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Supertex Industries Ltd.

BSE: 526133 Sector: Industrials
NSE: N.A. ISIN Code: INE881B01054
BSE LIVE 15:14 | 24 Nov 4.32 0.20
(4.85%)
OPEN

4.32

HIGH

4.32

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4.32

NSE 05:30 | 01 Jan Stock Is Not Traded.
OPEN 4.32
PREVIOUS CLOSE 4.12
VOLUME 446
52-Week high 5.23
52-Week low 3.07
P/E 7.08
Mkt Cap.(Rs cr) 5
Buy Price 4.32
Buy Qty 1554.00
Sell Price 0.00
Sell Qty 0.00
OPEN 4.32
CLOSE 4.12
VOLUME 446
52-Week high 5.23
52-Week low 3.07
P/E 7.08
Mkt Cap.(Rs cr) 5
Buy Price 4.32
Buy Qty 1554.00
Sell Price 0.00
Sell Qty 0.00

Supertex Industries Ltd. (SUPERTEXINDS) - Director Report

Company director report

Dear Members

The Directors are pleased to present herewith the Thirty-first AnnualReport together with the audited statement of accounts of your Company for the year ended31st March 2017.

FINANCIAL RESULTS

Year ended 31.03.2017 Year ended 31.03.2016
Rs. in lacs Rs. in lacs
Turnover 9447.13 9156.26
Other Income 86.71 91.50
Income from Operations/ Profit before Interest and Depreciation 299.94 232.81
Interest 199.13 147.68
Profit before Depreciation 100.81 85.13
Depreciation 49.35 41.41
Profit Before Tax 51.46 43.72
Deferred Tax 14.15 (12.27)
Profit After Tax and before exceptional items 65.61 31.45
Exceptional Items (3.11) (11.30)
Profit for the year 62.50 20.15

In order to meet the growing funding requirements of the Company it hasbeen decided to retain profits of the business in the Company. As such your directorshave not recommended any dividend for the year under report.

WORKING

During the year the oil prices dropped substantially bringing down theyarn prices. The production improved during the year by 8% and was higher at 5344 MT asagainst 4903 MT last year. The turnover however was higher only by 3% at Rs. 9447.13 lacsas against Rs. 9156.26 lacs last year due to the lower yarn and raw material prices.Exports constitute 38% of total sales made during the year. The exports are recorded onCIF basis sans duties and taxes. The processing charges increased by 13% to Rs. 54.73lacs from Rs 48.57 lacs last year.

The Company modernized its texturising division by replacing oldermachinery. This is expected to enhance the productivity and lower the cost ofmanufacturing. Moreover the upgraded technology is in tune with the internationalmarket's requirements. The exercise kept the department affected for over a monthwhich has reflected in its working but the same is likely to enhance the Company'sproduction and profitability in the future.

The Company is looking forward to setting up more facilities to meetits varied domestic and international demand. It wants to manufacture several additionalhigh end value added products developed in consultation with some niche customers. Thisis expected to improve the margins in future. The export turnover was Rs. 3613 lacs asagainst Rs. 3716 lacs last year although the quantity exported is higher at 3684 MT asagainst 3522 MT in the last year. The profit after taxation increased to Rs 62.50 lacs asagainst Rs. 20.14 lacs in the past year. The upgraded production facilities are likely toimprove the current year profitability and improve the overall performance of the Companyduring the current year. The management is working hard to improve the capacityutilization further. The prices remained volatile as per the fluctuation of the crude oilprices.

EXPORTS

The Company continued exports of its products and it has exported about38% of the total sales during the year. Quantitatively however it has exported 3684 MTout of 5344 MT production which is equal to 69%. The Company is selling to other globalmarkets apart from Turkey and is receiving positive response from international customers.The products are well received by the market and the exports are expected to grow.

SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES

No company has become/ceased to be a joint venture partner or associateof the Company during the financial year 2016-17.

EXTRACT OF ANNUAL RETURN

Extract of Annual Return of the Company is annexed herewith as AnnexureI to this Report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

The Directors regret to report the sad demise of Mr. S S MishraChairman Emeritus of the Company (retired from the position of Non-Executive Director atlast AGM) on 27th March 2017. Mr. S S Mishra was the founder of the Company and providedvaluable guidance and vision to the Company. He shall be an inspiration for all of us.

In accordance with the provisions of Section 152 of the Companies Act2013 and the Company's Articles of Association Mr. R K Mishra Chairman and ManagingDirector retires by rotation at the forthcoming Annual General Meeting and being eligibleoffers himself for re-appointment. The Board recommends his re-appointment for theconsideration of the Members of the Company at the ensuing Annual General Meeting.

All independent directors have given declarations that they meet thecriteria of independence as laid down under section 149(6) of the Companies Act 2013 andRegulation 16(b) of the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 ("SEBI Listing Regulations").

There was no change in the Key Managerial Personnel (KMP) during theyear under review.

BOARD EVALUATION

In compliance with the provisions of the Companies Act 2013 and thecorporate governance requirements as prescribed by SEBI Listing Regulations theperformance evaluation of the Board was carried out during the year under review. TheBoard of Directors expressed their satisfaction with the evaluation process.

MEETINGS

During the year four Board Meetings four Audit Committee Meetings twoStakeholders Relationship Committee Meetings one Nomination and Remuneration CommitteeMeeting and one Independent Directors Meeting were convened and held. The details of whichare given in the Corporate Governance Report. The intervening gap between the Meetings waswithin the period prescribed under the Companies Act 2013.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

The Company has not given any loans or guarantees exceeding the limitprescribed under the provisions of section 186 of the Companies Act 2013.

VIGIL MECHANISM/ WHISTLE BLOWER POLICY

The Company has a Whistle Blower Policy for directors and employees toreport concerns about unethical behavior genuine concerns or grievances. The said policyhas been posted on the website of the Company.

REMUNERATION POLICY

The Company follows a policy on remuneration of Directors and SeniorManagement employees. The Policy is approved by the Nomination & RemunerationCommittee and the Board. The details of this policy are explained in the CorporateGovernance Report.

FIXED DEPOSITS

The outstanding amount of Deposits with your Company was Nil. Duringthe year your Company has not accepted any deposits within the meaning of Section 73 ofthe Companies Act 2013 and the Companies (Acceptance of Deposits) Rules 2014.

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

All contracts / arrangements / transactions entered by the Companyduring the financial year with related parties were in the ordinary course of business andon an arm's length basis. During the year the Company had not entered into anycontract / arrangement / transaction with related parties which could be consideredmaterial in accordance with the related party transactions policy of the company. ThePolicy on dealing with related party transactions as approved by the Board may be accessedon the Company's website. Your Directors draw attention of the members to Note 33 tothe financial statement which sets out related party disclosures.

RISK MANAGEMENT

Business risk evaluation and management is an ongoing process withinthe Company. The assessment is periodically examined by the Board.

CORPORATE GOVERNANCE

Your Company attaches considerable significance to compliance with theconditions of Corporate Governance stipulated in Clause ‘C' of Schedule V onAnnual Report pursuant to Regulations 34(3) of SEBI Listing Regulations. A Report onCorporate Governance is hereto annexed.

INTERNAL CONTROL SYSTEM

The Company has an Internal Control System commensurate with the sizescale and complexity of its operations. During the year such controls were tested and noreportable material weaknesses in the design or operation were observed.

PARTICULARS OF EMPLOYEES

The information required under Section 197 of the Act read with rule5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014are given below:

a. The ratio of the remuneration of each director to the medianremuneration of the employees of the Company for the financial year:

Non-Executive Directors Ratio to median remuneration
Mr G R Toshniwal 0.21
Mr M A Sharma 0.21
Mr P R Kapadia 0.21
Mrs Meeta Shingala 0.21
Late Mr S S Mishra* 0.21
Executive Directors
Mr R K Mishra Chairman and Managing Director 18.32
Mr S K Mishra Director and CFO 13.16

* Retired from the post of Non-Executive Director at the AGM held on23.09.2016

b. The percentage increase in remuneration of each director chiefexecutive officer chief financial officer company secretary in the financial year:

Directors Chief Financial Officer and Company Secretary % increase in remuneration in the financial year
Non-executive directors
Mr G R Toshniwal -
Mr M A Sharma -
Mr P R Kapadia -
Mrs Meeta Shingala -
Late Mr S S Mishra* -
Executive Directors and KMPs
Mr R K Mishra Chairman and Managing Director 7.49
Mr S K Mishra Director and CFO 1.49
Ms Vaishali Naik Company Secretary 21.00

* Retired from the post of Non-Executive Director at the AGM held on23.09.2016.

c. The percentage increase in the median remuneration of employees inthe financial year: 4%

d. The number of permanent employees on the rolls of Company: 70

e. Average percentile increase already made in the salaries ofemployees other than the managerial personnel in the last financial year and itscomparison with the percentile increase in the managerial remuneration and justificationthereof and point out if there are any exceptional circumstances for increase in themanagerial remuneration:

- Average increase in the remuneration of all employees excluding KMPs:8% - Average increase in the remuneration of KMPs: 6 % f. Affirmation that theremuneration is as per the remuneration policy of the Company:

The Company affirms remuneration is as per the remuneration policy ofthe Company.

g. The information required pursuant to Section 197 read with Rule 5(2) and rule 5(3) of The Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 in respect of employees of the Company is as follows:

a) Employed throughout the year- NIL
b) Employed for part of the year- NIL

AUDITORS

Pursuant to the provisions of Section 139 of the Companies Act 2013and Rules made thereunder the term of office of M/s. M.B. Agrawal & Co. as theStatutory Auditors of the Company will conclude from the close of ensuing Annual General

Meeting of the Company. The Board of Directors places on record itsappreciation to the services rendered by M/s. M.B. Agrawal & Co. as the StatutoryAuditors of the Company.

Subject to the approval of the Members the Board of Directors of theCompany has recommended the appointment of M/s. S.M. Gupta & Co. CharteredAccountants as the Statutory Auditors of the Company.

SECRETARIAL AUDITOR AND SECRETARIAL AUDIT REPORT

The Board has appointed M/s Vikas R. Chomal & AssociatesPracticing Company Secretary Mumbai to carry out Secretarial Audit under the provisionsof Section 204 of the Companies Act 2013. The report of the Secretarial Auditor isannexed to this report as Annexure - II.

DIRECTORS' RESPONSIBILITY STATEMENT

In terms of Section 134 (5) of the Companies Act 2013 the directorswould like to state that:

(a) in the preparation of the annual accounts the applicableaccounting standards had been followed along with proper explanation relating to materialdepartures; (b) the directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the company at the end of thefinancial year and of the Profit of the company for that period; (c) the directors hadtaken proper and sufficient care for the maintenance of adequate accounting records inaccordance with the provisions of the Companies Act 2013 for safeguarding the assets ofthe company and for preventing and detecting fraud and other irregularities; (d) thedirectors had prepared the annual accounts on a going concern basis; (e) the directors hadlaid down internal financial controls to be followed by the company and that such internalfinancial controls are adequate and were operating effectively and; (f) the directors haddevised proper systems to ensure compliance with the provisions of all applicable laws andthat such systems were adequate and operating effectively.

ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO

The Particulars with respect to energy conservation technologyabsorption foreign exchange earnings and outgo as required to be disclosed under Section134(3)(m) of the Companies Act 2013 read with Rule 8(3) of the Companies (Accounts)Rules 2014 and forming part of the Directors' Report for the year ended 31st March2017 are annexed to this report.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

As required under the Listing Agreement Management Discussion &Analysis Report is attached and forms a part of this Report.

ACKNOWLEDGEMENT

The Directors wish to place on record their appreciation of thecontribution made by the executives officers and workmen of the Company during the year.The Board also acknowledges with thanks the support co-operation and assistance given bythe Axis Bank.

For and on behalf of the Board
R K Mishra
Chairman and Managing Director
Mumbai 30th May 2017