The Directors have great pleasure in presenting the 75th Annual Report together withthe Audited Financial Statements for the financial year ended 31st March 2017.
(Rs In Crores)
| ||2016-17 ||2015-16 |
|Particulars ||(12 months) ||(9 Months) |
|Total Income ||4470 ||2971 |
|Profit Before Interest Depreciation & Tax ||769 ||472 |
|Interest & Financial Charges ||30 ||29 |
|Depreciation Amortization and Impairment ||154 ||105 |
|Profit Before Tax & Exceptional Item ||585 ||338 |
|Exceptional Item || ||(8) |
|Profit Before Tax ||585 ||330 |
|Provision for Current Tax ||195 ||103 |
|Deferred Tax ||11 ||15 |
|Profit After Tax ||379 ||212 |
|Other Comprehensive Income (Net of Taxes) ||(2) ||(1) |
|Total Comprehensive Income ||377 ||211 |
Rs in Crores
|(i) Dividend on 127026870 Equity Shares of Rs 2/- each @ 750% i.e. Rs 15/-per share (including Special Dividend @250% i.e. || || |
|Rs 5/- per Share to commemorate the completion of 75th year of the Company) as under:- || || |
|(Previous year @ 375% i.e. Rs 7.50/- per equity share) || || |
|(a) Interim Dividend @ 150% i.e. Rs 3/- per share (already paid in October 2016) ||38 || |
|(b) Final Dividend recommended @ 600% i.e. Rs 12/- per share including Special Dividend @ 250% i.e. Rs 5/- per share ||152 ||190 |
|(ii) Corporate Dividend Tax as applicable (including Rs 8 crores paid on Interim Dividend) || ||39 |
| || ||229 |
The Board of Directors of the Company had adopted the Dividend Distribution Policy onJanuary 25 2017 in line with the SEBI (Listing Obligations & Disclosure Requirements)Regulations 2015. The Policy is uploaded on the Company's website at www. supreme.co.in
OVERVIEW OF THE FINANCIAL PERFORMANCE
The financial performance highlights for the year ended 31st March 2017 are asfollows -The Company sold 340906 MT of Plastic goods and achieved net product turnover ofRs 4376 Crores during the year under review against sales of 329350 MT and net productturnover of Rs 4097 crores in the corresponding period of the previous year achievingvolume & product value growth of about 4% and 7% respectively. Total Income andOperating Profit for the current year amounted to Rs 4470 crores and Rs 769 croresrespectively as compared to Rs 2971 crores and Rs 472 crores in the previous financialyear comprising of nine months.
The Profit before Tax and Profit after Tax for the current year amounted to Rs 585crores and Rs 377 crores respectively as compared to Rs 330 crores and Rs 211 crores inthe previous financial year comprising of nine months.
MANAGEMENT DISCUSSION AND ANALYSIS
The Management's Discussion and Analysis forms an integral part of this report andgives detail of the overview industry structure and developments different productgroups of the Company operational performance of its various business segments.
The Company's financial discipline and prudence is reflected in strong credit ratingascribed by CRISIL.-
|Total Bank Loan Facilities ||Rs 1143 crores |
|Rated || |
|Long-Term Rating ||CRISIL AA/Stable (Reaffirmed) |
|Short-Term Rating ||CRISIL A1+ (Reaffirmed) Rs 200 |
| ||crores short term debt enhanced |
| ||from Rs 125 crores. |
In accordance with the terms and conditions governing the Fixed Deposit Scheme theCompany has exercised the option to repay on 1st April 2014 all the Fixed Deposits withaccrued interest as at the end of 31st March 2014. Accordingly the Company is not havingany Fixed Deposit as on 31st March 2017 except 25 deposits amounting to Rs 4 lacs whichremained unclaimed as on 31st March 2017.
DIRECTORS' RESPONSIBILITY STATEMENT:
The Board of Directors acknowledge the responsibility for ensuing compliances with theprovisions of Section 134(3)(c) read with Section 134(5) of the Companies Act 2013 in thepreparation of annual accounts for the year ended on 31st March 2017 and state that: in the preparation of the annual accounts the applicable accounting standards hadbeen followed and there is no material departures from the same; the Directors haveselected such accounting policies and applied consistently and made judgments andestimates that are reasonable and prudent so as to give a true and fair view of the stateof affairs of the Company as at 31st March 2017 and of the profit of the Company for theyear ended on that date ; the Directors have taken proper and sufficient care forthe maintenance of adequate accounting records in accordance with the provisions of thisAct for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities; the Directors have prepared the annual accounts on a goingconcern basis; the Directors have laid down internal financial controls to befollowed by the Company and that such internal financial controls are adequate and areoperating effectively; and the Directors have devised proper systems to ensurecompliance with the provisions of all applicable laws and that such systems were adequateand operating effectively;
The Company has taken the requisite steps to comply with the recommendations concerningCorporate Governance.
A separate statement on Corporate Governance together with a certificate from theauditors of the Company regarding compliance of conditions of Corporate Governance asstipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015forms part of this Annual Report.
ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING / OUTGO
Information on conservation of energy technology absorption foreign exchange earningsand outgo required to be given pursuant to Section 134(3) (m) of the Companies Act 2013read with Rule 8 of the Companies (Accounts) Rules 2014 is annexed herewith as Annexure- I to this report.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
The prescribed particulars of Employees required under Section 197(12) of the CompaniesAct 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is annexed herewith as Annexure-II to this Report.
The information required under Section 197(12) of the Companies Act 2013 read withRule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 and forming part of the Boards' Report for the year ended 31st March 2017 isgiven in the separate Annexure of this Report.
The Annual Report excluding the aforesaid Annexure is being sent to the Members of theCompany in terms with the provision of Section 136 of the Companies Act 2013. Members whoare interested in obtaining these particulars may write to the Company Secretary at theRegistered Office of the Company. The aforesaid Annexure is also available for inspectionby Members at the Registered Office of the Company 21 days before the 75th Annual GeneralMeeting and up to the date of the ensuing Annual General Meeting during the business hourson working days.
CONSOLIDATED FINANCIAL STATEMENT
The consolidated financial statements of the company & its subsidiary &associate which form part of Annual Report have been prepared in accordance with section129(3) of the Companies Act 2013. Further a statement containing the salient features ofthe Financial Statement of Subsidiary Company & Associate Company in the prescribedformat AOC-1 is annexed herewith as Annexure - III to this Report. The statementalso provides the details of performance and financial position of the Subsidiary Company& Associate Company.
In accordance with Section 136 of the Companies Act 2013 the Audited FinancialStatements including the consolidated financial statements & related information ofthe Company & Audited Accounts of its Subsidiary Company are available on the websitewww.supreme.co.in. These documents will also be available for inspection during businesshours at the registered office of the company. Any member desirous of obtaining a copy ofthe said financial statement may write to the Company Secretary at the Registered Officeof the company.
The Consolidated net profit of the company and its subsidiary amounted to Rs 428 croresfor the financial year ended 31st March 2017 as compared to Rs 220 crores for the previousfinancial year comprising of nine months period ended 31st March 2016. Additional detailsregarding performance of the Associate Company & Subsidiary Company have beenmentioned in the succeeding paragraphs.
ASSOCIATE COMPANY - SUPREME PETROCHEM LIMITED (SPL)
During the year the Company received an aggregate Dividend of Rs 1 per Equity Sharefrom Supreme Petrochem Ltd (SPL) - promoted jointly by your Company and the R RahejaGroup. Net revenues and net profit for the year ended 31st March 2017 were Rs 3224 croresand Rs 179 crores respectively.
The Supreme Industries Overseas FZE Sharjah UAE a wholly owned subsidiary havingprincipal activity to promote globally Plastics piping products completed eleven years ofsuccessful operation recording net profit of AED 148308 /- during the year April 2016-March 2017.
During the year under review Plastics Piping Division achieved exports revenue of US$4.96 million and 2853 MT in volume by exporting products to twenty one countries coveringGCC Africa Australia UK Ireland Europe & Indian sub-continent. Sales increased by3% in $ terms & by 7% in volume terms over the corresponding period of previous year .Overall this cycle of business was shadowed by shrinking demands from existing markets dueto unstable business sentiments.
Company has made project sales to Sri Lanka & Maldives as well entered into IraqCyprus Ireland Jordan and Tunisia. During the current year company expects to growover 20% with possible culmination of high value tender & project sales as well byenhancing the client base in existing & new geographies. Company will continue toexhibit the products in various international exhibitions to spread the brand name &in-turn improve the export volume. All efforts will be made to enhance customer based inexisting GCC & African countries as well as new business links into North Africa &erstwhile Russian countries.
The Board of Directors of the Company had adopted a Policy for determining materialsubsidiary company in line with the SEBI (Listing Obligations & DisclosureRequirements) Regulations 2015. The Policy is uploaded on the Company's website atwww.supreme.co.in. Presently there is no material subsidiary company.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet with the criteria of the independence as prescribed both undersection 149(6) of the Companies Act 2013 and under Regulation 16 (1)(b) of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.
In accordance with the provisions of the Companies Act 2013 none of the IndependentDirectors are liable to retire by rotation. Shri V.K. Taparia Executive Director (DIN No:00112567) of the Company retires by rotation at the forthcoming Annual General Meeting inaccordance with provisions of the Companies Act 2013 and the Articles of Association ofthe Company and being eligible offers himself for re-appointment.
Shri S J Taparia Executive Director (DIN No :00112513) of the Company who hithertowas not liable to retire by rotation is now proposed to be liable to retire by rotationpursuant to the provisions of section 152 of the Companies Act 2013.
KEY MANAGERIAL PERSONNEL
Shri M P Taparia Managing Director Shri P C Somani Chief Financial Officer and ShriR J Saboo AVP (Corporate Affairs) & Company Secretary were appointed as KeyManagerial Personnel of your Company in accordance with the provisions of Section 203 ofthe Companies Act 2013 and there is no change in the same during the year under review.
DISCLOSURES RELATED TO BOARD COMMITTEES AND POLICIES a. Board Meetings:
The Board of Directors met 5 times during the year ended 31st March 2017 in accordancewith the provisions of the Companies Act 2013 and rules made thereunder. The detailsthereof are given in the Corporate Governance Report.
b. Board Performance Evaluation:
(i) The Company has devised criteria for performance evaluation of IndependentDirectors Board/ Committees and other individual Directors which includes criteria forperformance evaluation of Non Executive Directors and Executive Directors. Performanceevaluation has been carried out as per the Nomination & Remuneration Policy.
At the meeting of the Board all the relevant factors that are material for evaluatingthe performance of individual Directors the Board/ Committees were discussed in detail. Astructured questionnaire each for evaluation was prepared and recommended to the Board byNomination & Remuneration Committee for doing the required evaluation after takinginto consideration the input received from the Directors covering various aspects of theBoard's functioning such as adequacy of the composition of the Board and its Committeesexecution and performance of specific duties obligations and governance etc.
A separate exercise was carried out to evaluate the performance of individual Directorsincluding the Chairman of the Board who were evaluated on parameters such as level ofengagement and contribution qualifications knowledge skills and experience in therespective fields honesty integrity ethical behavior and leadership Independence ofjudgment safeguarding the interest of the Company attending the meetings regularlyunderstanding the business regulatory competitive and social environment understandingstrategic issues and challenges bringing outside information and perspective to Board fordeliberations ability to identify the cost benefits and implications of Board decisionsetc. The performance evaluation of the Independent Directors was also carried by theentire Board. The performance evaluation of the Chairman Managing Director &Executive Directors was carried out by the independent Directors at its separate meetingheld on 25th January 2017. The Directors expressed their satisfaction with the evaluationprocess.
(ii) The Board has on the recommendation of the Nomination & RemunerationCommittee framed a Nomination & Remuneration policy and Policy on fixation ofcriteria for selection & appointment of Directors & Senior Management Personnel.The Nomination & Remuneration Policy and Policy on fixation of criteria for selection& appointment of Directors & Senior Management Personnel are annexed herewith as AnnexureIV (A) & Annexure IV (B) to this Report.
The Statutory Auditors M/s Lodha & Co. Chartered Accountants having RegistrationNo 301051E was appointed in 74th Annual General Meeting to hold office from theconclusion of 74th Annual General meeting for a term of consecutive five years tillconclusion of 79th Annual General Meeting (subject to ratification of the appointment bythe members at every Annual General Meeting). The Auditors have confirmed theireligibility to the effect that the ratification of their appointment if made would bewithin the prescribed limits of the Companies Act 2013 and that they are not disqualifiedfor such appointment.
Note on financial statement referred to in the Auditor's Report are self-explanatoryand do not call for any further comments. The Auditor's Report does not contain anyqualification reservation or adverse remark.
SECRETARIAL AUDIT REPORT FOR THE PERIOD ENDED 31ST MARCH 2017
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board hasappointed M/s V. Laxman & Co. Company Secretaries (C.P No. 744) to conductSecretarial Audit for the financial year ended on 31st March 2017.
Secretarial Audit Report issued by M/S V. Laxman & Co Company Secretaries in FormMR-3 forms part to this report Annexure V.
The said report does not contain any observation or qualification requiring explanationor adverse remark.
MATERIAL CHANGES AND COMMITEMENT AFFECTING FINANCIAL POSITION OF THE COMPANY
There are no material changes or commitments occurring after 31st March 2017 which mayaffect the financial position of the company or may require disclosure.
IMPLEMENTATION OF SAP
The Company has decided to switch over from existing ERP to SAP which is the leadingERP solution world wide. The process of implementation of the SAP is expected to beginsoon. The implementation of SAP shall integrate all the business process across theorganisation.
ROLL OUT OF GST MODEL LAW
In view of impending Roll out of GST with effect from 1st July 2017 the company isgearing up to get itself to the tune of the new GST frame work which will not only lead tochange in the indirect tax structure but shall also lead to the change in the businessprocess/ functions. The Company has already obtained the provisional registration inrespect of all its units across the country. It has also started creating awarenessamongst the Marketing teams of various business segments its vendors and customers. Thecompany is also in the process of drawing implementation plan to get fully prepared &equipped under new regime.
INTERNAL FINANCIAL CONTROLS
The company has in place Internal Financial Control system commensurate with size& complexity of its operations to ensure proper recording of financial and operationalinformation & compliance of various internal controls & other regulatory &statutory compliances. During the year under review no material or serious observationhas been received from the Internal Auditors of the Company for inefficiency or inadequacyof such controls.
Internal Auditors' comprising of professional Chartered Accountants monitor &evaluate the efficacy of Internal Financial Control system in the company its compliancewith operating system accounting procedures & policies at all the locations of thecompany. Based on their report of Internal Audit function corrective actions in therespective area are undertaken & controls are strengthened. Significant auditobservations & corrective action suggested are presented to the Audit Committee.
PARTICULAR OF CONTRACTS OR ARRANGEMENT WITH RELATED PARTIES
All transactions with Related Parties are placed before the Audit Committee as also theBoard for approval. Prior omnibus approval of the Audit Committee and the Board isobtained for the transactions which are of a foreseen and repetitive nature. Thetransactions entered into pursuant to the omnibus approval so granted are audited and astatement giving details of all related party transactions is placed before the AuditCommittee and the Board of Directors for their approval on a quarterly basis. Alltransactions entered into with related parties during the year were on arm's length basisin the ordinary course of business and in line with the threshold of materiality definedin the Company's policy on Related Party Transactions & are in accordance with theprovisions of the Companies Act 2013 Rules issued thereunder & Regulation 23 of(SEBI Listing Obligations and Disclosure
Requirements) Regulations 2015 During the financial year ended on 31st March 2017there were no transactions with related parties which qualify as material transactions.
The details of the related party transactions are set out in Note 39 to the standalonefinancial statements forming part of this Annual Report.
The Form AOC-2 pursuant to section 134(3)(h) of the Companies Act read with Rule 8(2)of the Companies(Accounts) Rules 2014 is set out as Annexure VI to this Report.
The Policy on Related Party Transactions as approved by the Board is also uploaded onthe Company's website at the Link: www.supreme.co.in
PARTICULARS OF LOANS GUARANTEES INVESTMENTS AND SECURITIES
The company has complied with the provisions of section 185 & 186 of the Act to theextent applicable with respect to the loans and investments made.
VIGIL MECHANISM POLICY FOR THE DIRECTORS AND EMPLOYEES
A "Vigil Mechanism Policy" for Directors and employees of the Company isconstituted to provide a mechanism which ensures adequate safeguards to employees andDirectors from any victimization on rising of concerns of any violations of legal orregulatory requirements incorrect or misrepresentation of any financial statements andreports etc.
RISK MANAGEMENT POLICY
Your Company has an elaborate risk Management procedure and adopted a systematicapproach to mitigate risk associated with accomplishment of objectives operationsrevenues and regulations. Your Company believes that this would ensure mitigating stepsproactively and help to achieve stated objectives. The entity's objectives can be viewedin the context of four categories Strategic Operations Reporting and Compliance. Weconsider activities at all levels of the organization viz Enterprise level Divisionlevel Business unit level and Subsidiary level in Risk Management framework. The RiskManagement process of the Company focuses on three elements viz. (1) Risk Assessment; (2)Risk Management; (3) Risk Monitoring.
A Risk Management Committee is constituted which has been entrusted with theresponsibility to assist the Board in (a) Overseeing and approving the Company'senterprise risk management framework; and (b) Overseeing that all the risk that theorganization faces.
The key risks and mitigating actions are also placed before the Audit Committee of theCompany. Significant audit observations and follow up actions thereon are reported to theAudit Committee. The Audit Committee reviews adequacy and effectiveness of the Company'sinternal control environment and monitors the implementation of audit recommendationsincluding those relating to strengthening of the Company's risk management policies andsystems.
CORPORATE SOCIAL RESPONSIBILITY POLICY
The brief outline of the Corporate Social Responsibility (CSR) Policy of the companyand the initiatives undertaken by the company on CSR activities during the year are setout in Annexure of this Report in the format prescribed in the Companies (Corporate SocialResponsibility Policy) Rules 2014. (Annexure VII)
The Policy is available on the website of the Company.
BUSINESS RESPONSIBILITY REPORT
The Business Responsibility Report as approved by the Business Responsibility Committeeand Board of Directors forms part of this Annual Report.
EXTRACT OF ANNUAL RETURN:
The details forming part of the extract of the Annual Return in form MGT-9 is annexedherewith as Annexure VIII.
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:
1. Details relating to deposits covered under Chapter V of the Act.
2. Issue of equity shares with differential rights as to dividend voting or otherwise.
3. Issue of shares (sweat equity shares) to employees of the Company under ESOS.
4. Neither the Managing Director nor the Whole Time Directors of the Company receivedany remuneration or commission from any of its subsidiary.
5. No significant or material orders were passed by the
Regulators or Courts or Tribunals which impact the going concern status and Companyoperations in future.
6. Your Directors further state that during the year under review there were no casesfiled pursuant to the Sexual Harassment of Woman at Workplace (Prevention Prohibition andRedressal) Act 2013.
The Board of Directors wishes to express its gratitude and record its sincereappreciation for the commitment and dedicated efforts put in by all the employees. YourDirectors take this opportunity to express their grateful appreciation for theencouragement cooperation and support received by the Company from the local authoritiesbankers customers suppliers and business associates. The directors are thankful to theesteemed shareholders for their continued support and the confidence reposed in theCompany and its management.
| ||For and on behalf of the Board of Directors |
| ||B. L. Taparia |
| ||Chairman |
|Place: Mumbai || |
|Date: 28th April 2017 |