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Notes to Accounts of Supreme Industries Ltd.

Mar 31, 2023

Capital redemption reserve: Capital redemption reserve is being created by transfer from Retained earnings at the time of buy back of equity shares in accordance with the Act. The reserve will be utilised in accordance with the provisions of the Act.

General reserve: The General reserve is created by way of transfer of profits from retained earnings for appropriation purposes. This reserve is utilised in accordance with the provisions of the Act.

Retained earnings: Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or other distributions paid to shareholders.

31 FINANCIAL INSTRUMENTS

The Management assessed that cash and cash equivalents, trade receivables, trade payables and other current liabilities approximate their carrying amounts largely due to the short term maturities of these instruments. The fair value of the financial assets and financial liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities.

Level 2: Other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.

Level 3: Techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data.

The fair value of investments in equity/liquid funds is based on the price quotation at the reporting date derived from quoted market prices in active market. The Company enters into derivative financial instruments with various banks. Foreign exchange forward contracts are valued mark to mark valuation as provided by the Banks.

32 RISK MANAGEMENTFinancial risk management objectives and policies

The Company''s financial risk management is an integral part of how to plan and execute its business strategies. The Company''s activity expose it to market risk, liquidity risk , commodity risk and credit risk. In order to minimise any adverse effects on the financial performance of the Company, derivative financial instruments, such as foreign exchange forward contracts are entered to hedge certain foreign currency risk exposures. Derivatives are used exclusively for hedging purposes and not as trading or speculative instruments. The Company''s financial risk management policy is set by the Managing Director and governed by overall direction of Board of Directors of the Company.

Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, equity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including investments and deposits , foreign currency receivables, payables and loans and borrowings.

a. credit RISK

Credit risk arises from the possibility that the counter party may not be able to settle their obligations as agreed. To manage this, the Company periodically assess financial reliability of customers, taking into account the financial condition, current economic trends, and analysis of historical bad debts and ageing of accounts receivable. Individual risk limits are set accordingly.

The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis through each reporting period. To assess whether there is a significant increase in credit risk the Company compares the risk of default occurring on asset as at the reporting date with the risk of default as at the date of initial recognition. It considers reasonable and supportive forwarding-looking information such as:

i) Actual or expected significant adverse changes in business

ii) Actual or expected significant changes in the operating results of the counterparty

iii) Financial or economic conditions that are expected to cause a significant change to the counterparty''s ability to meet its obligations

iv) Significant increase in credit risk on other financial instruments of the same counterparty

The company catogarises financial assets based on the assumptions, inputs and factors specific to the class of financial assets into High-quality assets, negligible credit risk; Quality assets, low credit risk; Standard assets, moderate credit risk; Substandard assets, relatively high credit risk; Low quality assets, very high credit risk; Doubtful assets, credit-impaired.

Financial assets are written off when there is no reasonable expectations of recovery, such as a debtor failing to engage in a repayment plan with the Company. The Company categorises a loan or receivable for write off when a debtor fails to make contractual payments greater than one year past due. Where loans or receivables have been written off, the Company continues engage in enforcement activity to attempt to recover the receivable due. Where recoveries are made, these are recognized in profit or loss.

The Company maintains exposure in cash and cash equivalents, investments in liquid mutual funds and Corporate deposits. Investments in liquid mutual funds and corporate deposits are fair valued on Level 1 or Level 2 inputs.

The Company invests after considering multiple criteria prescribed by the Risk Management Committee. These risks are monitored regularly by the Risk Management Committee.

B. LIQUIDITY RISK

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time, or at a reasonable price. The Company''s treasury department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related such risk are overseen by senior management. Management monitors the Company''s net liquidity position through rolling forecasts on the basis of expected cash flows.

C. MARKET RISK- INTEREST RATE RISK

Interest rate risk is the risk that the fair value of future cash flows of the financial instruments will fluctuate because of changes in market interest rates. In order to optimize the Company''s position with regards to interest income and interest expenses and to manage the interest rate risk, treasury performs a comprehensive corporate interest rate risk management by balancing the proportion of fixed rate and floating rate financial instruments in its total portfolio.

Exposure to interest rate risk

The Company is not exposed to significant interest rate risk as at the respective reporting date.

D. MARKET RISK- FOREIGN CuRRENCY RISK

The Company operates internationally and portion of the business is transacted in several currencies and consequently the Company is exposed to foreign exchange risk through its sales and services in overseas and purchases from overseas suppliers in various foreign currencies. Exports of the company are significantly lower in comparison to its imports. Foreign currency exchange rate exposure is partly balanced by exports of goods and prudent hedging policy.

The Company enjoys natural hedge to the extent of exports effected. Although the Company believes that these derivatives constitute hedges from a economic prospective, they might not qualify for hedge accounting under Ind AS 109.

E. COMMODITY RISK

Principal Raw Material for Company''s products is variety of plastic polymers which are primarily Derivatives of Crude Oil. Company sources its raw material requirement from across the globe. Domestic market prices are also generally remains in sync with international market price scenario.

Volatility in Crude Oil prices, Currency fluctuation of Rupee vis-a-vis other prominent currencies coupled with demand-supply scenario in the world market affect the effective price and availability of polymers for the Company. Company effectively manages deals with availability of material as well as price volatility through:

1. Widening its sourcing base

2. Appropriate contracts and commitments

3. Well planned procurement & inventory strategy and

4. Prudent hedging policy on foreign currency exposure

Risk committee of the Company comprising members from Board of Directors and operations has developed and enacted a risk management strategy regarding commodity Price risk and its mitigation.

Company believes in conservative leverage policy. Company''s capex plan over the medium term shall be largely funded through internal accruals.

B The Company follows the policy of Dividend for every financial year as may be decided by Board considering financial performance of the company and other internal and external factors enumerated in the Company dividend policy. As per the dividend policy, generally the Company maintains a dividend pay-out ratio in the range of 35% to 55% of net profit (PAT).

Dividends declared by the Company are based on the profit available for distribution. On 28th April, 2023, the Board of Directors of the Company have proposed a final dividend of R 20/- per share in respect of the year ended 31st March, 2023 subject to the approval of shareholders at the ensuing Annual General Meeting, and if approved, would result in a cash outflow of approximately R 254 Crores.

34 DISCLOSURE PURSUANT TO IND AS - 19 "EMPLOYEE BENEFITS"

i) Gratuity: In accordance with the applicable laws, the Company provides for gratuity, a defined benefit retirement plan ("The Gratuity Plan") covering eligible employees. The Gratuity Plan provides for a lump sum payment to vested employees on retirement (subject to completion of five years of continuous employment), death, incapacitation or termination of employment that are based on last drawn salary and tenure of employment. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation on the reporting date and the Company makes annual contribution to the gratuity fund administered by life Insurance Companies under their respective Group Gratuity Schemes.

The sensitivity analyses above have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting year and may not be representative of the actual change. It is based on a change in the key assumption while holding all other assumptions constant. When calculating the sensitivity to the assumption, the same method used to calculate the liability recognised in the balance sheet has been applied. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared with the previous year.

ii) Compensated Absences: The Company permits encashment of compensated absence accumulated by their employees on retirement, separation and during the course of service. The liability in respect of the Company, for outstanding balance of leave at the balance sheet date is determined and provided on the basis of actuarial valuation as at the balance sheet date performed by an independent actuary. The Company doesn''t maintain any plan assets to fund its obligation towards compensated absences.

iii) Notes:

Liability for post employment benefits, other long term benefits, termination benefits and certain short term benefits such as compensated absences is provided on an actuarial basis for the Company as a whole. Accordingly the amount for above pertaining to key management personnel is not ascertainable and, therefore, not included above.

a) Most of the issues of litigation pertaining to Central Excise/Income Tax are based on interpretation of the respective Law & Rules thereunder. Management has been opined by its counsel that many of the issues raised by revenue will not be sustainable in law as they are covered by judgments of respective judicial authorities which supports its contention. As such no material impact on the financials of the Company is envisaged.

b) Sales Tax and Entry Tax related litigation/demand primarily pertains to non- receipt of declaration forms from customers and mismatch of input tax credit or some interpretation related issues w.r.t. applicability of schemes. Counsel of the Company opined positive outcome based on merits of the cases under litigation. As such no material impact on the financials of the Company is envisaged.

c) Other issues are either in ordinary course of business or not of substantial nature and management is reasonably confident of their positive outcome. Management shall deal with them judiciously and provide for appropriately, if any such need arises.

a) Related party relationship is as identified by the management and relied upon by the auditors.

b) No amounts in respect of related parties have been written off/ written back during the year or has not made any provision for doubtful debts/ receivable.

c) Related party transactions have been disclosed on basis of value of transactions in terms of the respective contracts.

d) Terms and conditions of sales and purchases: the sales and purchases transactions with the related parties are in the ordinary course of business based on normal commercial terms, conditions, market rates and memorandum of understanding signed with the related parties. For the year ended 31st March, 2023, the Company has not recorded any loss allowances for transactions between the related parties.

40 In terms of para 4 of Ind As 108 "Operating Segments", segment information has been provided in the notes to Consolidated

Financial Statements.

46 (a) No proceeding has been initiated or pending against the Company for holding any Benami property under the Benami

Transactions (Prohibition) Act, 1988, as amended, and rules made thereunder.

(b) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

(c) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

(d) There were no transactions relating to previously unrecorded income that have been surrendered and disclosed as income during the year in the tax assessments under the Income Tax Act, 1961.

(e) The Company has not advanced or loaned to or invested in funds to any other person(s) or entity(is), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(i) directly or indirectly lend to or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or

(ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

(f) The Company has not received any fund from any person(s) or entity(is), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall

(i) directly or indirectly lend to or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(ii) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries

47 The previous year''s figures have been re-grouped / re-classified wherever required to conform to current year''s classification.


Mar 31, 2022

b) Terms/rights attached to Equity shares :

The Company has only one class of issued Equity Shares having a par value of R 2 per share. Each Shareholder is eligible for one vote per share held.

In the event of liquidation, the equity shareholders are eligible to receive the residual assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

Nature & Purpose of the Reserve:

Capital reserve: Capital reserve represents the capital subsidy received by the Company. The reserve will be utilised in accordance with the provisions of the Act.

Securities premium: Securities premium is credited when shares are issued at premium. This will be utilised in accordance with the provisions of the Act.

Capital redemption reserve: Capital redemption reserve is being created by transfer from Retained earnings at the time of buy back of equity shares in accordance with the Act. The reserve will be utilised in accordance with the provisions of the Act.

General reserve: The General reserve is created by way of transfer of profits from retained earnings for appropriation purposes. This reserve is utilised in accordance with the provisions of the Act.

Retained earnings: Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or other distributions paid to shareholders.

1. Refer Note 40 for related party balances.

2. The Company has certain dues to suppliers registered under Micro, Small and Medium Enterprises Development Act, 2006 (''MSMED Act''). The disclosure pursuant to the said MSMED Act, to the extent information available to the Company are as follows:

32 FINANCIAL INSTRUMENTS

The Management assessed that cash and cash equivalents, trade receivables, trade payables and other current liabilities approximate their carrying amounts largely due to the short term maturities of these instruments. The fair value of the financial assets and financial liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities.

Level 2: Other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.

Level 3: Techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data.

For financial instruments measured at fair value in the Balance Sheet, a three level fair value hierarchy is used that reflects the significance of inputs used in the measurements. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and lowest priority to unobservable inputs (Level 3 measurements).

The categories used are as follows:

• Level 1: quoted prices for identical instruments

• Level 2: directly or indirectly observable market inputs, other than Level 1 inputs; and

• Level 3: inputs which are not based on observable market data.

The fair value of investments in equity/liquid funds is based on the price quotation at the reporting date derived from quoted market prices in active market. The Company enters into derivative financial instruments with various banks. Foreign exchange forward contracts are valued mark to mark valuation as provided by the Banks.

33 RISK MANAGEMENTFinancial risk management objectives and policies

The Company''s financial risk management is an integral part of how to plan and execute its business strategies. The Company''s activity expose it to market risk, liquidity risk, commodity risk and credit risk. In order to minimise any adverse effects on the financial performance of the Company, derivative financial instruments, such as foreign exchange forward contracts are entered to hedge certain foreign currency risk exposures. Derivatives are used exclusively for hedging purposes and not as trading or speculative instruments. The Company''s financial risk management policy is set by the Managing Director and governed by overall direction of Board of Directors of the Company.

Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, equity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including investments and deposits, foreign currency receivables, payables and loans and borrowings.

a. credit RISK

Credit risk arises from the possibility that the counter party may not be able to settle their obligations as agreed. To manage this, the Company periodically assess financial reliability of customers, taking into account the financial condition, current economic trends, and analysis of historical bad debts and ageing of accounts receivable. Individual risk limits are set accordingly.

The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis through each reporting period. To assess whether there is a significant increase in credit risk the Company compares the risk of default occurring on asset as at the reporting date with the risk of default as at the date of initial recognition. It considers reasonable and supportive forwarding-looking information such as:

i) Actual or expected significant adverse changes in business

ii) Actual or expected significant changes in the operating results of the counterparty

iii) Financial or economic conditions that are expected to cause a significant change to the counterparty''s ability to meet its obligations

iv) Significant increase in credit risk on other financial instruments of the same counterparty

The company catogarises financial assets based on the assumptions, inputs and factors specific to the class of financial assets into High-quality assets, negligible credit risk; Quality assets, low credit risk; Standard assets, moderate credit risk; Substandard assets, relatively high credit risk; Low quality assets, very high credit risk; Doubtful assets, credit-impaired.

Financial assets are written off when there is no reasonable expectations of recovery, such as a debtor failing to engage in a repayment plan with the Company. The Company categorises a loan or receivable for write off when a debtor fails to make contractual payments greater than one year past due. Where loans or receivables have been written off, the Company continues engage in enforcement activity to attempt to recover the receivable due. Where recoveries are made, these are recognized in profit or loss.

The Company maintains exposure in cash and cash equivalents, investments in liquid mutual funds and Corporate deposits. Investments in liquid mutual funds and corporate deposits are fair valued on Level 1 or Level 2 inputs.

The Company invests after considering multiple criteria prescribed by the Risk Management Committee. These risks are monitored regularly by the Risk Management Committee.

B. LIQUIDITY RISK

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time, or at a reasonable price. The Company''s treasury department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related such risk are overseen by senior management. Management monitors the Company''s net liquidity position through rolling forecasts on the basis of expected cash flows.

C. MARKET RISK- INTEREST RATE RISK

Interest rate risk is the risk that the fair value of future cash flows of the financial instruments will fluctuate because of changes in market interest rates. In order to optimize the Company''s position with regards to interest income and interest expenses and to manage the interest rate risk, treasury performs a comprehensive corporate interest rate risk management by balancing the proportion of fixed rate and floating rate financial instruments in its total portfolio.

Exposure to interest rate risk

The Company is not exposed to significant interest rate risk as at the respective reporting date.

D. MARKET RISK- FOREIGN CuRRENCY RISK

The Company operates internationally and portion of the business is transacted in several currencies and consequently the Company is exposed to foreign exchange risk through its sales and services in overseas and purchases from overseas suppliers in various foreign currencies. Exports of the company are significantly lower in comparison to its imports. Foreign currency exchange rate exposure is partly balanced by exports of goods and prudent hedging policy.

The Company enjoys natural hedge to the extent of exports effected. Although the Company believes that these derivatives constitute hedges from a economic prospective, they might not qualify for hedge accounting under Ind AS 109.

E. COMMODITY RISK

Principal Raw Material for Company''s products is variety of plastic polymers which are primarily Derivatives of Crude Oil. Company sources its raw material requirement from across the globe. Domestic market prices are also generally remains in sync with international market price scenario.

Volatility in Crude Oil prices, Currency fluctuation of Rupee vis-a-vis other prominent currencies coupled with demand-supply scenario in the world market affect the effective price and availability of polymers for the Company. Company effectively manages deals with availability of material as well as price volatility through:

1. Widening its sourcing base

2. Appropriate contracts and commitments

3. Well planned procurement & inventory strategy and

4. Prudent hedging policy on foreign currency exposure

Risk committee of the Company comprising members from Board of Directors and operations has developed and enacted a risk management strategy regarding commodity Price risk and its mitigation.

F. IMPACT OF COVID-19

The Company has considered the possible impact of COVID-19 in preparation of financials statements. The impact of the global health pandemic may be different from that estimated as at the date of approval of financial statements. Considering the continuing uncertainties, the Company will continue to closely monitor any material changes to future economic conditions.

B The Company follows the policy of Dividend for every financial year as may be decided by Board considering financial performance of the company and other internal and external factors enumerated in the Company dividend policy. As per the dividend policy, generally the Company maintains a dividend pay-out ratio in the range of 35 % to 55% of net profit (PAT).

Dividends declared by the Company are based on the profit available for distribution. On 29th April, 2022, the Board of Directors of the Company have proposed a final dividend of R 18 per share in respect of the year ended 31st March, 2022 subject to the approval of shareholders at the ensuing Annual General Meeting, and if approved, would result in a cash outflow of approximately R 228.65 Crores.

35 DISCLOSURE PURSUANT TO IND AS - 19 "EMPLOYEE BENEFITS"

i) Gratuity: In accordance with the applicable laws, the Company provides for gratuity, a defined benefit retirement plan ("The Gratuity Plan") covering eligible employees. The Gratuity Plan provides for a lump sum payment to vested employees on retirement (subject to completion of five years of continuous employment), death, incapacitation or termination of employment that are based on last drawn salary and tenure of employment. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation on the reporting date and the Company makes annual contribution to the gratuity fund administered by life Insurance Companies under their respective Group Gratuity Schemes.

The sensitivity analyses above have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting year and may not be representative of the actual change. It is based on a change in the key assumption while holding all other assumptions constant. When calculating the sensitivity to the assumption, the same method used to calculate the liability recognised in the balance sheet has been applied. The methods and types ol assumptions used in preparing the sensitivity analysis did not change compared with the previous year.

ii) Compensated Absences: The Company permits encashment of compensated absence accumulated by their employees on retirement, separation and during the course of service. The liability in respect of the Company, for outstanding balance of leave at the balance sheet date is determined and provided on the basis of actuarial valuation as at the balance sheet date performed by an independent actuary. The Company doesn''t maintain any plan assets to fund its obligation towards compensated absences.

iii) Notes:

Liability for post employment benefits, other long term benefits, termination benefits and certain short term benefits such as compensated absences is provided on an actuarial basis for the Company as a whole. Accordingly the amount for above pertaining to key management personnel is not ascertainable and, therefore, not included above.

36 LEASES

Under Ind AS 116, the nature of expenses in respect of operating leases has changed from "lease rent" to "depreciation cost" and ''''finance cost'''' for the right-to-use assets and for interest accrued on lease liability respectively.

The weighted average lessee''s incremental borrowing rate applied to the lease liabilities is 9% p.a.

a) Most of the issues of litigation pertaining to Central Excise/Income Tax are based on interpretation of the respective Law & Rules thereunder. Management has been opined by its counsel that many of the issues raised by revenue will not be sustainable in law as they are covered by judgments of respective judicial authorities which supports its contention. As such no material impact on the financials of the Company is envisaged.

b) Sales Tax and Entry Tax related litigation/demand primarily pertains to non- receipt of declaration forms from customers and mismatch of input tax credit or some interpretation related issues w.r.t. applicability of schemes. Counsel of the Company opined positive outcome based on merits of the cases under litigation. As such no material impact on the financials of the Company is envisaged.

c) Other issues are either in ordinary course of business or not of substantial nature and management is reasonably confident of their positive outcome. Management shall deal with them judiciously and provide for appropriately, if any such need arises.

39 COMMITMENTS

Estimated amount of contracts remaining to be executed on Capital Account and not provided for (net of advances) is R 237.62

Crores (Previous year R 178.58 Crores).

c) Related party transactions have been disclosed on basis of value of transactions in terms of the respective contracts.

d) Terms and conditions of sales and purchases: the sales and purchases transactions among the related parties are in the ordinary course of business based on normal commercial terms, conditions, market rates and memorandum of understanding signed with the related parties. For the year ended 31st March, 2022, the Company has not recorded any loss allowances for transactions between the related parties.

41 In terms of para 4 of Ind As 108 "Operating Segments", segment information has been provided in the notes to Consolidated Financial Statements.

42 During the year, pursuant to revised notification/guidelines issued by the State government of Madhya Pradesh, Industrial subsidy claims post GST regime have been recomputed, Accordingly claims receivable amounting to Rs. 12.62 crores in respect of FY 201 7-18 to FY 2020-21 has been reversed and has been adjusted from Government grants/subsidy (Refer Note 24 - Other operating income).

43 Post GST, pending notification from the State government of West Bengal, the Company has not recognized (Amount not ascertainable) benefit of Industrial Promotion Assistance Scheme pertaining to Kharagpur Unit since July,2017. The Company is hopeful of continuance of the Scheme and benefits accruing therefrom.

49 (a) No proceeding has been initiated or pending against the Company for holding any Benami property under the Benami

Transactions (Prohibition) Act, 1988, as amended, and rules made thereunder.

(b) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

(c) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

(d) There were no transactions relating to previously unrecorded income that have been surrendered and disclosed as income during the year in the tax assessments under the Income Tax Act, 1961.

(e) The Company has not advanced or loaned to or invested in funds to any other person(s) or entity(is), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(i) directly or indirectly lend to or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or

(ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

(f) The Company has not received any fund from any person(s) or entity(is), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall

(i) directly or indirectly lend to or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(ii) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries

50 The Code on Social Security, 2020 (''Code'') relating to employee benefits during employment and post-employment benefits has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified. The Company will assess the impact of the Code and recognise the same when the Code becomes effective.

51 The previous year figures have been re-grouped / re-classified wherever required to conform to current year''s classification.


Mar 31, 2021

32 FINANCIAL INSTRUMENTS

The Management assessed that cash and cash equivalents, trade receivables, trade payables and other current liabilities approximate their carrying amounts largely due to the short term maturities of these instruments. The fair value of the financial assets and financial liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities.

Level 2: Other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.

Level 3: Techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data.

RISK MANAGEMENT

Financial risk management objectives and policies

The Company''s financial risk management is an integral part of how to plan and execute its business strategies. The Company''s activity expose it to market risk, liquidity risk , commodity risk and credit risk. In order to minimise any adverse effects on the financial performance of the Company, derivative financial instruments, such as foreign exchange forward contracts are entered to hedge certain foreign currency risk exposures. Derivatives are used exclusively for hedging purposes and not as trading or speculative instruments. The Company''s financial risk management policy is set by the Managing Director and governed by overall direction of Board of Directors of the Company.

CREDIT RISK

Credit risk arises from the possibility that the counter party may not be able to settle their obligations as agreed. To manage this, the Company periodically assess financial reliability of customers, taking into account the financial condition, current economic trends, and analysis of historical bad debts and ageing of accounts receivable. Individual risk limits are set accordingly.

The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis through each reporting period. To assess whether there is a significant increase in credit risk the Company compares the risk of default occurring on asset as at the reporting date with the risk of default as at the date of initial recognition. It considers reasonable and supportive forwarding-looking information such as:

i) Actual or expected significant adverse changes in business

ii) Actual or expected significant changes in the operating results of the counterparty

iii) Financial or economic conditions that are expected to cause a significant change to the counterparty''s ability to meet its obligations

iv) Significant increase in credit risk on other financial instruments of the same counterparty

The company catogarises financial assets based on the assumptions, inputs and factors specific to the class of financial assets into High-quality assets, negligible credit risk; Quality assets, low credit risk; Standard assets, moderate credit risk; Substandard assets, relatively high credit risk; Low quality assets, very high credit risk; Doubtful assets, credit-impaired.

Financial assets are written off when there is no reasonable expectations of recovery, such as a debtor failing to engage in a repayment plan with the Company. The Company categorises a loan or receivable for write off when a debtor fails to make contractual payments greater than one year past due. Where loans or receivables have been written off, the Company continues engage in enforcement activity to attempt to recover the receivable due. Where recoveries are made, these are recognized in profit or loss.

The Company maintains exposure in cash and cash equivalents, investments in liquid mutual funds and Corporate deposits. Investments in liquid mutual funds and corporate deposits are fair valued on Level 1 or Level 2 inputs.

The Company invests after considering multiple criteria prescribed by the Risk Management Committee. These risks are monitored regularly by the Risk Management Committee.

LIQUIDITY RISK

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time, or at a reasonable price. The Company''s treasury department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related such risk are overseen by senior management. Management monitors the Company''s net liquidity position through rolling forecasts on the basis of expected cash flows.

MARKET RISK- INTEREST RATE RISK

Interest rate risk is the risk that the fair value of future cash flows of the financial instruments will fluctuate because of changes in market interest rates. In order to optimize the Company''s position with regards to interest income and interest expenses and to manage the interest rate risk, treasury performs a comprehensive corporate interest rate risk management by balancing the proportion of fixed rate and floating rate financial instruments in its total portfolio.

Exposure to interest rate risk

The Company is not exposed to significant interest rate risk as at the respective reporting date.

MARKET RISK- FOREIGN CuRRENCY RISK.

The Company operates internationally and portion of the business is transacted in several currencies and consequently the Company is exposed to foreign exchange risk through its sales and services in overseas and purchases from overseas suppliers in various foreign currencies. Exports of the company are significantly lower in comparison to its imports. Foreign currency exchange rate exposure is partly balanced by exports of goods and prudent hedging policy.

Derivative financial instruments

The Company holds derivative financial instruments such as foreign currency forward to mitigate the risk of changes in exchange rates on foreign currency exposures. The counterparty for these contracts is generally are banks. These derivative financial instruments are valued based on quoted prices for similar assets and liabilities in active markets or inputs that are directly or indirectly observable in the market place.

COMMODITY RISK

Principal Raw Material for Company''s products is variety of plastic polymers which are primarily Derivatives of Crude Oil. Company sources its raw material requirement from across the globe. Domestic market prices are also generally remains in sync with international market price scenario.

Volatility in Crude Oil prices, Currency fluctuation of Rupee vis-a-vis other prominent currencies coupled with demand-supply scenario in the world market affect the effective price and availability of polymers for the Company. Company effectively manages deals with availability of material as well as price volatility through:

1. Widening its sourcing base

2. Appropriate contracts and commitments

3. Well planned procurement & inventory strategy and

4. Prudent hedging policy on foreign currency exposure

Risk committee of the Company comprising members from Board of Directors and operations has developed and enacted a risk management strategy regarding commodity Price risk and its mitigation.

impact of COvID-19

As a result of the nationwide lockdown imposed by the Government of India, the operations of the Company were temporarily disrupted at its various manufacturing facilities impacting production and dispatches from the second half of March 2020. The Company had resumed operations since last week of April 2020 / first week of May 2020 in compliance with the guidelines issued by respective authorities and is continuing to take adequate precautions for safety and wellbeing of its employees. In view of recent surge in Covid-19 cases, few states reintroduced some restrictions and the Company continues to be vigilant and cautious.

The Company has considered the possible impact of COVID-19 in preparation of the above results. The impact of the global health pandemic may be different from that estimated as at the date of approval of results. Considering the continuing uncertainties, the Company will continue to closely monitor any material changes to future economic conditions.

tPITAL RISK MANAGEMENT

The Company''s objectives when managing capital are to

• safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders

• maintain an optimal capital structure to reduce the cost of capital

The Company monitors capital on the basis of the following debt equity ratio:

ii) Compensated Absences: The Company permits encashment of compensated absence accumulated by their employees on retirement, separation and during the course of service. The liability in respect of the Company, for outstanding balance of leave at the balance sheet date is determined and provided on the basis of actuarial valuation as at the balance sheet date performed by an independent actuary. The Company doesn''t maintain any plan assets to fund its obligation towards compensated absences.

iii) Notes:

Liability for post employment benefits, other long term benefits, termination benefits and certain short term benefits such as compensated absences is provided on an actuarial basis for the Company as a whole. Accordingly the amount for above pertaining to key management personnel is not ascertainable and, therefore, not included above.

36 LEASES

Effective April 1, 2019, the Company had adopted Ind AS 116 "Leases" using modified retrospective approach. The Company''s lease asset classes primarily consist of leases for buildings and vehicles. These leases were classified as "Operating Leases" under Ind AS 17. On transition to Ind AS 116 "Leases", for these leases, lease liabilities were measured at the present value of remaining lease payments, discounted at the Company''s incremental borrowing rate as at April 01, 2019. Right to Use is measured either at an amount equal to the lease liability adjusted by the amount of any prepaid or accrued lease payments.

The Company had used following practical expedient, when applying Ind AS 116 to leases previously classified as operating leases under Ind AS 17.

• The company didn''t recognized Right to Use and Lease liabilities for lease for which the lease terms ends within 12 months on the date of initial transition and low value assets

• The Company excluded initial direct cost from measurement of the Right to Use assets at the date of initial application.

• The Company uses hindsight in determining the lease term where the contract contains options to extend or terminate the lease.

Under Ind AS 116, the nature of expenses in respect of operating leases has changed from "lease rent" to "depreciation cost" and ''''finance cost'''' for the right-to-use assets and for interest accrued on lease liability respectively, and therefore, these expenses for the current year are not comparable to the previous years, to that extent.

The weighted average lessee''s incremental borrowing rate applied to the lease liabilities is 9% p.a.

a) Most of the issues of litigation pertaining to Central Excise/Income Tax are based on interpretation of the respective Law & Rules thereunder. Management has been opined by its counsel that many of the issues raised by revenue will not be sustainable in law as they are covered by judgments of respective judicial authorities which supports its contention. As such no material impact on the financials of the Company is envisaged.

b) Sales Tax and Entry Tax related litigation/demand primarily pertains to non-receipt of declaration forms from customers and mismatch of input tax credit or some interpretation related issues w.r.t. applicability of schemes. Counsel of the Company opined positive outcome based on merits of the cases under litigation. As such no material impact on the financials of the Company is envisaged.

c) Other issues are either in ordinary course of business or not of substantial nature and management is reasonably confident of their positive outcome. Management shall deal with them judiciously and provide for appropriately, if any such need arises.

39 COMMITMENTS

Estimated amount of contracts remaining to be executed on Capital Account and not provided for (net of advances) is

R 17858 lakhs (Previous year R 15308 lakhs).

a) Related party relationship is as identified by the management and relied upon by the auditors.

b) No amounts in respect of related parties have been written off/ written back during the year or has not made any provision for doubtful debts/ receivable.

c) Related party transactions have been disclosed on basis of value of transactions in terms of the respective contracts.

d) Terms and conditions of sales and purchases: the sales and purchases transactions among the related parties are in the ordinary course of business based on normal commercial terms, conditions, market rates and memorandum of understanding signed with the related parties. For the year ended 31st March, 2021, the Company has not recorded any loss allowances for transactions between the related parties.

41 In terms of para 4 of Ind As 108 "Operating Segments", segment information has been provided in the notes to Consolidated

Financial Statements.

1. During the year under review, Company has dismantled Consortium arrangement of banking and has withdrawn all security offered to its banks. Now there is a Multiple banking arrangement in place fully on unsecured basis i.e. no assets have been offered as security for availing the banking facilities.

2. Term Loans from banks were secured as first pari passu charge basis on movable properties of the Company viz. plant and equipment & moulds, both present and future, situated at all the locations of the Company.

3. Working Capital Loans from banks were secured against:

First pari passu charge by way of hypothecation of stocks and book debts, both present and future

Second / subservient charge on all movable properties of the Company viz. plant and equipment & moulds, both present and future, situated at all the locations of the Company.

13 Post GST, pending notification from the West Bengal Government, the Company has not recognized (Amount not ascertainable) benefit of Industrial Promotion Assistance Scheme pertaining to its Kharagpur Unit since July, 2017. The Company is hopeful of continuance of the Scheme and benefits accruing therefrom.

47 The Code on Social Security, 2020 (''Code'') relating to employee benefits during employment and post-employment benefits has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified. The Company will assess the impact of the Code and recognise the same when the Code becomes effective.

48 The previous year figures have been re-grouped / re-classified wherever required to confirm to current year classification. All figures of financials has been rounded off to nearest lakhs rupees.


Mar 31, 2019

Proposed Dividend:

The Board of directors have recommended the payment of a final dividend of RS. 9 per fully paid up equity share (March 31, 2018 -RS. 9), The proposed dividend is subject to the approval of shareholders in the ensuing annual general meeting.

Nature & Purpose of the Reserve:

Capital Reserves: Capital reserve represents the capital subsidy received by the Company. The reserve will be utilised in accordance with the provisions of the Act.

Securities premium: Securities premium reserve is credited when shares are issued at premium. The reserve will be utilised in accordance with the provisions of the Act.

Capital Redemption Reserves: Capital redemption reserve is being created by transfer from Retained earnings at the time of buy back of equity shares in accordance with the Act. The reserve will be utilised in accordance with the provisions of the Act.

General reserve: The General reserve is created by way of transfer of profits from retained earnings for appropriation purposes. This reserve is utilised in accordance with the provisions of the Act.

Retained earnings: Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or other distributions paid to shareholders.

1 FINANCIAL INSTRUMENTS

The Management assessed that cash and cash equivalents, trade receivables, trade payables and other current liabilities approximate their carrying amounts largely due to the short term maturities of these instruments. The fair value of the financial assets and financial liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities.

Level 2: Other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.

Level 3: Techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data.

The carrying amounts and fair values of financial instruments by catergory are as follows:

Fair value estimation

For financial instruments measured at fair value in the Balance Sheet, a three level fair value hierarchy is used that reflects the significance of inputs used in the measurements. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and lowest priority to unobservable inputs (Level 3 measurements).

The categories used are as follows:

- Level 1: quoted prices for identical instruments

- Level 2: directly or indirectly observable market inputs, other than Level 1 inputs; and

- Level 3: inputs which are not based on observable market data.

The fair value of investments in equity is based on the price quotation at the reporting date derived from quoted market prices in active market. The Company enters into derivative financial instruments with various counterparties, principally financial institutions. Foreign exchange forward contracts are valued using valuation techniques, which employs the use of market observable inputs. The most frequently applied valuation techniques include forward pricing using present value calculations.

2 RISK MANAGEMENT

Financial risk management objectives and policies

The Company’s financial risk management is an integral part of how to plan and execute its business strategies. The Company’s activity exposes it to market risk, liquidity risk , commodity risk and credit risk. In order to minimise any adverse effects on the financial performance of the Company, derivative financial instruments, such as foreign exchange forward contracts, foreign currency and interest rate swaps are entered to hedge certain foreign currency risk exposures to hedge variable interest rate exposures. Derivatives are used exclusively for hedging purposes and not as trading or speculative instruments. The Company’s financial risk management policy is set by the Managing Director and governed by overall direction of Board of Directors of the Company.

Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, equity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including investments and deposits , foreign currency receivables, payables and loans and borrowings.

A. CREDIT RISK

Credit risk arises from the possibility that the counter party may not be able to settle their obligations as agreed. To manage this, the Company periodically assess financial reliability of customers, taking into account the financial condition, current economic trends, and analysis of historical bad debts and ageing of accounts receivable. Individual risk limits are set accordingly.

The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis through each reporting period. To assess whether there is a significant increase in credit risk the Company compares the risk of default occurring on asset as at the reporting date with the risk of default as at the date of initial recognition. It considers reasonable and supportive forwarding-looking information such as:

i) Actual or expected significant adverse changes in business

ii) Actual or expected significant changes in the operating results of the counterparty

iii) Financial or economic conditions that are expected to cause a significant change to the counterparty’s ability to meet its obligations

iv) Significant increase in credit risk on other financial instruments of the same counterparty

The company catogarises financial assets based on the assumptions, inputs and factors specific to the class of financial assets into High-quality assets, negligible credit risk; Quality assets, low credit risk; Standard assets, moderate credit risk; Substandard assets, relatively high credit risk; Low quality assets, very high credit risk; Doubtful assets, credit-impaired.

Financial assets are written off when there is no reasonable expectations of recovery, such as a debtor failing to engage in a repayment plan with the Company. The Company categorises a loan or receivable for write off when a debtor fails to make contractual payments greater than one year past due. Where loans or receivables have been written off, the Company continues engage in enforcement activity to attempt to recover the receivable due. Where recoveries are made, these are recognized in profit or loss.

B. LIQUIDITY RISK

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time, or at a reasonable price. The Company’s treasury department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related such risk are overseen by senior management. Management monitors the Company’s net liquidity position through rolling forecasts on the basis of expected cash flows.

Financing arrangements

The Company had access to following undrawn Borrowing facilities at end of reporting period:

C. MARKET RISK - INTEREST RATE RISK

Interest rate risk is the risk that the fair value of future cash flows of the financial instruments will fluctuate because of changes in market interest rates. In order to optimize the Company’s position with regards to interest income and interest expenses and to manage the interest rate risk, treasury performs a comprehensive corporate interest rate risk management by balancing the proportion of fixed rate and floating rate financial instruments in its total portfolio.

Exposure to interest rate risk

The Company is not exposed to significant interest rate risk as at the respective reporting date.

D. MARKET RISK- FOREIGN CURRENCY RISK.

The Company operates internationally and portion of the business is transacted in several currencies and consequently the Company is exposed to foreign exchange risk through its sales and services in overseas and purchases from overseas suppliers in various foreign currencies. Exports of the company are significantly lower in comparison to its imports. Foreign currency exchange rate exposure is partly balanced by exports of goods and prudent hedging policy.

Derivative financial instruments

The Company holds derivative financial instruments such as foreign currency forward to mitigate the risk of changes in exchange rates on foreign currency exposures. The counterparty for these contracts is generally are banks. These derivative financial instruments are valued based on quoted prices for similar assets and liabilities in active markets or inputs that are directly or indirectly observable in the market place.

The Company enjoys natural hedge to the extent of: a) Exports effected and b) Inventory held (being sensitive to exchange rate fluctuations). Although the Company believes that these derivatives constitute hedges from a economic prospective, they might not qualify for hedge accounting under Ind AS 109.

E. COMMODITY RISK

Principal Raw Material for Company’s products is variety of plastic polymers which are primarily Derivatives of Crude Oil. Company sources its raw material requirement from across the globe. Domestic market prices are also generally remains in sync with international market price scenario.

Volatility in Crude Oil prices, Currency fluctuation of Rupee vis-a-vis other prominent currencies coupled with demand-supply scenario in the world market affect the effective price and availability of polymers for the Company. Company effectively manages deals with availability of material as well as price volatility through:

1. Widening its sourcing base

2. Appropriate contracts and commitments

3. Well planned procurement & inventory strategy and

4. Prudent hedging policy on foreign currency exposure

Risk committee of the Company comprising members from Board of Directors and operations has developed and nacted a risk management strategy regarding commodity Price risk and its mitigation.

3 CAPITAL RISK MANAGEMENT

A The Company’s objectives when managing capital are to

- safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders

- maintain an optimal capital structure to reduce the cost of capital

The Company monitors capital on the basis of the following debt equity ratio:

Company believes in conservative leverage policy. Its debt equity ratio is lower than the industry average.

Company’s capex plan over the medium term shall be largely funded through internal accruals and suppliers credit. The Company plans to remain virtual debt free company. The Company also expects monetization of the remaining unsold area of Supreme Chamber in near future which shall further strengthen the cash flow of the Company.

B The Company follows the policy of Dividend for every financial year as may be decided by Board considering financial performance of the company and other internal and external factors enumerated in the Company dividend policy. As per the dividend policy, generally the Company maintains a dividend pay-out ratio (including Dividend Distribution tax) in the range of 35 % to 55% of net profit (PAT).

4 DISCLOSURE PURSUANT TO IND AS - 19 “EMPLOYEE BENEFITS”

i) Gratuity: In accordance with the applicable laws, the Company provides for gratuity, a defined benefit retirement plan (“The Gratuity Plan”) covering eligible employees. The Gratuity Plan provides for a lump sum payment to vested employees on retirement (subject to completion of five years of continuous employment), death, incapacitation or termination of employment that are based on last drawn salary and tenure of employment. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation on the reporting date and the Company makes annual contribution to the gratuity fund administered by life Insurance Companies under their respective Group Gratuity Schemes.

The disclosure in respect of the defined Gratuity Plan are given below:

The sensitivity analyses above have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period and may not be representative of the actual change. It is based on a change in the key assumption while holding all other assumptions constant. When calculating the sensitivity to the assumption, the same method used to calculate the liability recognised in the balance sheet has been applied. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared with the previous period.

ii) Compensated Absences: The Company permits encashment of compensated absence accumulated by their employees on retirement, separation and during the course of service. The liability in respect of the Company, for outstanding balance of leave at the balance sheet date is determined and provided on the basis of actuarial valuation as at the balance sheet date performed by an independent actuary. The Company doesn’t maintain any plan assets to fund its obligation towards compensated absences.

iii) Notes:

Liability for post employment benefits, other long term benefits, termination benefits and certain short term benefits such as compensated absences is provided on an actuarial basis for the Company as a whole. Accordingly the amount for above pertaining to key management personnel is not ascertainable and, therefore, not included above.

Notes:

a) Most of the issues of litigation pertaining to Central Excise/Service Tax/Income Tax are based on interpretation of the respective Law & Rules thereunder. Management has been opined by its counsel that many of the issues raised by revenue will not be sustainable in law as they are covered by judgments of respective judicial authorities which supports its contention. As such no material impact on the financials of the Company is envisaged.

b) Sales Tax and Entry Tax related litigation/demand primarily pertains to non- receipt of declaration forms from customers and mismatch of input tax credit or some interpretation related issues w.r.t. applicablity of schemes. Counsel of the Company opined positive outcome based on merits of the cases under litigation. In most of the cases, required documents are being filed and minor impact if any, shall be given in the year of final outcome of respective matter in appeal.

c) Other issues are either in ordinary course of business or not of substantial nature and management is reasonably confident of their positive outcome. Management shall deal with them judiciously and provide for appropriately, if any such need arises.

5 COMMITMENTS

a) Estimated amount of contracts remaining to be executed on Capital Account and not provided for (net of advances) is RS. 11152 lacs (Previous year RS. 13376 lacs).

b) The Company has taken premises under cancellable operating lease. These lease agreements are normally renewed on expiry. The rental expenditure is accounted for in statement of profit and loss of the Company in accordance with Ind AS-17 on lease transactions.

The Company has also taken office premises under non-cancellable operating lease. The total of future minimum lease payments under this lease for the period not later than one year is RS. 544 lacs (previous year RS. 525 lacs) and for the period later than one year & not later than five years is RS. 2151 lacs (previous year RS. 513 lacs) and for the period later than five years is RS. 106 lacs (previous year RS. 78 lacs).

6 DISCLOSURE ON RELATED PARTY TRANSACTIONS Names of related parties and description of relationship and Nature of Transactions:

Parties where controls exists :

The Supreme Industries Overseas FZE, Dubai - Subsidiary

Key Managerial Personnel:

Mr. M P Taparia, Managing Director ; Mr. S J Taparia, Executive Director ; Mr. V K Taparia, Executive Director ; Mr. PC. Somani, Chief Financial Officer ; Mr. R.J. Saboo, AVP (Corporate Affairs) & Company Secretary.

Other Related Parties:

Non Executive Directors

Mr. B. L. Taparia, Chairman; Mr. N. N. Khandwala, Director; Mr. B. V. Bhargava, Director; Mr. Y. P Trivedi, Director; Mr. R. Kannan, Director; Mr. R. M. Pandia, Director; Smt. Rashna Khan, Director

Mr. Vivek Taparia, Business Development Manager (Relative of Director)

Notes:

a) Related party relationship is as identified by the management and relied upon by the auditors.

b) No amounts in respect of related parties have been written off/ written back during the year or has not made any provision for doubtful debts/ receivable.

c) Related party transactions have been disclosed on basis of value of transactions in terms of the respective contracts.

d) Terms and conditions of sales and purchases: the sales and purchases transactions among the related parties are in the ordinary course of business based on normal commercial terms, conditions, market rates and memorandum of understanding signed with the related parties. For the year ended 31st March, 2019, the Company has not recorded any loss allowances for transactions between the related parties.

7 In terms of para 4 of Ind As 108 “Operating Segments”, segment information has been provided in the notes to Consolidated Financial Statements.

8 ASSETS PROVIDED AS SECURITY

The carrying amounts of assets provided as security for current and non-current borrowings are:

Notes:

1. Term Loans from banks are secured as first pari passu charge basis on movable properties of the Company viz. plant and equipment & moulds, both present and future, situated at all the locations of the Company.

2. Working Capital Loans from banks are secured against:

First pari passu charge by way of hypothecation of stocks and book debts, both present and future

Second / subservient charge on all movable properties of the Company viz. plant and equipment & moulds, both present and future, situated at all the locations of the Company.

9 a) Consequent to the approvals received from Shareholders on 19th May’2018 and in pursuance to Business Transfer Agreement dated 4th April’ 2018, the Company has at the close of the quarter ended 30th June’2018 transferred its Khushkhera Unit engaged in manufacture of Plastic Automotive Components as a going concern to a newly formed Joint Venture Company viz. Kumi Supreme India Pvt Ltd on a slump sale basis. Accordingly, gain on sale of the said undertaking amounting to RS. 7044 lacs has been recognised and disclosed as Exceptional Items.

b) Gain of RS. 1131 lacs on sale of land and building at Hosur unit - I is disclosed as Exceptional Items.

10 Post GST, pending notification from the West Bengal Government, the Company has not recognized (Amount not ascertainable) benefit of Industrial Promotion Assistance Scheme pertaining to its Kharagpur Unit since July’2017. The Company is hopeful of continuance of the Scheme and benefits accruing therefrom.

11 RECENT ACCOUNTING PRONOUNCEMENTS

Ind AS 116 - Leases

On March 30, 2019, Ministry of Corporate affairs have notified Ind AS 116 - “Leases”. Ind AS 116 will replace the existing leases standards Ind AS 17 - “Leases” and related interpretations. The new standard sets out the principles for the recognition, measurement, presentation and disclosures of lease for both lease and lessor. Ind AS 116 introduces a single lease accounting model and requires a leassee to recognise the assets and liabilities for all leases with a term of more than 12 months, unless the underlying assets are of low value. Ind AS 116 substantially carried forward the accounting treatment prescribed for lessor. The effective date for adoption of Ind AS 116 is annual period beginning on or after April 01, 2019. The Company is evaluating the impact of the issued Ind AS 116 on its financial statements.

Ind AS 12 -”Income taxes” - Appendix C - Uncertainty over income tax treatments

On March 30, 2019, Ministry of Corporate affairs have notified Appendix C to Ind AS 12, uncertainty over the income tax treatments which is to be applied while performing the determination of taxable profits/(loss), tax bases, unused tax losses, unused tax credits and tax rates, when there is uncertainty over income tax treatments under Ind AS 12. According to the appendix, the company needs to determine the probability of the relevant tax authorities accepting the each tax treatments that the companies have used or plan to use in their income tax filings which has to be considered to compute the most likely amount or expected value of the tax treatments, when determining the taxable profits/(loss), tax bases, unused tax losses, unused tax credits and tax rates. The effective date for adoption of Ind AS 116 is annual period beginning on or after April 01, 2019. The Company is evaluating the impact of the issued appendix C on its financial statements.”

12 a) The previous year’s figures have been re-grouped / re-classified wherever required to conform to current year’s classification.

All figures of financials has been rounded off to nearest lacs rupees.

b) In view of exceptional items mentioned in Note no. 41 above, the current year’s figures are strictly not comparable with those of the previous year.


Mar 31, 2018

1 FINANCIAL INSTRUMENTS

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique: Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities.

Level 2: Other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.

Level 3: Techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data.

The carrying amounts and fair values of financial instruments by catergory are as follows:

2 RISK MANAGEMENT

Financial risk management objectives and policies

The Company’s financial risk management is an integral part of how to plan and execute its business strategies. The Company’s activity expose it to market risk, liquidity risk , commodity risk and credit risk. In order to minimise any adverse effects on the financial performance of the Company, derivative financial instruments, such as foreign exchange forward contracts, foreign currency and interest rate swaps are entered to hedge certain foreign currency risk exposures to hedge variable interest rate exposures. Derivatives are used exclusively for hedging purposes and not as trading or speculative instruments. The Company’s financial risk management policy is set by the Managing Director and governed by overall direction of Board of Directors of the Company.

Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, equity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including investments and deposits , foreign currency receivables, payables and loans and borrowings.

A. CREDIT RISK

Credit risk arises from the possibility that the counter party may not be able to settle their obligations as agreed. To manage this, the Company periodically assess financial reliability of customers, taking into account the financial condition, current economic trends, and analysis of historical bad debts and ageing of accounts receivable. Individual risk limits are set accordingly.

The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis through each reporting period. To assess whether there is a significant increase in credit risk the Company compares the risk of default occurring on asset as at the reporting date with the risk of default as at the date of initial recognition. It considers reasonable and supportive forwarding-looking information such as:

i) Actual or expected significant adverse changes in business

ii) Actual or expected significant changes in the operating results of the counter party

iii) Financial or economic conditions that are expected to cause a significant change to the counter party’s ability to meet its obligations

iv) Significant increase in credit risk on other financial instruments of the same counter party

The company catogarises financial assets based on the assumptions, inputs and factors specific to the class of financial assets into High-quality assets, negligible credit risk; Quality assets, low credit risk; Standard assets, moderate credit risk; Substandard assets, relatively high credit risk; Low quality assets, very high credit risk; Doubtful assets, credit-impaired.

Financial assets are written off when there is no reasonable expectations of recovery, such as a debtor failing to engage in a repayment plan with the Company. The Company categorises a loan or receivable for write off when a debtor fails to make contractual payments greater than one year past due. Where loans or receivables have been written off, the Company continues engage in enforcement activity to attempt to recover the receivable due. Where recoveries are made, these are recognized in profit or loss.

B. LIQUIDITY RISK

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time, or at a reasonable price. The Company’s treasury department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related such risk are overseen by senior management. Management monitors the Company’s net liquidity position through rolling forecasts on the basis of expected cash flows.

Financing arrangements

The Company had access to following undrawn Borrowing facilities at end of reporting period:

C. MARKET RISK- INTEREST RATE RISK

Interest rate risk is the risk that the fair value of future cash flows of the financial instruments will fluctuate because of changes in market interest rates. In order to optimize the Company’s position with regards to interest income and interest expenses and to manage the interest rate risk, treasury performs a comprehensive corporate interest rate risk management by balancing the proportion of fixed rate and floating rate financial instruments in its total portfolio.

D. MARKET RISK- FOREIGN CURRENCY RISK.

The Company operates internationally and portion of the business is transacted in several currencies and consequently the Company is exposed to foreign exchange risk through its sales and services in overseas and purchases from overseas suppliers in various foreign currencies. Exports of the company are significantly lower in comparison to its imports. Foreign currency exchange rate exposure is partly balanced by exports of goods and prudent hedging policy.

Derivative financial instruments

The Company holds derivative financial instruments such as foreign currency forward and currency and interest rate swaps to mitigate the risk of changes in exchange rates on foreign currency exposures. The counter party for these contracts is generally are banks. These derivative financial instruments are valued based on quoted prices for similar assets and liabilities in active markets or inputs that are directly or indirectly observable in the market place.

The Company enjoys natural hedge to the extent of: a) Exports effected and b) Inventory held (being sensitive to exchange rate fluctuations). Although the Company believes that these derivatives constitute hedges from a economic prospective, they might not qualify for hedge accounting under Ind AS 109.

E. COMMODITY RISK

Principal Raw Material for Company’s products is variety of plastic polymers which are primarily Derivatives of Crude Oil. Company sources its raw material requirement from across the globe. Domestic market prices are also generally remains in sync with international market price scenario.

Volatility in Crude Oil prices, Currency fluctuation of Rupee vis-a-vis other prominent currencies coupled with demand-supply scenario in the world market affect the effective price and availability of polymers for the Company. Company effectively manages with availability of material as well as price volatility through:

1. Widening its sourcing base

2. Appropriate contracts and commitments

3. Well planned procurement & inventory strategy and

4. Prudent hedging policy on foreign currency exposure

Risk committee of the Company comprising members from Board of Directors and operations has developed and enacted a risk management strategy regarding commodity Price risk and its mitigation.

3 CAPITAL RISK MANAGEMENT

A The Company’s objectives when managing capital are to

- safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders

- maintain an optimal capital structure to reduce the cost of capital

The Company monitors capital on the basis of the following debt equity ratio:

Company believes in conservative leverage policy. Its debt equity ratio is lower than the industry average.

Company’s capex plan over the medium term shall be largely funded through internal accruals and suppliers credit. The Company is committed to become virtual debt free company in couple of year which shall further improve its capital structure. The Company also expects monetization of the remaining unsold area of Supreme Chamber in near future which shall further strengthen the cash flow of the Company.

Company’s cash flow shall further be improved by divesting one of its manufacturing unit to newly formed Joint venture Company on slump sales basis.

Loan covenants

In respect of term loan, the Company is required to comply with the following financial covenants:

The Company has complied with these covenants throughout the reporting period.

B The Company follows the policy of Dividend for every financial year as may be decided by Board considering financial performance of the company and other internal and external factors enumerated in the Company’s dividend policy. As per the dividend policy, generally the Company maintains a dividend pay-out ratio (including present Dividend Distribution tax) in the range of 35 % to 55% of net profit (PAT).

4 DISCLOSURE PURSUANT TO IND AS - 19 “EMPLOYEE BENEFITS”

i) Gratuity: In accordance with the applicable laws, the Company provides for gratuity, a defined benefit retirement plan (“The Gratuity Plan”) covering eligible employees. The Gratuity Plan provides for a lump sum payment to vested employees on retirement (subject to completion of five year of continuous employment), death, incapacitation or termination of employment that are based on last drawn salary and tenure of employment. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation on the reporting date and the Company makes annual contribution to the gratuity fund administered by life Insurance Companies under their respective Group Gratuity Schemes.

The disclosure in respect of the defined Gratuity Plan are given below:

The liabilities are split between different categories of plan participants as follows:

- active members - 100% (2016-17: 100%)

The Company expects to contribute RS.597 lacs to the funded plans in financial year.2018-19 The Plan assets have been invested in Insurance managed funds.

D. Assumptions

With the objective of presenting the plan assets and plan liabilities of the defined benefits plans at their fair value on the balance sheet, assumptions under Ind AS 19 are set by reference to market conditions at the valuation date.

The sensitivity analyses above have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period and may not be representative of the actual change. It is based on a change in the key assumption while holding all other assumptions constant. When calculating the sensitivity to the assumption, the same method used to calculate the liability recognised in the balance sheet has been applied. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared with the previous period.

ii) Compensated Absences: The Company permits encashment of compensated absence accumulated by their employees on retirement, separation and during the course of service. The liability in respect of the Company, for outstanding balance of leave at the balance sheet date is determined and provided on the basis of actuarial valuation as at the balance sheet date performed by an independent actuary. The Company doesn’t maintain any plan assets to fund its obligation towards compensated absences.

Notes:

a) Most of the issues of litigation pertaining to Central Excise/Service Tax/Income Tax are based on interpretation of the respective Law & Rules thereunder. Management has been opined by its counsel that many of the issues raised by revenue will not be sustainable in law as they are covered by judgments of respective judicial authorities which supports its contention. As such no material impact on the financials of the Company is envisaged.

b) Sales Tax and Entry Tax related litigation/demand primarily pertains to non- submission of required declaration forms in time due to non- receipt of the same from customers and/ or some interpretation related issues. However in most of the cases, required documents are being filed and minor impact if any, shall be given in the year of final outcome of respective matter in appeal.

c) Other issues are either in ordinary course of business or not of substantial nature and management is reasonably confident of their positive outcome. Management shall deal with them judiciously and provide for appropriately, if any such need arises.

5 COMMITMENTS

a) Estimated amount of contracts remaining to be executed on Capital Account and not provided for (net of advances) is RS.13376 lacs (Previous year RS.5889 lacs).

b) Pursuant to the Co-operation agreement dated 27th December’2017 entered with the HPC Research s.r.o., Czech Republic a, a start up Limited Liability Company focusing on Research and Development in composite cylinders in which the Company has invested RS.192 lacs towards part capital contribution representing 10% share as on March 31, 2018 and balance commitment of RS.288 lacs to be contributed by June 30, 2018

c) The Company has taken premises under cancellable operating lease. These lease agreements are normally renewed on expiry. The rental expenditure is accounted for in statement of profit and loss of the Company in accordance with Ind AS-17 on lease transactions.

The Company has also taken office premises under non-cancellable operating lease. The total of future minimum lease payments under this lease for the period not later than one year is RS.525 lacs (previous year RS.459 lacs) and for the period later than one year & not later than five year is RS.513 lacs (previous year RS.653 lacs) and for the period later than five year is RS.78 lacs (previous year RS.125 lacs) .

6 DISCLOSURE ON RELATED PARTY TRANSACTIONS Names of related parties and description of relationship:

Parties where controls exists :

The Supreme Industries Overseas FZE, Dubai - Subsidiary

Associate and other related parties with whom transaction have been entered during the course of business:

Supreme Petrochem Limited (associate)

Key Managerial Personnel:

Mr. M P Taparia, Managing Director ;

Mr. S J Taparia, Executive Director ;

Mr. V K Taparia, Executive Director ;

Mr. PC. Somani, Chief Financial Officer ;

Mr. R.J. Saboo, AVP (Corporate Affairs) & Company Secretary.

Enterprises in which Directors have significant influence:

Devvrat Impex Private Limited

Other Related Parties:

Mr. B. L. Taparia, Chairman ;

Mr. N. N. Khandwala, Director ;

Mr. B. V. Bhargava, Director ;

Mr. Y. P Trivedi, Director ;

Mr. R. Kannan, Director ;

Mr. R. M. Pandia, Director ;

Smt. Rashna Khan, Director

Mr. Vivek Taparia, Business Development Manager (Relative of Director)

Figures in bracket relate to previous year.

Notes:

a) Related party relationship is as identified by the management and relied upon by the auditors.

b) No amounts in respect of related parties have been written off/ written back during the year or has not made any provision been made for doubtful debts/ receivable.

7 In terms of Ind As 108 “Operating Segments”, segment information has been provided in the notes to Consolidated Financial Statements.

Note:

1. Term Loans from banks are secured as first pari passu charge basis on movable properties of the Company viz. plant and equipment & moulds, both present and future, situated at all the locations of the Company.

2. Working Capital Loans from banks are secured against:

First pari passu charge by way of hypothecation of stocks and book debts, both present and future

Second / subservient charge on all movable properties of the Company viz. plant and equipments & moulds, both present and future, situated at all the locations of the Company.

8 On April 4, 2018, the Company has entered into a Definitive Agreement with the Kumi Kasei Co., Ltd. (Kumi), Japan to form a Joint Venture Company namely Kumi Supreme India Private Limited (“JVC”) inter-alia, including also business transfer of Automotive Component manufacturing facility having carrying value of RS.2865 Lacs as on 31st March 2018, situated at Khushkhera in Rajasthan (Auto Component Business-part of Company’s Industrial product Segment) as a going concern on a slump sale basis for a cash consideration of approximately RS.10800 Lacs subject to closing adjustments. The Company shall hold 20.67% equity stake in the newly formed JVC. The aforesaid business activity does not constitute a separate major component of the Company and therefore, has not been classified as discontinued operations. Presently, the said transaction does not have any impact on the above results and necessary financial impact will be given in the subsequent period subject to fulfillment of closing conditions which is expected to be completed by end of June, 2018. The details of the assets held for disposal are as under :

9 Pre GST, the Company was eligible for Industrial Promotion Assistance Schemes (Schemes) in the state of Maharashtra, West Bengal and Madhya Pradesh mostly by way of refund of Sales Tax. Post GST, Maharashtra Government has issued notification dated February 14, 2018 for continuation of the Scheme and accordingly, during the year the Company has recognized this benefit of RS.528 lacs , for the period from 1st July, 2017 to 31st March, 2018 (included in other operating income). However, pending notification from the West Bengal and Madhya Pradesh state governments, on prudent basis, the Company has not recognized (Amount not ascertainable) this benefit for aforesaid period. The Company is, however, hopeful of continuance of the Schemes and benefits accruing therefrom.

10 The capacity of the Company’s cylinder unit situated at Halol (Gujarat) engaged in manufacturing of composite cylinder having carrying value of fixed assets (excluding freehold land) RS.7309 lacs as on March 31, 2018 is presently underutilised. Composite cylinders being a very technical product, getting various approvals is a long drawn process. Recently BIS standards have also been published which will facilitate introduction of these cylinders in domestic market. The Company is getting good enquiries from the export market and hopeful of significant breakthrough in near future. The cylinder product has also been procured by an oil marketing company for carrying out test marketing and it is confident of getting favourable response. In view of the same, no impairment provision is considered necessary.

11 The previous period’s figures have been re-grouped / re-classified wherever required to conform to current year’s classification. All figures of financials has been rounded off to nearest lacs rupees.


Mar 31, 2017

Note:

1. Refer note 39 for related party balances.

2. The Company has certain dues to suppliers registered under Micro, Small and Medium Enterprises Development Act, 2006 (''MSMED Act''). The disclosure pursuant to the said MSMED Act are as follows:

3 FIRST-TIME ADOPTION OF IND AS

The Company has adopted Indian Accounting Standards (Ind AS) as notified by the Ministry of Corporate Affairs with effect from April 1st, 2016, with a transition date of July 1st, 2015. The adoption of Ind AS has been carried out in accordance with Ind AS 101, First-time Adoption of Indian Accounting Standards. Ind AS 101 requires that all Ind AS standards and interpretations that are issued and effective for the first Ind AS financial statements for the year ended 31st March, 2017, be applied retrospectively and consistently for all financial years presented. However, in preparing these Ind AS financial statements, the Company has availed of certain exemptions and exceptions in accordance with Ind AS 101, as explained below. The resulting difference between the carrying values of the assets and liabilities in the financial statements as at the transition date under Ind AS and Previous GAAP have been recognized directly in equity (retained earnings or another appropriate category of equity).

Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from previous GAAP to Ind AS.

A. Optional Exemptions

(a) Deemed Cost

Ind AS 101 permits to measure all its property, plant & equipments at their previous GAAP carrying value i.e. being deemed cost represented by Gross Block reduced by accumulated depreciation on July 01, 2015.

(b) Investments in subsidiaries and associate

The Company present separate financial statement wherein Ind AS 27 requires it to measure its investment in subsidiaries and associate either at cost or in accordance with the Ind AS 109. The Company at first time adoption has measured such investment at cost in accordance with the Ind AS 27, wherein it has option to measure the investments in its separate opening Ind AS balance sheet at cost as determined in accordance with Ind AS 27 or deemed cost. Deemed cost shall be fair value at the entity''s date of transition to Ind AS in its separate financial statement or previous GAAP carrying amount as on that date. The Company has adopted deemed cost being previous GAAP carrying amount as on date of transition.

B. Mandatory Exceptions

(a) Estimates

An entity''s estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies).

Ind AS estimates as at 1 July 2015 are consistent with the estimates as at the same date made in conformity with previous GAAP The Company made estimates for following items in accordance with Ind AS at the date of transition as these were not required under previous GAAP:

- Investment in equity instruments carried at FVTPL or FVOCI; and

- Impairment of financial assets based on expected credit loss model.

(b) Classification and measurement of financial assets

Ind AS 101 requires an entity to assess classification and measurement of financial assets on the basis of the facts and circumstances that exist at the date of transition to Ind AS.

C. Transition to Ind AS - Reconciliations

The following reconciliations provide a quantification of the effect of significant differences arising from the transition from previous GAAP to Ind AS in accordance with Ind AS 101:

I. Reconciliation of Balance sheet as at July 1, 2015 and March 31, 2016

II. Reconciliation of Statement of Profit and Loss for the year ended March 31, 2016

III. Reconciliation of Equity as at July 1, 2015 and March 31, 2016

The presentation requirements under Previous GAAP differs from Ind AS and hence Previous GAAP information has been regrouped for ease of reconciliation with Ind AS. The Regrouped Previous GAAP information is derived from the Financial Statements of the Company prepared in accordance with Previous GAAP

Notes to first time adoption Note 1: Proposed Dividend

Under the previous GAAP dividend proposed by the board of directors after the balance sheet date but before the approval of the financial statements were considered as subsequent events. Accordingly, provision for proposed dividend including dividend distribution tax was recognized as liability. Under Ind AS, such dividends are recognized when the same is approved by the shareholders in the general meeting.

Note 2: Remeasurements of post employment benefit obligations

Under the previous GAAP cost relating to post employment benefit obligations including actuarial gain/losses were recognized in Profit & Loss. Under Ind AS, actuarial gain/losses on the net defined benefit liability are recognized in other comprehensive income instead of profit & loss.

Note 3: Security deposit

Under the previous GAAP interest free lease security deposits (that are refundable in cash on completion of lease term) are recorded at transaction price. Under Ind AS All financial assets are required to be recognized at fair value. Accordingly, the Company has fair valued the security deposits and the difference between the fair value and transaction value of the security deposit has been recognized as prepaid rent.

Note 4: Borrowings

Ind AS 109 requires transaction costs incurred towards borrowings to be deducted from the transaction value on initial recognition. These cost are recognized in profit & loss over the tenure of borrowings as a part of the interest expense by applying effective interest rate method.

Note 5: Fair Valuation of Investments

Under previous GAAP investment in equity instruments were classified into long term and current investments. Long term investments were carried at cost less provision other than temporary in nature. Current investments were carried at lower of cost or fair value. Under Ind AS, these investments are require to be measured at fair value either through OCI (FVTOCI) or through Profit & loss (FVTPL). The company has opted to fair value these investments through Profit & loss (FVTPL). Accordingly, resulting fair value change of these investments have been recognized in retained earnings as at the date of transition and subsequently in the profit & loss account for the year ended March 31 2016.

Note 6: Discount

Under previous GAAP the Company accounted for revenue net of trade discounts, sales taxes and excise duties. Under Ind AS, the Company will recognize revenue at fair value of consideration received or receivable. Any sales incentive, cash discounts or rebates in any form given to customers will be considered as reductions from revenue.

Note 7: Derivative Instruments

Under previous GAAP premium paid on the forward contracts were mortised over the period of the Forward contracts. Under Ind AS, such forward contracts have been fair valued through profit & loss.

Note 8: Deferred sales tax

Under previous GAAP deferred sales tax represent sales tax liability of the Company for sales effected during the sales tax deferral scheme period. As per the Scheme the same is payable over 15 Years. Accordingly, deferred sales tax has been considered as borrowing. Under Ind AS 109, Financial Instruments requires all financial liabilities to be recognized initially at fair value which is normally the transaction price. In case of interest free loan, fair value is determined in accordance with the Ind As 113 ''fair value measurement'' as the transaction price does not represent the fair value. Accordingly, the difference between the fair value and transaction price is recognized as gain considering it in the nature of government grant and credited to the equity.

Note 9: Deferred taxes

Under previous GAAP deferred taxes were recognized based on Profit & loss approach i.e. tax impact on difference between the accounting income and taxable income. Under Ind AS, deferred tax is recognized by following balance sheet approach i.e. tax impact on temporary difference between the carrying value of asset and liabilities in the books and their respective tax base.

10 FINANCIAL INSTRUMENTS

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities.

Level 2: Other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.

Level 3: Techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data.

11 RISK MANAGEMENT Financial risk management objectives and policies

The Company''s financial risk management is an integral part of how to plan and execute its business strategies. The Company''s activity expose it to market risk, liquidity risk, commodity risk and credit risk. In order to minimise any adverse effects on the financial performance of the Company, derivative financial instruments such as foreign exchange forward contracts, foreign currency/and interest rate swaps are entered to hedge certain foreign currency risk exposures to hedge variable interest rate exposures. Derivatives are used exclusively for hedging purposes and not as trading or speculative instruments. The Company''s financial risk management policy is set by the Managing Director and governed by overall direction of Board of Directors of the Company.

Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, equity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including investments and deposits , foreign currency receivables, payables and loans and borrowings.

A. CREDIT RISK

Credit risk arises from the possibility that the counter party may not be able to settle their obligations as agreed. To manage this, the Company periodically assess financial reliability of customers, taking into account the financial condition, current economic trends, and analysis of historical bad debts and ageing of accounts receivable. Individual risk limits are set accordingly.

The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis through each reporting period. To assess whether there is a significant increase in credit risk the Company compares the risk of default occurring on asset as at the reporting date with the risk of default as at the date of initial recognition. It considers reasonable and supportive forward-looking information such as:

i) Actual or expected significant adverse changes in business

ii) Actual or expected significant changes in the operating results of the counterparty

iii) Financial or economic conditions that are expected to cause a significant change to the counterparty''s ability to meet its obligations

iv) Significant increase in credit risk on other financial instruments of the same counterparty

The Company categorizes financial assets based on the assumptions, inputs and factors specific to the class of financial assets into High-quality assets, negligible credit risk; Quality assets, low credit risk; Standard assets, moderate credit risk; Substandard assets, relatively high credit risk; Low quality assets, very high credit risk; Doubtful assets, credit-impaired.

Financial assets are written off when there is no reasonable expectations of recovery, such as a debtor failing to engage in a repayment plan with the Company. The Company categorizes a loan or receivable for write off when a debtor fails to make contractual payments greater than one year past due. Where loans or receivables have been written off, the Company continues engage in enforcement activity to attempt to recover the receivable due. Where recoveries are made, these are recognized in profit or loss.

C. MARKET RISK- INTEREST RATE RISK

Interest rate risk is the risk that the fair value of future cash flows of the financial instruments will fluctuate because of changes in market interest rates. In order to optimize the Company''s position with regards to interest income and interest expenses and to manage the interest rate risk, treasury performs a comprehensive corporate interest rate risk management by balancing the proportion of fixed rate and floating rate financial instruments in its total portfolio.

D. MARKET RISK- FOREIGN CURRENCY RISK

The Company operates internationally and portion of the business is transacted in several currencies. Consequently the Company is exposed to foreign exchange risk through its sales and services in overseas and purchases from overseas suppliers in various foreign currencies. Exports of the company are significantly lower in comparison to its imports. Foreign currency exchange rate exposure is partly balanced by exports of goods and prudent hedging policy.

Derivative financial instruments

The Company holds derivative financial instruments such as foreign currency forward and currency and interest rate swaps to mitigate the risk of changes in exchange rates on foreign currency exposures. The counterparty for these contracts is generally are banks. These derivative financial instruments are valued based on quoted prices for similar assets and liabilities in active markets or inputs that are directly or indirectly observable in the market place.

The Company enjoys natural hedge to the extent of: a) Exports effected and b) Inventory held (being sensitive to exchange rate fluctuations). Although the Company believes that these derivatives constitute hedges from a economic prospective, they might not qualify for hedge accounting under Ind AS 109.

E. COMMODITY RISK

Principal Raw Material for Company''s products is variety of plastic polymers which are primarily Derivatives of Crude Oil. Company sources its raw material requirement from across the globe. Domestic market prices are also generally remains in sync with international market price scenario.

Volatility in Crude Oil prices, Currency fluctuation of Rupee vis-a-vis other prominent currencies coupled with demand-supply scenario in the world market affect the effective price and availability of polymers for the Company. Company effectively manages with availability of material as well as price volatility through:

1. Widening its sourcing base

2. Appropriate contracts and commitments

3. Well planned procurement & inventory strategy and

4. Prudent hedging policy on foreign currency exposure

Risk committee of the Company comprising members from Board of Directors and operations has developed and enacted a risk management strategy regarding commodity Price risk and its mitigation.

12 CAPITAL RISK MANAGEMENT

A The Company''s objectives when managing capital are to

- safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders

- maintain an optimal capital structure to reduce the cost of capital

Company believes in conservative leverage policy. Its debt equity ratio is lower than the industry average.

Company''s moderate capex plan over the medium term shall be largely funded through internal accruals and suppliers credit. The Company is committed to become virtual debt free company in couple of years which shall further improve its capital structure. The Company also expects monetization of the remaining unsold area of Supreme Chamber in near future which shall further strengthen the cash flow of the Company.

The Company has complied with these covenants throughout the reporting period.

B The Company follows the policy of Dividend for every financial year as may be decided by Board considering financial performance of the company and other internal and external factors enumerated in the Company''s dividend policy. As per the dividend policy, generally the Company maintains a dividend pay-out ratio (including present Dividend Distribution tax) in the range of 35% to 55% of net profit (PAT).

13DISCLOSURE PURSUANT TO IND AS - 19 "EMPLOYEE BENEFITS"

i) Gratuity: In accordance with the applicable laws, the Company provides for gratuity, a defined benefit retirement plan ("The Gratuity Plan") covering eligible employees. The Gratuity Plan provides for a lump sum payment to vested employees on retirement (subject to completion of five years of continuous employment), death, incapacitation or termination of employment that are based on last drawn salary and tenure of employment. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation on the reporting date and the Company makes annual contribution to the gratuity fund administered by life Insurance Companies under their respective Group Gratuity Schemes.

D. Assumptions

With the objective of presenting the plan assets and plan liabilities of the defined benefits plans at their fair value on the balance sheet, assumptions under Ind AS 19 are set by reference to market conditions at the valuation date.

The sensitivity analyses above have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period and may not be representative of the actual change. It is based on a change in the key assumption while holding all other assumptions constant. When calculating the sensitivity to the assumption, the same method used to calculate the liability recognized in the balance sheet has been applied. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared with the previous period.

ii) Compensated Absences: The Company permits encashment of compensated absence accumulated by their employees on retirement, separation and during the course of service. The liability in respect of the Company, for outstanding balance of leave at the balance sheet date is determined and provided on the basis of actuarial valuation as at the balance sheet date performed by an independent actuary. The Company doesn''t maintain any plan assets to fund its obligation towards compensated absences.

Notes:

a) Most of the issues of litigation pertaining to Central Excise/Service Tax/Income Tax are based on interpretation of the respective Law & Rules there under. Management has been opined by its counsel that many of the issues raised by revenue will not be sustainable in law as they are covered by judgments of respective judicial authorities which supports its contention. As such no material impact on the financials of the Company is envisaged.

b) Sales Tax and Entry Tax related litigation/demand primarily pertains to non- submission of required declaration forms in time due to non- receipt of the same from customers and/ or some interpretation related issues. However in most of the cases, required documents are being filed and minor impact if any, shall be given in the year of final outcome of respective matter in appeal.

c) Other issues are either in ordinary course of business or not of substantial nature and management is reasonably confident of their positive outcome. Management shall deal with them judiciously and provide for appropriately, if any such need arises.

14 COMMITMENTS

a) Estimated amount of contracts remaining to be executed on Capital Account and not provided for (net of advances) is

V 5889 lacs (Previous year V 4673 lacs).

b) The Company has taken premises under cancellable operating lease. These lease agreements are normally renewed on expiry. The rental expenditure is accounted for in statement of profit and loss of the Company in accordance with Ind AS-17 on lease transactions.

The Company has also taken office premises under non-cancellable operating lease. The total of future minimum lease payments under this lease for the period not later than one year is V 459 lacs (previous year V 459 lacs) and for the period later than one year & not later than five years is V 653 lacs (previous year V 1098 lacs) and for the period later than five year is V 125 lacs (previous year V 138 lacs).

15 DISCLOSURE ON RELATED PARTY TRANSACTIONS Names of related parties and description of relationship: Parties where controls exists :

The Supreme Industries Overseas FZE, Sarjah - Subsidiary

Associate with whom transaction have been entered during the course of business:

Supreme Petrochem Limited (associate)

Key Managerial Personnel:

Mr. M P Taparia, Managing Director ; Mr. S J Taparia, Executive Director ; Mr. V K Taparia, Executive Director ; Mr. PC. Somani, Chief Financial Officer ; Mr. R.J. Saboo, AVP (Corporate Affairs) & Company Secretary.

Enterprises in which Directors have significant influence:

Devrat Impex Private Limited

Other Related Parties:

Mr. B. L. Taparia, Chairman ; Mr. N. N. Khandwala, Director ; Mr. B. V. Bhargava, Director ; Mr. Y P Trivedi, Director ; Mr. R. Kannan, Director ; Mr. R. M. Pandia, Director ; Smt. Rashna Khan, Director

Mr. Vivek Taparia, Business Development Manager (Relative of Director)

Figures in bracket relate to previous year.

Notes:

a) Related party relationship is as identified by the management and relied upon by the auditors.

b) No amounts in respect of related parties have been written off/ written back during the year or has not made any provision for doubtful debts/ receivable.

40 In terms of Ind As 108 "Operating Segments", segment information has been provided in the notes to Consolidated Financial Statements.

41 ASSETS PROVIDED AS SECURITY

The carrying amounts of assets provided as security (First Charge) for current and non-current borrowings are:

Note:

16. Term Loans from banks are secured as first pari passu charge basis on movable properties of the Company viz. plant and equipment & moulds, both present and future, situated at all the locations of the Company.

17. Working Capital Loans from banks are secured against:

First pari passu charge by way of hypothecation of stocks and book debts, both present and future

Second / subservient charge on all movable properties of the Company viz. plant and equipment & moulds, both present and future, situated at all the locations of the Company.

18 Previous financial period comprises of 9 months from 1st July 2015 to 31st March 2016 against the current year figures which are for a period of 12 months and thus are not comparable. The previous period''s figures have been re-grouped / re-classified wherever required to conform to current year''s classification. All figures of financials has been rounded off to nearest lacs rupees.


Jun 30, 2015

1. Terms/rights attached to Equity shares :

The company has only one class of issued Equity Shares having a par value of Rs. 2 per share. Each Shareholder is eligible for one vote per share held.

The Dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of Interim Dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the company after distribution of all preferential amounts, in proportion to their shareholding.

2. DISCLOSURE PURSUANT TO ACCOUNTING STANDARD - 15 "EMPLOYEE BENEFITS"

i) Gratuity:

In accordance with the applicable laws, the Company provides for gratuity, a defined benefit retirement plan ("The Gratuity Plan") covering eligible employees. The Gratuity Plan provides for a lump sum payment to vested employees on retirement (subject to completion of five years of continuous employment), death, incapacitation or termination of employment that are based on last drawn salary and tenure of employment. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation on the reporting date and the Company makes annual contribution to the gratuity fund administered by Life Insurance Corporation of India under Group Gratuity Scheme.

The following table set out the funded status and amount recognised in the Company's financial statements as at 31st March, 2015 for the Gratuity Plan:

ii) Compensated Absences:

The Company permits encashment of compensated absence accumulated by their employees on retirement, separation and during the course of service. The liability in respect of the Company, for outstanding balance of leave at the balance sheet date is determined and provided on the basis of actuarial valuation as on 31st March 2015 performed by an independent actuary. The Company doesn't maintain any plan assets to fund its obligation towards compensated absences.

Rs. in Lacs

3. CONTINGENT LIABILITIES AND COMMITMENTS

2014 - 2015 2013 - 2014

CONTINGENT LIABILITIES

Bills/Cheques discounted 1140.55 1072.40

Bank Guarantees issued by Bankers 2556.00 2873.13

Claim against the company including Show-cause-cum- demand Notices in relation to Central Excise 1383.28 1019.76 and Service Tax not acknowledged as Debts Disputed Income Tax Demands 2564.96 2444.84

Disputed Sales Tax / Entry Tax Demands 699.29 1103.20

Other claims against the company not acknowledged as debts 263.20 288.72

Future obligation of exports towards imported capital goods at concessional rate of duty under EPCG Scheme. 5279.37 5352.08

COMMITMENTS

Estimated amount of contracts remaining to be executed on Capital Account and not 6072.15 931.49 provided for (net of advances)

Unexpired Letter of Credit issued by bankers 8005.86 5362.17

Notes:

a) Most of the issues of litigation pertaining to Central Excise & Service Tax are of repetitive nature & are based on interpretation of the provisions of Central Excise / Cenvat Credit Rules. Management has been opined by its counsel that many of the issues raised by revenue will not be sustainable in law as they are covered by judgment of CESTAT or High Courts which supports its contention. As such no material impact on the financials of the company is envisaged.

b) In case of Income Tax, matters pertaining to additions / disallowances, where the Company has preferred an Appeal, are repetitive in nature. Company has obtained Legal Counsel's opinion on all major items of dispute, as per which it is reasonably assured that the matters are likely to be decided in its favour and are also backed by various decisions of ITAT and /or various High Courts.

Based on internal assessment and opinion received from Tax experts, the Management is of the view that the impact of the risk associated with the pending Income tax matters,if any, in Appeal is moderate and shall not impact the Company's financials substantially.

c) Sales Tax and Entry Tax related litigation/demand primarily pertains to non- submission of required declaration forms in time due to non- receipt of the same from customers and/ or some interpretation related issues. However in most of the cases, required documents are being filed and minor impact if any, shall be given in the year of final outcome of respective matter in appeal.

d) Company is reasonably confident to fulfil its export obligation within the stipulated period of the respective EPCG licenses and does not envisage any material financial impact.

e) Other issues are either in ordinary course of business or not of substantial nature and management is reasonably confident of their positive outcome. Management shall deal with them judiciously and provide for appropriately, if any such need arises.

4. The company has capitalised interest amounting to Rs. 164.61 lacs (Previous year Rs. 632.12 lacs) on payments made towards various projects under implementation.

5. Depreciation for the year has been provided with reference to the useful life of respective assets as specified in Schedule II to the Companies Act, 2013 and reassesed by the company based on internal and external technical evaluation. The depreciation for the year is higher and consequently profit for the year is lower by Rs. 2803.85 lacs due to the change in the useful life of the assets. The company has transferred an amount of Rs. 1866.50 lacs to retained earning (net of Rs. 961.11 lacs transferred to deferred tax) representing the carrying amount of the assets whose useful life had been exhausted as on 30th June, 2014.

6. In respect of construction business determination of profit / losses and readability of the construction project involves making estimates by the company which are of technical nature, concerning the percentage of completion, cost to completion and foreseeable losses to completion. Profits from construction activity and valuation of inventory of commercial complex is based on such estimate. In the opinion of the management, the net realizable value of such inventory will not be lower than costs so included therein.

7. Forward contract premium of Rs. 95.06 lacs (Previous year Rs. 95.48 lacs) is to be recognized in subsequent accounting period in respect of forward exchange contracts entered by the company.

8. a) Company had setup a mega project at Gadegaon, Maharashtra and was entitled for Industrial Promotion subsidy as under:-

i) by way of refund of CST/ VAT for eligible period (till 31st January, 2015) under Package Scheme of Incentives, 2001 of Government of Maharashtra. A sum of Rs. 1892.59 lacs (Previous year Rs. 4170.74 lacs) accrued for the year has been included in other operating income.

ii) by way of exemption from electricity duty for eligible period (till 31st January, 2023), consequently Power and fuel cost for the year is lower by Rs. 282.22 lacs (Previous year Rs. 387.70 lacs) .

c) The company has received capital subisdy of Rs. 148.48 lacs (previous Year Nil) during the year, under package scheme of Incentives, 2007 from the State Government of Assam. The same has been reduced from the cost of the respective capital assets.

9. SEGMENT INFORMATION

The Company is engaged mainly in production of plastic products. Company has recognized construction of commercial property as a new non recurring business activity which is shown as separate reportable segment as per Accounting Standard on Segment Reporting (AS-17) issued by ICAI.

b) The geographical segmentation is not relevant as export turnover is not significant in respect to total turnover.

Names of related parties and description of relationship:

Subsidiary Company: The Supreme Industries Overseas FZE

Associates: Supreme Petrochem Ltd., Supreme Capital Management Ltd., Platinum Plastics & Industries Pvt. Ltd. Suraj Packaging Pvt. Ltd. Venkatesh Investment & Trading Co. Pvt. Ltd., Jovial Investment & Trading Co. Pvt. Ltd. and Boon Investment & Trading Co. Pvt. Ltd

Key Managerial Personnel: Mr. M P Taparia, Managing Director, Mr. S J Taparia, Executive Director & Mr. V K Taparia, Executive Director and their relatives.

10. a) The Company has taken premises under cancelable operating lease. These lease agreements are normally renewed on expiry. The rental expenditure is accounted for in statement of profit and loss of the Company in accordance with Accounting Standard on lease transactions (AS-19).

b) The company has also taken office premises under noncanceable operating lease. The total of future minimum lease payments under this lease for the period not later than one year is Rs. 424.20 lacs and for the period later than one year & not later than five years is Rs. 1237.25 lacs.

11. a) Provision for Income Tax liability has been made in the accounts based on the profit for the financial year ended 30th June 2015. Though the tax payable will be determined based on the taxable income for the period 1st April 2014 to 31st March 2015 (AY: 2015-16)

b) The Company has recognised deferred tax assets for the year aggregating to Rs. 1763.22 lacs in the Profit & Loss Account (Previous Year liability of Rs. 2609.95 lacs).

c) Corporate Tax includes provision for wealth tax Rs. 4 lacs (Previous year Rs. 4 lacs).

12. The company has decided to retain for self use one of the office unit admeasuring saleable area of 6681 square feet at its commercial premises, at Andheri,Mumbai pertaining to its Construction business division. Consequently a sum of Rs. 342.47 lacs has been converted into capital asset out of its stock in trade w.e.f. 1st May, 2015.

13. Ancillary costs incurred in the connection with the borrowing is amortised over the period of borrowing.

14. The previous year's figures have been re-grouped / re-classified wherever required to confirm to this year's classification.


Jun 30, 2014

Rs. in Lacs 1 CONTINGENT LIABILITIES AND COMMITMENTS 2013 - 2014 2012 - 2013

CONTINGENT LIABILITIES

Bills/Cheques discounted 1072.40 864.46

Bank Guarantees issued by Bankers 2873.13 1836.87

Claim against the company including Show-cause-cum- demand Notices in relation to 1019.76 1051.71 Central Excise and Service Tax not acknowledged as Debts

Disputed Income Tax Demands 2444.84 2255.48

Disputed Sales Tax / Entry Tax Demands 1103.20 552.47

Other claims against the company not acknowledged as debts 288.72 162.35

Future obligation of exports towards imported capital goods at concessional rate of duty 5352.08 6342.46 under EPCG Scheme.

COMMITMENTS

Estimated amount of contracts remaining to be executed on Capital Account and not 931.49 2200.63 provided for (net of advances)

Unexpired Letter of Credit issued by bankers 5362.17 4850.07

2. The company has capitalised interest amounting to Rs. 632.12 lacs (Previous year Rs.832.96 lacs) on payments made towards various projects under implementation.

3. a) Depreciation has been provided at the rates and in the manner provided in Schedule XIV to the Companies Act, 1956 except where the Company has reassessed the life of certain buildings, plant & machinery and accordingly revised the useful life of those assets. The Company has charged depreciation at higher rates than those specified under Schedule XIV of the Companies Act, 1956 on such assets.

b) Depreciation on incremental value due to revaluation is provided at the rates specified in Schedule XIV to the Companies Act, 1956. The additional charge of depreciation due to such revaluation is Rs. 4.39 lacs (Previous year Rs. 4.39 lacs). An equivalent amount has been transferred from Revaluation Reserve to Statement of Profit & Loss.

c) Rs. 0.06 lacs (Previous year Rs. 0.06 lacs) has been transferred from Revaluation Reserve to Leasehold Land Account being the amortisation in the value of Lease Premium due to efflux of time.

4. In respect of construction business determination of profit / losses and realisability of the construction project involves making estimates by the company which are of technical nature, concerning the percentage of completion, cost to completion and foreseeable losses to completion. Profits from construction activity and valuation of inventory of commercial complex is based on such estimate. In the opinion of the management, the net realizable value of such inventory will not be lower than costs so included therein.

5. Forward contract premium of Rs. 95.48 lacs (Previous year Rs. 345.75 lacs) is to be recognized in subsequent accounting period in respect of forward exchange contracts entered by the company.

6. a) Company had setup a mega project at Gadegaon, Maharashtra and is entitled for Industrial Promotion subsidy for eligible period under Package Scheme of Incentives, 2001 of Government of Maharashtra. A sum of Rs. 4170.74 lacs (Previous year Rs. 3574.74 lacs) accrued for the year has been included in other operating income.

7 SEGMENT INFORMATION

The Company is engaged mainly in production of plastic products. Company has recognized construction of commercial property as a new non recurring business activity which is shown as separate reportable segment as per Accounting Standard on Segment Reporting (AS-17) issued by ICAI.

8. a) The Company has taken premises under cancelable operating lease. These lease agreements are normally renewed on expiry. The rental expenditure is accounted for in statement of profit and loss of the Company in accordance with Accounting Standard on lease transactions (AS-19).

b) The company has also taken office premises under noncanceable operating lease. The total of future minimum lease payments under this lease for the period not later than one year is Rs. 422.52 lacs and for the period later than one year & not later than five years is Rs. 1654.87 lacs.

9. a) Provision for Income Tax liability has been made in the accounts based on the profit for the financial year ended 30th June 2014. Though the tax payable will be determined based on the taxable income for the period 1st April 2013 to 31st March 2014 (AY: 2014-15)

b) The Company has recognised deferred tax provision for the year aggregating to Rs. 2609.95 lacs in the Profit & Loss Account (Previous YearRs. 739.35 lacs).

c) Corporate Tax includes provision for wealth tax Rs. 4 lacs (Previous year Rs. 5 lacs).

10 An unfortune incident of fire occured at Urse unit, Maharashtra during the year, which damaged certain part of warehouse building and semi finished goods stored therein. The Company is in the process of lodging the insurance claim estimated at Rs. 110.55 lacs as per the policy. The adjustment if any will be made in the year of settlement of the claim.

11. The previous year''s figures have been re-grouped / re-classified wherever required to confirm to this year''s classification.


Jun 30, 2013

1. CONTINGENT LIABILITIES AND COMMITMENTS

2012 - 2013 2011 - 2012 CONTINGENT LIABILITIES

Bills / Cheques discounted 864.46 1407.91

Bank Guarantees issued by Bankers 1836.87 1182.60

Claim against the company including Show-cause-cum-demand 1051.71 1006.29

Notices in relation to Central Excise and Service Tax not acknowledged as Debts

Disputed Income Tax Demands 2255.48 1925.13

Disputed Sales Tax / Entry Tax Demands 552.47 581.51

Other claims against the company not acknowledged as debts 162.35 152.90

Future obligation of exports towards imported capital goods at 6342.46 6779.41 concessional rate of duty under EPCG Scheme.

COMMITMENTS

Estimated amount of contracts remaining to be executed on 2200.63 14771.68

Capital Account and not provided for (net of advances)

Unexpired Letter of Credit issued by bankers 4850.07 6344.51

2. The company has capitalised interest amounting to R 832.96 lacs (Previous year R 167.98 lacs) on payments made towards various projects under implementation.

Interest of R NIL (Previous year R 242.35 lacs) incurred during the year attributable to the property business is included in the cost of constructed property.

3. Depreciation has been provided at the rates and in the manner provided in Schedule XIV to the Companies Act, 1956 except where the Company has reassessed the life of certain buildings, plant & machinery and accordingly revised the useful life of those assets. The Company has charged depreciation at higher rates than those specified under Schedule XIV of the Companies Act, 1956 on such assets. During the year company has reassessed life of certain plant & machinery and charged depreciation at higher rates, above change have resulted in higher depreciation for the year by R 5.17 lacs (Previous year R 60.06 lacs) and correspondingly the profit for the year is lower by a similar amount.

Depreciation on incremental value due to revaluation is provided at the rates specified in Schedule XIV to the Companies Act, 1956.The additional charge of depreciation due to such revaluation is R 4.39 lacs (Previous year R 4.40 lacs). An equivalent amount has been transferred from Revaluation Reserve to Statement of Profit & Loss.

Rs. 0.06 (Previous year R 0.06 lacs) has been transferred from Revaluation Reserve to Leasehold Land Account being the amortisation in the value of Lease Premium due to efflux of time.

4. In respect of construction business determination of profit / losses and realisability of the construction project involves making estimates by the company which are of technical nature, concerning the percentage of completion, cost to completion and foreseeable losses to completion. Profits from construction activity and valuation of inventory of commercial complex are based on such estimate. In the opinion of the management, the net realizable value of such inventory will not be lower than costs so included therein.

5. Forward contract premium of R 345.75 lacs (Previous year R 270.12 lacs) is to be recognized in subsequent accounting period in respect of forward exchange contracts entered by the company.

6. Company had setup a mega project at Gadegaon, Maharashtra and is entitled for Industrial Promotion subsidy for eligible period under Package Scheme of Incentives, 2001 of Government of Maharashtra. A sum of R 3574.74 lacs (Previous year R 3121.31 lacs) accrued for the year has been included in other operating income.

Company has undertaken an expansion at Jalgaon Unit and is eligible for incentive under Package Scheme of Incentive 2007. A sum of R 85.22 lacs (Previous Year R 81.92 lacs) accrued for the year has been included in other operating income.

Company has undertaken an expansion at its Plastic Piping Division at Malanpur (MP) and is eligible for incentive under Package Scheme of Incentive State of Madhya Pradesh. A sum of R 47.43 lacs (Previous Year Nil) accrued for the year has been included in other operating income.

7. SEGMENT INFORMATION

The Company is engaged mainly in production of plastic products. Company has recognized construction of commercial property as a new non recurring business activity which is shown as separate reportable segment as per Accounting Standard on Segment Reporting (AS-17) issued by ICAI.

8. The Company had taken premises under cancelable operating lease during 2011-12. These lease agreements are normally renewed on expiry. The rental expenditure is accounted for in statement of profit and loss of the Company in accordance with Accounting Standard on lease transactions (AS-19). The company has acquired a motor car under Finance Lease for an aggregate fair value of R 16.59 lacs.

9. Provision for Income Tax liability has been made in the accounts based on the profits for the financial year ended 30th June, 2013, though the tax payable will be determined based on the taxable income for the period 1.4.2012 to 31.3.2013 (A/Y: 2013-14).

The Company has recognised deferred tax provision for the year aggregating to R 739.35 lacs in the the statement of profit of loss (Previous Year R 372.02 lacs).

Current Ta x includes provision for wealth tax R 5.00 lacs (Previous year R 4.00 lacs).

10. Commitment charges / processing fee paid / payable on Long Term Borrowings is being amortised over the average maturity of such borrowings.

11. The previous year’s figures have been re-grouped / re-c1lassified wherever required to confirm to this year’s classification.


Jun 30, 2012

Terms/rights attached to Equity shares :

The company has only one class of issued Equity Shares having a par value of Rs 2 per share. Each Shareholder is eligible for one vote per share held. The Dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of Interim Dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the company after distribution of all preferential amounts, in proportion to their shareholding.

NOTES :

Term Loans from banks and financial institutions are secured on first pari passu charge basis as under:

Immovable properties of the company, situated at certain locations of the company.

Movable properties of the company viz. plant, machineries & moulds, both present and future, situated at all the locations of the company.

NOTES :

Working Capital Loans from Banks mentioned as above are secured against:

First pari passu charge by way of hypothecation of stocks and Book Debts, both present and future

Second / subservient charge on all movable properties of the company viz. plant, machineries & moulds, both present and future, situated at all the locations of the company.

Second / subservient charge on all immovable properties of the company, situated at certain locations of the company.

There are no Micro, Small and Medium Enterprises as defined in the Micro, Small, Medium Enterprises Development Act, 2006, to whom the company owes dues on account of principal amount together with interest and accordingly no additional disclosures have been made.

The above information regarding Micro, Small and Medium Enterprises has been determined to the extent such parties have been identified on the basis of information available with the company. This has been relied upon by the Auditors.

Amount due and outstanding to be credited to the Investor Education and Protection Fund as at June 30, 2012 is NIL (Previous Year NIL), except where there are pending legal cases amounting to Rs 0.35 lacs (Previous year Rs0.35 lacs).

1 DISCLOSURE PURSUANT TO ACCOUNTING STANDARD - 15 "EMPLOYEE BENEFITS"_

The Gratuity Funds for the employees' are administered by Life Insurance Corporation of India under Group Gratuity Scheme. Liability of Gratuity has been valued by an independent actuary as on 31st March 2012 and has been provided accordingly.

2 CONTINGENT LAIBILITIES AND COMMITMENTS 2011 - 2012 2010 - 2011

CONTINGENT LIABILITIES

Bills/Cheques discounted 1407.91 742.71

Bank Guarantees issued by Bankers 1182.60 1120.74

Claim against the company including Show-cause-cum- demand Notices in relation to Central Excise and Service Tax 1006.29 963.41 not acknowledged as Debts

Disputed Income Tax Demands 1925.13 2039.64

Disputed Sales Tax / Entry Tax Demands 581.51 600.78

Other claims against the company not acknowledged as on 152.90 169.79 debts

Future obligation of exports towards imported capital 6779.41 6779.41 goods at concessional rate of duty under EPCG Scheme.

3. (a). The company has capitalised interest amounting to Rs. 167.98 lacs (Previous year Rs. 51.70 lacs) on payments made towards various projects under implementation.

(b). Interest of Rs.242.35 lacs (Previous year Rs.559.44 lacs) incurred during the year attributable to the property business is included in the cost of constructed property.

4. (a). Depreciation has been provided at the rates and in the manner provided in Schedule XIV to the Companies Act, 1956 except where the Company has reassessed the life of certain buildings, plant & machinery and accordingly revised the useful life of those assets. The Company has charged depreciation at higher rates than those specified under Schedule XIV of the Companies Act, 1956 on such assets. During the year company has reassessed life of certain plant & machinery and charged depreciation at higher rates, above change have resulted in higher depreciation for the year by Rs. 60.06 lacs (Previous year Nil) and correspondingly the profit for the year is lower by a similar amount.

(b). Depreciation on incremental value due to revaluation is provided at the rates specified in Schedule XIV to the Companies Act, 1956.The additional charge of depreciation due to such revaluation is Rs. 4.40 lacs (Previous year Rs 4.39 lacs). An equivalent amount has been transferred from Revaluation Reserve to Statement of Profit & Loss.

(c). Rs.0.06 (Previous year Rs.0.06 lacs) has been transferred from Revaluation Reserve to Leasehold Land Account being the amortisation in the value of Lease Premium due to efflux of time.

5. In respect of construction business determination of profit / losses and realisability of the construction project involves making estimates by the company which are of technical nature, concerning the percentage of completion, cost to completion and foreseeable losses to completion. Profits from construction activity and valuation of inventory of commercial complex is based on such estimate. In the opinion of the management, the net realizable value of such inventory will not be lower than costs so included therein.

6. Forward contract premium of Rs. 270.12 lacs (Previous year Rs 180.99 lacs) is to be recognized in subsequent accounting period in respect of forward exchange contracts entered by the company.

7. a. Company had setup a mega project at Gadegaon, Maharashtra and is entitled for Industrial Promotion subsidy for eligible period under Package Scheme of Incentives, 2001 of Government of Maharashtra. A sum of Rs.3121.31 lacs (Previous year Rs.2810.92 lacs) accrued for the year has been included in other operating income.

b. Company has undertaken an expansion at Jalgaon Unit and is eligible for incentive under Package Scheme of Incentive 2007. A sum of Rs. 81.92 lacs (Previous Year Nil) accrued for the year has been included in other operating income.

8. Segment Information

The Company is engaged mainly in production of plastic products. Company has recognized construction of commercial property as a new non recurring business activity which is shown as separate reportable segment as per Accounting Standard on Segment Reporting (AS-17) issued by ICAI.

The geographical segmentation is not relevant as export turnover is not significant in respect to total turnover.

Associates: Supreme Petrochem Ltd., Supreme Capital Management Ltd., Platinum Plastics & Industries Pvt. Ltd. Suraj Packaging Pvt. Ltd. Venkatesh Investment & Trading Co. Pvt. Ltd., Jovial Investment & Trading Co. Pvt. Ltd. and Boon Investment & Trading Co. Pvt. Ltd

Key Managerial Personnel: Mr. M P Taparia, Managing Director, Mr. S J Taparia, Executive Director & Mr. V K Taparia, Executive Director and their relatives.

9. (a) The Company has taken premises under cancelable operating lease. These lease agreements are normally renewed on expiry. The rental expenditure is accounted for in statement of profit and loss of the Company in accordance with Accounting Standard on lease transactions (AS-19).

(b) The company has acquired a motor car under Finance Lease for an aggregate fair value of Rs.16.59 lacs.

The total minimum lease payments (MLP) in respect thereof and the present value of the future lease payments, discounted at the interest rate implicit in the lease are:-_(Rs. in lacs)

In the previous year the Principal amount, Interest & Total MLP were NIL.

10. (a) Provision for Income Tax liability has been made in the accounts based on the profits for the financial year ended 30th June, 2012, though the tax payable will be determined based on the taxable income for the period 1.4.2011 to 31.3.2012 (A/Y: 2012-13).

(b) The Company has recognised deferred tax provision for the year aggregating to Rs.372.02 lacs in the Profit & Loss Account (Previous Year Rs 969.42 lacs).

(c) Corporate Tax includes provision for wealth tax Rs.4.00 lacs (Previous year Rs. 4.00 lacs).

11. Commitment charges / processing fee paid / payable on Borrowings is being amortised over the period of such borrowings.

12. The previous year's figures have been re-grouped / re-classified to conform to this year's classification which is as per the Revised Schedule VI. This adoption does not impact recognition and measurement principles followed for preparation of financial statements as on 30th June 2012.


Jun 30, 2011

1. Contingent Liabilities not provided for:

(Rs. in lacs)

2010-11 2009-10

a. Bills / Cheques discounted 742.71 712.39

b. Guarantees given by Banks 1120.74 834.91

c. Claims against the Company including Show Cause-cum-Demand Notices in relation to 963.41 871.30 Central Excise and Service Tax not acknowledged as Debts

d. Disputed Income Tax Demands 2039.64 1902.37

e. Disputed Sales Tax / Entry Tax Demands 600.78 459.74

f. Other claims against the company not acknowledged as debts. 159.79 164.07

g. The Company has imported capital goods under the Export Promotion Capital Goods Scheme of the Government of India, at concessional rate of duty on an understanding to fulfill quantified exports of which remaining future obligation aggregates to Rs. 6779.41 lacs. (Previous Year Rs. 7215.94 lacs). Non fulfillment of such future obligation, if any, entails options / rights to the Government to confiscate capital goods imported under the said license and other penalties under the above referred scheme.

2. Estimated amount of contracts remaining to be executed on Capital Account and not provided for (net of advances)Rs. 4696.70 lacs (Previous year Rs. 5649.57 lacs).

3. (a) The company has capitalised interest amounting toRs. 51.70 lacs (Previous yearRs. NIL) on payments made towards various projects under implementation.

(b) Interest of Rs. 559.44 lacs (Previous year Rs. 675.32 lacs) incurred during the year attributable to the property business is included in the cost of constructed property.

4. (a) Depreciation has been provided at the rates and in the manner provided in Schedule XIV to the Companies Act, 1956 except where the Company has reassessed the life of certain buildings, plant & machinery and accordingly revised the useful life of those assets. The Company has charged depreciation at higher rates than those specified under Schedule XIV of the Companies Act, 1956.

(b) Depreciation on incremental value due to revaluation is provided at the rates specified in Schedule XIV to the Companies Act, 1956. The additional charge of depreciation due to such revaluation is Rs. 4.39 lacs (Previous year Rs. 4.39 lacs). An equivalent amount has been transferred from Revaluation Reserve to Profit & Loss Account.

(c) Rs. 0.06 lacs (Previous year Rs. 1.68 lacs) has been transferred from Revaluation Reserve to Leasehold Land Account being the amortisation in the value of Lease Premium due to efflux of time.

5. In respect of construction business determination of profit / losses and realisability of the construction project involves making estimates by the company which are of technical nature, concerning the percentage of completion, cost to completion and foreseeable losses to completion. Profits from construction activity and valuation of inventory of commercial complex under construction is based on such estimate. In the opinion of the management, the net realizable value of such inventory will not be lower than costs so included therein.

6. Forward contract premium of Rs. 180.99 lacs (Previous year Rs. 91.03 lacs) is to be recognized in subsequent accounting period in respect of forward exchange contracts entered by the company.

7. Company had setup a mega project at Gadegaon, Maharashtra and is entitled for Industrial Promotion subsidy for eligible period under Package Scheme of Incentives, 2001 of Government of Maharashtra. A sum of Rs. 2810.92 lacs (Previous year Rs. 488.16 lacs) accrued for the year has been included in other income which includes Rs. 539.69 lacs due to amendment in commencement of eligibility period by Government of Maharashtra and pertains to earlier year(s).

8. Company is engaged mainly in production of plastic products and as such is the only reportable segment as per Accounting Standard on Segment Reporting (AS-17). The revenues, profit, and assets employed of construction business are not significant. The geographical segmentation is not relevant as export turnover is not significant in respect to total turnover.

Associates: Supreme Petrochem Ltd., Supreme Capital Management Ltd., (Erstwhile) Multilayer Films Ltd., (Erstwhile) Varali Investment & Trading Co. Pvt. Ltd., (Erstwhile) Jagatguru Investment & Trading Co. Pvt. Ltd., (Erstwhile) Balabheem Investment & Trading Co. Pvt. Ltd., Platinum Plastics & Industries Pvt. Ltd. and Suraj Packaging Pvt. Ltd., Venkatesh Investment & Trading Co. Pvt. Ltd., Jovial Investment & Trading Co. Pvt. Ltd., Boon Investment & Trading Co. Pvt. Ltd

Key Managerial Personnel: Mr. M. P. Taparia, Managing Director, Mr. S. J. Taparia, Executive Director & Mr. V K. Taparia, Executive Director and their relatives.

9. The Company has taken premises under cancelable operating lease. These lease agreements are normally renewed on expiry. The rental expenditure are accounted for in Profit and Loss Account of the Company in accordance with Accounting Standard on lease transactions (AS-19).

10. (a) Provision for Income Tax liability has been made in the accounts based on the taxable income for the period 1.4.2010 to 31.3.2011 (A/Y: 2011-12). The tax liability for the period 1.4.2011 to 30.6.2011 shall be determined on the basis of the taxable income for the year ended 31st March, 2012 (A.Y. 2012-13).

(b) The Company has recognised deferred tax provision for the year aggregating to Rs. 969.42 lacs in the Profit & Loss Account (Previous Year Rs. 556.30 lacs).

(d) Corporate Tax includes provision for wealth tax Rs. 4.00 lacs (Previous year Rs. 4.00 lacs).

11. Commitment charges / processing fee paid / payable on Borrowings is being amortised over the period of such borrowings.

12. The Company has given undertaking to IDBI Bank & ICICI Bank for non-disposal of its investments in Supreme Petrochem Ltd. (SPL) without the prior consent of the respective banks as long as any part of the loan facilities sanctioned by the Bank to SPL remains outstanding.

13. The company has received memorandum (as required to be filed by the suppliers with the notified authority under the Micro, Small and or Medium Enterprises Development Act, 2006) from some suppliers claiming their status as micro, small or medium enterprises. Consequently the amount and interest paid / payable to these parties is as under. The above information is complied by the company on the basis of information available, on unit- wise basis and relied upon by the auditors.

14. Disclosure pursuant to Accounting Standard -15 “Employee Benefits”

The Gratuity Funds for the employees' are administered by Life Insurance Corporation of India under Group Gratuity Scheme. Liability of Gratuity has been valued by an independent actuary as on 31st March 2011 and has been provided accordingly.

15. Sundry Debtors, Sundry Creditors, Unsecured Loans and Advances are subject to confirmation by the respective parties.

16. In the opinion of the Board, the current assets, loans and advances are approximately of the value stated, if realised in the ordinary course of business. The provisions for all the known and determined liabilities are adequate and not in excess of the amounts reasonably required.

17. Previous year's figures have been regrouped/ rearranged wherever necessary.


Jun 30, 2010

1. Contingent Liabilities not provided for: in lacs

2009-10 2008-09

a. Bills / Cheques discounted 712.39 1515.18

b. Guarantees given by Banks 834.91 766.10

c. Claims against the Company including Show Cause-cum-Demand Notices in relation to 871.30 897.68 Central Excise and Service Tax not acknowledged as Debts

d. Disputed Income Tax Demands 1902.37 1923.32

e. Disputed Sales Tax / Entry Tax Demands 459.74 375.85

f. Other claims against the company not acknowledged as debts. 164.07 85.28

g. The Company has imported capital goods under the Export Promotion Capital Goods Scheme of the Government of India, at concessional rate of duty on an understanding to fulfil quantified exports of which remaining future obligation aggregates to I 7215.94 lacs (Previous Year I 8265.29 lacs). Non fulfillment of such future obligation, if any, entails options / rights to the Government to confiscate capital goods imported under the said license and other penalties under the above referred scheme.

2. Estimated amount of contracts remaining to be executed on Capital Account and not provided for (net of advances) I 5649.57 lacs (Previous year I 2412.26 lacs).

3. The company has capitalised interest amounting to I NIL (Previous year I 697.77 lacs) on payments made towards various projects under construction.

4. (a) Depreciation has been provided at the rates and in the manner provided in Schedule XIV to the Companies Act, 1956 except where the Company has reassessed the life of certain buildings, plant & machinery and accordingly revised the useful life of those assets. The Company has charged depreciation at higher rates than those specified under Schedule XIV of the Companies Act, 1956. During the year company has reassessed life of certain machines and charged depreciation at higher rates, above change have resulted in higher depreciation for the year by I 76.52 lacs (Previous year I 234.52 lacs) and correspondingly the profit for the year is lower by a similar amount.

(b) Depreciation on incremental value due to revaluation is provided at the rates specified in Schedule XIV to the Companies Act, 1956. The additional charge of depreciation due to such revaluation is I 4.39 lacs (Previous year I 14.98 lacs). An equivalent amount has been transferred from Revaluation Reserve to Profit & Loss Account.

(c) I 1.68 lacs (Previous year I 2.22 lacs) has been transferred from Revaluation Reserve to Leasehold Land Account being the amortisation in the value of Lease Premium due to efflux of time.

5. Pursuant to the decision taken by the Board of Directors of the Company land and building of Protective Packaging Division at Nandesari in the State of Gujarat have been put for divestment subject to necessary approvals and compliances. Accordingly Land and building of Protective Packaging Division has been treated as assets held for disposal valued at estimated net realizable value or written down values, whichever is lower. Assets held for disposal includes I 170.67 lacs pertaining to the above said division.

6. Company has converted the capital asset of building under construction amounting to I 7721.05 lacs and the land costing I 10 lacs into stock in trade as on 1st July, 2009. Interest of I 675.32 lacs incurred during the year and I 1194.79 lacs incurred in previous years attributable to the property business is included in the cost of constructed property.

7. In respect of construction business determination of profit / losses and realisability of the construction project involves making estimates by the company which are of technical nature, concerning the percentage of completion, cost to completion and foreseeable losses to completion. Profits from construction activity and valuation of inventory of commercial complex under construction is based on such estimate. In the opinion of the management, the net realizable value of such inventory will not be lower than costs so included therein.

8. Forward contract premium of I 91.03 lacs (Previous year I 165.03 lacs) is to be recognized in subsequent accounting period in respect of forward exchange contracts entered by the company.

9. Company has setup a mega project at Gadegaon, Maharashtra and is entitled for Industrial Promotion subsidy for eligible period under Package Scheme of Incentives, 2001 of Government of Maharashtra. A sum of I 488.16 lacs accrued for the year has been included in other income.

10. An unfortunate incident of fire occurred in neighbouring warehouse on 21st June, 2010 which also destroyed companys goods stored in two warehouses at Bhiwandi, Dist Thane, Maharashtra. The company has filed insurance claim of I 205.88 lacs which is under assessment by surveyors. Necessary adjustment, if any, would be accounted in the year of final settlement.

11. Company is engaged mainly in production of plastic products and as such is the only reportable segment as per Accounting Standard on Segment Reporting (AS-17). The revenues, profit, and assets employed of construction business are not significant. The geographical segmentation is not relevant as export turnover is not significant in respect to total turnover.

12. The Company has taken premises under cancelable operating lease. These lease agreements are normally renewed on expiry. The rental expenditure are accounted for in Profit and Loss Account of the Company in accordance with Accounting Standard on lease transactions (AS-19).

13. (a) Provision for Income Tax liability has been made in the accounts based on the taxable income for the period 1.4.2009 to 31.3.2010 (A.Y. 2010-11). The tax liability for the period 1.4.2010 to 30.6.2010 shall be determined on the basis of the taxable income for the year ended 31st March, 2011 (A.Y. 2011-12).

(b) The Company has recognised deferred tax provision for the year aggregating to I 556.30 lacs in the Profit & Loss Account (Previous Year I 1200 lacs).

14. Commitment charges / processing fee paid / payable on Borrowings is being amortised over the period of such borrowings.

15. The Company has given undertaking to IDBI Bank & ICICI Bank for non-disposal of its investments in Supreme Petrochem Ltd. (SPL) without prior consent of the respective banks as long as any part of the loan facilities sanctioned by the Bank to SPL remains outstanding.

16. The company has received memorandum (as required to be filed by the suppliers with the notified authority under the Micro, Small and or Medium Enterprises Development Act, 2006) from some suppliers claiming their status as micro small or medium enterprises. Consequently the amount and interest paid / payable to these parties is as under. The above information is complied by the company on the basis of information available, on unit-wise basis and relied upon by the auditors.

17. Disclosure pursuant to Accounting Standard 15 - "Employee Benefits"

The Gratuity Funds for the employees are administered by Life Insurance Corporation of India under Group Gratuity Scheme. Liability of Gratuity has been valued by an independent actuary as on 31st March, 2010 and has been provided accordingly.

18. Sundry Debtors, Sundry Creditors, Unsecured Loans and Advances are subject to confirmation by the respective parties.

19. In the opinion of the Board, the current assets, loans and advances are approximately of the value stated, if realised in the ordinary course of business. The provisions for all the known and determined liabilities are adequate and not in excess of the amounts reasonably required.

20. Previous years figures have been regrouped / rearranged wherever necessary including the capital work-in-progress of Andheri property converted into stock in trade during the year.

21 Additional information pursuant to the provisions of paragraphs 3, 4C & 4D of Part II of Schedule VI of the Companies Act, 1956.

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