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Supreme Industries Ltd.

BSE: 509930 Sector: Industrials
NSE: SUPREMEIND ISIN Code: INE195A01028
BSE 00:00 | 12 Aug 1893.40 -1.55
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NSE 00:00 | 12 Aug 1894.00
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OPEN 1893.85
PREVIOUS CLOSE 1894.95
VOLUME 1828
52-Week high 2689.00
52-Week low 1668.60
P/E 28.55
Mkt Cap.(Rs cr) 24,056
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 1893.85
CLOSE 1894.95
VOLUME 1828
52-Week high 2689.00
52-Week low 1668.60
P/E 28.55
Mkt Cap.(Rs cr) 24,056
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Supreme Industries Ltd. (SUPREMEIND) - Director Report

Company director report

The Directors have great pleasure in presenting the 80th Annual Reporttogether with the Audited Financial Statements for the financial year ended 31st March2022.

(Rs In Crores)

Particulars FY 2021-2022 FY 2020-2021
Total Income 7840.51 6383.59
Profit Before Interest Depreciation & Tax 1309.89 1312.74
Finance Cost 5.15 22.05
Depreciation and Amortization Expenses 229.52 212.78
Profit Before Tax & Exceptional Items 1075.22 1077.91
Tax Expenses 263.33 276.53
Profit After Tax 811.89 801.38
Other Comprehensive Income (Net of Taxes) (0.94) (1.30)
Total Comprehensive Income 810.95 800.08

DIVIDEND

Rs in Crores

i) Dividend on 127026870 Equity Shares of Rs 2/- each @1200% i.e. Rs 24/- per share as under:-
(Previous year @ 1100% i.e. Rs 22/- per equity share)
(a) Interim Dividend @ 300% i.e. Rs 6/- per share (already paid in November 2021) 76.22
(b) Final Dividend @ 900% i.e. Rs 18/- per share 228.65
Rs 304.87

The Board of Directors of the Company had adopted the DividendDistribution Policy on 25th January 2017 in line with the SEBI (Listing Obligations &Disclosure Requirements) Regulations 2015. The Policy is uploaded on the Company'swebsite at www.supreme.co.in

OVERVIEW OF THE FINANCIAL PERFORMANCE

The financial performance highlights for the year ended 31st March2022 are as follows -

The Company sold 393908 MT of Plastic goods and achieved net productturnover of Rs 7625.24 Crores during the year under review against sales of 409109 MT andnet product turnover of Rs 6177.14 crores in the previous year having volume de-growthabout 4% and product value growth about 23% respectively.

Total Income and Operating Profit for the year under review amounted toRs 7840.51 crores and Rs 1242.19 crores respectively as compared to Rs 6383.59 crores andRs 1284.28 crores in the previous financial year.

The Profit before Tax and Profit after Tax for the year under reviewamounted to Rs 1075.22 crores and Rs 811.89 crores respectively as compared to Rs 1077.91crores and Rs 801.38 crores in the previous financial year.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management's Discussion and Analysis forms an integral part of thisreport and gives detail of the overview industry structure and developments differentproduct groups of the Company operational performance of its various business segments.

CREDIT RATING

The Company's financial discipline and prudence is reflected in strongcredit rating ascribed by CRISIL as under:-

Total Bank Loan Facilities Rated Rs 1445.90 crores
Long-Term Rating CRISIL AA+/Stable (Upgraded from CRISIL AA/Positive)
Short-Term Rating CRISIL A1+ (Reaffirmed)
Rs 200 crore commercial paper CRISIL A1+ (reaffirmed)

FIXED DEPOSITS

In accordance with the terms and conditions governing the Fixed DepositScheme the Company had exercised the option to repay on 1st April 2014 all the FixedDeposits with accrued interest as at the end of 31st March 2014. Accordingly the Companyis not having any Fixed Deposit as on 31st March 2022.

DIRECTORS' RESPONSIBILITY STATEMENT:

The Board of Directors acknowledge the responsibility for ensuingcompliances with the provisions of Section 134(3)(c) read with Section 134(5) of theCompanies Act 2013 in the preparation of annual accounts for the year ended on 31stMarch 2022 and state that:

• in the preparation of the annual accounts the applicableaccounting standards had been followed and there is no material departures from the same;

• the Directors have selected such accounting policies and appliedconsistently 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 as at 31st March 2022and of the profit of the Company for the year ended on that date;

• the Directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of this Actfor 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 ensure compliancewith the provisions of all applicable laws and that such systems were adequate andoperating effectively;

CORPORATE GOVERNANCE

The Company has taken the requisite steps to comply with therecommendations concerning Corporate Governance.

A separate statement on Corporate Governance together with acertificate from the auditors of the Company regarding compliance of conditions ofCorporate Governance as stipulated under SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 forms part of this Annual Report.

ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING/ OUTGO

Information on conservation of energy technology absorption foreignexchange earnings and outgo required to be given pursuant to Section 134(3) (m) of theCompanies Act 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 is annexedherewith as Annexure - I to this report.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

The prescribed particulars of Employees required under Section 197(12)of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is annexed herewith as Annexure-II tothis Report.

The information required under Section 197(12) of the Companies Act2013 read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 and forming part of the Boards' Report for the yearended 31st March 2022 is given in the separate Annexure of this Report.

The Annual Report excluding the aforesaid Annexure is being sent to theMembers of the Company in terms with the provision

of Section 136 of the Companies Act 2013. Members who are interestedin obtaining these particulars may write to the Company Secretary at the Registered Officeof the Company. The aforesaid Annexure is also available for inspection by Members at theRegistered Office of the Company 21 days before the 80th Annual General Meeting and up tothe date of the ensuing Annual General Meeting during the business hours on working days.

CONSOLIDATED FINANCIAL STATEMENT

The consolidated financial statements of the company & itssubsidiary & associate which form part of Annual Report have been prepared inaccordance with section 129(3) of the Companies Act 2013. Further a statement containingthe salient features of the Financial Statement of Subsidiary Company & AssociateCompany in the prescribed format AOC-I is annexed herewith as Annexure - III tothis Report. The statement also provides the details of performance and financial positionof the Subsidiary Company & Associate Company.

In accordance with Section 136 of the Companies Act 2013 the AuditedFinancial Statements including the consolidated financial statements & relatedinformation of the Company & Audited Accounts of its Subsidiary Company are availableon the website www.supreme.co.in. These documents will also be available for inspectionduring business hours at the registered office of the company. Any member desirous ofobtaining a copy of the said financial statement may write to the Company Secretary at theRegistered Office of the company.

The Consolidated net profit of the company and its subsidiary amountedto Rs 967.26 crores for the financial year ended 31st March 2022 as compared to Rs 976.59crores for the previous financial year ended 31st March 2021.

Additional details regarding performance of the Associate Company &Subsidiary Company have been mentioned in the succeeding paragraphs.

ASSOCIATE COMPANY - SUPREME PETROCHEM LIMITED (SPL)

SUPREME PETROCHEM LIMITED

Your company has an investment of 28936400 no of equity shares inthe SPL (promoted by your company & R Raheja Group) which constitutes 30.78% as at31st March 2022.

During the year under review your company received an aggregate amountof Rs 47.74 Crores as dividend including Rs 11.57 Crores of interim dividend for the year2021-22. Net revenue & net profit of that company for the year ended 31st March 2022was Rs 5062.80 Crores and Rs 663.26 Crores as against Rs 3206.45 Crores & Rs 477.49Crores respectively during previous year.

SPL has undertaken setting up of second line of Extruded PolystyreneBoard (XPS) with capacity of 100000M3 and increasing the master batch and Compoundcapacity by 50000 MTA.

SPL is also implementing mass ABS project with two lines of 70 KTA eachaggregating 140KTA at its complex at village Amdoshi Dist. Raigad Maharashtra intechnical collaboration with Ms. Versalis —ENI Chemicals Group Italy.

SPL has obtained requisite approvals for its proposed capital reductionfrom existing Rs 10 per equity share to Rs 4 per equity share and effected the same.Pursuant to the said reduction your company has since received Rs 17.36 Crores during thecurrent year.

SPL has proposed final dividend of Rs 14 per share in its board meetingheld on 27th April 2022 subject to the approval of shareholders which would entitle theCompany to receive an amount of Rs 40.51 Crores as dividend during the year 2022-23.

SUBSIDIARY COMPANY

Onset of the financial year 2021-22 was a pack of mixed sentimentswherein on one side entire humanity was recovering from the worst pandemic of the centurywhich cut the wings of all economy activities. On the other side businesses were embracingthe new normal and digging out the pathways of growth & sustenance.

The Supreme Industries Overseas FZE has encircled 16th years ofoperation and became instrumental in achieving sales turnover of US$ 10.26 Million(inclusive of third-party exports in INR) weighing 3685 MT during the financial year2021-22 achieving exceptional volume growth of about 44% in plastic piping business. Thegeography of trade is spread over thirty plus countries touching GCC Africa USA UKEurope & Indian- sub-continent.

Performance of financial year 2021-22 encompasses all the initiativesviz. continuance of business through decades old loyal customers looping in new partnersstrengthening the current distribution network & successfully being awarded high valueproject orders due to its widest range the total commitment to quality & services.

Once again Plexconcil an export promotion council under Ministry ofCommerce Government of India conferred on Supreme excellence in exports awards for PVCpipes & fittings for the four consecutive years starting from 2017 to 2021.

Supreme Overseas is aiming to surpass export-sales of US$13.00 Millionduring financial year 2022-23 by strengthening current network in all directions. Brandpromotion initiatives through various means likes of international exhibition expandcurrent basket of products & improvement of current range & developing newmarketing tools will be the instruments of growth for the year 2022-23.

MATERIAL SUBSIDIARY

The Board of Directors of the Company had adopted a Policy fordetermining material subsidiary company in line with the SEBI (Listing Obligations &Disclosure Requirements) Regulations 2015. The Policy is uploaded on the Company'swebsite at www. supreme.co.in. Presently there is no material subsidiary company.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Shri S.J.Taparia Executive Director (DIN: 00112513) of the Companyretires by rotation at the forthcoming Annual General Meeting in accordance withprovisions of the Companies Act 2013 and the Articles of Association of the Company andbeing eligible offers himself for re-appointment.

Shri Ramanathan Kannan Non-Executive Independent Director at 78thAnnual General Meeting was re-appointed for a further period of five years from 16thSeptember 2020 to 15th September 2025. He will attain 75 years of age on 23rd September2022 therefore in compliance with the provisions of Regulation 17(1A) of Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 members approval is required for continuation of his directorship up to the expiryof his term of office i.e. upto 15th September 2025.

Shri Y P Trivedi Non-Executive Independent Director's term expired on16th September 2021. He was associated with Supreme Group for over 35 years. The Companyexpresses its appreciation for valuable contribution made by him during his long tenure onthe Board of the Company.

Shri B V Bhargava Non-Executive Independent Director's term expired on16th September 2021. He was associated with Supreme for over 25 years. The Companyexpresses its appreciation for valuable contribution made by him during his long tenure onthe Board of the Company.

The Company has received declarations from all the IndependentDirectors of the Company confirming that they meet with the criteria of the independenceas prescribed both under section 149(6) of the Companies Act 2013 and under Regulation 16(1)(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.

In accordance with the provisions of the Companies Act 2013 none ofthe Independent Directors are liable to retire by rotation.

KEY MANAGERIAL PERSONNEL

Shri M P Taparia Managing Director Shri P C Somani Chief FinancialOfficer and Shri R J Saboo VP (Corporate Affairs) & Company Secretary were appointedas Key Managerial Personnel of your Company in accordance with the provisions of Section203 of the Companies Act 2013 and there is no change in the same during the year underreview.

DISCLOSURES RELATED TO BOARD COMMITTEES AND POLICIES

a. Board Meetings:

The Board of Directors met 6 times during the year ended 31st March2022 in accordance with the provisions of the Companies Act 2013 and rules made thereunder. The details thereof are given in the Corporate Governance Report.

b. Board Performance Evaluation:

(i) The Board in consultation with Nomination and RemunerationCommittee has devised criteria for performance evaluation of Independent DirectorsBoard/Committees and other individual Directors which includes criteria for performanceevaluation of Non-Executive Directors and Executive Directors. Performance evaluation hasbeen carried out as per the Nomination & Remuneration Policy.

Pursuant to amendment in section 178 by the Companies (Amendment) Act2017 which is effective from 7th May 2018 the Nomination and Remuneration Committeenoted the amendment and decided to carryout evaluation of performance of Board itsCommittees and individual Director. Accordingly Nomination and Remuneration Committeeconducted the performance evaluation of Board its Committees and individual Director inits meeting held on 22nd January 2022.

The performance evaluation of the Independent Directors was alsocarried by the entire Board. The performance evaluation of the Chairman Managing Director& Executive Directors was carried out by the independent Directors at its separatemeeting held on 24th January 2022.

The Board has on the recommendation of the Nomination &Remuneration Committee framed a Nomination & Remuneration policy and Policy onfixation of criteria for selection & appointment removal of Directors & SeniorManagement Personnel. The Nomination & Remuneration Policy and Policy on fixation ofcriteria for selection & appointment of

Directors & Senior Management Personnel are annexed herewith as AnnexureIV (A) & Annexure IV (B) to this Report.

AUDITORS

Statutory Auditors:-

The Statutory Auditors M/S Lodha & Co. Chartered Accountantshaving Registration No 301051 E was re-appointed in 79th Annual General Meeting to holdoffice from the conclusion of 79th Annual General Meeting for a term of consecutive fiveyears till conclusion of 84th Annual General Meeting.

The Statutory Auditors have given a confirmation that they are eligibleto continue with their appointment and that they have not been disqualified in any mannerfrom continuing as Statutory Auditors.

AUDITORS' REPORT

Note on financial statement referred in the Auditor's Report areself-explanatory and do not call for any further comments. The Auditor's Report does notcontain any qualification reservation or adverse remark.

COST AUDITORS

In terms of the provisions of Section 148 of the Act read with theCompanies (Cost Records and Audit) Rules 2014 as amended from time to time the Board ofDirectors on the recommendation of the Audit Committee has appointed M/s. Kishore Bhatia& Associates Cost Accountants (Registration No: 00294) as Cost Auditor of theCompany for the financial year ending 31st March 2023 on a remuneration as mentioned inthe Notice convening the 80th Annual General Meeting for conducting the audit of the costrecords maintained by the Company.

A Certificate from M/s. Kishore Bhatia & Associates CostAccountants has been received to the effect that their appointment as Cost Auditor of theCompany if made would be in accordance with the limits specified under Section 141 ofthe Act and Rules framed thereunder.

A resolution seeking Members' approval for remuneration payable to CostAuditors forms part of the Notice of the 80th Annual General Meeting of the Company andsame is recommended for your consideration.

Cost Audit Report for the year ended 31st March 2021 was filed with theRegistrar of Companies within the prescribed time limit and for the year ended 31st March2022 the same shall be filed within prescribed time after completion of Cost Audit by CostAuditors.

The Company has made and maintained requisite Cost accounts and recordsas required to be maintained as specified by the Central Government under sub-section (1)of section 148 of the Companies Act 2013.

SECRETARIAL AUDIT REPORT FOR THE YEAR ENDED 31ST MARCH 2022

Pursuant to the provisions of Section 204 of the Companies Act 2013and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 theBoard has appointed M/s V. Laxman & Co. Company Secretaries (C.P No. 744) to conductSecretarial Audit for the financial year ended on 31st March 2022.

Secretarial Audit Report for the financial year ended 31st March 2022issued by M/s. V. Laxman & Co Company Secretaries in

Form MR-3 forms part to this report Annexure V. The said reportdoes not contain any observation or qualification requiring explanation or adverse remark.

AUDIT COMMITTEE

The details pertaining to composition of the Audit Committee and termsof reference are included in the Corporate Governance Report which forms part of thisReport.

REPORTING OF FRAUDS

There was an instance of embezzlement by group of employees involvingan aggregate amount of Rs 17.42 lakhs at company's manufacturing unit at Gadegaon. Thecompany has recovered entire amount and all the employees/ associates who were involved inembezzlement have been expelled from service.

MATERIAL CHANGES AND COMMITMENT AFFECTING FINANCIAL POSITION OF THECOMPANY

There are no other material changes or commitments occurring after 31stMarch 2022 which may affect the financial position of the company or may requiredisclosure.

INTERNAL FINANCIAL CONTROLS

The company has in place Internal Financial Control systemcommensurate with size & complexity of its operations to ensure proper recording offinancial and operational information & compliance of various internal controls &other regulatory & statutory compliances. During the year under review no material orserious observation has been received from the Internal Auditors of the Company forinefficiency or inadequacy of such controls.

Internal Auditors' comprising of professional Chartered Accountantsmonitor & evaluate the efficacy of Internal Financial Control system in the companyits compliance with operating system accounting procedures & policies at all thelocations of the company. Based on their report of Internal Audit function correctiveactions in the respective area are undertaken & controls are strengthened. Significantaudit observations & corrective action suggested are presented to the Audit Committee.

PARTICULAR OF CONTRACTS OR ARRANGEMENT WITH RELATED PARTIES

All the transactions with Related Parties are placed before the AuditCommittee as also placed before the Board for approval. Prior omnibus approval of theAudit Committee and the Board is obtained for the transactions which are of a foreseen andrepetitive nature. The transactions entered into pursuant to the omnibus approval sogranted are audited and a statement giving details of all related party transactions isplaced before the Audit Committee and the Board of Directors for their approval on aquarterly basis.

All transactions entered into with related parties during the year wereon arm's length basis in the ordinary course of business and in line with the thresholdof materiality defined in the Company's policy on Related Party Transactions & are inaccordance with the provisions 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 2022 there were no transactions withrelated parties which qualify as material transactions.

The details of the related party transactions are set out in Note 40 tothe standalone financial statements forming part of this Annual Report.

The Form AOC-2 pursuant to section 134(3)(h) of the Companies Act readwith Rule 8(2) of the Companies (Accounts) Rules 2014 is set out as Annexure VI tothis Report.

The Policy on Related Party Transactions as approved by the Board isalso uploaded on the 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 & 186of the Act to the extent 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 theCompany is constituted to provide a mechanism which ensures adequate safeguards toemployees and Directors from any victimization on raising of concerns by them of anyviolations of legal or regulatory requirements incorrect or misrepresentation of anyfinancial statements and reports etc.

RISK MANAGEMENT POLICY

Your Company has an elaborate risk Management procedure and adopted asystematic approach to mitigate risk associated with accomplishment of objectivesoperations revenues and regulations. Your Company believes that this would ensuremitigating steps proactively and help to achieve stated objectives. The entity'sobjectives can be viewed in the context of four categories Strategic OperationsReporting and Compliance. The Company consider activities at all levels of theorganization viz Enterprise level Division level Business unit level and Subsidiarylevel in Risk Management framework. The Risk Management process of the Company focuses onthree elements viz. (1) Risk Assessment; (2) Risk Management; (3) Risk Monitoring.

A Risk Management Committee is constituted which has been entrustedwith the responsibility to assist the Board in

(a) Overseeing and approving the Company's enterprise risk managementframework; and (b) Overseeing that all the risk that the organization faces.

The key risks and mitigating actions are also placed before the AuditCommittee of the Company. Significant audit observations and follow up actions thereon arereported to the Audit Committee. The Audit Committee reviews adequacy and effectiveness ofthe Company's internal control environment and monitors the implementation of auditrecommendations including those relating to strengthening of the Company's riskmanagement policies and systems.

CORPORATE SOCIAL RESPONSIBILITY POLICY

The brief outline of the Corporate Social Responsibility (CSR) Policyof the company and the initiatives undertaken by the company on CSR activities during theyear are set out in Annexure of this Report in the format prescribed in the Companies(Corporate Social Responsibility Policy) Rules 2014. Annexure VII (A) & (B).

The Policy is available on the website of the Company i.e.www.supreme.co.in.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

Company decided to voluntary publish Business Responsibility andSustainability Report (BRSR) for the FY 2021-22. The BRSR as approved by the BusinessResponsibility and Sustainability Committee and Board of Directors forms part of thisAnnual Report.

DISCLOSURE AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE(PREVENTION PROHIBITION AND REDRESSAL) ACT 2013

The Company has zero tolerance towards sexual harassment at theworkplace and have a policy on prevention prohibition and redressal of sexual harassmentat workplace in line with the provisions of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 and the Rules thereunder. As requiredunder law an Internal Complaints Committee has been constituted for reporting andconducting inquiry into the complaints made by the victim on the harassments at the workplace. During the year under review there were no cases filed pursuant to the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.

ANNUAL RETURN:

Pursuant to the provisions of Section 134(3)(a) and Section 92(3) ofthe Act read with Rule 12 of the Companies (Management and Administration) Rules 2014the extract of the Annual Return of the Company for the Financial Year 31st March 2022 isuploaded on the website of the Company and can be accessed at www.supreme.co.in.

GENERAL DISCLOSURE

Your Directors state that no disclosure or reporting is required inrespect of the following items as there were no transactions on these items during theyear under review:

1. Details relating to deposits covered under Chapter V of the Act.

2. Issue of equity shares with differential rights as to dividendvoting or otherwise.

3. Issue of shares (sweat equity shares) to employees of the Companyunder ESOS.

4. Neither the Managing Director nor the Whole Time Directors of theCompany received any remuneration or commission from its subsidiary.

5. No significant or material orders were passed by the Regulators orCourts or Tribunals which impact the going concern status and Company's operations infuture.

ACKNOWLEDGEMENT

The Board of Directors wishes to express its gratitude and record itssincere appreciation for the commitment and dedicated efforts put in by all the employeesat all the levels during this challenging time. Your Directors take this opportunity toexpress their grateful appreciation for the encouragement co-operation and supportreceived by the Company from the local authorities bankers customers suppliers andbusiness associates. The directors are thankful to the esteemed shareholders for theircontinued support and the confidence reposed in the Company and its management.

For and on behalf of the Board of Directors
Place: Mumbai B. L. Taparia
Date: 29th April 2022 Chairman

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