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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) - Director Report

Company director report

Dear Shareholders

Your Directors take pleasure in presenting the Forty seventh Annual Report togetherwith the Audited Annual Accounts of your Company for the year ended March 31 2015.

(Rs. in lac)

FINANCIAL RESULTS 2014-15) 2013-14)
Total Income 6901.55) 5832.29)
Total Expenditure 7216.75) 6435.66)
Profit / (Loss) before Interest Depreciation and Taxation (315.20) (603.37)
Less : Interest 131.10) 82.53)
Less Depreciation 70.04) 102.13)
Profit / (Loss) Before Tax (516.34) (788.03)
Prior period Adjustment (1.22) (5.15)
Extra-ordinary Adjustment 441.66) 444.13)
Net Profit / (Loss) After Tax (75.90) (349.05)
Add : Balance brought forward from previous year (9532.30) (9183.25)
Balance carried to Balance Sheet (9608.21) (9532.30)

OPERATIONS

During the financial year there was some improvement in the offtake of the products inthe financial performance of the Company compared to the previous financial year. TheCompany has been able to achieve a higher turnover of Rs. 6901.55 lac showing an increaseof 15.49% compared to previous financial year. The price realization was also improved inthe line with the rise in the cost of production. The Company incurred an operational lossof Rs. 516.34 lac against Rs. 788.03 lac in the previous year.

The Board is hopeful for better economic situation in view of expenditure in theinfrastructural sector as planned by the Government in the coming years.

BIFR - STATUS

Your Company is a sick unit as declared by the Hon’ble Board for Industrial andFinancial Reconstruction (BIFR) on 24th September 2004. The Board has submittedrehabilitation scheme and the same is in the process of finalization by the operatingagency. The rehabilitation scheme since submitted to IDBI was duly approved by operatingagency i.e. IDBI. But in the proceedings dated 23rd April 2013 before the Hon’bleBoard the operating agency was directed to submit fully tied up scheme for the approvalof the Board. Subsequently in the course of hearing the Hon’ble BIFR by its orderdated 21st August 2014 has deregister the Company on the ground as the Company hasfailed to submit a fully tied up scheme.

However the Company has been successful in getting admitted its appeal to theHon’ble ABIFR (Appellate Tribunal of BIFR) vide order No. 204/14 and the proceedingis continuing and as such the Company is still under the purview of BIFR as a sickindustrial undertaking under SICA

INTEREST OUTGO

The Board decided to keep the interest on Non-Convertible Debentures and Bank loans inabeyance till the disposal of package by Hon’ble BIFR. However interest on otherborrowings have been charged in the books of the Company.

TRADING OF SECURITIES IN STOCK EXCHANGES

The trading of the shares of the Company are continued to be under suspension in theNational Stock Exchange and Bombay Stock Exchange. The Company has taken up the matterwith the respective stock exchanges for withdrawal of the suspension. The Company ishopeful for positive outcome in this matter.

DIVIDEND

In view of the losses during the year and also carry forward losses of the Company theBoard of Directors of the Company could not recommended any dividend for the financialyear ended 31st March 2015.

CONSERVATION OF ENERGY RESEARCH &DEVELOPMENT TECHNOLOGY ABSORPTION FOREIGNEXCHANGE EARNINGS AND OUTGO

Information related to conservation of energy Research & Development technologyabsorption foreign exchange earnings and outgo as required under section 134(3)(m) of theCompanies Act 2013 and Rule 8(3) of Companies (Accounts) Rules 2014 are given in theAnnexure - A as attached hereto and forming part of this Report.

CORPORATE GOVERNANCE

Your Company has practiced sound Corporate Governance and takes necessary actions atappropriate times for enhancing and meeting stakeholders’ expectations whilecontinuing to comply with the mandatory provisions of Corporate Governance. Your Companyhas complied with the requirements of revised Clause 49 of the Listing Agreement as issuedby Securities and Exchange Board of India and as amended from time to time. Your Companyhas given its deliberations to provide all the information in the Directors’ Reportand the Corporate Governance Report as per the requirements of Companies Act 2013 and theListing Agreement entered by the Company with the Stock Exchanges as a matter of prudenceand good governance.

A Report on Corporate Governance along with a certificate from Mr. Santosh KumarTibrewalla Practicing Company Secretary regarding compliance of conditions of CorporateGovernance and certification by CEO & CFO are given in Annexure - ‘B’‘C’ & ‘D’ to this report.

MANAGEMENT DISCUSSIONS & ANALYSIS REPORT

A report on Management Discussion & Analysis is given as Annexure - E tothis report.

DEPOSITS

The Company has not accepted any deposit during the year under review.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the Directors Responsibility Statement as referred to in section 134(3)(c)and 134(5) of the Companies Act 2013 your Directors hereby confirm that:

i) In the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures;

ii) The Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the company for that period;

iii) The Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the company and for preventing and detecting fraud and other irregularities;

iv) The Directors have prepared the annual accounts on a going concern basis;

v) The Directors have laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively; and

vi) The Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

PERSONNEL

The particulars and information of the employees as required under Section 197(12)ofthe Companies Act 2013 read with Rule 5 of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 has been set out as Annexure - F to this Reportattached hereto.

COMPANY’S WEBSITE

The website of your Company www.superforgings.in has been designed to present theCompany’s businesses up-front on the home page. The site carries a comprehensive database of information of the Company including the Financial Results of your CompanyShareholding pattern Director’s & Corporate profile details of BoardCommittees Corporate Policies and business activities of your Company. All the mandatoryinformation and disclosures as per the requirements of the Companies Act 2013 andCompanies Rules 2014 and as per the Listing agreement has been uploaded.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

i) Retirement by Rotation:

Pursuant to the provisions of Section 152(6) and other applicable provisions of theCompanies Act 2013 Mr. Om Prakash Modi (DIN 02409153) Director of the Company retiresby rotation at the ensuing Annual General Meeting and being eligible offered himself forre-appointment.

ii) Continuation of Mr. B.N. Modi as Managing Director:

Section 196(3) of the Act inter alia provides that no Company shall continue theemployment of a person who has attained the age of seventy years as Managing DirectorWhole-time Director or Manager unless it is approved by the members by passing a specialresolution. Part I of Schedule V to the Act contains similar provisions. Accordinglyrequisite resolution is proposed in the Annual General Meeting for continuation of Mr. B.N. Modi as Mg. Director.

iii) Appointment of Whole time - Key Managerial Personnel (KMP):

Pursuant to the provisions of Section 203 and other applicable provisions of theCompanies Act 2013 the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 and Rule 8(5)(iii) of Companies (Accounts) Rules 2014 the Board has appointedthe following personnel as the designated Whole time Key Managerial Personnel of theCompany within the meaning of the said section :

a) Mr. Baij Nath Modi Managing Director
b) Mr. G. N. Wahie Chief Financial Officer
c) Mrs. Khusboo Goel Company Secretary

There is no change in the Key Managerial Personnel during the year.

None of the Directors of the Company as mentioned in item nos. (i) (ii) & (iii)are disqualified as per section 164(2) of the Companies Act 2013. The Directors have alsomade necessary disclosures to the extent as required under provisions of section 184(1)& 149(6) of the Companies Act 2013 as applicable.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Company is not falling under the purview of section 135 of the Companies Act 2013and the relevant Rules made thereunder is not applicable for the time being. Thus theBoard is not required to constitute the CSR Committee and nor has to comply with any ofthe provisions thereof.

AUDITORS AND THEIR REPORTS i) Statutory Auditor:

The Statutory Auditor M/s Gora & Company Chartered Accountants holds office uptothe conclusion of the Annual General Meeting (AGM) to be held for the financial year2016-17 subject to ratification by the shareholders in every AGM. Accordingly the Boardon recommendation of Audit committee has proposed for ratification of their appointment inthe office of Statutory Auditors of the Company for the financial year 2015-16.

i) Explanation to the Auditor’s Remark in Respect to ‘Other Matters’:

Relating to Gratuity and Leave Benefit as required by AS - 15 on "Accounting forRetirement Benefit" the Actuary engaged for work could not complete the actuarialvaluation in time and hence the same is being accounted for on cash basis. The provisionswill be made based on the said valuation in compliance of AS - 15 in the financial year2015-16.

The other Notes to Accounts as referred in the Auditors Report are self-explanatoryand hence does not call for any further explanation.

ii) Cost Auditor:

Pursuant to section 148 of the Companies Act 2013 the Board of Directors onrecommendation of the Audit Committee had re-appointed M/s Debabrota Banerjee &Associates Cost Accountants as the Cost Auditors of the Company for the financial year2015-16. The Company has received consent and confirmation of eligibility for theirre-appointment as the Cost Auditors of the Company for the year 2015-16.

iii) Secretarial Auditor:

The Board has appointed Mr. Santosh Kumar Tibrewalla Practising Company Secretary asthe Secretarial Auditor of the Company to carry out the Secretarial Audit for the year2014-15 under the provisions of section 204 of the Companies Act 2013. The report of theSecretarial Auditor is enclosed as Annexure ‘G’ - MR-3 to thisBoard’s Report which is self-explanatory and hence do not call for any furtherexplanation.

CODE OF CONDUCT

The Code of Conduct for Directors KMPs and Senior Executive of the Company is alreadyin force and the same has been placed on the Company’s website: www.superforgings.comand the declaration to this effect is given in

Annexure ‘H’.

CODE OF CONDUCT FOR PREVENTION OF INSIDER TRADING

In terms of the SEBI (Prohibition of Insider Trading) Regulations 1992 your Companyhas already adopted the Code of Conduct for prevention of Insider Trading and the same isalso placed on the Company’s website: www.superforgings.in. Further in accordancewith the provisions of SEBI (Prohibition of Insider Trading) Regulations 2015 the Boardof Directors of the Company at their meeting held on 27th May 2015 have approved andadopted the code of practices and procedure for fair disclosure of Unpublished PriceSensitive Information and formulated the code of conduct of the Company.

DISCLOSURES AS PER APPLICABLE ACT AND LISTING AGREEMENT i) Related Party Transactions:

All transaction entered with related parties during the f.y. 2014-15 were on arm’slength basis and were in the ordinary course of business and provisions of Section 188(1)are not attracted. There have been no materially significant related party transactionswith the Company’s Promoters Directors and others as defined in section 2(76) of theCompanies Act 2013 and the listing agreement which may have potential conflict ofinterest with the Company at large. Accordingly disclosure in Form AOC - 2 is notrequired.

The necessary disclosures regarding the transactions are given in the notes toaccounts. The Company has also formulated a policy on dealing with the Related PartyTransactions and necessary approval of the audit committee and Board of Directors weretaken wherever required in accordance with the Policy.

ii) Number of Board Meetings:

The Board of Directors met 4 (four) times in the year 2014-15. The Details of the Boardmeeting and attendance of the Directors are provided in the Corporate Governance Reportattached as Annexure to this Board’s Report.

iii) Composition of Audit Committee:

The Board has constituted the Audit Committee under the Chairmanship of Mr. PBandyopadhyay. Complete details of the Committee are given in the Corporate GovernanceReport attached as Annexure to this Board’s Report.

iv) Extracts of Annual Return:

The details forming part of the extract of the Annual Return in Form MGT 9 as providedunder section 92(3) of the Companies Act 2013 is enclosed as Annexure ‘I’.

v) Risk Analysis:

The Company has in place a mechanism to inform the Board members about the Riskassessment and mitigation plans and periodical reviews to ensure that the critical risksare controlled by the executive management.

vi) Internal Financial Control:

The Company has in place adequate internal financial control as required under section134(5)(e) of the Act. During the year such controls were tested with reference tofinancial statements and no reportable material weakness in the formulation or operationswere observed.

vii) Loans Guarantees and Investments:

During the year under review your Company has not invested any money in Securities.

viii) Post Balance Sheet events:

There is no material changes in commitments affecting the financial position of theCompany occurred since the end of the financial year 2014-15.

ix) Subsidiaries Associates or Joint Ventures:

Your Company does not have any subsidiaries associates or joint ventures during theyear under review.

x) Evaluation of the Board’s Performance:

During the year under review the Board in compliance with the Companies Act 2013 andClause 49 of the Listing Agreement has adopted a formal mechanism for evaluating itsperformance and as well as that of its Committees and individual Directors including theChairman of the Board. The exercise was carried out through a structured evaluationprocess covering various aspects of the Boards functioning such as composition of theBoard & Committees experience & competencies performance of specific duties& obligations governance issues etc. Separate exercise was carried out to evaluatethe performance of individual Directors including the Board as a whole and the Chairmanwho were evaluated on parameters such as their participation contribution at the meetingsand otherwise independent judgments safeguarding of minority shareholders interest etc.

The evaluation of the Independent Directors was carried out by the entire Board andthat of the Chairman and the Non-Independent Directors were carried out by the IndependentDirectors in their separate meeting.

The Directors were satisfied with the evaluation results which reflected the overallengagement of the Board and its Committees with the Company.

xi) Nomination Remuneration and Evaluation Policy:

The Company on recommendation of its Nomination & Remuneration Committee has laiddown a Nomination Remuneration and Evaluation Policy in compliance with the provisionsof the Companies Act 2013 read with the Rules made therein and the Listing Agreement withthe stock exchanges (as amended from time to time). This Policy is formulated to provide aframework and set standards in relation to the followings and details on the same aregiven in the Corporate Governance Report attached as Annexure to this Board’sReport: a) Criteria for appointment and removal of Directors Key Managerial Personnel(KMP) and Senior Management Executives of the Company. b) Remuneration payable to theDirectors KMPs and Senior Management Executives. c) Evaluation of the performance of theDirectors. d) Criteria for determining qualifications positive attributes andindependence of a Director.

xii) Vigil Mechanism (Whistle Blower Policy):

Your Company has formulated a Whistle Blower Policy and employees of the Company areencouraged to escalate to the level of the Audit Committee any issue of concerns impactingand compromising with the interest of the Company and its stakeholders in any way. TheCompany is committed to adhere to highest possible standards of ethical moral and legalbusiness conduct and to open communication and to provide necessary safeguards forprotection of employees from reprisals or victimization for whistle blowing in goodfaith.

Details of establishment of the Vigil Mechanism have been uploaded on theCompany’s website: www.superforgings.in and also set out in the Corporate GovernanceReport attached as Annexure to this Board’s Report.

SIGNIFICANT & MATERIAL ORDERS PASSED BY REGULATOR OR COURTS OR TRIBUNALS IMPACTINGGOING CONCERN STATUS AND COMPANIES OPERATIONS IN FUTURE

There have been no significant & material orders passed by regulator / courts /tribunals impacting going concern status and Companies operations in future.

APPRECIATION

Your Directors take this opportunity to place on record their gratitude to the Centraland State Governments Bankers and Investors for their continuous support cooperation andtheir valuable guidance to the Company and for their trust reposed in the Company’smanagement. The Directors also commend the continuing commitment and dedication of theemployees at all levels and the Directors look forward to their continued support infuture.

On behalf of the Board of Directors
For Super Forgings & Steels Ltd.
sd/- sd/-
B. N. Modi M. L. Giria
Date : 13th August 2015 Mg. Director Independent Director
Place : Kolkata DIN: 0064993 DIN: 00916210