TO THE MEMBERS
Your Directors present the 26 Annual Report together with the Audited Statement ofAccounts of the Company for the financial year ended 31 March 2017.
Like earlier years Company's PTA plant is closed this year too. As the plant of theCompany is closed for more than 15 years the Company had no manufacturing trading orservice activities during the financial year ended 31 March 2017 and as such no Profit& Loss Account has been prepared for the above financial year and all the expenditureincurred has been added to Capital-work-in progress Account. However the Company hasprepared and submitted financial results to BSE in the prescribed format as per Regulation33 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
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 operationsince then the corrosion is taking place in the plant due to climatic and cyclonicconditions in the area. Company has not issued any shares or debentures to public afterits 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 commenceproduction. In order to protect the interest of the shareholders stake holders employeesand the national assets worth hundreds of Crores of investment the Company has madenecessary security arrangements this year too and Company is trying its best throughinvestors to settle the lenders in order to revive the business activity see report onManagement Discussion and Analysis (Annexure - C).
Your Directors have not recommended any dividend on equity shares for the year underreview 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 15 years the Company had nomanufacturing trading or service activities during the financial year ended 31 March2017.
DETAILS OF SIGNIFICATION AND MATERIAL ORDERS PASSED BY THE REGULATORS / COURTS /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 authoritiesimpacting the going concerned status.
INTERNAL FINANCIAL CONTROL (IFC):
The Company has internal control system commensurate with the size scale andcomplexity of its operation. The Company has appointed Mr. S.K. Khandelwal CharteredAccountants as the Internal Auditor at a remuneration of Rs. 60000/- p.a. in compliancewith section 138 of the Companies Act 2013. The scope of audit -and the outcome of theaudit are reviewed by Audit Committee at regular interval.
We have not accepted any fixed deposit and as such no amount of principal or interestwas outstanding as on the date of balance sheet.
M/s. B.M. Chaturvedi & Co. Chartered Accountants (Firm Registration Number:017607) who are the Statutory Auditors of the Company will hold office up to the ensuingAnnual General Meeting. As per the Companies Act 2013 a new firm Chaturvedi SK &Fellows Chartered Accountants (ICAI Firm Registration No. 112627W) has been recommendedfor appointment as Statutory Auditors of the Company for a term of five years from theconclusion of the forthcoming Annual General Meeting of the Company subject toratification by the shareholders every year. They have confirmed their eligibility underSection 141 of the Act and the Rules framed thereunder for their appointment as Auditorsof the Company.
The observations by the Auditors in their report are self-explanatory and in theopinion of the Board do not require any further explanation.
At present we have only one class of shares i.e. equity shares of Rs. 10 each. Ourauthorized share capital is Rs. 170 Crores divided into 17 Crores equity shares of Rs. 10each. The issued subscribed and paid-up capital of the Company is Rs. 161.86 Crores as onMarch 31 2017.
EXTRACT OF THE ANNUAL RETURN:
The details forming part of the extract of the Annual Return in Form MGT-9 is annexedherewith as Annexure "A"
CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION:
Your Company has taken sufficient care in the technical design of your PTA plant tooptimize the energy consumption to the maximum. After achieving commercial productionbased on our actual experience improvements to the process and technology will be madethrough 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 foreignexchange during the financial year ended 31 March 2017.
CORPORATE SOCIAL RESPONSIBILTIY:
The Provision with respect to Corporate Social Responsibility is not attracted to theCompany as the PTA plant of the Company is still at the pre-commencement stage and has notearned any profit / income.
In accordance with the provisions of the Companies Act 2013 and the Articles ofAssociation of the Company Mr. Suresh V. Chaturvedi Director of the company retires byrotation at the ensuing Annual General Meeting and being eligible offer himself forre-appointment. Details about Mr. Suresh V. Chaturvedi are given in the Notice of theensuring Annual General Meeting sent to the shareholders along with the Annual Report.
DECLARATION BY AN INDEPENDENT DIRECTOR(S) AND RE- APPOINTMENT IF ANY:
A declaration by an Independent Directors have been received stating that they meet thecriteria of independence as provided in sub-section (6) of section 149 of the CompaniesAct 2013. An independent director shall hold office for a maximum term upto fiveconsecutive years on the Board of a Company.
FORMAL ANNUAL EVALUATION:
Pursuant to the provisions of the Companies Act 2013 and Regulations 19 of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the Board has carriedout an annual performance evaluation of its own performance the Directors individually aswell as evaluation of the working of its Audit Nomination and Remuneration Committee.
NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS:
During the year 5 Board Meetings and 4 Audit Committee Meetings were conveyed and held.The details of which are given in the Corporate Governance Report. The intervening gapbetween the Meetings was within the period prescribed under the Companies Act 2013.
The Audit Committee acts as a link between the statutory and internal auditors and theBoard of Directors. Its purpose is to assist the Board in fulfilling its oversightresponsibilities of monitoring financial reporting processes reviewing the Company'sestablished systems and processes for internal financial controls governance andreviewing the Company's statutory and internal audit activities. The Committee is governedby a Charter which is in line with the regulatory requirements mandated by the CompaniesAct 2013 and Regulation 18 of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015.
STAKEHOLDER RELATIONSHIP COMMITTEE:
Your Company believes that its members are amongst its most important stakeholder. TheStakeholder Relationship Committee of the Company consists of Mr. Suresh V. Chaturvedi asChairman Mr. Jaffar Imam and Mr. G.S. Dahotre members. During the year the StakeholdersRelationship Committee met for 18 times.
NOMINATION AND REMUNERATION COMMITTEE:
The Board has on the recommendation of the Nomination and Remuneration Committeeframed a policy for selection and appointment of Directors Key Managerial Personal andtheir remuneration. The Nomination and Remuneration Committee consist of Mr. G.S. Dahotreas chairman Mr. Jaffar Imam and Mr. I.G. Mehrotra as members. This Committee has beenconstituted as per terms or provision of the Companies Act and under regulation of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015. During the year theCommittee met once to appoint Company Secretary of the Company.
VIGIL MECHANISM / WHISTLE BLOWER POLICY:
The Company has implemented a Whistle Blower Policy pursuant to which Whistle Blowercan raise concerns relating to Reportable Matters (as defined in the policy) such asbreach of Code of Conduct fraud bribery corruption employee misconduct illegalityhealth and& safety environmental issues and wastage/ misappropriation of bankfunds/assets etc. Further the mechanism adopted by the Company encourages the WhistleBlower to report genuine concerns or grievances and provides for adequate safe guardsagainst victimization of Whistle Blower who can avail such mechanism and has directaccess to the Chairman of the Audit Committee in exceptional cases.
The functioning of the Vigil Mechanism is reviewed by the Audit Committee from time totime. None of the Whistle Blower has been denied access to the Audit Committee of theBoard. The details of the Whistle Blower Policy are available on the website of theCompany i.e. www.svcsuperchemltd.com
CONTRACT / ARRAGEMENT WITH RELATED PARTIES:
All related party transactions that were entered during the financial year were inordinary course of the business of the company and were on arm's length basis. There areno materially significant related party transactions made by the Company with PromotersDirectors Key Managerial Personnel or other designated persons which may have potentialconflict with the interest of the Company. The policy on materiality of Related PartyTransactions is uploaded on the website of the company.
Your Company has an elaborate Risk Management Framework which is designed to enablerisks to be identified assessed and mitigated appropriately. The Board is entrusted withthe responsibility to assist in (a) Overseeing and approving the Company's enterprise widerisk management framework; and (b) Overseeing that all the risks that the organizationfaces such as financial credit market liquidity security property IT legalregulatory reputational and other risks have been identified and assessed and there is anadequate risk management infrastructure in place capable of addressing those risks.
INTERNAL FINANCIAL CONTROLS:
The Company has in place adequate internal financial controls with reference tofinancial statement. It has established an integrated framework for managing risks andinternal controls. The internal financial controls have been documented and embedded inthe business processes. Such controls have been assessed during the year under review andwere operating effectively.
In order to control expenses as advised by the shareholders in the earlier AnnualGeneral Meeting the Company did not appoint any Managing Director / Whole-time Directoror manager as required under section 197 of the Companies Act 2013.
There is no employee covered pursuant to section 197 read with rule 5(2) of Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014. Hence no particularsare given.
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 Company hasappointed Ranjeet Kumar Sharma & Associates a practicing Company Secretaries inpractice to undertake the Secretarial Audit of the Company. The report of the SecretarialAudit is annexed herewith as "Annexure B".
MANAGEMENT DISCUSSION AND ANALYSIS:
Separate section on Management discussion and analysis forming part of the Directors'report is annexed as Annexure "C".
During the year under review the Company has not reported fraud of any nature to theAudit Committee or Board.
DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION ANDREDRESSAL) ACT 2013
In order to prevent sexual harassment of women at work place a new act the SexualHarassment of Women at workplace (Prevention Prohibition and Redressal) Act 2013 hascome into force on 9th December 2013. Under the said Act every company is required toset up Internal Complaints Committee to look into complaints relating to sexual harassmentof any woman employee at work place.
The Company has adopted a policy for prevention of Sexual Harassment of Women atworkplace and has set up Committee for implementation of said policy. During the yearCompany 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 31 March 2017 theapplicable accounting standards have been followed along with explanation relating tomaterial departures;
II. They have selected such accounting policies and applied them consistently exceptfor the non-provision of interest on all secured loans as mentioned in Note No. 16 formingpart of the Balance Sheet and made judgments and estimates that are reasonable and prudentso as to give a true and fair view of the state of affairs of the Company as on 31 March2017;
III. The Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities; and
IV. The Directors have prepared the annual accounts for the financial year ended 31March 2017 on a going concern basis.
V. They have laid down 'internal financial controls' to be followed by the Company andthat such internal financial controls are adequate and were operating effectively.
VI. The directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and 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 sevenyears. Therefore there were no funds which were required to be transferred to InvestorEducation and Protection Fund (IEPF).
The Company has taken adequate steps to ensure that all mandatory provisions ofCorporate Governance in terms of Regulation 34 of the Securities Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 are complied with. Aseparate report on Corporate Governance is being incorporated as a part of the AnnualReport along with a certificate from the Auditors of the Company regarding Compliance ofthe 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 (Depositories andparticipants) Regulations1996 Reconciliation of Share Capital is being carried out atthe specified periodicity by the practicing Company Secretary. The findings of theReconciliation of Share Capital Audit are regularly taken at the Board Meeting besidessubmitting it to the Bombay Stock Exchange Limited.
CODE OF CONDUCT:
The Board has adopted the Code of Ethics and Business for the Non-Executive Directorsas also for the employees and other members of Senior Management. The said code has beencommunicated to all the Directors and Members of the Senior Management. Board members andsenior management personnel have affirmed compliance with the Code for the financial year2016-17.
CEO / CFO CERTIFICATION:
As there is no CEO in the Company CFO of the Company have certified to the Board ofDirectors inter alia the accuracy of financial statements and adequacy of internalcontrols for the financial reporting as required under Regulation 17(8) of the ListingRegulations for the year ended 31 March 2017.
The Company has adopted a Code of Conduct for Prevention of Insider Trading inaccordance with the requirements of SEBI (Prohibition of Insider Trading) Regulations2015 and Companies Act 2013 with a view to regulate trading in securities by theDirectors and designated employees of the Company. The Code requires pre-clearance fordealing in the Company's shares beyond threshold limits. Further it prohibits thepurchase or sale of Company's shares by the Directors and the designated employees whilein possession of unpublished price sensitive information in relation to the Company andduring the period when the Trading Window is closed.
The disclosures obtained under the code are submitted to the Bombay Stock ExchangeLimited from time to time. The Company regularly follows the system of Share TradingWindow mechanism as per the Insider Regulation.
DEMATERIALISATION OF SHARES:
As part of its efforts to provide better investor services your Company has admittedits equity in the Depository System of the National Securities Depositories Ltd. (NSDL)and Central Depository Services (India) Ltd. (CDSL) since 07.03.2000 and 23.03.2000respectively and has offered investors the facility to hold the shares in electronic formand enter into script less trades. Your Company has always paid utmost attention toimprove investor's relationship. As on 31 March 2017 approx. 87.36 % of the total sharesof the Company has already been dematerialized.
Your Directors would like to place on record their sincere thanks for the co-operationand support received from various agencies of the Central and State Governments allShareholders and Creditors.
Your Directors also take this opportunity to place on record their appreciation of thededication and sense of commitment shown by the officers and employees of the Company atall levels.
For and on behalf of the Board
Suresh V. Chaturvedi
Date: 3 May 2017