Surana Corporation Ltd

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STAKEHOLDERS EMPOWERMENT SERVICES

1 | P A G E

SURANA CORPORATION LTD. www.suranacorp.in

SECTOR: TRADING REPORTING DATE: 31ST MAY, 2016

Surana Corporation Ltd 31st May, 2016 TABLE 1 - MARKET DATA (STANDALONE) (As on 31st May, 2016)

NSE Code - SURANACORP NSE Market Price (₹) 1.10 NSE Market Cap. (₹Cr.) 2.68

Sector - Trading Face Value (₹) 10.00 Equity (₹Cr.) 24.36

52-week High/Low (₹) 5.00/ 1.05 Net worth (₹Cr.) -219.74

Business Group - Indian Private TTM P/E N.A. Traded Volume (Shares) 6,800

Year of Incorporation - 1991 TTM P/BV N.A. Traded Volume (lacs) 0.07

Source - Capitaline

Corporate Office: COMPANY BACKGROUND

No.30, G N T Road, Surana Corporation Limited is engaged in the manufacture, wholesale, and retail of jewellery

products in India. The Company offers chains, necklaces and chokers, bracelets, pendants,

rings, ear drops, and bangles; and imports gold and silver medallions. It also generates power

through wind mills. The Company sells products through its showrooms. It also exports its

products. Surana Corporation Limited was incorporated in 1991 and is headquartered in

Chennai, India.

Surana Corporation, has decided to amalgamate Surana Jewellery Ltd and Rukma Industries

Ltd with itself. And is in the process of getting requisite approval in for the same.

Madhavaram,

Chennai – 600 110, Tamil Nadu

Company Website:

www.suranacorp.in

TABLE 2 - PRICE PERFORMANCE

31st May,

2016

29th May,

2015

30th May,

2014

% Change CAGR for 2

years 2016 vs 2015 2015 vs 2014

Price (₹) 1.10 4.75 22.00 -76.84% -78.41% -77.64%

Trading Volume (Shares)

(yearly avg.) 8,307 2,773 1,013 199.61% 173.68% -

NSE Market Cap. (in ₹Cr.) 2.68 11.57 53.59 -76.84% -78.41% -77.64%

Source - Money Control

http://www.suranacorp.in/




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TABLE 3 - FINANCIALS

(₹Cr.) 2015 2014 2013 % Change CAGR for 2

years 2015 vs 2014 2014 vs 2013

Net Worth -219.74 69.90 430.23 -414.36% -83.75% N.A.

Current Assets 1,142.53 1,240.24 1,869.47 -7.88% -33.66% -21.82%

Non-Current Assets 144.27 176.59 134.68 -18.30% 31.12% 3.50%

Total Assets 1,286.80 1,416.83 2,004.14 -9.18% -29.30% -19.87%

Investments 7.92 7.09 10.30 11.71% -31.17% -12.31%

Finance Cost 170.24 140.97 63.74 20.76% 121.16% 63.43%

Long Term Liabilities 898.13 117.69 128.75 663.13% -8.59% 164.12%

Current Liabilities 573.13 1,229.24 1,445.17 -53.38% -14.94% -37.03%

Turnover 1,115.90 4,126.26 8,469.83 -72.96% -51.28% -63.70%

Profit After Tax (PAT, ₹Cr.) -287.07 -360.33 53.16 N.A. -778% N.A.

EPS (₹) -118.00 -148.00 22.00 N.A. -773% N.A.

Source - Money Control/Annual Report

Discussion as per Company:

During the year 2014-2015 the Company has achieved a Net Revenue of ₹1,115.90 Crores for the year ended 31st March, 2015

as compared to ₹4,126.26 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.

Revenues from wind power generation during the year amounted to ₹4.87 Crores as against ₹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.

During the year 2013-2014 the Company’s total turnover during the year ended 31st March, 2014, was at ₹4,126.95 Crores as

against ₹8,471.24 Crores for the previous year, recording a major dip of around 51%. The Company could achieve Sales of only

₹16.74 crores under Nominated Agency as against ₹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 ₹53.79 crores only against ₹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 ₹6.61 crores as against ₹11.95 crores. The Company’s Loss after Tax was at ₹360.33 Crores in the current year as

against a profit of ₹53.16 Crores for the Previous Year.

During the year 2012-2013 the Company’s total turnover ended 31st March, 2013, in spite of adverse circumstances, was at

₹8,471.24 crores as against ₹8,666.02 crores for the previous year, recording a marginal dip of just 2%.

The Company achieved a commendable performance of ₹543.75 crores of Bullion sales under Nominated Agency as against

₹471.22 crores in the previous year. The Export turnover of the Company decreased by 23% to ₹1,550.55 crores in 2012-2013 as

against ₹1,910.73 crores 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 ₹6,365.00 crores as against ₹6,755.29 crores

in the previous year. Revenues from wind energy during the year amounted to ₹11.95 crores as against ₹5.68 crores. The

Company’s Profit after Tax was at ₹53.16 Crores in the current year as against ₹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 behaviour. During the year, Gold Prices

witnessed a steady uptrend.




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AUDIT QUALIFICATIONS

Audit Qualifications in last 3 years:

The Auditors have not made any qualification in last three years. However, they have emphasised on the following matter in

the Annual Report for FY 2015.

Emphasis of Matter: 2015

“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 Response: 2015

“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.”

Response Comment

Frequency of Qualifications Not Applicable as the Auditors have not made any

qualifications.

Have the Auditors made any adverse remark in last 3 years? No -

Are the material accounts audited by the Principal Auditors? Yes -

Do the financial statements include material unaudited financial

statements?

No -

TABLE 4: BOARD PROFILE (As per Annual Report 2014-15)

Regulatory Norms Company

% of Independent Directors on the Board 33% 60%

% of Promoter Directors on the Board - 20%

Number of Women Directors on the Board At least 1 1

Classification of Chairman of the Board - Independent Director

Is the post of Chairman and MD/CEO held by the same person? - No

Average attendance of Directors in the Board meetings (%) - 92%

Source - Money Control/Annual Report

Composition of Board: As per Regulation 17(i)(b) of the Listing Regulations, 2015, the Company should have at least 33%

Independent Directors as the Chairman of the Board is a Non-Executive/ Independent Director. The Company has 60% of

Independent Directors and hence, it meets the regulatory requirements.

Board Diversity: The Company has 5 directors out of which 4 are male and 1 is female. The Company is compliant as per Clause

17 of the Listing Regulations, 2015 regarding the requirement of at least one-woman director.


http://www.sebi.gov.in/cms/sebi_data/attachdocs/1441284401427.pdf



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TABLE 5 - FINANCIAL RATIOS

Ratios 2015 2014 2013 % Change

2015 vs 2014 2014 vs 2013

Turn

ove

r

Rat

ios

Inventory Turnover 2.22 11.32 19.59 -80.40% -42.23%

Debtors Turnover 1.77 4.79 7.58 -62.96% -36.81%

Fixed asset Turnover 7.73 23.37 62.89 -66.90% -62.84%

Current Asset Turnover 0.98 3.33 4.53 -70.64% -26.57%

Ret

urn

Rat

ios Operating Profit Margin -26.09% -8.84% 0.84% N.A. -1,153.93%

Net Profit Margin -25.73% -8.73% 0.63% N.A. -1,491.34%

Return on Assets (ROA) -22.31% -25.43% 2.65% N.A. -1,058.80%

Return on Equity (ROE) N.A. -515.49% 12.36% N.A. -4,271.95%

Return on Capital Employed (ROCE) N.A. N.A. 19.04% N.A. N.A.

Liq

uid

ity

Rat

ios

Current Ratio 1.99 1.01 1.29 97.58% -22.00%

Quick Ratio 1.12 0.71 0.99 56.65% -28.36%

Cash Ratio 0.02 0.01 0.22 59.42% -94.92%

Working Capital Turnover ratio 1.96 375.11 19.96 -99.48% 1,779.15%

Solv

ency

Rat

ios Debt to equity ratio N.A. 18.40 1.59 N.A. 1058.19%

Interest Coverage Ratio N.A. N.A. 2.11 N.A. N.A.

Trad

ing

Rat

ios

Market Cap / Sales 0.00 0.00 0.00 269.77% 105.27%

Market Cap/ Net Worth N.A. 0.05 0.01 N.A. 515.49%

Market Cap/PAT N.A. N.A. 0.07 N.A. N.A.

Market Cap/EBITDA N.A. N.A. 63.78 N.A. N.A.

Trading Volume (shares) (avg. of 1

year) 8,242 2,376 950 246.87% 150.20%

Trading Volume (shares) (high in

1year) 71,216 74,290 7,241 -4.14% 925.96%

Trading Volume (shares) (low in 1

year) 1.00 3.00 1.00 -66.67% 200.00%

Ratio - High/low trading volume 71,216 24,763 7,241 187.59% 241.99%

Ratio - High/average trading volume 8.64 31.26 7.62 -72.36% 310.06%

Source - Money Control




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TABLE 6 (A): OWNERSHIP & MANAGEMENT RISKS

Mar' 2016 Mar’ 2015 Mar' 2014 Comments

Shar

eho

ldin

g

Promoter shareholding 50.28% 50.15% 50.15% No new equity shares were issued by the

Company during the two-year period from

Mar’2014 to Mar’2016. The promoter

shareholding increased from 50.15% to

50.28% in the year 2016 due to purchase of

shares by the promoters in the secondary

market. No other major change was

observed in the shareholding pattern during

the said period. The promoters have pledged

98.10% of their shareholding and 49.32% of

total shareholding.

Public - Institutional

shareholding - - -

Public - Others shareholding 49.72% 49.85% 49.85%

Non Promoter Non Public

Shareholding - - -

TABLE 6 (B): OWNERSHIP & MANAGEMENT RISKS

Market Activity of Promoters The promoters have bought 30,713 equity shares in last one year.

Preferential issue to promoters No preferential issue of shares was made to the promoters in last three years.

Preferential issue to others No preferential issue of shares was made to other shareholders in last three

years.

GDRs issued by the Company The Company did not issue any GDRs in last three years

Issue of ESOPs/Issue of shares other than

Preferential allotment

The Company does not have any stock option scheme. Further, no new equity

shares were issued by the Company in last three years

Source - Annual Report




6 | P A G E



Glossary

Equity: The equity shares capital of the Company

Net Worth: The amount by which the Assets exceeds the liabilities excluding shareholders’ funds of the Company

Turnover: The revenue earned from the operations of the Company

EPS: Earning Per Share is net profit earned by the Company per share

𝐸𝑃𝑆 =Profit After Tax

Number of outstanding shares

P/E ratio: It is the ratio of the Company’s share price to earnings per share of the Company

𝑃/𝐸 𝑟𝑎𝑡𝑖𝑜 =Price of each share

Earnings per share

Current Assets: Cash and other assets that are expected to be converted to cash in one year

Fixed Assets: assets which are purchased for long-term use and are not likely to be converted quickly into cash, such as land,

buildings, and equipment

Total Assets: Current Assets + Fixed Assets

Investments: An investment is an asset or item that is purchased with the hope that it will generate income or appreciate in the

future.

Finance Cost: The Financing Cost (FC), also known as the Cost of Finances (COF), is the cost and interest and other charges

incurred during the year in relation to borrowed money.

Long Term Liabilities: Long-term liabilities are liabilities with a maturity period of over one year.

Current Liabilities: A company's debts or obligations that are due within one year.

Inventory Turnover ratio: Inventory Turnover is a ratio showing how many times a company's inventory is sold and replaced over

a period.

𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =Sales Turnover

Inventory

Debtors Turnover: Accounts receivable turnover is an efficiency ratio or activity ratio that measures how many times a business

can turn its accounts receivable into cash during a period

𝐷𝑒𝑏𝑡𝑜𝑟𝑠 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =Sales Turnover

Accounts recievables

Fixed Asset Turnover: The fixed-asset turnover ratio is a financial ratio of net sales to fixed assets

𝐹𝑖𝑥𝑒𝑑 𝐴𝑠𝑠𝑒𝑡 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =Sales Turnover

Fixed Assets

Current Asset Turnover: The current-asset turnover ratio is a financial ratio of net sales to fixed assets

𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐴𝑠𝑠𝑒𝑡 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =Sales Turnover

Current Assets




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Operating Profit Margin: Operating margin is a measurement of what proportion of a Company’s revenue is left over after

paying for variable costs of production such as wages, raw materials etc. It can be calculated by dividing a Company’s operating

income (also known as “operating profit”) during a given period by its sales during the same period.

𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑃𝑟𝑜𝑓𝑖𝑡 𝑀𝑎𝑟𝑔𝑖𝑛 =Operating profit

Sales Turnover

Net Profit Margin: Net profit margin is the percentage of revenue left after all expenses have been deducted from sales

𝑁𝑒𝑡 𝑃𝑟𝑜𝑓𝑖𝑡 𝑀𝑎𝑟𝑔𝑖𝑛 =Net profit

Sales Turnover

Return on Assets: ROA tells you what earnings were generated from invested capital (assets)

𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝐴𝑠𝑠𝑒𝑡𝑠 =Net profit

Total Assets

Return on equity/net worth: return on equity (ROE) is the amount of net income returned as a percentage of shareholders’

equity.

𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝐸𝑞𝑢𝑖𝑡𝑦 =Net profit

Net worth

Return on Capital Employed: Return on capital employed (ROCE) is a financial ratio that measures a company's profitability

and the efficiency with which its capital is employed.

𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝐶𝑎𝑝𝑖𝑡𝑎𝑙 𝐸𝑚𝑝𝑙𝑜𝑦𝑒𝑑 =Net profit

Total Debt + Equity share capital

Current ratio: The current ratio is a financial ratio that measures whether or not a firm has enough resources to pay its debts

over the next 12 months. It compares a firm's current assets to its current liabilities.

𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑟𝑎𝑡𝑖𝑜 =Current Assets

Current Liabilities

Quick ratio: The quick ratio is a measure of how well a Company can meet its short term financial liabilities.

𝑄𝑢𝑖𝑐𝑘 𝑟𝑎𝑡𝑖𝑜 =Current Assets − Inventories

Current Liabilities

Cash ratio: The ratio of the liquid assets of a Company to its current liabilities.

𝑄𝑢𝑖𝑐𝑘 𝑟𝑎𝑡𝑖𝑜 =Current Assets − Inventories − Account Recievables

Current Liabilities

Working Capital Turnover ratio: The working capital turnover ratio is also referred to as net sales to working capital. It indicates a

Company's effectiveness in using its working capital.

𝑊𝑜𝑟𝑘𝑖𝑛𝑔 𝐶𝑎𝑝𝑖𝑡𝑎𝑙 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =𝑆𝑎𝑙𝑒𝑠 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟

Current Assets − Current Liabilities

Debt to Equity ratio: The debt-to-equity ratio (D/E) is a financial ratio indicating the relative proportion of

shareholders' equity and debt used to finance a company's assets.

𝐷𝑒𝑏𝑡 𝑡𝑜 𝐸𝑞𝑢𝑖𝑡𝑦 𝑟𝑎𝑡𝑖𝑜 =𝑆ℎ𝑜𝑟𝑡 𝑇𝑒𝑟𝑚 𝐷𝑒𝑏𝑡 + 𝐿𝑜𝑛𝑔 𝑇𝑒𝑟𝑚 𝐷𝑒𝑏𝑡

𝑁𝑒𝑡 𝑊𝑜𝑟𝑡ℎ

Interest Coverage ratio: The Interest coverage ratio is a debt ratio and profitability ratio used to determine how easily a

Company can pay interest on outstanding debt.

𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝐶𝑜𝑣𝑒𝑟𝑎𝑔𝑒 𝑅𝑎𝑡𝑖𝑜 =𝐸𝑎𝑟𝑛𝑖𝑛𝑔 𝐵𝑒𝑓𝑜𝑟𝑒 𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑎𝑛𝑑 𝑇𝑎𝑥

𝐹𝑖𝑛𝑎𝑛𝑐𝑒 𝐶𝑜𝑠𝑡


http://www.investopedia.com/terms/i/invested-capital.asp

http://www.investopedia.com/articles/stocks/05/04405.asp



8 | P A G E



Market Cap/Sales ratio: Market Cap/sales ratio, Price–sales ratio, P/S ratio, or PSR, is a valuation metric for stocks. It is calculated

by dividing the company's market cap by the revenue in the most recent year; or, equivalently, divide the per-share stock price by

the per-share revenue.

𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝/𝑆𝑎𝑙𝑒𝑠 𝑟𝑎𝑡𝑖𝑜 =𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝

𝑆𝑎𝑙𝑒𝑠 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟

Market Cap/ Net Worth ratio: It is a valuation ratio calculated by dividing Company’s market cap to net worth.

𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝/𝑁𝑒𝑡𝑤𝑜𝑟𝑡ℎ 𝑟𝑎𝑡𝑖𝑜 =𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝

𝑁𝑒𝑡𝑤𝑜𝑟𝑡ℎ

Market Cap/ PAT ratio: It is a valuation ratio calculated by dividing Company’s market cap to net profit.

𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝/𝑃𝐴𝑇 𝑟𝑎𝑡𝑖𝑜 =𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝

𝑛𝑒𝑡 𝑝𝑟𝑜𝑓𝑖𝑡

Market Cap/ EBITDA ratio: It is a valuation ratio calculated by dividing Company’s market cap to EBITDA.

𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝/𝐸𝐵𝐼𝑇𝐷𝐴 𝑟𝑎𝑡𝑖𝑜 =𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝

𝐸𝐵𝐼𝑇𝐷𝐴

Trading Volume (shares) (avg. of 1 year): Average number of shares/day traded in 1 year

Trading volume (shares) (high in 1 year): Highest number of shares/day traded in 1 year

Trading volume (shares) (minimum in 1 year): Lowest number of shares traded on any one day in 1 year


https://en.wikipedia.org/wiki/Stock

https://en.wikipedia.org/wiki/Market_cap

https://en.wikipedia.org/wiki/Stock



9 | P A G E



DISCLAIMER

Sources Company Information

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data sources include: BSE, NSE, SEBI, Capitaline, Moneycontrol, Businessweek,

Reuters, Annual Reports, IPO Documents and Company Website.

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Stakeholders Empowerment Services

Contact Information

Stakeholders Empowerment Services

A 202, Muktangan,

Upper Govind Nagar,

Malad East,

Mumbai – 400 097

Tel +91 22 4022 0322

[email protected]

[email protected]

www.sesgovernance.com.

Research Analyst: Waheed Shaikh


mailto:[email protected]

mailto:[email protected]

http://www.sesgovernance.com/

Surana Corporation Ltd

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