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Supreme Industries Ltd.

BSE: 509930 Sector: Industrials
NSE: SUPREMEIND ISIN Code: INE195A01028
BSE 00:00 | 16 May 1883.00 6.35
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NSE 00:00 | 16 May 1879.75
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OPEN 1874.00
PREVIOUS CLOSE 1876.65
VOLUME 2345
52-Week high 2689.00
52-Week low 1819.30
P/E 29.46
Mkt Cap.(Rs cr) 23,924
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 1874.00
CLOSE 1876.65
VOLUME 2345
52-Week high 2689.00
52-Week low 1819.30
P/E 29.46
Mkt Cap.(Rs cr) 23,924
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 79thAnnual Report together with the Audited Financial Statements for the financial

year ended 31st March 2021. (V In Crores)
Particulars FY 2020-2021 FY 2019-2020
Total Income 6373 5530
Profit Before Interest Depreciation & Tax 1300 854
Interest & Financial Charges 9 20
Depreciation Amortization and Impairment 213 206
Profit Before Tax & Exceptional Items 1078 628
Tax Expenses 277 132
Profit After Tax 801 496
Other Comprehensive Income (Net of Taxes) (1) (4)
Total Comprehensive Income 800 492

DIVIDEND

i) Dividend on 127026870 Equity Shares of R 2/- each @1100% i.e. R 22/- per share as under:- (Previous year @ 700% i.e. R 14/- per equity share)
(a) Interim Dividend @ 250% i.e. R 5/- per share (already paid in November 2020) 63.50
(b) Final Dividend @ 850% i.e. R 17/- per share 215.96
R 279.46

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

OVERVIEW OF THE FINANCIAL PERFORMANCE

The financial performance highlights for the year ended 31stMarch 2021 are as follows -

The Company sold 409109 MT of Plastic goods and achieved net productturnover of R 6177 Crores during the year under review against sales of 411521 MT and netproduct turnover of R 5408 crores in the previous year having nominal volume de-growthabout 1% and product value growth about 14% respectively.

Total Income and Operating Profit for the year under review amounted toR 6373 crores and R 1300 crores respectively as compared to R 5530 crores and R 854crores in the previous financial year.

The Profit before Tax and Profit after Tax for the year under reviewamounted to R 1078 crores and R 801 crores respectively as compared to R 628 crores and R496 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 R 1445.9 crores (Reduced from
Rated R 1612 Cr)
Long-Term Rating CRISIL AA/Positive (outlook revised from Stable and rating reaffirmed)
Short-Term Rating CRISIL A1+ (Reaffirmed)
R 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 allthe Fixed Deposits with accrued interest as at the end of 31st March 2014.Accordingly the Company is not having any Fixed Deposit as on 31st March2021.

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 2021 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 31stMarch 2021 and 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 2021 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 Act2013. Members who are interested in obtaining these particulars may write to the CompanySecretary at the Registered Office of the Company. The aforesaid Annexure is alsoavailable for inspection by Members at the Registered Office of the Company 21 daysbefore the 79th Annual General Meeting and up to the date of the ensuing Annual GeneralMeeting during the business hours on working days.

CONSOLIDATED FINANCIAL STATEMENT

The consolidated financial statements of the company & itssubsidiary & associates 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-1 is annexed herewith as Annexure - III to thisReport. The statement also provides the details of performance and financial position ofthe 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 R 977 crores for the financial year ended 31st March 2021 as compared to R463 crores for the previous financial year ended 31st March 2020.

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

During the year the Company received an aggregate dividend of R 11.57Crores from Supreme Petrochem Limited (SPL) - Promoted by your company and R Raheja Group.Net revenue and net profit of that Company for the year ended 31st March 2021were R 3206 Crs. and R 477 Crs. respectively. SPL has taken expansion plans at its boththe manufacturing sites to expand capacity of Polystyrene by 90000 MT per annum and30000 MT of EPS per annum at an outlay of about R 260 Crores.

During the year SPL bought back 2481287 Equity Shares(F.V.Rs10/-each) thereby reducing number of Equity Shares from 96501958 to 94020671.

Your company holds 28936400 Equity Shares in SPL. Consequent to theabove buy back the % of holding of its paid-up Equity Capital increased to 30.78% as at31st March 2021 from 30.01% as at 31st March 2020.

SPL also has taken in hand reduction in paid up share capital from R10/- per share to R 4/- per share without reducing the number of shares. Accordingly yourCompany will receive R 6/- per share for every share held by it. This is all subject torequisite approvals. SPL has also proposed final dividend @ 125% i.e. R 12.50/- per sharein its board meeting held on 30th April 2021 subject to the approval ofshareholders which would entitle the Company to receive R 36 Crores as dividend during theyear 2021-22.

SUBSIDIARY COMPANY

The Supreme Industries Overseas FZE has completed 15th years of itsoperation and achieved turnover of US$ 5.94 Million during the financial year 2020-21 ascompared to US$ 7.53 Million during the previous year through trade partners spread overthirty plus countries mapping GCC Africa USA UK Europe & Indian-subcontinent. Inspite of experiencing severe crises in global trade new channel partners were broughtinto folds and specific project orders were serviced during the year. The de-growth wasprincipally because of drop in demand and non-conclusion of project orders due toprevailing uncertainty else performance from the trade partners is exceptional underpandemic circumstances.

Supreme brand's flair of quality delivery and services were wellacknowledged by trade partners by continuing to procure the materials in spite of allodds ranging from disruptions in supply due to lockdowns and inordinate global shippingmovements. Supreme Overseas FZE is aiming to surpass export-sales of US$10 Million duringfinancial year 2021-22 relying on potentials of existing trade partners and continue toexpand the reach of Supreme brand to new geographical territories. Project orders willhave handsome share in achieving this target.

Brand promotion initiatives offline & online in line withpandemic directives will be executed to generate new leads to improvise geographicalpenetration specially the untapped markets. Identification of new product in all segmentsexpansion & improvement of current range developing marketing collaterals will be theorder of the day.

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 B.L.Taparia Non-Executive Director and Chairman (DIN: 00112438)of the Company retires by rotation at the forthcoming Annual General Meeting in accordancewith provisions of the Companies Act 2013 and the Articles of Association of the Companyand being eligible offers himself for re-appointment.

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 5 times through virtual meetings during theyear ended 31st March 2021 in accordance with the provisions of the CompaniesAct 2013 and rules made there under. The details thereof are given in the CorporateGovernance 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 NonExecutive 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 RemunerationCommittee noted the amendment and decided to carryout evaluation of performance of Boardits Committees and individual Director. Accordingly Nomination and Remuneration Committeeconducted the performance evaluation of Board its Committees and individual Director inits meeting held on 13th January 2021.

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 23rd January 2021.

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 Personnelare annexed herewith as Annexure IV (A) & Annexure IV (B) to this Report.

AUDITORS Statutory Auditors:-

The Statutory Auditors M/S Lodha & Co. Chartered Accountantshaving Registration No 301051E was appointed in 74th Annual General Meeting tohold office from the conclusion of 74th Annual General Meeting for a term ofconsecutive five years till conclusion of 79th Annual General Meeting. Theirpresent term of appointment as Statutory Auditors will be completing on ensuing 79thAnnual General Meeting of the members of the company. M/S Lodha & Co being eligiblehas expressed their willingness to serve as Statutory Auditors of the company. Theirre-appointment as Statutory Auditors if approved by the members of the Company willtake effect from the conclusion of this Annual General Meeting upto the conclusion of 84thAnnual General Meeting.

The Statutory Auditors have given a confirmation to the effect thatthey are eligible to continue with their appointment and that they have not beendisqualified in any manner from continuing as Statutory Auditors.

AUDITORS' REPORT

Note on financial statement referred to 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 2022 on a remuneration asmentioned in the Notice convening the 79th Annual General Meeting forconducting the audit of the cost records 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 79th Annual General Meeting of theCompany and same is recommended for your consideration.

Cost Audit Report for the year 31st March 2020 was filedwith the Registrar of Companies within the prescribed time limit and for the year ended31st March 2021 the same shall be filed within prescribed time after completionof Cost Audit by Cost Auditors.

The Company has made and maintained requisite accounts and records asrequired to maintain Cost Records 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 2021

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 2021.

Secretarial Audit Report for the financial year ended 31stMarch 2021 issued by M/s. V. Laxman & Co Company Secretaries in Form MR-3 forms partto this report Annexure V. The said report does not contain any observation orqualification 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 fraud by way of embezzlement by an employeeduring the year under review involving an amount of R 40 lakhs at its manufacturing unitat Noida. The Company has taken all requisite steps and an amount of R 31 lakhs has sincebeen recovered R 5 lakh is under process of recovery and R 4 lakh has been provided for.

MATERIAL CHANGES AND COMMITMENT AFFECTING FINANCIAL POSITION OF THECOMPANY

There are no other material changes or commitments occurring after 31stMarch 2021 which may affect the financial position of the company or may requiredisclosure.

In view of recent surge in Covid-19 cases few states re-enforcedlockdown like restrictions for a short period which currently is not expected to have anysignificant impact on company's operations/ results. The company continues to remainvigilant and cautious in this regard.

IMPLEMENTATION OF SAP

This was the 3rd year of implementation of SAP a leading ERP solutionwhich has since been rolled over from 1st April 2018 Due to the SAPimplementation various business processes such as HR Manufacturing Selling &Distributions and Accounts etc. have been integrated & simplified. SAP has beeneffectively used to enhance the productivity and efficiency of the Organization in theentire scale of operations. SAP's various innovative functionalities are evaluated andneed based developed & customised & solutions is designed to fulfil the needs ofan organization.

Through Documents Management System (DMS) all the requisite documentsare getting stored in the SAP system itself. The Standard Operating Procedure (SOPs) areprepared & updated from time to time for the various modules of SAP for the benefitsof the users and other professionals associated with the company.

This would now facilitate in digital transformation and also help indata analytics for better decision making process.

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 the Audit Committee and the Board is obtainedfor the transactions which are of a foreseen and repetitive nature. The transactionsentered into pursuant to the omnibus approval so granted are audited and a statementgiving details of all related party transactions is placed before the Audit Committee andthe Board of Directors for their approval on a quarterly 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 2021 there were no transactionswith related 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 to thisReport.

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'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 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 REPORT

The Business Responsibility Report as approved by the BusinessResponsibility Committee and Board of Directors forms part of this Annual 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 31stMarch 2021 is uploaded 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 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

B. L. Taparia
Chairman
Place: Mumbai
Date: 3 rd May 2021

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