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Super Forgings & Steels Ltd.

BSE: 513277 Sector: Metals & Mining
NSE: SUPERFORGE ISIN Code: INE661A01011
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Super Forgings & Steels Ltd. (SUPERFORGE) - Auditors Report

Company auditors report

TO THE MEMBERS OF SUPER FORGINGS & STEELS LIMITED

REPORT ON THE STANDALONE FINANCIAL STATEMENTS

We have audited the accompanying Standalone Financial Statements of Super Forgings& Steels Limited ("the Company") which comprise the Balance Sheet as at 31stMarch 2015 the statement of Profit and Loss the Cash Flow Statement for the year endedand a summary of significant accounting policies and other explanatory information (inwhich are incorporated the accounts of the Company’s Chennai Branch audited by otherauditor).

Management’s Responsibility for the Financial Statements

The Company’s Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act2013 with respect to the preparation of these StandaloneFinancial Statements that give a true and fair view of the financial position financialperformance and cash flows of the Company in accordance with the accounting principlesgenerally accepted in India including the Accounting Standards specified under Section 133of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. This responsibilityalso includes maintenance of adequate accounting records in accordance with the provisionsof the Act for safeguarding the assets of the Company and for preventing and detectingfrauds and other irregularities selection and application of appropriate accountingpolicies design implementation and maintenance of internal control relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these Standalone Financial Statementsbased on our audit. We conducted our audit in accordance with the Standards on Auditingspecified under Section 143(10) of the Companies Act 2013. These standards require thatwe comply with the ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the financial statements are free from materialmisstatement.

An audit involves performing procedures to obtain audit evidence about the accounts anddisclosures in the financial statements. The procedures selected depend on theauditors’ judgement including the assessment of the risks of material misstatementof the financial statements whether due to fraud or error. In making these riskassessments the auditor considers internal financial control relevant to theCompany’s preparation of the financial statements that give a true and fair view inorder to design audit procedures that are appropriate in the circumstances but not for thepurpose of expressing an opinion on whether the Company has in place an adequate internalfinancial control system over financial reporting and the operating effectiveness of suchcontrols. An audit also includes evaluating the appropriateness of accounting policiesused and reasonableness of the accounting estimates made by the Company’s Directorsas well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Standalone Financial Statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Standalone Financial Statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principals generally accepted in India.

(a) In the case of Balance Sheet of the State of Affairs of the Company as at 31stMarch 2015

(b) In the case of the Statement of Profit and Loss of the Loss of the Company for theyear ended on that date; and

(c) In the case of the Cash Flow Statements of the cash flow for the year ended onthat date.

Other Matter

The effect of non-provision of accrued leave liability and Provision for Gratuity onmanagement estimates and not based on actuarial valuation as required by AS-15 on"Accounting of Retirement Benefits" and "Impairment of

Assets" as required by AS-28 on the profitability of the Company is notascertainable. Refer Note No. 21 on Accounting Policies [Point No.1 (J) and Point No.18.] The Company is not required to provide depreciation on Fixed Assets of Dankuni Unitas 95% of assets whose life were expired as per revised Companies Act 2013 has beenwritten off keeping 5% of its residual value. (Refer point no. 3 of Note no. 21.)

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors’ Report) order 2015 (the"Order") issued by the Central Government we give in the Annexure a statementof the matters specified in the order.

2. As required by the Section 143(3) of the Act we report that :

(a) we have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit; (b) in ouropinion proper books of account as required by law have been kept by the Company so faras it appears from our examination of those books.

(c) the Balance Sheet the statement of Profit & Loss and the cash flow statementdealt with by this Report are in agreement with the books of account ;

(d) In our opinion the aforesaid Standalone Financial Statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014 ;

(e) On the basis of the written representations received from the Directors as on March31 2015 taken on record by the Board of Directors none of the Directors aredisqualified as on March 31 2015 from being appointed as a Director in terms of Section164 (2) of the Act.

For GORA & COMPANY
(Chartered Accountants)
(Firm Registration No. 327183E)
Sd/- Gora Chand Mukherjee
Place : Kolkata Partner
Date : May 27 2015 (Membership No. 017630)

ANNEXURE TO THE INDEPENDENT AUDITORS’ REPORT

(Referred to in Paragraph 1 under the head

Report on Other Legal and Regulatory Requirements of our report of even date)

i. (a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) The fixed assets except fixed assets of Dankuni unit were physically verified bythe management in accordance with the programme of verification which in our opinionprovides for physical verification of all major items of fixed assets at reasonableinterval during the year and no material discrepancies were noticed on such verification.

ii. (a) As explained to us inventories were physically verified during the year by themanagement at reasonable intervals except for Dankuni unit and no material discrepancieswere noticed on such verification.

(b) In our opinion and according to the information and explanation given to us theprocedure of physical verification of inventories followed by the management appeared tobe reasonable and adequate in relation to the size of the Company and nature of itsbusiness.

(c) In our opinion the Company is maintaining proper records of inventory and nomaterial discrepancies were noticed on physical verification.

iii According to the information and explanation given to us the Company has notgranted loans secured or unsecured to Companies Firms or other Parties covered in theregister maintained under section 189 of the Companies Act.

iv. In our opinion and according to the explanation given to us there are adequateinternal control system commensurate with the size of the Company and the nature of itsbusiness for the purchase of inventory and fixed assets and for the sale of goods andservices. As explained to us there is no continuing failure to correct major weakness ininternal control system.

v. The Company has not accepted any deposits during the year.

vi. Maintenance of cost records has been specified by the Central Government underSub-Section (1) of Section 148 of the Companies Act and are of the opinion that primafacie the prescribed cost records have been maintained. We have however not made adetailed examination of the cost record with a view to determine whether they are accurateor complete.

vii. According to the information and explanation given to us in respect of statutoryand other dues :

(a) The Company has been regular in depositing undisputed statutory dues includingProvident Fund Sales Tax Excise Duty and other material statutory dues except (i)Rs.219.40 lacs on account of Income Tax assessed for Block assessement years from 1985 -86to 20th September1996. The company has started payment of monthly instalment of Rs.4.65lacs over and above Rs.50.00 lacs down payment against the said demand. The lastinstalment due is on July’2015 (ii) The payment of deferred Sales Tax liability ofRs.409.74 lacs has been considered in the DRS with Hon’ble BIFR. The Company has beendeclared as a "Relief Undertaking" as per the Industrial policy of Government ofWest Bengal and is therefore eligible for relief and concessions as declared from timeto time under the said policy.

(b) The details of statutory and other dues which have not been deposited on account ofdisputes are given below:

Particulars Financial year to which the matter pertains Forum where the matter is pending Amount (Lac)
Income Tax 1991-1992 Deputy Commissioner Central Circle Rs. 24.91
Kolkata (Referred to I.T.O)
1993-1994 Deputy Commissioner Central Circle Rs. 16.84
Kolkata (Referred to I.T.O)
1999-2000 Deputy Commissioner Central Circle Rs. 57.95
Kolkata (Referred to I.T.O)
Sales Tax 2000-2001 Asst. Commissioner Commercial Taxes Rs. 113.68
Chowringhee Circle
2010-2011 Asst. Commissioner Commercial Taxes Rs. 0.99
Chowringhee Circle

(c) The amount required to be transferred to Investor Education and Protection fund isnot applicable as the Company has incurred loss.

viii. The accumulated losses of the Company are more than its net worth as at the endof the year. The Company has incurred cash losses during the current year as well as inthe previous year.

(ix) The default in non-payment of dues to Financial Institutions and Non-ConvertibleDebentures does not arise as the Company has entered into negotiated settlement with M/s.Life Insurance Corporation of India for NCD of Rs. 300.00 lacs and Unsecured Loan ofRs.175.00 lacs at principal value to be repaid over a period of 5 (five) years withinterest @12.5% on reducing balance method. Similarly the Company has entered intonegotiated settlement with SASF (IDBI) for Term Loan of Rs.450.00 lacs at their principalvalue to be repaid over a period of 5 (five) years with interest @ 12.5% on reducingbalance method. In both cases the Company is regular in making payment of itsobligations. In case of banks the account has become NPA and hence the Company is notproviding interest and the same is explained in point no. 5 of Note no. 21.

(x) According to the information given to us the Company has not given any guaranteefor loans taken by others from Banks or Financial Institutions.

(xi) No new term loan was availed by the Company during the year.

(xii) To the best of our knowledge and belief and according to the information andexplanation given to us no fraud on or by the Company was noticed or reported during theyear.

For GORA & COMPANY
(Chartered Accountants)
(Firm Registration No. 327183E)
Sd/- Gora Chand Mukherjee
Place : Kolkata Partner
Date : May 27 2015 Membership No. 017630