DIRECTOR'S REPORT TO THE MEMBERS Your Directors present the 24u,Annual Report together with the Audited Statement of Accounts of the Company for the financial year ended 31" March, 2015. FINANCIAL RESULTS: Like earlier years Company's PTA plant is closed this year too. As the plant of the Company is closed for more than 15 years the Company had no manufacturing, trading or service activities during the financial year ended 31s' March, 2015 also and as such no Profit & Loss Account has been prepared for the above financial year and all the expenditure incurred has been added to Capital-Work-In progress Account. However, the Company has prepared financial results in the prescribed format as per Listing Agreement with BSE Limited. PROJECT: Company's plant has been closed since September, 2000 and with the passage of time, inspite of time to time maintenance by the Company and in the absence of any operation since, then, the corrosion is taking place in the plant due to climatic and cyclonic conditions in the area. Company has not issued any shares or debentures to public after its initial public issue in 1994. These funds were fully utilized by March, 1996. Subsequently, due to non-availability of loan fund from banks, plant could not commence production. In order to protect the interest of the shareholders, stake holders, employees and the national assets worth hundreds of Crores of investment, the Company has made necessary security arrangements this year too and company is trying its best through investors to settle the lenders in order to revive the business activity (see report on Management discussion and Analysis. DIVIDEND: Your Directors have not recommended any dividend on equity shares for the year under review as the Company is still at the pre-commencement stage. STATE OF COMPANY'S AFFAIRS: As the plant of the Company is closed for more than 14 years the Company had no manufacturing, trading or service activities during the financial year ended 31s' March, 2015. DETAILS OF SIGNIFICATION AND MATERIAL ORDERS PASSED BY THE REGULATORS / COURTS I TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND THE COMPANY'S OPERATIONS IN FUTURE: In the year under review no material order has been passed by above said authorities impacting the going concerned status. INTERNAL FINANCIAL CONTROL: The Company has internal control system commensurate with the size, scale and complexity of its operation. The Company has appointed Mr. S.K. Khandelwal, Chartered Accountants as the Internal Auditor at a remuneration of Rs. 60000/- p.a. in compliance with section 138 of the Companies Act, 2013. The scope of audit and the outcome of the audit are reviewed by Audit Committee at regular interval. FIXED DEPOSITS: Your Company has not accepted or renewed any deposit under chapter V of the Companies Act, 2013. STATURORY AUDITORS: M/s B. M. Chaturvedi & Co., Chartered Accountants, the Company's Auditors, retire at the conclusion of the ensuing Annual General Meeting. They have given their consent to act as Auditors of the Company if reappointed and have confirmed that their appointment, if made, would be within the prescribed limits under Section 141 of the Companies Act, 2013. As required under clause 49 of the Listing Agreement, the Auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India. AUDITOR'S REPORT: The observations by the Auditors in their report are self-explanatory and, in the opinion of the Board, do not require any further explanation. SHARE CAPITAL: At present we have only one class of shares - equity shares of Rs. 10 each. Our authorized share capital is Rs. 170 Crores divided into 17 Crores equity shares of Rs. 10 each. The issued, subscribed and paid-up capital of the Company is Rs. 161.86 Crores as on March 31,2015. EXTRACT OF THE ANNUAL RETURN: The details forming part of the extract of the Annual Return in Form MGT- 9 is annexed herewith as Annexure - "A" CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION: Your Company has taken sufficient care in the technical design of your PTA plant to optimize the energy consumption to the maximum. After achieving commercial production, based on our actual experience, improvements to the process and technology will be made through our Technical Services and R & D Departments towards further optimization. FOREIGN EXCHANGE EARNINGS & OUTGO: The Company has not utilized any foreign exchange and has not earned any foreign exchange during the financial year ended 316' March, 2015. CORPORATE SOCIAL RESPONSIBILITY: The Provision with respect to Corporate Social Responsibility is not attracted to the Company as the PTA plant of the Company is still at the pre-commencement stage and has not earned any profit / income. PERSONNEL: There is no employee covered pursuant to Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended, hence, no particulars are given. DIRECTORS: As per Section 149 and other applicable provisions of the Companies Act, 2013,your Directors are seeking appointment of Mr. Jaffar Imam as Independent Directors for four consecutive years for a term upto March 31,2019. Details of the proposal for appointment of Mr. Jaffar Imam are mentioned in the Explanatory Statement under Section 102 of the Companies Act, 2013 of the Notice of the 24"Annual General Meeting. Mr. Jaffar Imam has made a declaration that he meets the criteria of independence as provided in sub-section (6) of 149 of the Companies Act, 2013. Ms. Abha Ravi was appointed as the Additional Director as per section 149 (1) read with Rule 3 of Chapter XI of the Companies Act, 2013 with effect from March 25,2015. Ms. Abha Ravi holds office up to the date of ensuing Annual General Meeting. Her candidature for appointment as a Director liable to retire by rotation has been included in the Notice convening the forthcoming Annual General Meeting of the Company. In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company Mr. Suresh V. Chaturvedi Director of the company retires by rotation at the ensuing Annual General Meeting and being eligible offer himself for re-appointment. Details about Suresh V. Chaturvedi are given in the Notice of the ensuring Annual General Meeting sent to the shareholders along with the Annual Report. DECLARATION BY AN INDEPENDENT DIRECTOR(S) AND REAPPOINTMENT, IF ANY: A declaration by an Independent Directors have been received stating that they meet the criteria of independence as provided in sub-section (6) of Section 149 of the Companies Act, 2013. An independent director shall hold office for a maximum term up to five consecutive years on the Board of a Company. FORMAL ANNUAL EVALUATION: Pursuant to the provisions of the Companies Act, 2013 and clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, the Directors individually as well as evaluation of the working of its Audit, Nomination and Remuneration Committee. NUMBER OF MEETINGS OFTHE BOARD OF DIRECTORS: During the year 5 Board Meetings and 5 Audit Committee Meetings were conveyed and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013. AUDIT COMMITTEE: The Audit Committee acts as a link between the statutory an internal auditors and the Board of Directors. Its purpose is to assist the Board in fulfilling its oversight responsibilities of monitoring financial reporting processes, reviewing the Company's established systems and processes for internal financial controls, governance and reviewing the Company's statutory and internal audit activities. The Committee is governed by a Charter which is in line with the regulatory requirements mandated by the Companies Act, 2013 and Clause 49 of the Listing Agreement. STAKEHOLDER RELATIONSHIP COMMITTEE: Your Company believes that its members are amongst its most important stakeholder. The Stakeholder Relationship Committee of the Company consists of Mr. Suresh V. Chaturvedi, Mr. Jaffar Imam and Mr. G.S. Dahotre. NOMINATION AND REMUNERATION COMMITTEE: The Board has, on the recommendation of the Nomination and Remuneration Committee framed a policy for selection and appointment of Directors, senior management and their remuneration. The Nomination and Remuneration Committee consist of Mr. G.S. Dahotre, Mr. Jaffar Imam and Mr. I.G. Mehrotra. VIGIL MECHANISM I WHISTLE BLOWER POLICY: The Company has implemented a Whistle Blower Policy pursuant to which Whistle Blowers can raise concerns relating to Reportable Matters (as defined in the policy) such as breach of SVC Superchem Code of Conduct, fraud,bribery, corruption, employee misconduct, illegality, health & safety, environmental issues and wastage/misappropriation of bank funds/assets, etc. Further, the mechanism adopted by the Company encourages the Whistle Blower to report genuine concerns or grievances and provides for adequate safe guards against victimization of Whistle Blower who avail of such mechanism and also provides for direct access to the Chairman of the Audit Committee, in exceptional cases. The functioning of the Vigil mechanism is reviewed by the Audit Committee from time to time. None of the Whistle Blowers have been denied access to the Audit Committee of the Board. The details of the Whistle Blower Policy are available on the website of the Company i.e. www.svcsuperchemltd.com. CONTRACT/ARRAGEMENT WITH RELATED PARTIES: The Company has not entered into any transaction during the financial year with the related party in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have potential conflict with the interest of the Company. MANAGERIAL REMUNERATION: In order to control expenses as advised by the shareholders in the earlier Annual General Meeting, the Company did not appoint any Managing Director / Whole-time Director or manager as required under section 197 of the Companies Act, 2013. SECRETARIAL AUDIT REPORT: Pursuant to provisions of section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Companies has appointed Mr. R.N. Gupta, a practicing Company Secretaries in practice to undertake the Secretarial Audit of the Company. The report of the Secretarial Audit is annexed herewith as "Annexure B". MANAGEMENT, DISCUSSION AND ANALYSIS: Separate section on Management, discussion and analysis forming part of the Directors' report is annexure as Annexure "C". FRAUD REPORTING: During the year under review the Company has not reported to the Audit Committee / Board fraud of any nature. DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 In order to prevent sexual harassment of women at work place a new act The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 has been notified on 9th December, 2013. Under the said Act every company is required to setup an Internal Complaints Committee to look into complaints relating to sexual harassment at work place of any women employee. Company has adopted a policy for prevention of Sexual Harassment of Women at workplace and has set up Committee for implementation of said policy. During the year, Company has not received any complaint of sexual harassment. DIRECTORS' RESPONSIBILITY STATEMENT: As required u/s 134 (5) of the Companies Act, 2013, the Directors confirm that; I. In the preparation of the annual accounts for the year ended 31s' March 2015, the applicable accounting standards have been followed along with explanation relating to material departures; II. They have selected such accounting policies and applied them consistently except for the non-provision of interest on all secured loans as mentioned in Note No. 5 (g) forming part of the Balance Sheet and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on 31" March 2015; III. The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and IV. The Directors have prepared the annual accounts for the financial year ended 31s' March, 2015 on a going concern basis. V. The Directors, had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively. TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND: Your Company did not have any funds lying unpaid or unclaimed for a period of seven years. Therefore there were no funds which were required to be transferred to Investor Education and Protection Fund (IEPF). CORPORATE GOVERNANCE: The Company has taken adequate steps to ensure that all mandatory provisions of Corporate Governance, in terms of Clause 49 to the Listing Agreements with Stock Exchange, are complied with. A separate report on Corporate Governance is being incorporated as a part of the Annual Report along with a certificate from the Auditors of the Company regarding Compliance of the conditions of Corporate Governance which is annexed to the Directors' Report. RECONCILIATION OF SHARE CAPITAL AUDIT REPORT: As directed by the Securities and Exchange Board of India (SEBI), Reconciliation of Share Capital is being carried out at the specified periodicity by the practicing Company Secretary. The findings of the Reconciliation of Share Capital Audit are regularly taken at the Board Meeting, besides submitting it to the Bombay Stock Exchange Limited. CODE OF CONDUCT: The Board has adopted, the Code of Ethics and Business for the Non- Executive Directors as also for the employees and other Members of Senior Management. The said code has been communicated to all the Directors and Members of the Senior Management. Board Members and Senior Management personnel have affirmed compliance with the Code forthe financial year 2014-15. CEO/CFO CERTIFICATION As per Sub- clause VIII of Clause 49 of the Listing Agreement, there is no CEO in the Company however, the Company has obtained the CFO Certification taken on record at the Board meeting held on 23"1 May, 2015 for the financial year ended 31s' March, 2015 INSIDER TRADING: The Company has adopted a Code of Conduct for Prevention of Insider Trading in accordance with the requirements of SEBI (Prohibition of Insider Trading) Regulations, 2015 and Companies Act, 2013 with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code requires pre-clearance for dealing in the Company shares beyond threshold limits. Further, it prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The disclosures obtained under the code are submitted to the Bombay Stock Exchange Limited, Mumbai from time to time. The Company regularly follows the system of Share Trading Window mechanism as per the Insider Regulation. DEMATERIALISATION OF SHARES: As part of its efforts to provide better investor services, your Company has admitted its equity in the Depository System of the National Securities Depositories Ltd. (NSDL) and Central Depository Services (India) Ltd. (CDSL) since 7.3.2000 and 23.3.2000 respectively and has offered investors the facility to hold the shares in electronic form and enter into script less trades. Your Company has always paid utmost attention to improve investor's relationship. As on 31s' March, 2015 approx. 74.84 % of the total shares of the Company has already been dematerialized. By order of the Board of Director's For SVC Superchem Ltd. G.S. Dahotre DIRECTOR Jaffar Imam DIRECTORS Place: Mumbai. Date: 3rd August, 2015 |