 of the Companies Act, 1956. Tire maximum amount involved
during the year balance of loans granted to such patties was
(Amount in Rs)
1. Surana Power Ltd - 5,03,83,872
2. Surana Green Power Ltd. - 4,58,68,937
3. Surana Mines & Minerals Ltd. - 54,29,645
(b) In our opinion, the rate of interest and other terms and conditions
of such loans are not, prim a facie, prejudicial to the interest of the
(c) The parties have repaid the principia amounts as stipulated and
have also been retard in the payment of interest to the company.
(d) There is no overdue amount in excess of Rs. 5,00,000 art in
respect of loans granted to companies firms or other parties listed
in the register maintained under section 301 of7 the Companies Act
(e) The company had taken loan from three companies covered in the
register maintained under section 301 of the Companies Act, 1956. The
maximum amount involved during the year was Rs. 20 crores and the
year-end balance of loans taken from such parties was Rs. NIL.
(f) in our opinion, the rate of interest and other terms and conditions
on which loans have been taken from companies, firms or other parties
listed in the register maintained under section 301 of the Companies
Act, 1956 are not, prima facie, project.cia1 to the interest of the
(g) The company is regular in repay the principal amounts as
stipulated and has been regular in the payment of interest.
(iv) In our opinion and according) to the information and explanations
given to us, there is adequate internal control system commensurate
with the size of the Company and the nature of its business for the
purchase of inventories and fixed assets and for the sale of goods
and services and we have not observed any continuing faunae to correct
major weaknesses in such internal contro1 system.
(V) (a) According to the information and explanations given to us, we
are of the opinion that the particulars of all contracts or
arrangements that need to be entered into the register maintained under
section 301 of the Companies Act, 1956 have been so entered.
(b) 6 our opinion arid according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under section 301 op
the Companies /Act, 1956 and exceeding the value of rupees five lakhs
in respect of any party during the year have been made at prices which
are reasonable having regard to prevailing market prices at the
(vi) The Company has not accepted deposits from the Pubic.
(vii) In our opinion, the Company has an adequate internal audit system
commensurate with the size and nature of its business.
(viii) We have broadly reviewed the books of account and records
maintained by the Company relating to the manufacture or steel and
electricity, pursuant to the Rules made by the Central Government for
the maintenance of cost records under Section 209(1)(d) of the
Companies Act, 1956 and are of7 the opinion that prima facie, the
prescribed accounts and records have been made and maintained. We have,
however, not made a detailed examination of the records with a view to
determining whet ethyl are accurate or complete.
(ix) (a) According to the information and explanations given to us, the
Company is generally regular in depositing undisputed statutory dues
including Provident Fund Investor Education and Protection Fund,
Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise
Duty, Cess and other material statutory dues with the appropriate
authorities snaring the year. We are informed that the Company is not
covered under operation of the Employees'' State Insurance Act at
(b) According to the information and explanations given to us, nr
undisputed amounts payable in respect of Income Tax, Wealth Tax, Sales
Tax, Custom Duty, Excise Duty, Cess and other material statutory
dues, were in arrears, as at 31st March, 2012 for a period of more than
six months from the date they became payable.
(c) According to the information and explanations given to us, details
of dues or sales tax, wealth tax, service tax, customs duty. excise
duty and cess which have not been deposited as on 31st March, 2012 on
account any disputer
Name of the Statute
(Nature of the which the Forum where matter is Amount
Dues) amount pending
demanded by the
Dept., from Sept.97
to Mar ''00 under 1997 Rs.93,88,727
Hon''ble High Court,
Rule 5 of Hot
2000 Chennai Rs.33,48,742
as deposit in
Determination the year
1999- Hon''ble High Court,
Rebate Claim Rs.28,68,511/-
Commissioner of Central Rs.88,32,710
Shortage of Material 2005 Excise, Commissioners
in the year
Chennai 2007 - 2008)
Commissioner of Central
Supply to SEZ
Developers 2010 Excise, Commissioners
Commissioner of Central
Material 2010 Excise, Commissioners
Reversal of Cenvat
Credit 2011 CESTAT Bangalore Rs.11,76,
2000 - Hon''ble High Court,
Penalty levied by
DRI Intelligence 2003 Chennai '' Rs.1,00,
of material 2005- Hon''ble Supreme Court
Department 1995 - Won the case before Rs.66,50.
lease rental paid to 1996 to ITAT, pending before the
NBFCs 1997 - assessing officer for year 2006 -
1998 revision order
Sales Tax Department
Writ is being filed
Reversal of Input
VAT credit on sales 2010-11 Hon''ble Madras High Rs. 4,03,
made to SEZ
developers . court
(x) The company does not have any accumulated losses and not incurred
cash loss during the financial year covered by our audit and in the
immediately preceding financial year.
(xi) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in copayment of dues to
financial institutions, banks or debenture holders.
(xii) In our opinion and according to information and explosions
given to us, the terms and conditions of the guarantees given by the
Company for loans tauten by others from banks or financial institutions.
(xiii) To the best of our knowledge and operand according to the
information and explanations given to us, in our opinion, terns loans
availed by the Company were, prima facie, applied the Company doing
the year for the purposes for which the loans were obtained.
(xiv) According the information and explanations given to us and on
an overall examination of the Balance Sheet of the Company, funds
raised on short-term basis have, prima facie, not been used during the
year for long term investment.
(xv) No preferential allotment of shares was made during the current
year to the Parries / Companies covered under the register maintained
301 the Companies act.
(xvi) According to the information and explanations given to us and the
records examined by us, the Company has not issued any Debentures
during the year.
(xvii)During the period covered by our audit report, the Company has
not raised any money by public issue.
(xviii) To the best our knowledge and belief and according to the
information and explanations given to use no fraud on or by the Company
was noticed or reported during the year.
For R. SUBRAMANIAN & COMPANY
Chartered Accountants, for C.S.P JAIN & CO
A. S. RAMANATHAN
Membership No.: 11072 C.S.PRTHVRAJ JAN
Firm No : 004137S Proprietor
Membership No. 11529
Place : Chennai Firm No. 001227S
Dated : 28th May, 2012