REPORT ON CORPORATE GOVERNANCE
1. COMPANY'S PHILOSOPHY ON CORPORATE GOVERNANCE
The Company in terms of Clause 49 of the Listing Agreement with the Stock Exchanges the Company has adopted practice of Corporate Governance for ensuring and protecting the rights of its shareholders by means of transparency, integrity, accountability and checks at the different levels of the management of the Company.
The appointment of all the Independent Directors of the Company has been confirmed by the shareholders in the previous Annual General Meeting of the Company held on 26th September, 2014 for a term of consecutive five years i.e. upto March 31, 2019 and they shall not be liable to retire by rotation. They meet all the criteria's as provided in Companies Act, 2013 and Clause 49 of the Listing Agreement. The appointment letters issued to every Independent Directors sets out their roles, responsibilities, fiduciary duties in the Company and the expectation of the Board from them along with other terms of their appointment.
They have taken active part at the Board and Committee Meetings by providing valuable guidance to the Management on various aspects of business, policy direction, governance, compliance etc. and play critical role on strategic issues, which enhances the transparency and add value in the decision making process of the Board of Directors.
The Company in accordance with Clause 49 of the Listing Agreement with the Stock Exchanges, has taken initiatives to familiarize its Independent Directors (IDs) with the Company, their roles, rights, responsibilities in the company, nature of the industry in which the company operates, business model of the company, etc., through various programs posted on the website of the Company: www.superforgings.in
The Board has carried out performance evaluation of Independent Directors and recommended to continue the term of their appointment.
SEPARATE MEETING OF THE INDEPENDENT DIRECTORS:
As stipulated by the Code of Independent Directors under the Companies Act, 2013 and the Listing Agreement, the Company has facilitated holding of a separate meeting of the Independent Directors, which held on February 12, 2015, and inter alia has reviewed;
i. the performance of non-independent Directors and the Board as a whole;
ii. the performance of the Chairperson of the Company, taking into account the views of executive Directors and nonexecutive Directors; and
iii. assessed the quality, quantity and timeliness of flow of information between the Company management and the Board that is necessary for the Board to effectively and reasonably perform their duties.
The Independent Directors also reviewed the quality, content and timeliness of the flow of information between the Management and the Board and it's Committees which is necessary to effectively and reasonably perform and discharge their duties.
c) Number of Board meetings held and dates on which held
During the financial year 2014-15, 4 (four) Board meetings were held on 29.05.2014, 13.08.2014, 13.11.2014 and 12.02.2015. The gap between any two consecutive meetings did not exceed one hundred and twenty days in terms of the Listing Agreement with the Stock Exchange.
3. CODE OF CONDUCT
The Company has framed Code of Conduct for all Board Members, Key Managerial Personnel and other Senior Executives of the company who have affirmed compliance with the same as on 31st March, 2015. Duties of the Independent Directors have suitably been incorporated in the code. The Code of Conduct is displayed on the website of the Company, www.superforgings.com
In pursuance of the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations 1992 (as amended), the Board has approved the 'Code of Conduct for prevention of Insider Trading' and entrusted the Audit Committee to monitor the compliance of the code. The Board at its meeting held on 27th May, 2015 has approved and adopted the SEBI (Prohibition of Insider Trading) Regulations, 2015 relating to the code of practices and procedure for fair disclosure of Unpublished Price Sensitive Information and formulated the code of conduct of the Company.
Whistle Blower (Vigil Mechanism) Policy
As per the requirements of the Companies Act, 2013 and the revised Clause 49 of the Listing agreement, the Company had established a mechanism for employees to report concerns for unethical behavior, actual or suspected fraud, or violation of the code of conduct or ethics. It also provides for adequate safeguards against the victimization of employees who avail the said mechanism. This policy also allows the direct access to the Chairperson of the Audit Committee. The Audit Committee is committed to ensure the flawless work environment by providing a platform to report any suspected or confirmed incident of fraud / misconduct.
4. AUDIT COMMITTEE
The Audit Committee was entrusted with review of quarterly and annual financial statements before submission to the Board, review of observations of auditors and to ensure compliance of internal control systems authority for investigation and access for full information and external professional advice for discharge of the functions delegated to the Committee by the Board. All the members of the Committee are financially literate.
The scope of the audit committee, inter alia, includes:
a) Review of the Company's financial reporting process, the financial statements (quarterly & yearly) and financial / risk management policies;
b) Review of the adequacy of the internal control systems and finance of the internal audit team;
c) Discussions with the management and the external auditors, the audit plan for the financial year and joint post-audit and review of the same.
d) Recommendation for appointment, remuneration & terms of Appointment of Auditors, etc.
Terms of reference
The present terms of reference / scope and function of the Audit Committee are as follows:
01. Oversight of the company's financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible;
02. Recommendation for appointment, remuneration and terms of appointment of auditors of the company;
03. Approval of payment to statutory auditors for any other services rendered by the statutory auditors;
04. Reviewing, with the management, the annual financial statements and auditor's report thereon before submission to the board for approval, with particular reference to:
a. Matters required to be included in the Director's Responsibility Statement to be included in the Board's report in terms of clause (c) of sub-section 3 of section 134 of the Companies Act, 2013
b. Changes, if any, in accounting policies and practices and reasons for the same
c. Major accounting entries involving estimates based on the exercise of judgment by management
d. Significant adjustments made in the financial statements arising out of audit findings
e. Compliance with listing and other legal requirements relating to financial statements
f. Disclosure of any related party transactions
g. Qualifications in the draft audit report
05. Reviewing, with the management, the quarterly financial statements before submission to the board for approval;
6. Reviewing, with the management, the statement of uses / application of funds raised through an issue (public issue, rights issue, preferential issue, etc.), the statement of funds utilized for purposes other than those stated in the offer document / prospectus / notice and the report submitted by the monitoring agency monitoring the utilisation of proceeds of a public or rights issue, and making appropriate recommendations to the Board to take up steps in this matter;
7. Review and monitor the auditor's independence and performance, and effectiveness of audit process;
08. Approval or any subsequent modification of transactions of the company with related parties;
09. Scrutiny of inter-corporate loans and investments;
10. Valuation of undertakings or assets of the company, wherever it is necessary;
11. Evaluation of internal financial controls and risk management systems;
12. Reviewing, with the management, performance of statutory and internal auditors, adequacy of the internal control systems;
13. Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit;
14. Discussion with internal auditors of any significant findings and follow up there on;
15. Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the board;
16. Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern;
17. To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors;
18. To review the functioning of the Whistle Blower mechanism;
19. Approval of appointment of CFO (i.e., the whole-time Finance Director or any other person heading the finance function or discharging that function) after assessing the qualifications, experience and background, etc. of the candidate;
20. Carrying out any other function as is mentioned in the terms of reference of the Audit Committee.
The Audit committee is empowered to investigate any activities within its terms of reference, seek information from employees, obtain outside legal or other professional advice or secure attendance of outside experts of relevant field as and when necessitated. The Audit Committee also reviews such matters as referred to it by the Board.
b. Remuneration Policy :
The Company follows the policy to fix remuneration of Managing Director & Whole Time Directors by taking into account the financial position of the Company, trend in the industry, qualification, experience, past performance and past remuneration of the respective Directors in the manner to strike a balance between the interest of the Company and its Shareholders.
Sitting Fees: Presently, the Non-Executive Directors do not receive any remuneration from the Company.
d. Terms of reference
The terms of reference of the Nomination & Remuneration Committee are as follows:
i. To identify persons who are qualified to become Directors and who may be appointed in the Senior management in accordance with the criteria laid down and to recommend to the Board their appointment, terms of appointment and/or removal;
ii. To formulate a criteria for determining the qualification, positive attitudes, independence of a Director and evaluation of Independent Directors and the Board;
iii. To evaluate every Directors performance;
iv. To recommend to the Board a policy, relating to the remuneration for the Directors, key managerial persons and other employees;
v To ensure that the level of composition of remuneration is reasonable and sufficient to attract, retain and motivate directors of the quality required to run the Company successfully;
vi. To ensure that the relationship of remuneration to performance is clear and meets the appropriate performance benchmarks;
vii. To ensure that the remuneration to directors, key managerial personnel and senior management involves a balance between fixed and incentive pay reflecting short and long term performance objectives appropriate to the working of the company and its goals;
viii. To devise a policy on Board diversity.
ix. To Carry out any other function as is mandated by the Board of Directors of our Company or prescribed by the Listing Agreement, as amended, from time to time.
x. To invite any employee or such document as it may deem fit for exercising of its functions
xi. To obtain such outside or professional advice as it may consider necessary to carry out its duties
e. Policy for evaluation of Independent Directors and the Board :
The following criteria may assist in determining how effective the performances of the Directors have been:
- Leadership & Managerial abilities.
- Contribution to the corporate objectives & plans.
- Communication of expectations & concerns clearly with subordinates.
- Obtaining adequate, relevant & timely information from external sources.
- Review & approval of strategic & operational plans of the Company, its objectives and budgets.
- Regular monitoring of corporate results against projection.
- Identification, monitoring & mitigation of significant corporate risks.
- Assessment of policies, structures & procedures followed in the company and their significant contribution to the same.
- Direct, monitor & evaluate KMPs, senior officials.
- Regularity in attending meetings of the Company and inputs therein.
- Review & Maintenance of corporation's ethical conduct.
- Ability to work effectively with rest of the Board of Directors.
- Commitment to the promotion of equal opportunities, health and safety in the workplace.
6. SHARE TRANSFER COMMITTEE
Ms. Khusboo Goel (Agarwal), Company Secretary, acts as the Secretary to the Share Transfer Committee.
The Share Transfer Committee meet as and when required and is entrusted with transfer / transmission of shares, issue of duplicate share certificates, change of name / status, transposition of names, sub-division / consolidation of share certificates, dematerialisation / re-materialisation of shares, etc.
7. STAKEHOLDERS RELATIONSHIP COMMITTEE
The Committee presently comprises of two non-executive and independent members viz., Mr. M. L. Giria & Mr. P. Bandyopadhyay and one Executive Director viz. Mr. Piyush Modi to look into redressing of shareholder's and investors grievances like non-transfer of shares, non receipt of Balance Sheet, etc. Mr. M.L. Giria, Non- executive Member is the Chairman of the Committee.
Ms. Khusboo Goel (Agarwal), Company Secretary of the Company is the Compliance Officer of the Committee.
The Committee oversees the disposal of all complains / grievances of shareholders like non-transfer of Shares, non-receipt of Annual Report, non-receipt of declared Dividends, dematerialization & re-materialisation of Shares, etc.
No request for Share transfer remains pending for registration for more than 15 days. No complaint / query is received by the Company during the financial year and no complaint is pending as on 31st March, 2015.
a. Disclosures on materially significant related party transactions i.e. transactions of the Company of material nature, with its promoters, the Directors or the management, their subsidiaries or relatives, etc. that may have potential conflict with the interests of the Company at large:
None of the transactions with any of the related parties were in conflict with the interest of the Company.
b. Details of non-compliance by the Company, penalties, structures imposed on the Company by Stock Exchanges or Securities and Exchange Board of India or any Statutory Authority, on any matter related to the capital markets, during the last three years :
The trading of the shares of the Company are continued to be under suspension in the National Stock Exchange and Bombay Stock Exchange. The Company has been regularly complying with all the listing requirements of the Stock Exchanges.
c. Whistle Blower Policy :
The Whistle Blower policy of the Company is in place and the Company not denied access to Audit Committee by any personnel of the Company.
d. Accounting Treatment in preparation of financial statement :
The Company has followed the guidelines of accounting standards as prescribed by the Institute of Chartered Accountants of India in preparation of financial statement.
e. Subsidiary Company :
The Company does not have any material non-listed Indian Subsidiary as defined in Clause 49 of the Listing Agreement.
f. Risk Management :
The Company has identified risk involved in respect to its products, quality, cost, location and finance. It has also adopted the procedures / policies to minimize the risk and the same are reviewed and revised as per the needs to minimize and control the risk.
g. CEO / CFO Certification
The CEO & CFO certification as required under Clause 49 is annexed hereto which forms part of this report.
h. Management Discussion and Analysis Report
The Management Discussion and Analysis Report as required under Clause 49 is annexed hereto which forms part of this report.
10. DETAILS OF DIRECTORS SEEKING APPOINTMENT / RE-APPOINTMENT
The details of Directors seeking appointment / re-appointment as required under the clause 49(VIII)(E)(1) of the Listing Agreement with the Stock Exchanges is given in annexure to the notice which forms part of this Report. The disclosure of relationships between directors interse as required as per Clause 49(VIII)(E) is hereunder.
11. MEANS OF COMMUNICATION
Un-audited financial results on quarterly basis and limited review by the auditors in the prescribed format are taken on record by the Board of Directors at its meeting within the prescribed time of the close of every quarter and the same are furnished to all the Stock Exchanges where the Company's shares are listed. The results are also published within 48 hours in the Newspapers. The quarterly un-audited financial results are published in the Financial Express in English and in Dainik Lipi in Bengali language. The financial results are also displayed on the website of the Company, www.superforging.com
Shares of your Company are listed on The Calcutta Stock Exchange Association Ltd., Kolkata, Bombay Stock Exchange Ltd., Mumbai and The National Stock Exchange of India Ltd., Mumbai. The name and address of the respective Stock Exchanges and the Company's Stock Code are given below.
1. The Calcutta Stock Exchange Ltd., 7, Lyons Range, Kolkata - 700 001 Stock Code : 10029029
2. Bombay Stock Exchange Limited, 25, P. J. Towers, Dalal Street, Mumbai - 400 001
Stock Code : 513277
3. National Stock Exchange of India Ltd. Exchange Plaza, 5th floor, Plot No. C/1, 'G' Block, Bandra-Kurla Complex, Bandra (E), Mumbai - 400 051
Stock Code : SUPERFORGE
Note : The Company, pursuant to the approval of Shareholders, has applied for de-listing of the Shares of the Company from the Calcutta and Bombay Stock Exchanges. Confirmation to de-listing is awaited from both the Stock Exchanges.
13. GENERAL INFORMATIONS FOR MEMBERS
Annual General Meeting : 24th day of September, 2015 at 11.30 A. M.
a. (Date, Time & Venue) ‘Ballygunge Institute’ 171/2D, Rashbehari Avenue, Kolkata - 700 019
b. Dividend payment : Directors have not recommended any dividend on equity Shares for the Financial Year ended on 31.3.2015
c. Date of Book Closure : 19th September, 2015 to 24th September, 2015 (both days inclusive)
d. Financial Year : April-March
N.T. denotes ‘No Trading’ in the Stock Exchange due to non-functional of trading platform of the Stock Exchange.
f. Performance in comparison to broad based indices: No comparison to broad based indices such as BSE Sensex / CRISIL Index, etc. could be drawn since trading at National and Bombay Stock Exchanges is suspended and there was no trading in the Calcutta Stock Exchange during the financial year.
g. Registrar & Share Transfer Agents : C B Management Services (P) Ltd. P-22, Bondel Road, Kolkata - 700 019 Tel : 033 2280 6692 / 22870263 Fax : 033 4011 6739 E-mail : email@example.com
h. Shares Transfer System : Share Transfer System is entrusted to the Registrar and Share Transfer Agents. Transfer Committee is empowered to approved the Share Transfers. Transfer Committee Meeting is generally held as and when required. The Share Transfer, Issue of duplicate certificate, etc. is endorsed by Directors/ Executives/Officers as may be authorised by the Transfer Committee. Grievances received from members and miscellaneous correspondence are processed by the Registrars within 15 days.
k. Dematerialisation of Shares : ISIN : INE 661A01011
44.90% and 6.18% of the total equity share capital are held in dematerialized form with National Securities Depository Ltd. and Central Depository Services (India) Ltd., respectively as on 31.03.2015
l. Outstanding Instruments : The Company has not issued any GDRs / ADRs /Warrants or any convertible Instrument. As such, there is no impact on Equity of the Company.
m. Plant Location :
Unit-1 : 62/D/2, J. N. Mukherjee Road, Ghusuri, Howrah (W.B.)
Unit-2 : 15/2, Belur Road, Liluah, Howrah (W.B.)
Dankuni : Manoharpur, Dankuni, Dist. Hooghly (W.B.)
Bhadreshwar : NH – 2, Delhi Road, Village – Dhobapukur, P. O.
Bighati, P.S. Bhadreshwar, District - Hooghly (W.B.)
Chennai Plot No. 35B/3, Developed Plot, Industrial Estate,
Unit : Ambattur, Chennai 600 058
n. Address for Correspondence : SUPER FORGINGS & STEELS LTD., 6, Lyons Range, Kolkata - 700 001
o. Contact Person : Ms. Khusboo Goel (Agarwal), Company Secretary
Mandatory / Non-mandatory provisions of the Corporate Governance
The Company has complied with all the applicable mandatory requirements of the Clause 49 of the Listing Agreement and has complied with the following non-mandatory requirements of the aforesaid clause :- Reporting of Internal Auditor : The Internal Auditors report directly to the Audit Committee.
The Company has taken cognizance of other non mandatory requirements as set out in clause 49 of the Listing Agreement and shall consider adopting the same at an appropriate time