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Supertex Industries Ltd.

BSE: 526133 Sector: Industrials
NSE: N.A. ISIN Code: INE881B01054
BSE 00:00 | 08 Feb 2.89 0
(0.00%)
OPEN

2.70

HIGH

2.89

LOW

2.70

NSE 05:30 | 01 Jan Supertex Industries Ltd
OPEN 2.70
PREVIOUS CLOSE 2.89
VOLUME 350
52-Week high 6.99
52-Week low 2.70
P/E 6.28
Mkt Cap.(Rs cr) 3
Buy Price 2.89
Buy Qty 2580.00
Sell Price 2.70
Sell Qty 300.00
OPEN 2.70
CLOSE 2.89
VOLUME 350
52-Week high 6.99
52-Week low 2.70
P/E 6.28
Mkt Cap.(Rs cr) 3
Buy Price 2.89
Buy Qty 2580.00
Sell Price 2.70
Sell Qty 300.00

Supertex Industries Ltd. (SUPERTEXINDS) - Director Report

Company director report

Dear Members

The Directors are pleased to present herewith the Thirty-Second Annual Report togetherwith the audited statement of accounts of your Company for the year ended 31st March2018.

FINANCIAL RESULTS

Year ended 31.03.2018 Year ended 31.03.2017
Rs. in Lacs Rs. in Lacs
Turnover 11394.48 9447.13
Other Income 24.84 87.52
Profit before Interest and Depreciation 377.96 291.34
Interest 221.66 199.13
Profit before Depreciation 156.30 92.21
Depreciation 54.17 49.35
Profit Before Tax 102.13 42.86
Tax for earlier year - (3.11)
Deferred Tax (40.37) 14.15
Profit After Tax 61.76 53.90
Other Comprehensive Income (1.35) (6.59)
Total Comprehensive Income 60.41 47.31

In order to meet the growing funding requirements of the Company it has been decided toretain profits of the business in the Company. As such your directors have notrecommended any dividend for the year under report.

During the year under review no amount has been transferred to General Reserves.

As mandated by the Ministry of Corporate Affairs the financial statements for the yearended on March 31 2018 has been prepared in accordance with the Indian AccountingStandards (IND AS) notified under Section 133 of the Companies Act 2013 read with theCompanies (Indian Accounting Standards) Rules 2015 and other relevant provisions of theAct. The estimates and judgements relating to the Financial Statements are made on aprudent basis so as to reflect in a true and fair manner the form and substance oftransactions and reasonably present the Company's state of affairs profits and cash flowsfor the year ended March 31 2018.

WORKING

During the year the polyester markets remain subdued due to introduction of GST regimein its first half resulting in weaker demand and low rates. Demand revived poststabilisation of the GST regime. However there was a sharp increase in imports due tohigher GST rates on domestic production. Higher tax rates across the polyester chain alsoresulted in the shutdowns of textile units. Domestic markets were impacted by the increasein imports of fabrics after the implementation of GST as almost all categories of importsincreased compared to pre-GST levels.

Import duties on certain categories of fabrics and end products were increasedsubsequently but imports continue to stay at a higher level.

The production improved during the year by 18% and was higher at 6384 MT as against5426 MT last year. The turnover was higher by 21% at Rs. 11394.48 lacs as against Rs.9447.13 lacs last year. Exports constitute 38% of total sales made during the year. Theexports are recorded on CIF basis sans duties and taxes.

The Company had modernized its texturising division last year. This has resulted inimproved production and sales. In the current year also the Company is looking forward tosetting up more facilities to meet its varied yarn and fabric demand. These are expectedto improve the margins in future. The export turnover was higher by 22% at Rs. 4396 lacsas against Rs. 3613 lacs last year and the quantity exported is higher at 3921 MT asagainst 3684 MT in the last year.

The net profit before taxation was Rs 102.12 lacs as against Rs. 42.86 lacs in the pastyear. The profit after deferred tax and other items was Rs 60.41 lacs as against Rs 47.31lacs last year. The management is focusing on improving the capacity utilization further.

EXPORTS

The Company continued exports of its products and it has exported about 38% of thetotal sales during the year. The Company is selling to other global markets apart fromTurkey and is receiving positive response from international customers.

SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES

No company has become/ceased to be a joint venture partner or associate of the Companyduring the financial year 2017-18.

EXTRACT OF ANNUAL RETURN

Extract of Annual Return of the Company is annexed herewith as Annexure I to thisReport.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

In accordance with the provisions of Section 152 of the Companies Act 2013 Mr. S KMishra Executive Director and CFO retires by rotation at the forthcoming Annual GeneralMeeting and being eligible offers himself for re-appointment. The Board recommends hisre-appointment for the consideration of the Members of the Company at the ensuing AnnualGeneral Meeting.

All independent directors have given declarations that they meet the criteria ofindependence as laid down under section 149(6) of the Companies Act 2013 and Regulation16(b) of the Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 ("SEBI Listing Regulations").

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

BOARD EVALUATION

In compliance with the provisions of the Companies Act 2013 and the corporategovernance requirements as prescribed by SEBI Listing Regulations the performanceevaluation of the Board was carried out during the year under review. The Board ofDirectors expressed their satisfaction with the evaluation process.

MEETINGS

During the year four Board Meetings four Audit Committee Meetings two StakeholdersRelationship Committee Meetings one Nomination and Remuneration Committee Meeting and oneIndependent Directors Meeting were convened and held. The details of which are given inthe Corporate Governance Report. The intervening gap between the Meetings was within theperiod prescribed under the Companies Act 2013.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

The Company has not given any loans or guarantees exceeding the limit prescribed underthe 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 to report concernsabout unethical behavior genuine concerns or grievances. The said policy has been postedon the website of the Company.

REMUNERATION POLICY

The Company follows a policy on remuneration of Directors and Senior Managementemployees. The Policy is approved by the Nomination & Remuneration Committee and theBoard. The details of this policy are explained in the Corporate Governance Report.

FIXED DEPOSITS

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

COMPLIANCE OF SECRETARIAL STANDARDS

The Company has complied with the applicable Secretarial Standards.

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

All contracts / arrangements / transactions entered by the Company during the financialyear with related parties were in the ordinary course of business and on an arm's lengthbasis. During the year the Company had not entered into any contract / arrangement /transaction with related parties which could be considered material in accordance with therelated party transactions policy of the company.

The Policy on dealing with related party transactions as approved by the Board may beaccessed on the Company's website. Your Directors draw attention of the members to Note 29to the financial statement which sets out related party disclosures.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There were no significant and material orders passed by the Regulators/Courts thatwould impact the going concern status of the Company and its future operations.

MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OF THEFINANCIAL YEAR AND THE DATE OF THIS REPORT

There have been no material changes or commitments affecting the financial position ofthe Company which have occurred between the end of the financial year of the Company towhich the financial statements relate and the date of the Report.

RISK MANAGEMENT

Business risk evaluation and management is an ongoing process within the Company. Theassessment is periodically examined by the Board.

CORPORATE GOVERNANCE

The Company attaches considerable significance to compliance with the conditions ofCorporate Governance stipulated in Clause ‘C' of Schedule V on Annual Report pursuantto Regulations 34(3) of SEBI Listing Regulations. A Report on Corporate Governance ishereto annexed.

INTERNAL CONTROL SYSTEM

The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. During the year such controls were tested and no reportablematerial weaknesses in the design or operation were observed.

PARTICULARS OF EMPLOYEES

The information required under Section 197 of the Act read with rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are givenbelow:

a. The ratio of the remuneration of each director to the median remuneration of theemployees of the Company for the financial year:

Non-Executive Independent Directors Ratio to median remuneration
Mr G R Toshniwal 0.20
Mr M A Sharma 0.20
Mr P R Kapadia 0.20
Mrs Meeta Shingala 0.20
Executive Directors
Mr R K Mishra Chairman and Managing Director 16.60
Mr S K Mishra Director and CFO 13.61

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

Directors Chief Financial Officer and Company Secretary % increase in remuneration in the financial year
Non-Executive Independent Directors
Mr G R Toshniwal -
Mr M A Sharma -
Mr P R Kapadia -
Mrs Meeta Shingala -
Executive Directors and KMPs
Mr R K Mishra Chairman and Managing Director 6.32
Mr S K Mishra Director and CFO 6.29
Ms Vaishali Naik Company Secretary 19.00

c. The percentage increase in the median remuneration of employees in the financialyear: 5 %

d. The number of permanent employees on the rolls of Company: 71

e. Average percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration:

- Average increase in the remuneration of all employees excluding KMPs: 4 %

- Average increase in the remuneration of KMPs: 8 %

f. Affirmation that the remuneration is as per the remuneration policy of the Company:

The Company affirms remuneration is as per the remuneration policy of the 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 inrespect of employees of the Company is as follows:

a) Employed throughout the year- NIL

b) Employed for part of the year- NIL

AUDITORS

A) Statutory Auditor:

M/s. S.M. Gupta & Co. Chartered Accountants were appointed as Auditors of theCompany for a period of five years from the conclusion of the Annual General Meeting heldon 29th September 2017.

There is no audit qualification reservation or adverse remark for the year underreview.

B) Cost Auditor:

The Board of Directors on the recommendation of the Audit Committee has appointed M/sNNT & Co. Cost Accountants (Firm Registration Number 100911) as Cost Auditor toaudit the cost records of the Company for the Financial Year 2018-19. As required underthe Companies Act 2013 a resolution seeking members approval for the remunerationpayable to the Cost Auditor forms part of the Notice convening the Annual General Meetingfor their ratification.

C) Secretarial Auditor:

The Board has appointed M/s Vikas R. Chomal & Associates Practicing CompanySecretaries Mumbai to carry out Secretarial Audit under the provisions of Section 204 ofthe Companies Act 2013. The report of the Secretarial Auditor is annexed to this reportas Annexure - II.

DIRECTORS' RESPONSIBILITY STATEMENT

In terms of Section 134 (5) of the Companies Act 2013 the directors would like tostate that:

(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;

(b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe Profit of the company for that period;

c) 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;

d) the directors had prepared the annual accounts on a going concern basis;

(e) the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively and;

(f) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The Particulars with respect to energy conservation technology absorption foreignexchange earnings and outgo as required to be disclosed under Section 134(3)(m) of theCompanies Act 2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 andforming part of the Directors' Report for the year ended 31st March 2018 are annexed tothis report.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

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

ACKNOWLEDGEMENT

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

For and on behalf of the Board
R K Mishra
Chairman and Managing Director
Mumbai 30th May 2018

ANNEXURE TO THE DIRECTORS REPORT

Section 134(3)(m) of the Companies Act 2013.

As required under Section 134(3)(m) of the Companies Act 2013 read with Rule 8(3) ofthe Companies (Accounts) Rules 2014 the relevant information is given below :

(A) Conservation of energy

The Company is engaged in the process of energy conservation continuously throughimproved operational and maintenance practices.

(i) The steps taken or impact on conservation of energy:

a) Optimisation of production facilities.

b) Limiting the use of air-conditioning in the plants to need based minimum.Installation of Air Ventilators for proper ventilation with minimal energy consumption.

c) The Company ensures minimal power consumption at its plant by constantly maintainingthe power factor within the specified limits. The power factor has been improved byinstalling necessary capacitors thereby reducing energy losses.

(ii) The steps taken by the company for utilising alternate sources of energy:

The Company has taken various initiatives for utilizing alternate energy efficientsources.

(iii) The capital investment on energy conservation equipments:

The efforts for conservation of energy are on an ongoing basis throughout the year. Themeasures taken have resulted in savings in the cost of production.

(B) Technology absorption

(i) Efforts in brief made towards technology absorption:

Complete modification of DC drives to AC drives in major production facility/upgradingthe same and making them comparatively maintenance free and economical to operate.

(ii) Benefits derived as a result of above efforts: a) Reduced maintenanceexpenditure b) Increased Production at lower cost per unit c) Lower downtime d) Simplerprocess and indigenous technology e) Economical

(iii) In case of imported technology (imported during the last three years reckonedfrom the beginning of the financial year):

(a) Technology imported: NIL

(b) The year of import: Not Applicable

(c) Whether the technology been fully absorbed: Not Applicable

(iv) The expenditure incurred on Research and Development: NIL

(C) Foreign Exchange Earnings and Outgo

Foreign Exchange Earnings – Rs. 4119.39 Lacs (Previous Year – Rs. 3385.58Lacs)

Foreign Exchange Outgo – Rs. 163.05 Lacs (Previous Year – Rs. 170.42 Lacs)

For and on behalf of the Board
R K Mishra
Chairman and Managing Director
Mumbai 30th May 2018