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Super Forgings & Steels Ltd.

BSE: 513277 Sector: Metals & Mining
NSE: SUPERFORGE ISIN Code: INE661A01011
BSE 05:30 | 01 Jan Super Forgings & Steels Ltd
NSE 05:30 | 01 Jan Super Forgings & Steels Ltd

Super Forgings & Steels Ltd. (SUPERFORGE) - Director Report

Company director report

Dear Shareholders

Your Directors take pleasure in presenting the Fiftieth Annual Report together with theAudited Annual Accounts of your Company for the year ended March 31 2019.

(Rs. in 000)

Financial Results F.Y. 2018-19 F.Y. 2017-18
Particulars Amount Amount
i. Turnover 676752 530041
ii. Other Income 2048 9408
Total Revenue 678800 539449
Total Expenditure 726832 519221
Profit / (Loss) before Interest Depreciation and Taxation (48032) (20228)
Less: Interest (43538) (11978)
Depreciation (3064) (5304)
Profit / (Loss) before Tax and Extra-Ordinary items (94634) (44790)
Prior period Adjustment - -
Extra-ordinary Adjustment 44503 44576
Net Profit / (Loss) after tax (50130) (214)
Add : Balance brought forward from previous year (983745) (983531)
Balance carried to Balance Sheet (1033875) (983745)

STATE OF COMPANY'S AFFAIRS AND OPERATIONS

During the financial year the Company has clocked a turnover of Rs. 67.68 crores asagainst Rs. 53.00 crores in the financial year 2018-19. There has been increase of almost27.70% in the turnover of the Company compared to the previous financial year due to someimprovement in the off-take of the products of the Company. The price realization was alsoimproved in the line with the rise in the cost of production. The Company incurred a lossof Rs. 501 .30 lakhs against Rs. 2.14 lakhs in the previous year. The Board is hopeful forbetter price realization in view of the expected improvement in the demand of the productsas envisaged in the global and domestic market.

There is no change in the business of the Company during the financial year 2018-19.

DIVIDEND

In view of the losses during the year and also carry forward losses of the CompanytheBoard of Directors of the Company could not recommended any dividend for the financialyear ended 31st March 2019.

ISSUE OF SHARES

The Company has not issued any shares during the financial year under review.

DEPOSITS

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

CONSERVATION OF ENERGY RESEARCH &

DEVELOPMENT TECHNOLOGY ABSORPTION FOREIGN EXCHANGE 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 inAnnexure - '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 while continuing tocomply with the mandatory provisions of Corporate Governance. Your Company has compliedwith the requirements of applicable Regulations of Securities & Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 as issued bySecurities and Exchange Board of India and as amended from time to time. Your Company hasgiven its deliberations to provide all the information in the Directors Report and theCorporate Governance Report as per the requirements of Companies Act 2013 and Regulationsof Securities & Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 entered by the Company with the Stock Exchanges as amatter of prudence and 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.

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.net. TheBoard Members and Senior Management have affirmed their compliance with the Code andpursuant to Regulation 26(3) read with Schedule V of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 a declaration signed by the Managing Director(CEO) to this affect is at Annexure - ‘E'.

MANAGEMENT DISCUSSIONS & ANALYSIS REPORT

A report on Management Discussion & Analysis is given as Annexure - ‘F' tothis report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

i) Appointment and resignation of Directors:

There was no appointment or resignation of Directors during the financial year.

ii) Retirement by Rotation:

Pursuant to the provisions of Section 152(6) and other applicable provisions of theCompanies Act 2013 and Articles of Association of the Company Mr. Om Prakash Modi (DIN:02409153) Director of the Company retires by rotation at the ensuing Annual GeneralMeeting and being eligible offered himself for re-appointment.

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 hadbeen followed along with proper explanation related to material departures;

ii) Appropriate accounting policies have been selected and applied consistently andjudgments and estimates that are reasonable and prudent have been made so as to give atrue and fair view of the state of affairs of the Company as at 31st March 2019 and ofthe Loss of the Company for the year ended on 31st March 2019;

iii) Proper and sufficient care has been taken to the best of their knowledge andability for the maintenance of adequate accounting records in accordance with theprovisions of this Act for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities;

iv) The annual accounts have been prepared 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 are operatingeffectively; and

vi) Proper systems have been devised to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and operating effectively.

AUDITORS AND THEIR REPORTS

(i) Statutory Auditor:

The present Statutory Auditors M/s. Gora & Company Chartered Accountants holdsoffice upto the conclusion of the Annual General Meeting (AGM) to be held for thefinancial year 2021-22.

The Notes to Accounts as referred in the Auditors Report are self-explanatory andhence 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 (Registration No. 001703) Cost Accountants as the Cost Auditors of theCompany for the financial year 201920. The Company has received consent and confirmationof eligibility for their re-appointment as the Cost Auditors of the Company for thefinancial year 2019-20.

(iii) Secretarial Auditor:

The Board had appointed Mr. Santosh Kumar Tibrewalla Practising Company Secretary asthe Secretarial Auditor of the Company to carry out the Secretarial Audit for the year2018-19 under the provisions of section 204 of the Companies Act 2013. The report of theSecretarial Auditor is enclosed as Annexure 'G' - MR-3 to this Board's Report.

In respect of the non-payment of listing fees in the last few years the Boardclarifies that the Company is in the process of getting the listing fees reduced on therequest made to all the stock exchanges viz. BSE NSE and CSE due to sizable increase inthe listing fees and continued increase in the operational losses of the Company for whichit is unable to cope with payment of increased listing fees. Besides the Company is fullyadhering to the all other compliances of the listing requirements of aforesaid StockExchanges as per the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015. The Company is hopeful that the stock exchanges would come out with some relaxationin the quantum of listing fees to be paid by the Company.

The rest of the report is self-explanatory and hence do not call for any furtherexplanation.

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 to the Company for the timebeing. Thus the Board is neither required to constitute the CSR Committee nor has tocomply with any of the provisions thereof.

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 -'H' to this Reportattached hereto.

THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION AND REDRESSAL)ACT 2013

The Company has in place an Anti-Sexual Harassment Policy in line with the requirementsof the Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal)Act 2013. All employees (permanent contractual temporary trainees) are covered underthis Policy. The Policy is gender neutral. During the year under review no complaintswith allegations of sexual harassment were filed.

COMPANY'S WEBSITE

The website of your Company www.superforgings.net has been designed to present theCompany's businesses up-front on the home page. The site carries a comprehensive databaseof information of the Company including the Financial Results of your CompanyShare-holding pattern Directors'& Corporate Profile details of Board CommitteesCorporate Policies and business activities of your Company. All the mandatory informationand disclosures as per the requirements of the Companies Act 2013 and Companies Rules2014 and as per SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015has been uploaded.

LISTING OF SECURITIES IN STOCK EXCHANGES

The shares of the Company are presently listed at The Calcutta Stock Exchange Ltd. BSELimited and National Stock Exchange of India Limited. The Company is registered with bothNSDL & CDSL for holding the shares in dematerialized form and open for trading. TheCompany has paid fees to the depositories.

BSE Ltd. has since compulsorily delisted shares of the Company w.e.f. 4th July 2018due to non-payment of outstanding listing fees and extortive re-instatement fees of Rs.30.00 lakhs and NSE had followed BSE and had compulsorily delisted shares of the Companyw.e.f. 8th August 2018. The Company has contested the order for delisting of BSE Ltd andNSE in SEBI Appellate Tribunal (SAT) and the appeal is still pending before SAT.

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.

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.net. Further in accordance withthe provisions of Regulation 8 of SEBI (Prohibition of Insider Trading) Regulations 2015the Board of Directors of the Company at their meeting in the previous financial year hasapproved and adopted the code of practices and procedure for fair disclosure ofUn-published Price Sensitive Information and formulated the code of conduct of theCompany.

DISCLOSURES AS PER APPLICABLE ACT AND LISTING AGREEMENT / SEBI (LODR) REGULATIONS2015:

i) Related Party Transactions:

All transaction entered with related parties during the f.y. 2018-19 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 Regulation 23 of SEBI (Listing Obligations & DisclosureRequirements) Regulations 2015 which may have potential conflict of interest with theCompany at large. Accordingly disclosure in Form AOC 2 is not required.

The necessary disclosures regarding the transactions as required in Form AOC 2 aregiven in the notes to accounts. The Company has also formulated a policy on dealing withthe Related Party Transactions and necessary approval of the Audit Committee and Board ofDirectors were taken wherever required in accordance with the Policy. The Company has notentered into any specific contract with related parties.

ii) Number of Board Meetings:

The Board of Directors met 4 (four) times in the financial year 2018-19. The Details ofthe Board meeting and attendance of the Directors are provided in the Corporate GovernanceReport attached as Annexure to this Board's Report.

iii) Composition of Audit Committee:

The Audit Committee under the Chairmanship of Mr. P. Bandyopadhyay in place. Completedetails of the Committee are given in the Corporate Governance Report attached asAnnexure to this Board's Report.

iv) Extracts of Annual Return:

The details forming part of the extract of the Annual Return as provided under section92(3) of the Companies Act 2013 is enclosed as Annexure - 'I' - MGT-9.

It is also placed in the website of the Company at www. superforgings.net.

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 neither given any loans nor given anyguarantee or provided any security in connection with any loan to any other body corporateor person and has also not made any investment in other body corporate and the existinginvestment is within the overall limit of the amount and within the powers of the

Board as applicable to the Company in terms of section 179 and 186 of the CompaniesAct 2013. The particulars of all such loans guarantees and investments are entered inthe register maintained by the Company for the purpose.

viii) Post Balance Sheet events:

There are no material changes in commitments affecting the financial position of theCompany occurred since the end of the financial year 2018-19.

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:

The Nomination and Remuneration Committee of the Board of Directors had laid down thecriteria for evaluation of its own performance the Directors individually as well as theevaluation of working of its various Committee(s).

Evaluation Criteria :

AUTHORITY FOR EVALUATION TARGET PERSON FOR EVALUATION
Nomination and Remuneration Committee (NRC) All Directors (Individually) Board and Committees
a. Non - Independent Directors ( Non- IDs);
Independent Directors' Meeting (IDs) b. Chairperson ( taking into account the views of executive & Nonexecutive Directors);
c. Board as a Whole ; and
d. Committees of Board.
Board of Directors (BOD) Independent Directors (excluding participation of the ID being evaluated)

During the year under review the Board in compliance with the Companies Act 2013 andapplicable Regulations of Securities & Exchange Board of India (Listing Obligationsand Disclosure Requirements) Regulations 2015 has continued to adopt formal mechanismfor evaluating its performance and as well as that of its Committees and individualDirectors including the Chairman of the Board. The exercise was carried out through astructured evaluation process covering various aspects of the Boards functioning such ascomposition of the Board &Committees experience & competencies performance ofspecific duties & obligations governance issues etc. A Separate exercise was carriedout to evaluate the performance of individual Directors including the Board as a wholeand the Chairman who were evaluated on parameters such as their participationcontribution at the meetings and otherwise independent judgments safeguarding ofminority shareholders interest etc.

The evaluation of the Independent Directors was carried out by the entire Board andthat of the Chairman and the NonIndependent Directors were carried out by the IndependentDirectors in their separate meeting held on 12th February 2019.

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 Policy in compliance with the provisions of the Companies Act 2013 read with theRules made therein and the Listing Agreement entered with the stock exchanges (as amendedfrom time to time) is formulated to provide a framework and set standards. The salientfeatures of the policy are as follows:

a. Criteria for appointment and removal of Directors Key Managerial Personnel (KMP)and Senior Management Executives of the Company.

b. Remuneration payable to the Directors KMPs and Senior Management Executives.

c. Evaluation of the performance of the Directors.

d. Criteria for determining qualifications positive attributes and independence of aDirector.

The detailed Nomination & Remuneration Policy of the Company is placed on theCompany's website and can be viewed at www.superforgings.net

xii) Vigil Mechanism (Whistle Blower Policy):

Your Company has formulated a Whistle Blower Policy by virtue of which the Directorsand employees of the Company are encouraged to escalate to the level of the AuditCommittee any issue of concerns impacting and compromising with the interest of theCompany and its stakeholders in any way. The Company is committed to adhere to highestpossible standards of ethical moral and legal business conduct and to open communicationand to provide necessary safeguards for protection of Directors or employees or any otherperson who avails the mechanism from reprisals or victimization for whistle blowing ingood faith.

Details of establishment of the Vigil Mechanism have been uploaded on the Company'swebsite: www.superforgings. net and also set out in the Corporate Governance Reportattached as Annexure to this Board's Report.

xiii) Cost Records:

As per the requirements of the Section 148 of the Act read with the Companies (CostRecords and Audit) Rules 2014 as amended from time to time your Company is required tomaintain cost records and accordingly such accounts are made and records have beenmaintained.

xiv) Internal Complaint Committee:

The Company has complied with provisions relating to the constitution of InternalComplaints Committee under the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013.

SECRETARIAL STANDARDS

Secretarial Standards i.e. SS-1SS-2 and SS-3 relating to 'Meetings of the Board ofDirectors' 'General Meetings' and Dividend respectively to the extent as applicable havebeen duly followed by the Company.

INDUSTRIAL RELATIONS

The industrial relation during the year 2018-19 had been cordial. The Directors take onrecord the dedicated services and significant efforts made by the Officers Staff andWorkers towards the progress of the Company.

SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALSIMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE

There have been no significant & material orders passed by regulators / courts /tribunals impacting going concern status and Company's operations in future.

ACKNOWLEDGEMENT

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.

For and on behalf of the Board of Directors

For SUPER FORGINGS & STEELS LTD.

sd/-
B.N. Modi

Managing Director

(DIN No. 00064993)
sd/-
Date : 13.08.2019 Piyush Modi
Place: Kolkata

Executive Director (DIN No. 00071857)