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Directors Report of Supreme Petrochem Ltd.

Mar 31, 2023

The Board of Directors of the Company are pleased to present the Thirty Fourth Annual Report of the Company along with its Audited Financial Statements for the Financial Year ended on March 31, 2023.

1. FINANCIAL HIGHLIGHTS

(R in lakhs)

Year Ended 31.03.2023

Year Ended 31.03.2022

Total Revenue (net of GST)

534614.06

506279.78

Profit Before Tax (PBT)

66688.70

88781.81

Less - Tax Expenses

16874.92

22455.32

Profit After Tax (PAT)

49813.78

66326.49

Interim/Final Dividend on equity shares (including corporate dividend tax) paid during the year

16923.72

15513.41

Transfer to General Reserves

25000

45000

Retained Earnings

34392.49

26502.43

2. DIVIDEND

During the year under review, Directors of the Company on October 27, 2022, declared an interim dividend of R 4.00 (Rupees Four Only) per share (with face value of R 4/- per share) for financial year 2022-2023, involving an outflow of R 3760.83 Lakhs.

Directors have further recommended a final dividend of R 7/- (Rupees Seven Only) per share (with face value of R 2/- per share) for F.Y 2022-23 which will lead to an outflow of R 13162.89 lakhs subject to approval of members in the ensuing Annual General Meeting of the Company.

Pursuant to the provisions of Regulation 43A (1) of SEBI (LODR) Regulations, 2015, Company has formulated its Dividend Distribution Policy which is available on the website of the Company www.supremepetrochem. com. Company has transferred the unpaid or unclaimed dividend amounts to the Unclaimed Dividend Account of the respective financial years in terms of Section 124 of Companies Act 2013, as applicable.

3. REVIEW OF OPERATIONS

Company''s revenue stood at R 5346.14 Crores (net of GST) for the year under review as compared to R 5062.80 Crores (net of GST) in the previous year. Company during the year under review earned a net profit of R 498.14 Crores against R 663.26 Crores in the previous year. Shrinking global delta between price of raw material and Company''s products and Company''s inability to meet domestic demand due to

delays in startup of its expansion capacities on account of late receipt of statutory approvals impacted Company''s performance during the year.

4. SUB-DIVISION / SPLITTING OF EQUITY SHARES

During the year under review, the Company sub-divided its equity shares from the paid-up face value of R 4/-per share to R 2/- per share w.e.f. 07.01.2023 (date of commencement of trading / issue of new share certificate) in terms of shareholders'' approval obtained vide ordinary resolution dated December 02, 2022, however keeping the paid-up share capital of the Company intact at R 37,60,82,684/-, divided into 18,80,41,342 paid-up equity shares of R 2/- each.

5. MANAGEMENT DISCUSSION AND ANALYSIS REPORT & CORPORATE GOVERNANCE REPORT

Management Discussion and Analysis Report & Corporate Governance Report of the Company for the year under review are annexed to the Annual Report separately forming its integral part. The certificates issued by M/s. Parikh & Associates, practicing Company Secretaries, pertaining to compliance of ''Corporate Governance'' conditions by Company, as applicable, and no debarment or disqualification of Directors of the Company by SEBI/ MCA or any other statutory authority from being appointed or continuing as Director of the Company are annexed to Corporate Governance Report as Annexure - A & B respectively.

6. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT (BRSR)

Business Responsibility and Sustainability Report for the year under review in terms of Regulation 34(2) (f) of SEBI (LODR) Regulations, 2015, is annexed separately forming integral part of the Annual Report.

7. CORPORATE SOCIAL RESPONSIBILITY (CSR)

Corporate Social Responsibility Policy (CSR Policy) of the Company in terms of Section 135 of Companies Act, 2013 and Schedule VII thereto was approved by the Board post recommendation of CSR Committee and the same is available on the Company''s website at the link: www.supremepetrochem. com.

The Company, during the financial year 2022-23, was obligated to spend an amount of R 1082.11 lakhs on various CSR activities including set off amount of R 25.28 Lakhs excess CSR expenditure already incurred in F.Y. 202122 resulting into net CSR obligation amount of R 1056.83 lakhs for F.Y. 2022-23. Thus a net amount of R 580.47 lakhs was spent during F.Y. 2022-23 and balance unspent amount of R 476.36 lakhs in respect of four ongoing projects, three in Maharashtra State and one in Rajasthan State, have been deposited in a separate bank account for spending on these projects in next 3 years. With this

deposit, total CSR spending of Company amounts to R 1082.11 lakhs during F. Y 2022-23, including excess CSR expenditure of R 25.28 lakhs incurred in F.Y. 2021-22.

The prescribed amount to be spent by Company for CSR activities during F.Y. 2023-2024, as per Section 135 of Companies Act, 2013, amounts to R 1422.32 lakhs.

The details of CSR activities undertaken by the Company during the year under review is annexed to the Board Report vide Annexure 4 forming its integral part.

8. DIRECTORS AND KEY MANAGERIAL PERSONNEL(A) Change in Directors and Key Managerial Personnel:

(i) Appointment of Directors retiring by Rotation:

Shri Rajan B. Raheja (DIN 00037480) and Shri B. L. Taparia (DIN 00112438), Directors of the Company will retire by rotation at the ensuing Annual General Meeting of the Company and being eligible, have offered themselves for re-appointment as NonExecutive and Non-Independent Directors of the Company.

Except above changes, which the Board recommends and are included in the AGM notice for seeking approval of members, there is no other change in the composition of the Board of Directors and Key Managerial Personnel (KMPs) of the Company during the year under review.

(B) Annual evaluation of the Board and Board Committees:

Company has a well-defined system/criterion for evaluation of performance of the Board and its Committees, Independent Directors, Non-Independent Directors and Chairperson of the Company as approved by its Nomination and Remuneration Committee.

Pursuant to the provisions of Section 178(3) of Companies Act, 2013 and Regulation 17(10) of SEBI (LODR) Regulations, 2015, the Board has carried out the annual evaluation of Independent Directors of the Company viz. Shri M. S. Ramachandran, Shri R. Kannan, Ms. Ameeta Parpia, Dr. S. Sivaram and Shri Rajeev Pandia individually and the Board also carried out evaluation of all the Committees of the Board and found the performance of the Independent Directors and the Committees upto the mark. They also noted that all the Independent Directors of the Company are fulfilling the criteria of their independence as per the provisions of Section 149(6) of Companies Act, 2013 and Regulation 16(1)(b) of SEBI (LODR) Regulations, 2015 and the Directors of the Company do not bear any debarment / disqualification with respect to their continuance in the Directorship of the Company as

per their disclosures made to the Company.

Further in terms of the aforesaid Provisions of Companies Act, 2013 and Regulation 25(4) of SEBI (LODR) Regulations, 2015, the Independent Directors carried out the annual evaluation of Non- Independent Directors viz. Shri M. P Taparia, Shri Rajan B Raheja, Shri B. L. Taparia, Shri S. J. Taparia, Shri K.V. Mujumdar and the Board as a whole and the Chairperson of the Company and were highly contented with their efficient management of the overall affairs of the Company. They also appreciated the focused and apt leadership of the Board Chairperson Shri M. P Taparia in operating the business and maintaining the values, ethos, principles and standards of Corporate Governance.

The Board expressed its contentment with the evaluation results reflecting the high level of engagement of the Board and its Committees in managing the overall affairs of the Company and its Management.

The Criteria related to evaluation of Independent Directors are disclosed in the Corporate Governance Report annexed to the Annual Report separately forming its integral part.

(C) Remuneration Policy:

The criteria / policies of the Company for selection of Directors and Remuneration Policy for Directors, Key Managerial Personnel (KMPs) / Sr. Management Personnel and other employees of the Company is annexed to the Board Report vide Annexure 1 forming integral part thereof.

(D) Familiarization Programme of the Independent Directors:

Pursuant to the provisions of Regulation 25(7) of SEBI (LODR) Regulations, 2015, the details of the Familiarization Programme conducted for Independent Directors during the year under review is placed on the website of the Company and can be accessed at www.supremepetrochem.com

(E) Declaration from Independent Directors:

Pursuant to the provisions of Section 149 of the Act, the Independent Directors have submitted declarations that each of them meets the criteria of independence as provided in Section 149(6) of the Companies Act, 2013 and Rules framed thereunder and Regulation 16(1)(b) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. There has been no change in the circumstances affecting their status as Independent Directors of the Company during the year under review.

In the opinion of the Board, the Independent Directors

possess appropriate balance of skills, experience and knowledge as required for conducting the affairs of the Company.

9. DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134(5) of The Companies Act, 2013, Directors confirm that:

(a) in the preparation of the Annual Accounts, for the financial year ended March 31, 2023, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

(b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period;

(c) proper and sufficient care have been taken for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) the annual accounts have been prepared on a going concern basis;

(e) internal financial controls laid down by the Directors were followed by the Company and that such internal financial controls are adequate and are operating effectively;

(f) proper systems to ensure compliance with the provisions of all applicable laws were in place and that such systems are adequate and operating effectively.

10. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

With respect to disclosures pertaining to remuneration of employees and other details as required under Section 197(12) of the Companies Act, 2013, read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and also having regard to the proviso to Section 136(1) of the Companies Act, 2013 and as advised, the Annual Report excluding the aforesaid information(s) is being sent to the members of the Company, however statement showing the names and other requisite particulars of such employees drawing remuneration in excess of the threshold limits set out in the aforesaid rules is available for inspection at the Registered Office of the Company during working hours for a period of 21 days before the date of AGM and any member interested for obtaining such information may write to the Company Secretary and the same will be furnished on request.

The Annual Report of the Company is also available on

its website www.supremepetrochem.com

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 for the financial year:

a. The ratio of the remuneration of Whole Time Director to the median remuneration of the employees of the Company for the financial year 2022-2023:

Name of the Executive Director

Remuneration Ratio

Shri K.V Mujumdar

19.52:1

b.

The percentage increase in remuneration of Manager, CFO, Whole Time Director and Company Secretary n the Financial Year 2022-2023:

Designation

% Increase in the remuneration 2022-2023

Manager

13.23

Chief Financial Officer (CFO)

13.43

Whole Time Director

21.65

Company Secretary

9.33

c. The Key parameters for any variable component of remuneration availed by the Whole Time Director is dependent on performance of Company and respective employees.

d. The percentage increase in the median remuneration of employees in the Financial Year 2022-2023 - 10%

e. The number of permanent employees on the rolls of Company as on 31.03.2023 - 405

f. The average percentage increase in the salaries of employees other than the Managerial Personnel was 12.93% as compared to the average % increase of 15.11% in the Managerial personnel remuneration.

The Company affirms that the remuneration is as per the Remuneration Policy of the Company.

11. HEALTH, SAFETY & ENVIRONMENT (HSE)

Considering the significance of Health, Safety and Environment to any petrochemical operations, the Company has established a robust HSE system at both of its plants situated at Amdoshi, Maharashtra and Manali Chennai.

Both the Environmental Management System and Occupational Health and Safety Management System continued to be maintained by Company as per the ISO 14001:2015 Standard and ISO 45001:2018 Standard respectively.

The Company continues to implement the HSE Management

Systems under the guiding principles of declared Integrated Management System Policy (Occupational Health and Safety Policy'' and ''Environmental Policy'').

HSE Performance Index for the period under review stood to be in “Excellent” Range.

Company''s Amdoshi Plant has completed 8202 accident-free days as on March 31, 2023, i.e. 21.45 million manhours of accident-free operations.

12. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, CAPITAL INVESTMENT, FOREIGN EXCHANGE EARNING AND OUTGO

Information(s) required pursuant to the provisions of Section 134(3)(m) of the Companies Act, 2013, read with Rule 8 of the Companies (Accounts) Rules, 2014, are stated as hereunder

A CONSERVATION OF ENERGY

Energy Conservation programme at both the plant locations of the Company resulted in saving of energy to the extent of 744720 KWH.

The energy conservation programme mainly comprised of replacement of HPSV and HPMV fittings with LED fittings, replacement of existing equipment and induction motors with energy efficient equipment and induction motors, provision of VFDs and optimization of equipment utilization in plant.

B TECHNOLOGY ABSORBTION

As far as technology absorption is concerned, all the previously supplied technologies have fully been absorbed and implemented.

C CAPITAL INVESTMENT

The details w.r.t. Capital Investment of the Company (viz. CAPEX) are stated in the Management Discussion and Analysis Report of the Company separately annexed to the Annual Report forming its integral part.

D FOREIGN EXCHANGE EARNINGS AND OUTGO (ON ACTUAL BASIS)

(R in Lakhs)

Foreign exchange earnings and

F.Y. 2022-2023

outgo (Actuals)

a.

Inflow in Foreign Currency

29115.00

b.

Outflow in Foreign Currency

397710.00

13. TRANSFER OF UNCLAIMED SHARES AND DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND

Pursuant to the provisions of Section 124(5) of the Companies Act, 2013, all unpaid or unclaimed dividends for a period of seven years are required to be transferred by the Company to the Investor Education and Protection

Fund (IEPF) established by the Central Government.

Company transferred an aggregate amount of R 37.47 Lakhs during the year under review to the Investor Education and Protection Fund Account. The aggregate amount transferred to the fund since January 2002 is R 567.06 Lakhs.

Further Section 124(6) of the Companies Act, 2013 requires that all shares in respect of which unpaid or unclaimed dividend has been transferred to IEPF, shall also be transferred to IEPF.

In view of above provisions, Company transferred 67537 equity shares belonging to 426 shareholders between 28/11/2022 to 09/12/2022 to the Investor Education and Protection Fund Account. Company transfers the shares to IEPF Account as per the IEPF Regulations, the aggregate whereof stands at 3475900 shares as on 31.03.2023 (viz. paid-up share capital of R 2/- per share).

The unclaimed dividends on equity shares paid in March 2016 are in process for transfer to IEPF in April 2023 and unclaimed dividends on equity shares paid in October 2016 will be due for transfer to the IEPF in November 2023. Investors who have not yet claimed these dividends are requested to contact the Company or the RTA of the Company for any support required in this regard.

The Company will upload full details of such shareholders and shares due for transfer to IEPF Account on its website at www.supremepetrochem.com/investorrelations. Members are requested to complete formalities for claiming unpaid dividend, if any, to avoid transfer of such shares to IEPF. Please refer to the section Shareholders'' Assistance in the Corporate Governance Report for further details.

14. AUDITORS AND AUDIT REPORTS Statutory Auditors

M/s. G M Kapadia & Co. is the Statutory Auditors of the Company and their Audit Report forms integral part of the Annual Report. They were appointed for 5 years period in AGM held on 18.07.2018, therefore their term as an Statutory Auditor will terminate at the conclusion of this 34th AGM.

During the year under review, the Audit Report does not contain any qualification, reservation, adverse remark or disclaimer and no fraud was noticed by the Auditors of the Company during Financial Year 2022-2023 which is reportable under Section 143(12) of the Companies Act, 2013.

On expiry of the term of M/s. G. M. Kapadia & Co. as Statutory auditors, M/s. Kalyaniwalla & Mistry LLP, a Chartered Accountants Firm (Firm Regn. No. 104607W/ W100166), has been recommended for appointment as Statutory Auditors of the Company for a period of 5 years

(F.Y 2023-24 to 2027-28) by the Audit Committee of the Company and the Board and the same is being placed before members for seeking their approval.

Cost Auditors

M/s. Kishore Bhatia & Associates has been appointed by the Board as Cost Auditors of the Company to conduct audit of its cost accounting records for the financial year 2023-2024.

In accordance with the requirement of the Central Government and pursuant to the provisions of Section 148 of the Act, the Company has maintained the cost records for Financial Year 2022-2023 as applicable. Annual Audit of the cost accounting records of the Company is also carried out by the Cost Auditors.

The remuneration payable to the Cost Auditors is required to be ratified by the members. Accordingly, a resolution for the remuneration of said cost auditor is included in the AGM notice of the Company vide Item No. 6 annexed to the Annual Report.

Secretarial Auditors

The Company has devised proper systems to ensure compliance with the provisions of Secretarial Standards issued by the Institute of Company Secretaries of India as applicable to the Company and that such systems are adequate and operating effectively.

Pursuant to the provisions of Section 204 of Companies Act, 2013 and rules thereto, M/s. Parikh & Associates, Practicing Company Secretaries, have been appointed by the Board as Secretarial Auditors of the Company to conduct its Secretarial Audit for the Financial Year 2023- 2024.

The Secretarial Audit Report for the Financial Year ended March 31, 2023 in form No. MR-3 is annexed to the Board Report vide Annexure-2 forming integral part thereof. The Secretarial Auditors'' Report does not contain any qualification, reservation or adverse remark except for delay of 11 days in holding meeting of Risk Management Committee of Company on 16.09.2022 due to non-availability of requisite quorum.

15. RELATED PARTY TRANSACTIONS

Transactions with related parties during the year under review were in compliance with the provisions of Regulation 23(1) of SEBI (LODR) Regulations, 2015 and Section 188 of Companies Act, 2013. These transactions were in the ordinary course of business and on an arm''s length basis. During the year under review, Company did not enter into any contract or arrangement which could be considered material as per the policy of Company on materiality of Related Party Transactions.

The said Policy on materiality of Related Party Transactions, as approved by the Board, is available on the Company''s website at the link: www.supremepetrochem.com. Information with respect to Related Party Transactions taken place during financial year 2022-23 is annexed to the Board Report in form AOC-2, vide Annexure 3, forming its integral part.

16. RISK MANAGEMENT

Risk evaluation of the business of the Company and the Management thereof is a consistent process within the Company. In terms of the provisions of Regulation 17(9) of SEBI (LODR) Regulations, 2015, the Company has a robust risk management framework to inform the Board members about risk assessment and minimisation procedures. As a process, the risks associated with the business are prioritised based on probability, severity, nature and effectiveness of current detection.

Each risk factor is monitored periodically by the Management and any risk-associated event arising from these factors which are likely to impact the operations of the Company significantly are reported to the Risk Management Committee and the Board. The risk management framework is aimed at efficiently mitigating the Company''s various business and operational risk through strategic actions.

In terms of Regulation 21 of SEBI (LODR) Regulations, 2015, the Company has constituted a Risk Management Committee on July 18, 2018, which met twice during the year to review the risks associated with the operations of the Company. During the year under review, management has not come across any element of risk which can threaten its existence or disrupt / impact business operations significantly.

17. INTERNAL FINANCIAL CONTROLS

Company has adequate internal financial control system in place commensurating with its size, scale, complexity and the nature of business with an objective to ensure that its financial and operational informations are duly recorded, authorised and reported apart from protecting its assets against any major misuse or loss. The Company''s Internal Auditors carry out regular checks on the adequacy of the internal financial controls and has not come out with any material or serious observation(s) for inefficiency or inadequacy of such controls. The Internal Audit System is reviewed periodically to ensure its adequacy and compliances in conformity with the policies of the Company and its operating system.

The Internal Audit Reports are submitted periodically to the Audit Committee. The Audit Committee members review these reports and discuss with the executive management, wherever required and requisite corrective actions are taken up by the process owners in their respective areas, thereby strengthening the financial controls.

18. VIGIL MECHANISM / WHISTLE BLOWER

POLICY

Company has formulated a Whistle Blower Policy and has also established an effective vigil / whistle blower mechanism for its Stakeholders including its Employees & Directors and provides them a channel to report to the Management their concerns about unethical behaviour, actual or suspected fraud, mismanagement or violation of code of conduct or policy of the Company, if any. The mechanism provides for adequate protection against victimization of the whistle blower and provides for direct access to the Chairperson of the Audit Committee in exceptional cases.

19. POLICY FOR PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE

Company has zero tolerance for sexual harassment at workplace and has adopted, in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act 2013 (POSH), a documented policy for prevention, prohibition and redressal of sexual harassment of women at workplace, under the guiding principle that no woman shall be subjected to sexual harassment at workplace(s) in the Company''s location(s).

Company has formed the Internal Complaints Committee (ICC) comprised of internal and external members, to hear, inquire, investigate and suitably address the matter of complaints of sexual harassment, if any, and to recommend punitive / corrective action to the Management. Easy access has been provided to the ICC for woman employees of the Company.

Disclosures pursuant to the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and SEBI - Listing Regulations are as under:

No of complaints filed during the financial year 2022-2023

NIL

No of complaints filed / disposed of during the financial year 2022-2023

NIL

No of complaints pending as on the end of financial year 2022-2023

NIL

20. MEETINGS OF THE BOARD AND COMMITTEES OF THE BOARD

The number of meetings of the Board and various committees including their composition are set out in the Corporate Governance Report which forms integral part of this report. The intervening gap between the meetings was within the period prescribed under provisions of the Companies Act 2013 and SEBI (LODR) Regulations except delay of 11 days in holding Risk Management Committee Meeting due to non-availability of requisite quorum.

21. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENT

No loans or guarantees or direct investment in the securities of the Company were made by the Company, pursuant to the provisions of Section 186 of the Companies Act, 2013, during the Financial Year 2022-2023.

22. ANNUAL RETURN

Pursuant to the provisions of Section 134(3)(a) and Section 92(3) of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014, Annual Return of the Company as at 31st March, 2023 is uploaded on the website of the Company www.supremepetrochem.com

23. DETAILS OF SUBSIDIARIES / JOINT VENTURES/ ASSOCIATES ENTITY

The Company does not have any Subsidiary/ Joint Venture /Associate entity.

24. CODE OF CONDUCT FOR PROHIBITION OF INSIDER TRADING

Company has in place a Code of Conduct for prohibition of Insider Trading, which stipulates the process of trading in the securities of the Company by the persons having direct or indirect access to the Unpublished Price Sensitive Information(s) of the Company (UPSIs) including the designated persons. The said code is aimed to regulate, monitor and report the trading in the securities of the Company by the Insiders as per prevailing law and regulation(s).

The said Code of Conduct is available at the website of the Company www.supremepetrochem.com.

The Company has also put in place requisite Structured Digital Database (SDD) system for the Designated Persons (DPs) to protect the confidentiality of Unpublished Price Sensitive Information (UPSI) of the Company.

25. CREDIT RATING

During the year under review, the Company has not issued any debt instrument or fixed deposit receipts etc. in India or abroad.

CRISIL Ratings Ltd has reaffirmed long term rating at CRISIL AA-/Stable and short term rating at CRISIL A1 for Company''s fund and non fund based working capital facilities from Banks.

India Ratings and Research (IND-Ra) has assigned Company''s long term rating at IND AA- with positive outlook and short term rating at IND A1 for Company''s fund and non fund based working capital facilities from Banks.

The above ratings reflects financial discipline and resilience of the Company.

26. ACCREDITATIONS

Company has following accreditations:

1. ISO 9001:2015 (Quality Management System), ISO 14001:2015 (Environment Management System) and ISO 45001:2018 (Occupational Health and Safety Management System) certified from Bureau Veritas and valid up to 09-04-2024.

2. Authorized Economic Operator (AEO) under T2 category by Directorate of International Customs, for its import and exports, valid upto 30-01-2025.

3. Recognized as Three Star Export House by Ministry of Commerce and Industry (DGFT), valid till 07-06-2026.

27. MATERIAL CHANGES AND COMMITMENTS BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THE BOARD REPORT

No material changes and commitments have occurred after the closure of the financial year ended 31st March 2023 till the date of this Report, which would affect the financial position of the Company significantly.

28. GENERAL DISCLOSURES

(A) No disclosure or reporting is required of the following items as there were no transactions with respect to following activities / matters during the year under review.

i. Issue of equity shares with differential rights as to dividend, voting or otherwise.

ii. Issue of shares (including sweat equity shares) to employees of the Company under any Scheme.

iii. Details relating to deposits covered under Chapter V of the Companies Act, 2013.

iv. No significant or material orders were passed by the Regulators or Courts or Tribunals against the Company or its Directors which may impact the going concern status of the Company or its operations in future or the Directors of the Company in any manner.

v. No change in the nature of business of the Company.

vi. No Fund based Borrowing (viz. term loan) availed/ utilised.

(B) Other Disclosures:

The details of Directorship, meetings held and committee membership of the Directors of the Company are stated in the Corporate Governance Report annexed separately to the Annual Report forming its integral part.

ACKNOWLEDGEMENT

Directors record their deep gratitude for the unstinted & valuable support and co-operation provided by the stakeholders of the Company all across including its Shareholders, Bankers, Customers, Suppliers, Business Associates etc. and last but not the least by the employees of the Company for their constant, devoted, outstanding services and contribution to the Company.

For and on behalf of the Board

M. P. Taparia

Chairperson

Place: Mumbai Date: April 26, 2023.


Mar 31, 2022

The Board of Directors of the Company are delighted to present the Thirty Third Annual Report of the Company along with its Audited Financial Statements for the Financial Year ended on March 31, 2022.

1. FINANCIAL HIGHLIGHTS

(R in lakhs)

Year Ended 31.03.2022

Year Ended 31.03.2021

Revenue (net of GST)

506279.78

320645.12

Profit Before Tax (PBT)

88781.81

64378.36

Less - Tax Expenses

22455.32

16629.19

Profit After Tax (PAT)

66326.49

47749.17

Interim/Final Dividend on equity shares (including corporate dividend tax) paid during the year

15513.41

3760.82

Transfer to General Reserves

45000

30000.00

Retained Earnings

26502.42

20689.35


2. DIVIDEND

During the year under review, Directors of the Company on October 20, 2021, declared an interim dividend of R 4.00 (Rupees Four Only) per share for financial year 2021-2022 on its paid up Equity Share Capital, consisted of 94020671 equity shares of R 10/- each leading to a total outflow of R 3760.83 Lakhs.

Directors have further recommended a final dividend of R 14/- (Rupees Fourteen only) per share for financial year 2021-2022 (350%) on its paid up Equity Share Capital consisting of 94020671 Equity Shares of R 4/- each post reduction of share capital leading to an outflow of R 13162.89 lakhs subject to approval of members in the ensuing Annual General Meeting of the Company.

The payout of dividend is in line with the Company''s policy to meet its long-term growth objectives and will be met through internal cash accruals of the Company.

Pursuant to the provisions of Regulation 43A(1) of SEBI (LODR) Regulations, 2015, the Company has formulated its Dividend Distribution Policy which is available on the website of the Company www.supremepetrochem.com.

3. REVIEW OF OPERATIONS

Company''s revenue stood at R 5062.80 Crores (net of GST) for the year under review as compared to R 3206.45 Crores (net of GST) in the previous year. Company during the year under review earned a net profit of R 663.26 Crores against R 477.49 Crores in the previous

year. Healthy delta between price of raw material and Company''s products prevalent globally aided by overall growth in Company''s volumes by 16.7% helped improve Company''s performance for the F.Y 2021-22. Improved demand from appliances sector with local manufacturers ramping up production and also from non OEM segments helped increase in the volumes. XPS board was in demand for packaging and transportation of Covid vaccine apart from improved usage in institutional construction.

4. REDUCTION OF SHARE CAPITAL

The Board of Directors of the Company in their meeting held on March 12, 2021, recommended the scheme for the reduction of paid up equity share capital of the Company in terms of Section 66 of the Companies Act, 2013 and Regulation 37 of SEBI (LODR) Regulations, 2015. As per said scheme a sum of R 6/- per share was to be returned to eligible shareholders by way of reduction of nominal and paid-up value of each equity share from R 10/- to R 4/- per share. The said scheme was approved by the shareholders vide special resolution dated 13-08-2021 and subsequently also approved by National Company Law Tribunal, Mumbai Bench, Mumbai (“NCLT”) vide order dated 10-03-2022.

Post the reduction of paid-up equity share capital of Company as aforesaid, the authorised equity share capital of the Company will be R 125 Crores divided into 31,25,00,000 equity shares of R 4/- each. The issued, subscribed and paid up share capital of the Company therefore stands reduced to R 37,60,82,684/- (Rupees Thirty Seven Crores Sixty Lakhs Eighty Two Thousand Six Hundred and Eighty Four Only ) divided into 9,40,20,671 (Nine Crores Forty Lakhs Twenty Thousand Six Hundred Seventy One Only) equity shares of R 4/- each fully paid up as against earlier its Share Capital of R 94,02,06,710 (Rupees Ninety Four Crores Two Lakhs Six Thousand Seven Hundred Ten Only) divided into 9,40,20,671 equity shares of R 10/- each fully paid up. An amount of R 6/- per equity share has been paid to the eligible equity shareholders of the Company as on the record date April 8, 2022 and the remaining 21,84,79,329 equity shares of R 4/- (Rupee Four Only) each are unissued.

The paid up share capital of the Company, therefore stands reduced to R 3760.83 Lakhs from earlier capital of R 9402.01 Lakhs as on March 31,2022.

5. MANAGEMENT DISCUSSION AND ANALYSIS REPORT & CORPORATE GOVERNANCE REPORT

Management Discussion and Analysis Report (including the details w.r.t Technology Import, Capital Expenditure (CAPEX), expansion activities) & Corporate Governance Report of the Company for the year under review are annexed to the Annual Report separately forming its integral part. The Certificate(s) issued by M/s Parikh & Associates, Practicing Company Secretaries, pertaining to compliance of ''Corporate Governance'' conditions by Company, as applicable, and no debarment or

disqualification of Directors of the Company, by SEBI/ MCA or any other statutory authority, from being appointed or continue as Director of the Company is annexed to Corporate Governance Report vide Annexure - A & B respectively.

6. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT (BRSR)

Business Responsibility and Sustainability Report for the year under review in terms of amended Regulation 34(2) (f) of SEBI (LODR) Regulations, 2015, though optional for F.Y 2021-22, is annexed separately forming integral part of the Annual Report.

7. HEALTH, SAFETY & ENVIRONMENT (HSE)

Considering the significance of Health, Safety & Environment (HSE) to any petrochemical operations, Company has established a robust HSE system at both of its plants situated at Amdoshi, Maharashtra and Manali, Chennai.

Both the Environmental Management System and Occupational Health and Safety Management System continue to be maintained by the Company as per the ISO 14001:2015 Standard and ISO 45001:2018 Standard, respectively.

Company continues to implement the HSE Management Systems under the Guiding Principles of declared Integrated Management System Policy (Occupational Health and Safety Policy'' and ''Environmental Policy'').

HSE Performance Index for the period under review is in “Excellent” Range.

The Company has completed 7837 accident-free days as on March 31,2022, which amounts to 20.50 million manhours of accident-free operations.

8. DIRECTORS AND WHOLE TIME MANAGERIAL PERSONNEL(A) Change in Directors and Key Managerial Personnel:

(i) Appointment of Directors retiring by Rotation:

Shri M. P Taparia (DIN 00112461) and Shri S. J. Taparia (DIN 00112513), Directors of the Company will retire by rotation at the ensuing Annual General Meeting of the Company and being eligible, have offered themselves for re-appointment as NonExecutive and Non-Independent Directors of the Company.

Except above changes, which the Board recommends and are included in the AGM notice for seeking approval of members, there is no other change in the composition of the Board of Directors and Key Managerial Personnel (KMPs) of the Company during the year under review.

(B) Annual evaluation of the Board and Board Committees:

Company has a well-defined criterion for evaluation of performance of the Board and its Committees, Independent Directors, Non-Independent Directors and Chairperson of the Company as approved by its Nomination and Remuneration Committee.

Pursuant to the provisions of Section 178(3) of Companies Act, 2013 and Regulation 17(10) of SEBI (LODR) Regulations, 2015, the Board has carried out the annual evaluation of Independent Directors of the Company viz. Shri M. S. Ramachandran, Shri R. Kannan, Ms. Ameeta Parpia, Dr. S. Sivaram and Shri Rajeev Pandia individually and working of all the Committee of the Board and found their performance to be highly commendable. They also noted that all the Independent Directors of the Company are fulfilling the criteria of their independence as per the provisions of Section 149(6) of Companies Act, 2013 and Regulation 16(1)(b) of SEBI (LODR) Regulations, 2015 and the Directors of the Company do not bear any debarment / disqualification with respect to their continuance in the Directorship of the Company as per their disclosures made to the Company.

Further pursuant to the aforesaid Provisions of Companies Act, 2013 and Regulation 25(3) & (4) of SEBI (LODR) Regulations, 2015, the Independent Directors carried out the annual evaluation of NonIndependent Directors viz. Shri M. P Taparia, Shri Rajan B Raheja, Shri B. L. Taparia, Shri S. J. Taparia, Shri K.V. Mujumdar and the Board as a whole and the Chairperson of the Company and were immensely satisfied with their efficient management of the overall affairs of the Company. They also appreciated the focused leadership and versatile functioning of the Board Chairperson Shri M. P Taparia in maintaining the values, ethos, principles and standards of Corporate Governance.

The Board expressed its contentment with the evaluation results reflecting the high level of engagement of the Board and its Committees in managing the overall affairs of the Company and its Management.

The Criteria related to evaluation of Independent Directors are disclosed in the Corporate Governance Report annexed to the Annual Report separately forming its integral part.

The criteria / policies of the Company for selection of Directors and Remuneration Policy for Directors, Key Managerial Personnel (KMPs) / Sr. Management Personnel and other employees of the Company is annexed to the Board Report vide Annexure 1 forming integral part of the Board Report.

(C) Familiarization Programme of the Independent Directors:

Pursuant to the provisions of Regulation 25(7) of SEBI (LODR) Regulations, 2015, the details of the Familiarization Programme conducted for Independent Directors during the year under review is placed on the website of the Company and can be accessed at www.supremepetrochem.com.

(D) Declaration from Independent Directors

Pursuant to the provisions of Section 149 of the Act, the Independent Directors have submitted declarations that each of them meets the criteria of independence as provided in Section 149(6) of the Companies Act, 2013 and Rules framed thereunder and Regulation 16(1)(b) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. There has been no change in the circumstances affecting their status as Independent Directors of the Company during the year under review.

In the opinion of the Board, the Independent Directors possess appropriate balance of skills, experience and knowledge as required for conducting the affairs of the Company.

9. DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134(5) of The

Companies Act, 2013, Directors confirm that:

(a) in the preparation of the annual accounts, for the financial year ended March 31, 2022, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

(b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period;

(c) proper and sufficient care have been taken for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) the annual accounts have been prepared on a going concern basis;

(e) internal financial controls laid down by the Directors were followed by the Company and that such internal financial controls are adequate and are operating effectively;

(f) proper systems to ensure compliance with the provisions of all applicable laws were in place and that such systems are adequate and operating effectively.

10. TRANSFER OF UNCLAIMED SHARES AND DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND

Pursuant to the provisions of Section 124(5) of the Companies Act, 2013, all unpaid or unclaimed dividends for a period of seven years are required to be transferred by the Company to the Investor Education and Protection Fund (IEPF) established by the Central Government.

Company transferred an aggregate amount of R 38.73 Lakhs during the year under review to the Investor Education and Protection Fund Account. The aggregate amount transferred to the fund since January 2002 is R 529.59 Lakhs.

Further Section 124(6) of the Companies Act, 2013 requires that all shares in respect of which unpaid or unclaimed dividend has been transferred to IEPF, shall also be transferred to IEPF. The Rules notified by Ministry of Corporate Affairs, inter alia other matters, contain provisions for transfer of all shares in respect of which dividend has not been paid or claimed for seven consecutive years or more, in the name of IEPF.

In view of above provisions, Company transferred 89355 equity shares belonging to 569 shareholders between 10/01/2022 to 15/01/2022 to the Investor Education and Protection Fund Account including 100 equity Shares from the Unclaimed Suspense Account.

The unclaimed dividends on equity shares paid in September 2015 will be due for transfer to the IEPF in September, 2022. Investors who have not yet claimed these dividends are requested to contact the Company or the RTA of the Company for any support required, in this regard.

The Company will upload full details of such shareholders and shares due for transfer to IEPF Account on its website at www.supremepetrochem.com/investorrelations. Members are requested to complete formalities for claiming unpaid dividend, if any, to avoid transfer of such shares to IEPF. Please refer to the section Shareholders'' Assistance in the Corporate Governance Report for further details.

11. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, CAPITAL INVESTMENT, FOREIGN EXCHANGE EARNING AND OUTGO

Information(s) required pursuant to the provisions of Section 134(3)(m) of the Companies Act, 2013, read with Rule 8 of the Companies (Accounts) Rules, 2014, are stated as hereunder

A CONSERVATION OF ENERGY

Energy Conservation programme at both the plant locations of the Company resulted in saving of energy to the extent of 371600 KWH (comprising of 253979 KWH at Amdoshi Plant, Maharashtra and 117621 KWH at Manali Plant, Tamilnadu).

The energy conservation programme mainly comprised of replacement of HPSV and HPMV Fittings with LED Fittings, replacement of existing induction motors with energy efficient induction motors, provision of VFDs and optimisation of equipment utilisation in plant.

B TECHNOLOGY ABSORBTION

As far as Technology absorption is concerned, all the previously supplied technologies have fully been absorbed and implemented.

C CAPITAL INVESTMENT

The details w.r.t. Capital Investment of the Company (viz. CAPEX) are stated in the Management Discussion and Analysis Report of the Company separately annexed to the Annual Report forming its integral part.

D FOREIGN EXCHANGE EARNINGS AND OUTGO (ON ACTUAL BASIS)

(R in lakhs)

Foreign exchange earnings and outgo

F.Y. 2021-

(Actuals)

2022

a. Inflow in Foreign Currency

44424.62

b. Outflow in Foreign Currency

353126.00

12. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

With respect to disclosures pertaining to remuneration of employees and other details as required under Section 197(12) of the Companies Act, 2013, read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and also having regard to the proviso to Section 136(1) of the Companies Act, 2013 and as advised, the Annual Report excluding the aforesaid information(s) is being sent to the members of the Company, however statement showing the names and other requisite particulars of such employees drawing remuneration in excess of the threshold limits set out in the aforesaid rules is available for inspection at the Registered Office of the Company during working hours for a period of 21 days before the date of AGM and any member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request.

The Annual Report of the Company is also available on its website www.supremepetrochem.com Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 for the financial year:

a. The ratio of the remuneration of Executive Director to the median remuneration of the employees of the Company for the financial year 2021-22:

Name of the Executive Director

Remuneration Ratio

Shri K.V. Mujumdar

13.86:1

b.

The percentage increase in remuneration of Manager, CFO, Whole Time Director and Company Secretary n the F.Y. 2021-22:

Designation

% Increase in the remuneration 2021-2022

Manager

10.86%

Chief Financial Officer (CFO)

10.75%

Whole Time Director

15.83%

Company Secretary

12.47%

c. The Key parameters for any variable component of remuneration availed by the Whole Time Director; it is dependent on Company and employee''s performance.

d. The percentage increase in the median remuneration of employees in the Financial Year 2021-2022 - 10%

e. The number of permanent employees on the rolls of Company as on 31.03.2022 - 382

f. The average percentage increase in the salaries of employees other than the Managerial Personnel was 11% as compared to the average % increase of 13.35% in the Managerial personnel remuneration.

The Company affirms that the remuneration is as per the Remuneration Policy of the Company.

13. AUDITORS AND AUDIT REPORTS

Statutory Auditors

M/s. G M Kapadia & Co. is the Statutory Auditors of the Company, and their Audit Report forms integral part of the Annual Report. The members in the Annual General Meeting held on July 18, 2018 appointed M/s. G M Kapadia & Co., Chartered Accountants (FRN104767W) as Statutory Auditors of the Company to hold office from conclusion of 29th Annual General Meeting of the Company to the conclusion of its 34th Annual General Meeting to be held in calendar year 2023. The requirement of ratification of appointment of Statutory Auditors every year by the members of Company have been withdrawn w.e.f. May 7, 2018 vide Companies (Amendment) Act, 2017.

During the year under review, the Audit Report does not contain any qualification, reservation, adverse remark or disclaimer and no fraud was noticed by the Auditors of the Company during Financial Year 2021-2022 which is reportable under Section 143(12) of the Companies Act, 2013.

Cost Auditors

M/s. Kishore Bhatia & Associates has been appointed by the Board as Cost Auditors of the Company to conduct audit of its cost accounting records for the financial year 2022-2023.

In accordance with the requirement of the Central Government and pursuant to the provisions of Section 148 of the Act, the Company has maintained the cost records for Financial Year 2021-2022 as applicable. Annual Audit of the cost accounting records of the Company is also carried out by the Cost Auditors.

The remuneration payable to the Cost Auditors is required to be placed before the members in General Meeting for their ratification. Accordingly, a resolution for the remuneration of said cost auditor is included in the AGM notice of the Company vide Item No. 5 annexed to the Annual Report.

Secretarial Auditors

The Company has devised proper systems to ensure compliance with the provisions of secretarial standards issued by the Institute of Company Secretaries of India as applicable to the Company and that such systems are adequate and operating effectively.

Pursuant to the provisions of Section 204 of Companies Act, 2013 and rules thereto, M/s. Parikh & Associates, Practicing Company Secretaries, has been appointed by the Board as Secretarial Auditors of the Company to conduct its secretarial audit for the Financial Year 20222023.

The Secretarial Audit Report for the Financial Year ended March 31,2022 in form No. MR-3 is annexed to this Board Report vide Annexure-2 forming integral part thereof. The Secretarial Auditors'' Report does not contain any qualification, reservation or adverse remark.

14. RELATED PARTY TRANSACTIONS

Transactions with related parties during the year under review were in compliance with the provisions of Regulation 23(1) of SEBI (LODR) Regulations, 2015 and Section 188 of Companies Act, 2013. These transactions were in the ordinary course of business and on an arm''s length basis. During the year under review, Company did not enter into any contract or arrangement which could be considered material as per the policy of Company on materiality of Related Party Transactions.

The said Policy on materiality of Related Party Transactions, as approved by the Board, is available on the Company''s website at the link: www.supremepetrochem.com. Information with respect to Related Party Transactions taken place during financial year 2021-22 is annexed to the Board Report in form AOC-2, vide Annexure 3, forming its integral part.

15. CORPORATE SOCIAL RESPONSIBILITY (CSR)

Corporate Social Responsibility Committee has formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) in terms of Section 135 of Companies Act, 2013 and Schedule VII thereto. The CSR Policy as approved by the Board is available on the Company''s website at the link: www.supremepetrochem. com.

The Company, during the financial year 2021-2022, has spent an amount of R 565.55 Lakhs on various CSR activities as against the total required amount of R 540.27 Lakhs post adjustment of the set off amount of R 14.94 Lakhs excess CSR expenditure incurred in Financial Year 2020- 2021. An unspent amount of R 416.38 Lakhs in respect of two ongoing projects in Maharashtra State has been deposited in a separate bank account for spending on these projects in next 3 years. With this deposit, CSR spending exceeds the prescribed amount by R 25.28 Lakhs and this amount is available for set off against CSR activities in F.Y 2022-23.

The prescribed amount to be spent by Company for CSR activities during Financial Year 2022-2023, as per Section 135 of Companies Act, 2013, amounts to R 1082.11 Lakhs.

The details of CSR activities undertaken by the Company during the year under review is annexed to the Board Report vide Annexure 4 forming its integral part.

16. RISK MANAGEMENT

Risk Evaluation of the business of the Company and the Management is a consistent process within the Company. In terms of the provisions of Regulation 17(9) of SEBI (LODR) Regulations, 2015, the Company has a robust risk management framework to identify, monitor and minimize its risk. As a process, the risks associated with the business are prioritised based on Probability, Severity, Nature and Effectiveness of current detection.

Risk Management approach is comprised of three components:

1) Risk Governance

2) Risk Identification

3) Risk Assessment and Control

Each risk factor is monitored periodically by the Management and any risk-associated event arising from these factors which are likely to impact operations considerably are reported to the Board and Risk Management Committee.

In accordance with the provisions of Regulation 21 of SEBI (LODR) Regulations, 2015, the Company has constituted a Risk Management Committee on July 18, 2018, to look into and effectively deal with the risk-matters and risk events, if any, of the Company and take appropriate remedial steps, wherever required. During the year under review, management has not come across any element of risk which can threaten its existence.

17. INTERNAL FINANCIAL CONTROLS

Company has adequate internal financial control system in place commensurating with its size, scale and the nature of business with an objective to ensure that transactions are recorded, authorised and reported correctly apart from protecting its assets against any major misuse or loss. Company has adequate internal financial control system with reference to its financial statements also. The Company''s Internal Auditors carry out regular checks on the adequacy of the internal financial controls. Company has designated Internal Auditors for functions such as GST, financial controls and systems. The Internal Audit system is reviewed periodically to ensure its adequacy and compliances in conformity with the policies of the Company and its operating system.

The Internal Audit Reports are submitted periodically to the Audit Committee. The Audit Committee members review these reports and discuss with the executive management, wherever required and requisite corrective actions are taken up by the process owners in their respective areas and thereby strengthen the financial controls.

18. VIGIL MECHANISM / WHISTLE BLOWER POLICY

Company has formulated a Whistle Blower Policy and has also established an effective vigil / whistle blower mechanism for its Stakeholders including its Employees & Directors and provides them a channel to report to the Management their concerns about unethical behaviour, actual or suspected fraud, mismanagement or violation of code of conduct or policy of the Company, if any. The mechanism provides for adequate protection against victimization of the whistle blower and provides for direct access to the Chairperson of the Audit Committee in exceptional cases.

19. POLICY FOR PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE

Company has zero tolerance for sexual harassment at workplace and has adopted, in line with the provision of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act 2013 (POSH), a documented policy for prevention, prohibition and redressal of sexual harassment of women at workplace, under the guiding principle that no woman shall be subjected to sexual harassment at workplace(s) in the Company''s location(s).

Company has re-constituted the Internal Complaints Committee (ICC) comprised of internal and external members, to hear, inquire, investigate and suitably address the matter of complaints of sexual harassment, if any, and to recommend punitive / corrective action to the Management. Easy access has been provided to the ICC for woman employees of the Company.

Disclosures pursuant to the provisions of Sexual Harassment of Women at Workplace (Prevention,

Prohibition and Redressal) Act, 2013 and SEBI - Listing Regulations are as under:

No of complaints filed during the financial year 2021-22

NIL

No of complaints filed / disposed of during the financial year 2021-22

NIL

No of complaints pending as on the end of financial year 2021-22

NIL

20. MEETINGS OF THE BOARD OF DIRECTORS

Six meetings of the Board of Directors were held during the F.Y 2021-22. The details are provided in the Corporate Governance Report annexed separately to the Annual Report forming its integral part.

21. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENT

The Company had not given any loans or guarantees or made any direct investment in the securities of the Company, pursuant to the provisions of Section 186 of the Companies Act, 2013 during the Financial Year 2021-2022.

22. ANNUAL RETURN

Pursuant to the provisions of Section 134(3)(a) and Section 92(3) of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014, Annual Return of the Company as at 31st March, 2022 is uploaded on the website of the Company www.supremepetrochem. com.

23. DETAILS OF SUBSIDIARIES / JOINT VENTURES/ ASSOCIATES ENTITY

The Company does not have any subsidiary/ joint venture / Associate entity.

24. CODE OF CONDUCT FOR PROHIBITION OF INSIDER TRADING

Company has in place a Code of Conduct for prohibition of Insider Trading, which stipulates the process of trading in the securities of the Company by the persons having direct or indirect access to the Unpublished Price Sensitive Information(s) of the Company (UPSIs) including the designated employees / connected persons. The said code is aimed to regulate, monitor and report the trading in the securities of the Company by the Insiders as per prevailing law and regulation(s).

The said Code of Conduct is available at the website of the Company www.supremepetrochem.com.

25. CREDIT RATING

During the year under review, the Company has not issued any debt instrument or fixed deposit receipts etc. in India or abroad.

CRISIL Ratings Ltd has assigned long term rating at CRISIL AA-/Stable and short term rating at CRISIL A1 for Company''s fund and non fund based working capital facilities from Banks.

India Ratings and Research (IND-Ra) has assigned Company''s long term rating at IND AA- with stable outlook and short term rating at IND A1 for Company''s fund and non fund based working capital facilities from Banks.

26. ACCREDITIONS

Company has following accreditations :

1. ISO 9001:2015, ISO 14001:2015 and ISO 45001:2018 from Bureau Veritas for its Management System, valid upto 09-04-2024.

2. Authorized Economic Operator (AEO) under T2 category by Directorate of International Customs, for its import and exports, valid upto 30-01-2025.

3. Recognized as Three Star Export House by Ministry of Commerce and Industry (DGFT), valid till 07-06-2026.

27. MATERIAL CHANGES AND COMMITMENTS BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THE BOARD REPORT

No material changes and commitments have occurred after the closure of the financial year ended 31st March 2022 till the date of this Report, which would affect the financial position of the Company significantly.

The trading in equity shares of the Company bearing ISIN - INE663A01017 was suspended from trading on the portals of BSE and NSE w.e.f. April 8, 2022, due to its ongoing scheme/ process of reduction of equity share capital detailed vide Item No. 4 as stated hereinabove and listing of new shares. The process for listing of new shares with reduced nominal and paid-up value of R 4/- per share with BSE Limited and The National Stock Exchange of India Limited is under process.

28. GENERAL DISCLOSURES

(A) No disclosure or reporting is required of the following items as there were no transactions with respect to following activities / matters during the year under review.

i. Issue of equity shares with differential rights as to dividend, voting or otherwise.

ii. Issue of shares (including sweat equity shares) to employees of the Company under any Scheme.

iii. Details relating to deposits covered under Chapter V of the Companies Act, 2013.

iv. No significant or material orders were passed by the Regulators or Courts or Tribunals against the Company or its Directors which may impact the going concern status of the Company or its operations in future or the Directors of the Company in any manner.

v. No change in the nature of business of the Company.

vi. No Fund based Borrowing (viz. term loan) availed/ utilised.

(B) Other Disclosures:

The details of Directorship, meetings held and committee membership of the Directors of the Company are stated in the Corporate Governance Report annexed separately to the Annual Report forming its integral part.

ACKNOWLEDGEMENT

Directors record their deep gratitude for the unstinted & valuable support and co-operation provided by the stakeholders of the Company all across including its Shareholders, Bankers, Customers, Suppliers, Business Associates etc. and last but not the least by the employees of the Company for their relentless, devoted, outstanding services and contribution to the Company.

For and on behalf of the Board

Rajan B. Raheja

Director

S. J. Taparia

Director

Place: Mumbai Date: April 27, 2022


Mar 31, 2019

Dear Members,

The Board of Directors of your Company are pleased to present the Thirtieth Annual Report of the Company along with its Audited Financial Statements for the financial year ended on March 31, 2019.

1. FINANCIAL HIGHLIGHTS

(Rs. in lakhs)

Year Ended 31.03.2019

Year Ended 31.03.2018

Revenue (Net of Excise Duty / GST)

320379.64

303462.52

Profit Before Tax (PBT)

7616.30

17893.64

Tax Expenses

2695.61

6281.58

Profit After Tax (PAT)

4920.69

11612.06

Interim / Final Dividend on equity shares (including corporate dividend tax) paid during the year

5235.49

5226.67

Transfer to General Reserves

2500.00

7000.00

Retained Earnings/Balance carried forward

6416.30

9231.10

2. DIVIDEND

During the year under review your Directors declared an interim dividend @10% on its paid up Share capital, consisted of 9,65,01,958 equity shares of RS. 10/- each (viz. dividend of Re 1.00 per equity share) on October 26, 2018 involving an outgo of RS. 1163.46 Lakhs including corporate dividend tax of RS. 198.44 Lakhs. Your Directors have now further recommended a final dividend of RS. 2/- per equity share (viz. 20%) entailing an outgo of RS. 2326.87 Lakhs including corporate dividend tax of RS. 396.83 Lakhs, subject to approval of members at the ensuing Annual General Meeting of the Company. The total dividend for the financial year 2018-19 would thus be RS. 3490.33 Lakhs including corporate dividend tax. The payout of dividend is in line with your Company’s policy to meet its long term growth objectives and meet the financial requirements through its internal cash accruals.

Pursuant to the provisions of Regulation 43A(1) of SEBI (LODR) Regulations, 2015, the Company has formulated its Dividend Distribution Policy which is available at the website of the Company www.supremepetrochem.com.

3. REVIEW OF OPERATIONS

Your Company’s revenue increased to RS. 3,20,379.64 lakhs (net of GST) for the year under review as compared to RS. 3,03,462.52 lakhs (net of excise duty and GST) in the previous year witnessing a growth of about 5.57%.

During the year under review, your Company earned a net profit of RS. 49.21 crores against RS. 116.12 crores in the previous year. The operations were adversely affected due to heavy inventory losses suffered during the third quarter of the year under review consequent to sharp fall in the price of Styrene Monomer between September, 2018 to November, 2018 and subdued demand in the first half of the year on account of uncertainty caused by the order on ban of certain one time use plastic products.

Status of Insurance Claim - Chennai Plant

Insurance claim in respect of the loss / damage to the assets of Company’s EPS plant in Tamil Nadu, due to floods, has finally been settled at RS. 819.28 Lakhs against our claim for RS. 977 Lakhs.

4. MANAGEMENT DISCUSSION AND ANALYSIS REPORT & CORPORATE GOVERNANCE REPORT

Management Discussion and Analysis for the year under review is presented separately in the Annual Report. The Report on Corporate Governance forms an integral part of this Report. The compliance of ‘Corporate Governance’ conditions has also been certified by the Auditors and the same is annexed to the report on Corporate Governance.

5. BUSINESS RESPONSIBILITY REPORT (BRR)

Business Responsibility Report for the year 2018-19 is included as part of the Annual Report forming its integral part.

6. HEALTH, SAFETY & ENVIRONMENT (HSE)

Considering the significance of Health, Safety & Environment (HSE) to any petrochemical operations, your Company has established a robust HSE system at both of its plants in Amdoshi, Maharashtra and Manali, Tamil Nadu.

The Environmental Management System and Occupational Health and Safety Management System continue to be maintained by your Company as per ISO 14001:2015 Standard and OHSAS 18001:2007 Standard respectively, as certified by M/s. Bureau Veritas, a global leader, in conformity assessment and certification services.

HSE Performance Index for the period under review stood to be in “Excellent” Range. The Company has also received various prestigious awards and recognitions towards its highest grade of safety standards consistently maintained at its both the plants, the details whereof are placed on the website of the Company www.supremepetrochem.com.

7. CHANGE IN DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMPs)

(a) Retirement by Rotation:

Shri Rajan B. Raheja (DIN 00037480) and Shri B. L. Taparia (DIN 00112438), Directors of the Company will retire by rotation at the ensuing Annual General Meeting of the Company and being eligible, have offered themselves for re-appointment as the Directors of the Company.

The Board recommends their re-appointment.

(b) Re-Appointment of Independent Directors:

Shri M. S. Ramachandran, Shri R. Kannan, Dr. S. Sivaram and Ms. Ameeta Parpia were appointed as Independent Directors of the Company and will hold office upto September 21, 2019.

Considering their skills, expertise, performance evaluation and experience in the respective fields and the contribution made by these Directors during their tenure as an Independent Director since their appointment, the Nomination and Remuneration Committee and the Board have recommended for re-appointment of these Directors as Independent Directors on the Board of Company to hold office for second term of five consecutive years commencing from September 22, 2019 upto September 21, 2024 and they will not be liable to retire by rotation. The Company has received declaration from all these Directors that they continue to fulfill the criteria of independence as prescribed under 149(6) of Companies Act, 2013 and Regulation 16(1 )(b) and 25(8) of SEBI (LODR) Regulations, 2015 (including any amendment or statutory re-enactment thereof for the time being in force).

In terms of the provisions of section 160 (1) of the Companies Act, 2013, the Company has received notice from a member signifying his intention to propose the candidature of Shri M. S. Ramachandran, Shri R. Kannan, Dr. S. Sivaram and Ms. Ameeta Parpia for the office of Independent Director of the Company, not liable to retire by rotation.

Brief particulars/resume of the aforesaid Directors seeking their re-appointment, as per regulation 26(4) and 36(3) of SEBI (LODR) Regulations, 2015 and Regulation 1.2.5 of Secretarial Standard (SS-2) are provided in the AGM notice forming part of this Annual Report.

The Independent Director of Company Shri Nihalchand Chauhan has notified the Company that post expiry of his current term on September 21, 2019, he will not be available to continue in the Company for his personal reasons.

(c) Appointment of Independent Director

The Board is pleased to appoint Shri Rajeev M. Pandia (DIN : 00021730) as an Additional Independent Director of the Company for a period of five years w.e.f. April 26, 2019 subject to the approval of members in the ensuing Annual General Meeting of the Company as per the applicable provisions of the Companies Act, 2013. Shri Rajeev M. Pandia is a chemical engineer from IIT (Bombay) with masters from Stanford University, USA and has over 45 years of multifaceted experience in the chemical sector and he is eligible to be appointed as Independent Director of the company as per respective provisions of Companies Act, 2013 and SEBI - Listing Regulations. Brief particulars/ profile of Shri Rajeev M. Pandia are stated in the AGM notice forming part of this Annual Report.

(d) Key Managerial Personnel (KMPs)

Shri Ravi V. Kuddyady, who was Company Secretary Cum Compliance Officer of the Company retired from the services of Company. The Board placed on record its deep appreciation for the valuable services rendered by Shri Ravi V. Kuddyady during his tenure.

Shri D. N. Mishra (FCS-5506) was appointed as Company Secretary of the Company w.e.f. 06.10.2018 and confirmed on 26.10.2018.

Except as stated hereinabove, there is no other change in the composition of the Board of Directors and KMPs during the year under review.

(e) Annual evaluation of the Board and Board Committees

Your Company has a well defined criteria, as approved by the Nomination and Remuneration Committee of the Company, for evaluation of performance of the Board and its Committees, Independent Directors, Non-Independent Directors and Chairperson of the Company.

Pursuant to the provisions of section 178 (3) of Companies Act, 2013 and Regulation 17(10) of SEBI (LODR) Regulations, 2015, the Board has carried out on January 21, 2019 the annual evaluation of Independent Directors of the Company viz. Shri M. S. Ramachandran, Shri R. Kannan, Dr. S. Sivaram, Shri Nihalchand Chauhan and Ms. Ameeta Parpia individually and working of all the Board Committees and found their performance to be highly satisfactory. They also noted that all the Independent Directors of the Company are fulfilling the criteria of their independence as per the provisions of section 149(6) of Companies Act, 2013 and Regulation 16(1 )(b) of SEBI (LODR) Regulations, 2015.

Further pursuant to the said provisions of Companies Act, 2013 and Regulation 25(3) & (4) of SEBI (LODR) Regulations, 2015, the Independent Directors carried out the annual evaluation of Non-Independent Directors viz. Shri M. P. Taparia, Shri S. J. Taparia, Shri B. L. Taparia and Shri Rajan B. Raheja, Board as a whole and the Chairperson of the Company and were highly satisfied with their overall functioning. They also appreciated the exemplary leadership role of the Board Chairperson Shri M. P. Taparia in upholding and following the values and standards of Corporate Governance.

The Board expressed its satisfaction with the evaluation results, which reflects the high degree of engagement of the Board and its committees with the Company and its Management.

The Criteria of evaluation of Independent Directors have been mentioned in the Corporate Governance Report annexed to this Annual Report.

The criteria/policies of the Company for selection of Directors and Remuneration Policy for Directors, Key Managerial Personnel (KMPs) / Senior Management Personnel is annexed to this Annual Report vide Annexure 1.

(f) Familiarization Programme of the Independent Directors:

Pursuant to the provisions of Regulation 25(7) of SEBI (LODR) Regulations, 2015, the detail of the Familiarization Programme conducted for Independent Directors during the year under review is placed on the website of the Company and can be assessed at http://supremepetrochem.com/pdf/Familiarisation-Programme-For-Independent-Directors.pdf

8. DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 134 (5) of the Companies Act, 2013, your Directors confirm that:

(a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

(b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period;

(c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) the Directors have prepared the annual accounts on a going concern basis;

(e) the Directors, have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively;

(f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

9. TRANSFER OF UNCLAIMED SHARES AND DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND

As per Section 124(5) of the Companies Act, 2013, all unpaid or unclaimed dividends for a period of seven years are required to be transferred by the Company to the Investor Education and Protection Fund (IEPF) established by the Central Government.

Further Section 124(6) of the Companies Act, 2013 requires that all shares in respect of which unpaid or unclaimed dividend has been transferred to IEPF, shall also be transferred to IEPF. The Rules notified by Ministry of Corporate Affairs amongst other matters, contain provisions for transfer of all shares in respect of which dividend has not been paid or claimed for seven consecutive years or more, in the name of IEPF Suspense Account.

Your Company transferred an aggregate amount of RS. 57.82 lakhs during the year under review to the Investor Education and Protection Fund from the unclaimed dividend. The aggregate amount transferred to the fund since January 2002 is RS. 393.51 lakhs.

Your Company also transferred 101502 equity shares belonging to 726 shareholders between November 30, 2018 to December 14, 2018 to the Investor Education and Protection Fund including 3074 equity shares from the unclaimed Suspense Account. Total equity shares transferred to the fund since November 2017 is 1388711 equity shares.

The unclaimed dividends on equity shares paid in October, 2012 will be due for transfer to the Fund in November, 2019. Investors who have not yet claimed these dividends are requested to contact either the Company’s Secretarial Department or its R & T Agent.

The Company will upload full details of such shareholders and shares due for transfer to IEPF Suspense Account on its website at www.supremepetrochem.com/investorrelations. Members are requested to complete formalities for claiming unpaid dividend if any to avoid transfer of the shares to IEPF. Please refer to the section Shareholders’ Assistance in the Corporate Governance Report for further details.

10. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, CAPITAL INVESTMENT, FOREIGN EXCHANGE EARNING AND OUTGO

Information as per Section 134(3)(m) of Companies Act, 2013 read with rule 8 of the Companies (Accounts) Rules, 2014 is stated as herein below.

A. CONSERVATION OF ENERGY

Energy conservation programme at both the plant locations of the Company resulted in savings of energy to the extent of 544207 KWH (comprised of 456900 KWH in the Amdoshi Plant, Maharashtra and 87307 KWH in the Manali Plant, Chennai). Company did not make any significant capital investment on energy conservation equipments during the year under review.

The energy conservation programmes consisted mainly of the following :

At the plant in Amdoshi, Maharashtra

- Replacement of high energy consuming lights with LED Fittings

- Replacement of HPMV Fittings

- Replacement of HPSV Fittings

- Provision of VFDs to DOL / Star Delta Motors

- Replacement of Induction Motors with energy efficient Induction Motors

- CT-3 commissioning for utility & CW flow optimization for all reactors

- CT-1 Fan VFD optimization

At the plant in Manali, Chennai

- Improvement in process operations

- High energy consuming devises like reciprocating compressor for air application replaced by energy efficient compressor

- Replacement of high energy consuming lights with LED Fittings

B. TECHNOLOGY ABSORPTION

There are neither any existing technology supply agreements nor Company has entered into any new technology agreement. All previously supplied technologies have been successfully absorbed and implemented.

C. FOREIGN EXCHANGE EARNINGS AND OUTGO (on Actual Basis)

11. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration, as prescribed in the said rules, forms part of the Annual Report. Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are stated hereunder. Having regard to the provisions of the first proviso to Section 136(1) of the Companies Act, 2013 and as advised, the Annual Report excluding the aforesaid information under rule 5(2) & 5(3) is being sent to the members of the Company, however these information are available for inspection at the registered office of the Company during business hours on the working days and any member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request.

The information required under Section 197 of the Act read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as aforesaid, are given below:

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

Not Applicable (as there is no whole time Director on the Board of Company)

b. The percentage increase in remuneration of Manager, CFO and Company Secretary

Designation

% increase in remuneration in the Financial Year

Manager

0.93

Chief Financial

1.59

Officer (CFO)

Company

N.A

Secretary

(as appointed w.e.f. October 6, 2018)

c. The percentage increase in the median remuneration of employees in the financial year: 10.9%

d. The number of permanent employees on the rolls of Company : 359

e. The average percentage increase in the salaries of employees other than the Manager was 10.2% as compared to an increase of 0.93% in the Manager’s remuneration.

The Company affirms that the remuneration is as per the remuneration policy of the Company.

12. AUDITORS AND AUDITORS’ REPORTS

Statutory Auditors

M/s. G. M. Kapadia & Co. is the Statutory Auditors of the Company and their Audit Report forms part of Annual Report. The members in the Annual General Meeting held on July 18, 2018 have appointed M/s. G. M. Kapadia & Co., Chartered Accountants (FRN 104767W) as Statutory Auditors of the Company to hold office from the conclusion of 29th Annual General Meeting of the Company until the conclusion of the Annual General Meeting of the Company to be held in calendar year 2023. The requirement of ratification of appointment of Statutory Auditors every year by the members of Company have been withdrawn w.e.f. May 7, 2018 vide Companies (Amendment) Act, 2017, hence this business has not been included in the AGM Notice.

During the year under review, the Audit Report does not contain any qualifications, reservations, adverse remarks or disclaimer and no frauds were reported by the Auditors of the Company under Section 143 (12) of the Companies Act, 2013.

Cost Auditors

Cost Audit Report of the Company for the financial year 2017-18 as issued by the Cost Auditor, devoid of any adverse remarks, was filed with the authorities within the due date viz. August 7, 2018.

M/s. Kishore Bhatia & Associates, Cost Accountants, was appointed by the Board as Cost Auditor of the Company to audit its cost accounting records for the financial year 2018-19.

The remuneration payable to the Cost Auditor for F.Y. 2019-20 is required to be placed before the members in General Meeting for ratification. Accordingly, a resolution for the remuneration of said cost auditor is included in the AGM notice of the Company vide item no. 10 annexed to this Annual Report.

Secretarial Auditors

Pursuant to the provisions of section 204 of Companies Act, 2013 and rules thereto, M/s. Parikh & Associates, Practicing Company Secretaries, was appointed by the Board as Secretarial Auditors of the Company to conduct its secretarial audit for the financial year 2018-19.

The secretarial audit report for the financial year ended March 31, 2019 in form No. MR-3 is annexed to this Annual Report vide Annexure-2 forming its integral part. The Secretarial Auditors’ Report does not contain any qualifications, reservations or adverse remarks.

GST Auditors

Pursuant to the provisions of section 35(5) of Central Goods and Services Tax Act, 2017 and rules thereto, M/s. Dilip Phadke & Co. was appointed as GST Auditor of the Company for financial year 2017-18 and Shri Punit Gupta, Chartered Accountant, has been appointed by the Board as GST Auditor of the Company for financial year 2018-19 and 2019-20.

13. RELATED PARTY TRANSACTIONS

Transactions with the related parties during the year under review were in compliance with the provisions of Regulation 23(1) of SEBI (LODR) Regulations, 2015 and section 188 of Companies Act, 2013. These transactions were in the ordinary course of business and on an arm’s length basis. During the year under review, your Company did not enter into any contract or arrangement which could be considered material as per the applicable rules/policy of Company on materiality of related party transactions.

The said Policy on materiality of related party transactions, as approved by the Board, is available on the Company’s website at the link http://supremepetrochem.com/pdf/ Policy-On-Dealing-With-Related-Party-Transactions.pdf. Information with respect to related party transactions for the financial year 2018-19 in Form No. AOC-2 is annexed to this Annual Report vide Annexure 3.

14. CORPORATE SOCIAL RESPONSIBILITY (CSR)

Corporate Social Responsibility Committee has formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) in accordance with the provisions of section 135 of Companies Act, 2013 and Schedule VII thereto indicating the activities which can be undertaken by the Company, as stated hereunder. This Policy has been approved by the Board. The CSR Policy is available on the Company’s website at the link: http://supremepetrochem.com/pdf/Corporate-Social-Responsibility.pdf.

Activities identified by the Company for CSR purpose:

(i) Promoting Health care including preventive health care and sanitation and making available safe drinking water.

(ii) Promoting education, including special education and employment enhancing vocation skills, livelihood enhancement projects, granting of scholarships and building/improving infrastructure at educational institutions and/or other public welfare organisations.

(iii) Protection of national heritage, art and culture including restoration of buildings and sites of historical importance and works of art; setting up public libraries.

(iv) Contribution to the Prime Minister’s National Relief Fund or any other fund set up by the Central Government for socio-economic development and relief and welfare of the Schedule Caste, the Scheduled Tribes, other backward classes, minorities and women.

(v) Contributions or funds provided to technology incubators located within academic institutions which are approved by the Central Government.

(vi) Ensuing environmental stability, ecological balance, conservation of natural resources and maintaining equality of soil, air and water.

(vii) Rural development projects.

(viii) Slum rehabilitation.

(ix) Setting up old age homes, day care centres and such other facilities for senior citizens and homes for orphans.

(x) Eradicating poverty, hunger and malnutrition.

(xi) Provision of training/facilities for training to local youth in order to promote rural sports, nationally recognized sports, Paralympics sports and Olympic sports.

The Company, during the financial year 2018-19, could spend only an amount of RS. 340.65 Lakhs out of the total allocated amount for CSR Activities RS. 363.20 Lakhs due to lack of availability of requisite land / local authority approvals etc. pertaining to the projects / activities already identified by the Company for CSR purpose.

The prescribed amount to be spent by Company for CSR activities during financial year 2019-20, as per section 135 of Companies Act, 2013, amounts to RS. 355.20 Lakhs.

The details of CSR activities undertaken by the Company during the year under review is annexed to this Annual Report vide Annexure 4.

15. RISK MANAGEMENT

Business Risk Evaluation and Management is an ongoing process within the Company. In consideration of the provisions of Regulation 17(9) of SEBI (LODR) Regulations, 2015, your Company has a robust risk management framework to identify, monitor and minimise its risk. As a process, the risks associated with the business are prioritised based on Severity, Likelihood and Effectiveness of current detection.

Risk Management approach is composed of three components:

1) Risk Governance

2) Risk Identification

3) Risk Assessment and Control

Each risk factor is monitored periodically by the Management, any event arising from these, likely to impact the operations are reported to the Board.

In consonance with the provisions of Regulation 21 of SEBI (LODR) Regulations, 2015, the Company has constituted a Risk Management Committee on July 18, 2018.

16. INTERNAL FINANCIAL CONTROLS

Your Company has in place adequate internal financial control system commensurate with its size, scale and the nature of business, which ensures that transactions are recorded, authorised and reported correctly apart from safeguarding its assets against significant misuse or loss. Your Company has adequate internal financial controls with reference to its financial statements. The Company’s internal auditors carry out regular checks on the adequacy of the internal financial controls. The Company has specific internal auditors for functions such as GST, financial controls and systems. The Internal Audit system is reviewed from time to time to ensure its adequacy and compliances to the laid down policies of the Company and operating system.

The Internal Audit Reports are submitted periodically to the Audit Committee. The Audit Committee reviews these reports with the executive management and requisite corrective actions are taken by the process owners in their respective areas and thereby strengthen the controls.

17. VIGIL MECHANISM / WHISTLE BLOWER POLICY

Your Company has formulated a Whistle Blower policy and has also established an effective vigil/whistle blower mechanism for its Stakeholders including its employees & Directors and provides them a channel to report to the Management their concerns about unethical behavior, actual or suspected fraud, mismanagement or violation of code of conduct or policy of the Company. The mechanism provides for adequate safeguards against victimization of the whistle blower and also provides for direct access to the Chairperson of the Audit Committee in exceptional cases.

18. POLICY FOR PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE

Your Company has a documented policy for prevention, prohibition and redressal of sexual harassment of women at workplace, under the guiding principle that ‘No woman shall be subjected to sexual harassment in the Company’s locations’.

Your Company has constituted an Internal Complaints’ Committee (ICC) comprised of internal and external members, to hear and inquire in the matter of complaints of sexual harassment and to recommend punitive / corrective action to the Management. Easy access has been provided to the ICC for women employees.

There were no complaints / cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 during the year under review.

19. MEETINGS OF THE BOARD OF DIRECTORS

Five meetings of the Board of Directors were held during the year under review. The details are provided in the Corporate Governance Report annexed to this annual report.

20. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENT

During financial year 2018-19, the Company has not entered into any transaction with respect to loan, guarantee or investments under Section 186 of the Companies Act, 2013.

21. ANNUAL RETURN

The extract of the Annual Return of the Company in Form No. MGT-9 is annexed to this Annual Report vide Annexure 5 forming its integral part. Pursuant to the amended provisions of section 92(3) and 134 (3)(a) of the Companies Act, 2013, the Annual Report of the Company in Form No. MGT-7 is available on the Company’s website www.supremepetrochem.com.

22. CODE OF CONDUCT FOR PROHIBITION OF INSIDER TRADING

Your Company has in place a Code of Conduct for prohibition of Insider Trading, which specifies the process of trading in the securities of the Company by the persons having direct or indirect access to the unpublished price sensitive informations (UPSIs) of the Company including the designated employees / connected / covered persons. The said code is aimed to regulate, monitor and report their trading in the securities of the Company whether done on his / her own behalf or on behalf of any other person, on basis of UPSIs of the Company.

The said Code of Conduct is available at the website of the Company www.supremepetrochem.com.

23. CREDIT RATINGS

During the year under review, the Company has not issued any debt instrument or fixed deposit receipts etc. in India or abroad.

India Ratings & Research has affirmed long term rating at IND A with Stable Outlook and with rating of IND A / Stable/IND A1 for working Capital related Banking Facilities, including fund based and non fund based facilities, of your Company for the year 2019. There was no revision in its credit rating during the financial year 2018-19.

24. SECRETARIAL STANDARDS

The Company complies with the Secretarial Standards, issued by the Institute of Company Secretaries of India, which are mandatorily applicable to the Company.

25. GENERAL DISCLOSURES

(A) No disclosure or reporting is required of the following items as there were no transactions with respect to following activities / matters during the year under review.

(i) Issue of equity shares with differential rights as to dividend, voting or otherwise.

(ii) Issue of shares (including sweat equity shares) to employees of the Company under any scheme.

(iii) Details relating to deposits covered under Chapter V of the Companies Act, 2013.

(iv) No significant or material orders were passed by the Regulators or Courts or Tribunals against the Company or its Directors which may impact the going concern status or Company’s operations in future or the Directors of the Company in any manner.

(v) There is no change in the nature of business of the Company.

(B) Other Disclosures:

(i) No material / significant changes or commitments have occurred in the Company after 31.03.2019 and till the date of this Board’s Report.

(ii) Company has maintained all the cost records applicable to it during financial year 2018-19.

(iii) Policies of the Company are available at www. supremepetrochem.com.

ACKNOWLEDGEMENT

Your Directors record their deep appreciation for the unstinted support and co-operation obtained from the stakeholders of the Company including its Shareholders, Bankers, Customers, Suppliers, Business Associates etc. and last but not the least to the employees of the Company for their dedicated and sincere services to the Company all across.

For and on behalf of the Board

M. P. Taparia

Chairperson

Place: Mumbai

Date: April 26, 2019.


Mar 31, 2018

The Directors are pleased to present the twenty ninth Annual Report and the Company’s audited financial statements for the year ended on March 31, 2018.

1. FINANCIAL RESULTS

(Rs. in lakhs)

2017-2018

2016-2017

Revenue (net of excise duty and GST)

303462.52

292610.93

Profit before tax

17893.64

27784.84

Tax expenses

6281.58

9843.61

Profit after tax

11612.06

17941.23

Interim/Final Dividend on equity shares (including corporate dividend tax) paid during the year

5226.67

1161.52

Transfer to general reserve

7000.00

10000.00

Balance carried forward

9231.10

9845.71

2. DIVIDEND

During the year under review your Directors declared an interim dividend of RS.1.00 per equity share. Your Directors now recommend a final dividend of RS.3.50 per equity share entailing an out go of RS.4072 lakhs including corporate dividend tax. The total dividend for the year would thus be RS.5233.47 lakhs including corporate dividend tax. The payout of dividend is in line with your Company’s policy to pay dividend linked to longterm growth objectives of the Company to be met from internal cash accruals.

3. REVIEW OF OPERATIONS

Your Company’s revenue increased to RS.303462.52 lakhs (net of excise duty and GST) for the year under review as compared to RS.292610.93 lakhs (net of excise duty) in the previous year. This increase is mainly on account of increased cost during the year of Styrene Monomer the main raw material for your Company’s products.

Net Profit after tax for the year under review is RS.11612.06 lakhs as against RS.17941.23 lakhs in the previous year.

Your Company’s performance is discussed in detail in the ‘Management Discussion and Analysis Report’.

Status of Insurance Claim - Chennai Plant

The settlement of the loss/damage to the assets at the EPS plant in Tamil Nadu due to floods in December, 2015 is in progress. Your Company had filed preliminary claim of RS.1092 lakhs. Final claim bill lodged is for RS.977 lakhs. Your Company has till date received interim claim of RS.718 lakhs.

4. MANAGEMENT DISCUSSION AND ANALYSIS REPORT & CORPORATE GOVERNANCE

Management Discussion and Analysis for the year under review is presented separately in the Annual Report. The Report on Corporate Governance forms an integral part of this Report. The compliance of ‘Corporate Governance’ conditions has also been certified by the Auditors and the same is annexed to the report on Corporate Governance.

5. BUSINESS RESPONSIBILITY REPORT

The requirement relating to Business Responsibility Report became applicable to your Company for the year under review. Business Responsibility Report for the year 201718 is included as part of the Annual Report.

6. HEALTH, SAFETY & ENVIRONMENT

Both the Environmental Management System and Occupational Health and Safety Management System continued to be maintained by your Company as per the ISO 14001:2015 Standard and OHSAS 18001:2007 Standard respectively.

Your Company has continued implementation of HSE management Systems under the Guiding Principles of declared Integrated Management System policy. (Occupational Health and Safety Policy’ and ‘Environmental Policy’) HSE Performance Index for the period under review stood to be in “Excellent” Range.

Your Company has completed 6375 accident free days as on March 31, 2018 which amounts to 16.48 million man-hours of accident free operations.

7. DIRECTORS AND KEY MANAGERIAL PERSONNEL

Shri M P Taparia (DIN 00112161) and Shri S J Taparia (DIN 00112513), Directors of the Company retire by rotation and being eligible offer themselves for re-appointment.

A brief resume of the Directors eligible for re-appointment is given in the report on Corporate Governance.

During the year under review the members re-appointed Shri Rajan B Raheja (DIN 00037480) and Shri B L Taparia (DIN 00112438) as Non-Executive Non-Independent Directors liable to retire by rotation.

Your Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Companies Act, 2013 and the Listing Agreement with the Stock Exchanges.

Your Company has in place criteria for evaluation of performance of the Board, Independent Directors and Non-Independent Directors approved by the Nomination and Remuneration Committee.

The Independent Directors, in their meeting evaluated the performance of the Board, the Chairperson and the Non-Independent Directors while the Nomination and Remuneration Committee evaluated the performance of all the Directors. The Board evaluated the performance of the Independent Directors.

The criteria/policies of the Company for selection of Directors and Remuneration Policy for Directors, Key Managerial Personnel and other Employees are attached herewith marked as Annexure-1.

The details of the Familiarisation Programme for Independent Directors are placed on the website of the Company and can be accessed at http:// supremepetrochem.com/pdf/Familiarisation-Programme-For-Independent-Directors.pdf

8. DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 134 (5) of the Companies Act, 2013, your Directors confirm that:

(a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

(b) the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period;

(c) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

(e) the directors, have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively;

(f) the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

9. TRANSFERS TO INVESTOR EDUCATION AND PROTECTION FUND

Your Company transferred an aggregate amount of RS.38.41 lakhs during the year under review to the Investor Education and Protection Fund. The aggregate amount transferred to the fund since January 2002 is RS.335.69 lakhs.

As per Section 124(5) of the Companies Act, 2013, all unpaid or unclaimed dividends for a period of seven years are required to be transferred by the Company to the Investor Education and Protection Fund (IEPF) established by the Central Government.

Further Section 124(6) of the Companies Act, 2013 requires that all shares in respect of which unpaid or unclaimed dividend has been transferred to IEPF, shall also be transferred to IEPF. The Rules notified by Ministry of Corporate Affairs amongst other matters, contain provisions for transfer of all shares in respect of which dividend has not been paid or claimed for seven consecutive years or more, in the name of IEPF Suspense Account.

Your Company transferred 1287209 equity shares, of 7605 shareholders between fourth to eighth December, 2017 to the Investor Education and Protection Fund including 72780 equity shares from the unclaimed Suspense Account.

The unclaimed dividends on equity shares paid in October 2011 will be due for transfer to the Fund in November 2018. Investors who have not yet claimed these dividends are requested to contact either the Company’s Secretarial Department or the R & T Agents.

The Company will upload full details of such shareholders and shares due for transfer to IEPF Suspense Account on its website at www.supremepetrochem.com/investorrelations. Members are requested to complete formalities for claiming unpaid dividend if any to avoid transfer of the shares to IEPF. Please refer to the section Shareholders’ Assistance in the Corporate Governance Report for further details.

10. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO

Information as per Section 134(3)(m) read with COMPANIES DISCLOSURE OF PARTICULARS IN THE REPORT OF THE (BOARD OF DIRECTORS) RULE 8 OF THE COMPANIES (ACCOUNTS) RULES, 2014 forms part of the DIRECTORS’ REPORT for the year under review.

A. CONSERVATION OF ENERGY

Energy conservation programmes at both plant locations resulted in savings of energy to the extent of 355926 KWH (273304 KWH in the Amdoshi Plant and 82622 KWH in the plant in Manali, Chennai).

The energy conservation progammes consisted mainly of the following :

At the plant in Amdoshi, Maharashtra

1) Installation of energy efficient devices like motors, air conditioners in place of old low efficiency devices.

2) Replacement of florescent lamps, tube lights, mercury and sodium vapour light fittings with LED fittings.

3) Replacement of conventional Drives with Variable Frequency Drives (VFDs) wherever possible.

At the plant in Manali, Chennai

1) Improvement in process operations resulted in reduction in specific energy consumed for production of EPS.

2) High energy consuming devices like reciprocating compressor for air application, chiller for chilled water application were replaced by energy efficient screw compressors.

3) Replacing conventional drives with variable frequency drives was carried out wherever specific energy consumption was high.

4) Existing high energy consuming conventional lights were replaced with energy efficient LED lights in a phased manner.

B. TECHNOLOGY ABSORPTION

There are no existing technology supply agreements. All previously supplied technologies have been successfully absorbed.

c. The percentage increase in the median remuneration of employees in the financial year: 10%

d. The number of permanent employees on the rolls of Company : 376

e. The average percentage increase in the salaries of employees other than the Manager was 11% as compared to an increase of 8% in the Manager’s remuneration.

11. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

In terms of the provisions Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules are provided in the Annual Report. Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in the Annual Report. Having regard to the provisions of the first proviso to Section 136(1) of the Companies Act, 2013 and as advised, the Annual Report excluding the aforesaid information is being sent to the members of the Company.

The said information is available for inspection at the registered office of the Company during working hours and any member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request. The full Annual Report including the aforesaid information is being sent electronically to all those members who have registered their email addresses and is available on the Company’s website.

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

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

Not Applicable

b. The percentage increase in remuneration of Manager, CFO and Company Secretary

Designation

% increase in remuneration in the financial year

Manager

8.0

Chief Financial Officer

8.0

Company Secretary

8.5

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

The Company affirms that the remuneration is as per the remuneration policy of the Company.

12. AUDITORS AND AUDITORS’ REPORT Statutory Auditors

The term of the Statutory Auditors M/s. G. M. Kapadia & Co., Chartered Accountants, ends at the conclusion of the ensuing Annual General Meeting, and are eligible to be appointed as Statutory Auditors for a period of five years from the conclusion of the ensuing Annual General Meeting until the conclusion of the Annual General Meeting to be held in the calendar year 2023.

G. M. Kapadia & Co. is a reputed firm of Chartered Accountants established in the year 1938 and possesses a strong team of professionals with indepth knowledge in the desired fields particularly the regulatory requirements.

The Firm’s domestic and international clients range from privately owned entities to public listed Companies including large reputed Companies, banks, insurance companies, investment banks, venture capital funds, mutual funds, private equity funds, brokers and high net-worth individuals.

The Firm was rated amongst the leading tax firms in India by the International Tax Review for the tenth consecutive year in its publication World Tax 2018.

The Firm was also rated amongst the leading transfer pricing firms in India by the International Tax Review for the fifth consecutive year in its publication of World Transfer Pricing 2018.

Considering the standing of the firm and domain knowledge, Directors commend the appointment of M/s. G M Kapadia & Co as Statutory Auditors of the Company

The Auditors have confirmed their eligibility to the effect that their appointment, if made, would be within the prescribed limits of the Companies Act, 2013 and that they are not disqualified for such appointment.

There are no qualifications or adverse remarks in the auditors’ report. No frauds were reported by the Auditors under sub Section (12) of the Section 143 of the Companies Act, 2013.

Cost Auditors

Cost Auditors’ report for the year 2016-2017 was filed with the authorities on August 09, 2017 well within the due date. M/s. Kishore Bhatia & Associates, Cost Accountants have been appointed as Cost Auditors to audit the cost accounts of the Company for the financial year April 01, 2017 to March 31, 2018.

Secretarial Auditors

Your Company had appointed M/s. Parikh & Associates, Company Secretaries to conduct secretarial audit for the year under review. The secretarial audit report for the financial year ended March 31, 2018 is annexed hereto marked as Annexure-2. The Secretarial Auditors’ Report does not contain any qualifications or adverse remark.

13. RELATED PARTY TRANSACTIONS

Transactions with related parties during the year under review were in the ordinary course of business and on an arm’s length basis. During the year your Company had not entered into any contract or arrangement with a related party which would be considered as material in accordance with the policy of the Company on materiality of related party transactions.

The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company’s website at the link: http://supremepetrochem.com/pdf/Policy-On-Dealing-With-Related-Party-Transactions.pdf. Information on related party transactions are given in Annexure-5 in Form AOC-2 forming part of this report.

14. CORPORATE SOCIAL RESPONSIBILITY

Corporate Social Responsibility Committee has formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company. This Policy has been approved by the Board. The CSR Policy is available on the Company’s website at the link: http://supremepetrochem. com/pdf/Corporate-Social-Responsibility.pdf.

Your Company has identified the following areas for its CSR activities:

(i) promoting preventive health care and sanitation and making available safe drinking water.

(ii) promoting education, including special education and employment enhancing vocation skills, livelihood enhancement projects, granting of scholarships and building/improving infrastructure at educational institutions.

(iii) protection of national heritage, art and culture including restoration of buildings and sites of historical importance and works of art, setting up public libraries.

(iv) contribution to the Prime Minister’s National Relief Fund or any other fund set up by the Central Government for socio-economic development and relief and welfare of the Schedule Caste, the Scheduled Tribes, other backward classes, minorities and women.

(v) contributions or funds provided to technology incubators located within academic institutions which are approved by the Central Government.

(vi) ensuing environmental stability, ecological balance, conservation of natural resources and maintaining quality of soil, air and water.

(vii) rural development projects.

(viii) Slum rehabilitation.

(ix) Sports, nationally recognised sports, Paralympics Sports and Olympic Sports,

These activities will be carried out in the villages in proximity to your Company’s plants in Maharashtra and Tamil Nadu.

The report on CSR activities during the year under review is given in Annexure-4 to this report.

15. RISK MANAGEMENT

Business Risk Evaluation and Management is an ongoing process within the Company. Your Company has a robust risk management framework to identify, monitor and minimise risk as also identify business opportunities. As a process, the risks associated with the business are prioritised based on Severity, Likelihood and Effectiveness of current detection.

Risk Management approach is composed of three components:

1) Risk Governance

2) Risk Identification

3) Risk Assessment and Control

Each risk factor is monitored periodically by the Management, any event arising from these, likely to impact operations are reported to the Board.

16. INTERNAL FINANCIAL CONTROLS

Your Company has in place adequate internal financial controls commensurate with size and the nature of business, which ensures that transactions are recorded, authorised and reported correctly apart from safeguarding its assets against significant misuse or loss. Your Company also has adequate internal financial controls with reference to financial statements. The Company’s internal auditors carry out regular checks on the adequacy of the internal financial controls. Company has specific internal auditors for functions such as GST, financial controls and systems.

The internal audit reports are submitted periodically to the Audit Committee. The Audit Committee reviews these reports with the executive management.

17. VIGIL MECHANISM / WHISTLE BLOWER POLICY

Your Company has established a vigil / whistle blower mechanism which provides a channel to any employee / Director to report to the Management concerns about unethical behavior, actual or suspected fraud or violation of code of conduct or policy. The mechanism provides for adequate safe guards against victimisation of the whistle blower and also provides for direct access to the Chairperson/Manager/Chairperson of the Audit Committee in exceptional cases.

18. POLICY FOR PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE

Your Company has a documented policy for prevention, prohibition and redressal of sexual harassment of women at workplace, under the guiding principle that ‘No woman shall be subjected to sexual harassment in the Company’s locations’.

Your Company has constituted an Internal Complaints’ Committee (ICC) comprised of internal and external members, to hear and inquire in complaints of sexual harassment and to recommend punitive/corrective action to the Management. Easy access has been provided to the ICC for women employees.

We are glad to report that there were no complaints/cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 during the year under review.

19. MEETINGS OF THE BOARD

Five meetings of the Board of Directors were held during the year under review. For further details please refer to the report on Corporate Governance in this annual report.

20. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENT

There are no loans, guarantees or investments under Section 186 of the Companies Act, 2013 as on March 31, 2018.

21. EXTRACT OF ANNUAL RETURN

The extract of the Annual Return in Form MGT-9 is annexed herewith as Annexure-3 to this annual report.

22. GENERAL

No disclosure or reporting is required of the following items as there were no transactions on these items during the year under review.

(i) Issue of equity shares with differential rights as to dividend, voting or otherwise.

(ii) Issue of shares (including sweat equity shares) to employees of the Company under any scheme.

(iii) Details relating to deposits covered under Chapter V of the Companies Act, 2013

(iv) No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company’s operations in future.

Your Company does not have any Associate/ Joint Venture Subsidiary Companies.

ACKNOWLEDGEMENT

The Directors are thankful to the Bankers, Customers, Suppliers and other Business Associates/Stakeholders for their continued co-operation and support extended to your Company and to the employees for their dedicated and sincere services to the Company.

For and on behalf of the Board

M. P. Taparia

Chairperson

Place: Mumbai

Date: April 24, 2018.


Mar 31, 2017

The Directors are pleased to present the twenty eighth Annual Report and the Company''s audited financial statements for the year ended on March 31, 2017.

DIRECTORS’ REPORT

1. FINANCIAL RESULTS

(Rs, in lakhs)

2016-2017 (12 months)

2015-2016 (9 months)

Revenue

322378.93

235671.61

Profit before tax

27784.84

8485.04

Tax expenses

9843.61

2780.39

Profit after tax

17941.23

5704.65

Interim/Final Dividend on equity shares (including corporate dividend tax) paid during the year

1161.52

3484.42

Transfer to general reserve

10000.00

4000.00

Balance carried forward

9845.71

3066.00

2. DIVIDEND

During the year under review your Directors declared an interim dividend of R 1.00 per equity share. Your Directors now recommend a final dividend of R 3.50 per equity share entailing an out go R 4084.32 lakhs including corporate dividend tax. The total dividend for the year would thus be R 5245.84 lakhs including corporate dividend tax.

3. REVIEW OF OPERATIONS

The price of Styrene Monomer (SM) the main raw material for your Company''s products was generally stable in the first half of the year under review resulting in volume growth in all your Company''s products. However, the tight availability of SM during the latter half of the year due to declaration of force majeure in two large plants in USA and bunching of turnarounds of plants in Europe and Asia lead to volatility in SM price and had an adverse impact on all styrene’s products. This was further compounded by demonetization with consequent cash crunch in the unorganized sector dampening business sentiment. These events culminated in a modest sales volume growth for your Company during the year under review.

The domestic Polystyrene (PS) industry witnessed a fall in demand during the year under review due to the reasons mentioned earlier even though the industry had shown a healthy growth up to October 2016. Export volumes were flat for the year under review due to geo political issues in some export markets and low net back.

The domestic Expandable Polystyrene (EPS) market grew by 10.70% during the year under review compared to the previous year. This growth was largely due to demand from fish box market, grapes packaging for exports and insulation for cold storages.

The Specialty Polymer and Compounds (SPC) business is showing steady growth with introduction of new grades like black and coloured master batches which are receiving encouraging feedback from customers. SPC business grew at 44% during the year under review.

Extruded Polystyrene Insulation Board (XPS) grew by 35% during the year under review, with your Company supplying XPS to several prestigious educational, hospitality, medical and SEZ projects.

Styrene Methyl Methacrylate (SMMA)

The modified PS line with the ability to swing between PS and SMMA was ready for commercial production after necessary trial runs on February 3, 2017. Seed marketing has commenced and positive feedback has been received from the market. Your Company is the first one to manufacture this in India. It is an economical alternate to certain applications of PMMA, Polycarbonate and clear ABS.

Status of Insurance Claim - Chennai Plant

The settlement of the loss/damage to the assets at the EPS plant in Tamil Nadu due to floods in December, 2015 is in progress. Your Company had filed an initial claim of Rs, 1092 lakhs. Your Company has till date received interim claim of

Rs, 718 lakhs. Your Company has adequate insurance cover on reinstatement basis for fixed assets and on cost basis for raw materials and stores and on market price basis for finished goods, the management of your Company does not expect any financial loss on account of the same. Your Company is also insured for “Loss of Profit” during the period the plant operations were shut.

4. MANAGEMENT DISCUSSION AND ANALYSIS REPORT & CORPORATE GOVERNANCE

Management Discussion and Analysis for the year under review is presented separately in the Annual Report. The Report on Corporate Governance forms an integral part of this Report. The compliance of ''Corporate Governance’ conditions has also been certified by the Auditors and the same is annexed to the report on Corporate Governance.

5. HEALTH, SAFETY & ENVIRONMENT

Both the Environmental Management System and Occupational Health and Safety Management System continued to be maintained by your Company as per the ISO 14001:2015 Standard and OHSAS 18001:2007 Standard respectively.

Your Company has continued implementation of HSE management Systems under the Guiding Principles of declared Integrated Management System policy. (''Occupational Health and Safety Policy'' and ''Environmental Policy'').

HSE Performance Index for the period under review stood to be in “Excellent” Range.

The Company has completed 6012 accident free days as on March 31, 2017.

6. DIRECTORS AND KEY MANAGERIAL PERSONNEL

Shri Rajan B. Raheja (DIN 00037480) and Shri B. L. Taparia (DIN 00112438), Directors of the Company retire by rotation and being eligible offer themselves for re-appointment.

A brief resume of the Directors eligible for re-appointment is given in the report on Corporate Governance.

During the year under review the members re-appointed Shri M. P. Taparia (DIN 00112461) and Shri S. J. Taparia (DIN 00112513) as Non-Executive Non-Independent Directors liable to retire by rotation.

During the year under review the members appointed Shri N. Gopal as the Manager of the Company for the period from April 20, 2016 to March 31, 2018.

Your Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Companies Act, 2013 and the Listing Agreement with the Stock Exchanges.

Your Company has in place criteria for evaluation of performance of the Board, Independent Directors and Non-Independent Directors approved by the Nomination and Remuneration Committee.

The Independent Directors, in their meeting evaluated the performance of the Board, the Chairperson and the Non-Independent Directors while the Nomination and Remuneration Committee evaluated the performance of all the Directors. The Board evaluated the performance of the Independent Directors.

The criteria/policies of the Company for selection of Directors and Remuneration Policy for Directors, Key Managerial Personnel and other Employees are attached herewith marked as Annexure-1

The details of the Familiarization Programme for Independent Directors are placed on the website of the Company and can be accessed at http://supremepetrochem.com/pdf/ Familiarisation-Programme-For-Independent-Directors.pdf

7. DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 134 (5) of the Companies Act, 2013, your Directors confirm that:

(a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

(b) the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period;

(c) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

(e) the directors, have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively;

(f) the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

8. TRANSFERS TO INVESTOR EDUCATION AND PROTECTION FUND

Your Company transferred an aggregate amount of R 25.95 lakhs during the year under review to the Investor Education and Protection Fund. The aggregate amount transferred to the fund since January 2002 is R 297.28 lakhs.

The unclaimed dividends on equity shares paid in October 2010 will be due for transfer to the Fund in November 2017. Investors who have not yet claimed these dividends are requested to contact either the Company''s Secretarial Department or the R & T Agents.

The Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules 2016 as amended by Ministry of Corporate Affairs w.e.f. February 28, 2017 (the Rules) inter-alia provide for transfer of shares in respect of which dividend has not been encased by the shareholders for seven consecutive years or more in the name of Investor Education and Protection Fund (IEPF) Suspense Account.

Adhering to the various requirements set out in the Rules the Company has communicated individually to the concerned shareholders whose shares are liable to be transferred to IEPF Suspense Account under the said Rules.

The Company has uploaded full details of such shareholders and shares due for transfer to IEPF Suspense Account on its website at www.supremepetrochem.com/ investor relations. Members are requested to complete formalities for claiming unpaid dividend if any, by May 31, 2017. Please refer to the section Shareholders'' Assistance in the Corporate Governance Report for further details.

9. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO

Information as per Section 1 34(3)(m) read with COMPANIES DISCLOSURE OF PARTICULARS IN THE REPORT OF THE (BOARD OF DIRECTORS) RULE 8 OF

THE COMPANIES (ACCOUNTS) RULES, 2014 forms part

of the DIRECTORS'' REPORT for the year under review.

A. CONSERVATION OF ENERGY

Energy conservation programmes at both plant locations resulted in savings of energy to the extent of 722556 KWH (423283 KWH in the Amdoshi Plant and 299273 KWH in the plant in Manali, Chennai).

The energy conservation progammes consisted mainly of the following :

At the plant in Amdoshi, Maharashtra

1) Process optimization to achieve energy efficiency by elimination of dryer blower in the EPS plant and optimizing use of chilled water unit in the XPS plant.

2) Installation of modern energy efficient devices like motors, air conditioners in place of old high energy consuming devices.

3) Replacing fluorescent lamps, tube lights, mercury vapour and sodium vapour light fittings with energy efficient LED fittings.

At the plant in Manali, Chennai

1. Improvement in process operations resulting in savings in electrical energy consumed in the production of EPS.

2. Replacing in a phased manner all the old high energy consuming devices like compressors, blowers with modern energy efficient ones.

3. Replacing conventional drives with Variable Frequency Drives (VFDs) wherever possible.

4. Replacing in a phased manner the existing light fittings with energy efficient LED fittings.

B. TECHNOLOGY ABSORPTION

During the period under review your Company entered into a technology supply agreement with Polysty Inc. USA for the modification of one PS line into a swing line capable of producing either PS or SMMA. This technology has been absorbed successfully by commissioning the modified swing line

C. FOREIGN EXCHANGE EARNINGS AND OUTGO

(Rs,in lakhs)

Foreign exchange earnings and outgo

2016-2017

a.

Foreign exchange inflow

60325.92

b.

CIF value of imports including

234334.84

capital goods

c.

Expenditure in foreign currency

712.67

10. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

In terms of the provisions of Section 197(12) of the Companies Act, 2013, read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules are provided in the Annual Report. Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in the Annual Report. Having regard to the provisions of the first proviso to Section 136(1) of the Companies Act, 2013 and as advised, the Annual Report excluding the aforesaid information is being sent to the members of the Company.

The said information is available for inspection at the registered office of the Company during working hours and any member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request. The full Annual Report including the aforesaid information is being sent electronically to all those members who have registered their email addresses and is available on the Company''s website.

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

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

Not Applicable

b. The percentage increase in remuneration of Manager, CFO and Company Secretary

Designation

% increase in remuneration in the financial year

Manager (20/04/2016 to 31/03/2017)

10.58

Chief Financial Officer

9.45

Company Secretary

6.99

c. The percentage increase in the median remuneration of employees in the financial year : 8.4%

d. The number of permanent employees on the rolls of Company : 353

e. The explanation on the relationship between average increase in remuneration and Company performance:

On an average, employees received an annual increase of 7.2%. The operating profits before interest, depreciation and tax was R 30476.81 lakhs compared to R 10720.91 lakhs in the previous year (9 months period). The increase in remuneration is in line with the market trends. The increments are also linked to Company''s performance, apart from an individual''s performance.

f. Comparison of the remuneration of the key managerial personnel against the performance of the Company:

Aggregate remuneration of Key Managerial Personnel (KMP) during the year under review (R in lakhs)

419.78

Revenue (R in lakhs)

322378.93

Remuneration of KMP (as % of

0.13

revenue)

Profit before Tax (PBT) (R in lakhs)

27784.84

Remuneration of KMP (as % of PBT)

1.51

g. Variations in the market capitalization of the Company, price earnings ratio as at the closing date of the current financial year and previous financial year i.e. from July 1, 2015 to March 31, 2016:

Particulars

March 31, 2017

March 31, 2016

%

Change

Market capitalization (R in lakhs)

292352.68

105428.39

177.30

Price earnings ratio

16.30

18.49

(11.84)

h. Percentage increase over decrease in the market quotations of the shares of the Company in comparison to the rate at which the Company came out with the last public offer:

Particulars

March 31,

February

%

2017

21, 1994 (IPO)

Change

Market Price (BSE)

302.45

10

2924.50

Market Price (NSE)

302.95

10

2929.50

i. Comparison of remuneration of each key managerial personnel against the performance of the Company:

Particulars

Manager*

Chief

Financial

Officer

Company

Secretary

Remuneration during the year under review (Rs in lakhs)

184.37 *

192.29

43.12

Revenue (Rs in lakhs)

322378.93

Remuneration as a % of revenue

0.06

0.06

0.01

* 20/04/2016 to 31/03/2017

j. The key parameters for any variable component of remuneration availed by the directors:

Not Applicable

k. The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year

None.

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

The Company affirms that the remuneration is as per the remuneration policy of the Company.

11. AUDITORS AND AUDITORS’ REPORT Statutory Auditors

The members in the Annual General Meeting have appointed M/s. G M Kapadia & Co., Chartered Accountants, Firm Registration No. 104767W, as Statutory Auditors of the Company to hold office until the conclusion of the Annual General Meeting to be held in the calendar year 2018. In accordance with the first proviso of Section 139(1) of the Companies Act, 2013 the appointment of the Auditors is to be ratified by members at every Annual General Meeting. The Auditors have confirmed their eligibility to the effect that the ratification of their appointment, if made, would be within the prescribed limits of the Companies Act, 2013 and that they are not disqualified for such appointment. There are no qualifications or adverse remarks in the auditors'' report.

Cost Auditors

Cost Auditors'' report for the year 2015-2016 was filed with the authorities on July 28, 2016, well within the due date. M/s. Kishore Bhatia & Associates, Cost Accountants have been appointed as Cost Auditors to audit the cost accounts of the Company for the financial year April 01, 2016 to March 31, 2017.

Secretarial Auditors

The Company had appointed M/s. Parikh & Associates, Company Secretaries to conduct secretarial audit for the year under review. The secretarial audit report for the financial year ended March 31, 2017 is annexed hereto marked as Annexure-2. The Secretarial Auditors'' Report does not contain any qualifications or adverse remark.

12. RELATED PARTY TRANSACTIONS

Transactions with related parties during the year under review were in the ordinary course of business and on an arm''s length basis. During the year the Company had not entered into any contract or arrangement with a related party which would be considered as material in accordance with the policy of the Company on materiality of related party transactions.

The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company''s website at the link: http://supremepetrochem.com/pdf/ Policy-On-Dealing-With-Related-Party-Transactions.pdf. Information on related party transactions are given in Annexure-5 in Form AOC-2 forming part of this report.

13. CORPORATE SOCIAL RESPONSIBILITY

Corporate Social Responsibility Committee has formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company. This Policy has been approved by the Board. The CSR Policy is available on the Company''s website at the link: http://supremepetrochem. com/pdf/Corporate-Social-Responsibility.pdf

The Company has identified the following areas for its CSR activities:

(i) promoting preventive health care and sanitation and making available safe drinking water.

(ii) promoting education, including special education and employment enhancing vocation skills, livelihood enhancement projects, granting of scholarships and building/improving infrastructure at educational institutions.

(iii) protection of national heritage, art and culture including restoration of buildings and sites of historical importance and works of art; setting up public libraries.

(iv) contribution to the Prime Minister''s National Relief Fund or any other fund set up by the Central Government for socio-economic development and relief and welfare of the Schedule Caste, the Scheduled Tribes, other backward classes, minorities and women.

(v) contributions or funds provided to technology incubators located within academic institutions which are approved by the Central Government.

(vi) ensuing environmental stability, ecological balance, conservation of natural resources and maintaining quality of soil, air and water.

(vii) rural development projects.

(viii) Slum rehabilitation.

(ix) Sports, nationally recognized sports, Paralympics Sports and Olympic Sports,

These activities will be carried out in the villages in proximity to your Company''s plants in Maharashtra and Tamil Nadu.

The report on CSR activities during the year under review is given in Annexure-4 to this report.

14. RISK MANAGEMENT

Business Risk Evaluation and Management is an ongoing process within the Company. The Company has a robust risk management framework to identify, monitor and minimize risk as also identify business opportunities. As a process, the risks associated with the business are prioritized based on Severity, Likelihood and Effectiveness of current detection.

Risk Management approach is composed of three components:

1) Risk Governance

2) Risk Identification

3) Risk Assessment and Control

Each risk factor is monitored periodically by the Management, any event arising from these, likely to impact operations are reported to the Board.

15. INTERNAL FINANCIAL CONTROLS

Your Company has in place adequate internal financial controls with reference to financial statements. The Company''s internal auditors carry out regular checks on the adequacy of the internal financial controls. Company has specific internal auditors for functions such as excise, service tax, VAT and financial controls and systems.

16. VIGIL MECHANISM / WHISTLE BLOWER POLICY

Your Company has established a vigil / whistle blower mechanism which provides a channel to any employer / director to report to the Management concerns about unethical behavior, actual or suspected fraud or violation of code of conduct or policy. The mechanism provides for adequate safe guards against victimization of the whistle blower and also provides for direct access to the Chairperson/Manager/Chairperson of the Audit Committee in exceptional cases.

17. MEETINGS OF THE BOARD

Four meetings of the Board of Directors were held during the year under review. For further details please refer to the report on corporate governance in this annual report.

18. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENT

There are no loans, guarantees or investments under Section 186 of the Companies Act, 2013 as on March 31, 2017.

19. EXTRACT OF ANNUAL RETURN

The extract of the Annual Return in Form MGT-9 is annexed herewith as Annexure-3 to this annual report.

20. GENERAL

No disclosure or reporting is required of the following items as there were no transactions on these items during the year under review.

(i) Issue of equity shares with differential rights as to dividend, voting or otherwise.

(ii) Issue of shares (including sweat equity shares) to employees of the Company under any scheme.

(iii) No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company''s operations in future.

The Company does not have any Associate/Joint Venture Subsidiary Companies.

There were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal Act, 2013) during the year under review.

ACKNOWLEDGEMENT

The Directors are thankful to its Bankers, Customers, Suppliers and other Business Associates/Stakeholders for their continued co- operation and support extended to your Company and to the employees for their dedicated and sincere services to the Company.

For and on behalf of the Board

M. P. Taparia

Chairperson

Place: Mumbai

Date: April 26, 2017.


Mar 31, 2016

The Directors are pleased to present the twenty seventh Annual Report and the Company''s audited financial statements for the nine months period ended on March 31, 2016. (July 1, 2015 to March 31, 2016).

1. FINANCIAL RESULTS

(Rs, in lacs)

2015-2016 (9 months)

2014-2015 (12 months)

Income (net of excise)

206805.25

265253.76

Profit before Tax

8371.47

5629.30

Tax expenses

2750.79

2351.76

Profit after tax

5620.68

3277.54

Profit for the year (net of prior period adjustment)

5604.86

3570.12

Balance brought forward from Previous Year (net of adjustment relating to transitional provision)

3164.65

3336.74

Amount available for appropriation

8769.51

6906.86

Appropriation thereof(as recommended by the Board)

Dividend on equity shares (including corporate dividend tax)

*1742.21

1742.21

Transfer to general reserve

4000.00

2000.00

Balance carried forward

3027.30

3164.65

*Interim Dividend paid in March 2016

2. DIVIDEND

During the period under review i.e. July 1, 2015 to March 31, 2016 your Directors declared an interim dividend of Rs,1.50 per equity share for the year 2015-2016. Your Directors recommend that this dividend be declared as the final dividend.

3. REVIEW OF OPERATIONS

Steep fall in crude oil prices in the period July 2015 to December 2015 resulted in consequent fall in price of the main raw material Styrene Monomer (SM) and your Company''s products causing inventory losses to your Company during the first quarter ended September, 2015. The SM prices however stabilised in the second quarter ended on December 31, 2015 and with the low prices of the Company''s products, demand improved. The January to March 2016 quarter witnessed upsurge in demand for the Company''s main products due to marked improvement in demand for consumer appliances like refrigerators, air conditioners, air coolers and televisions. This coupled with smart pick up in business sentiments, helped your Company earn PBDIT of Rs,10584.07 lacs and profit after tax of Rs, 5604.86 lacs for this financial year of nine months.

Your Company registered a volume growth of 26% in respect of all its manufactured products during the period July 2015 - March 2016 compared to the same period in the previous year.

The domestic Polystyrene (PS) market saw healthy growth of 10.11% in the nine months period of July 2015 to March 2016, while the export of PS grew by 57% in the year under review, as compared to the same period in previous year. With this growth in exports, Company was able to increase share of export volumes to over 35% of total volume sales of Polystyrene.

Expandable Polystyrene (EPS) market grew by 9.70% during the nine months period under review. The growth was contributed mainly by packaging industry for white goods and grape boxes apart from construction industry using sandwich panels, 3-D panels and cold storage constructions.

Extruded Polystyrene Insulation Board (XPS) sales volume grew by 79% during the period under review. Continuous efforts are being made to strengthen the distributor network.

SMMA Project (Styrene Methyl Methacrylate)

Your Company proposes to modify one of the three Polystyrene (PS) lines at the plant in villages Amdoshi, Wangani in Maharashtra into a swing line capable of producing either PS or up to 42500 TPA of SMMA. The technology for the modification of the PS line and production of SMMA will be from Polysty Inc. USA. The cost of the project, including hardware and technology fees will not exceed '' 600 lacs and shall be met from internal accruals. The plant start-up is expected by end of 2016 and the estimated payback period is two years. SMMA is widely used for optical sheets. Other applications include home ware, office accessories, toys and medical devices.

Disruption in Operations of the Chennai Plant

The operations of the EPS plant in Chennai were disrupted in December 2015 due to the unprecedented rains and flooding in Chennai. The flood waters attained a level of 6 feet inside the plant and damaged inventories, electrical, mechanical equipment and instrumentation as also spares, system hardware, office equipment and furniture. Parts of the compound wall and water pond were also damaged. The Management team and employees worked untiringly to restore operations in a month''s time. The Board commends these efforts of the employees in not only restoring operations but also in servicing customers from the plant in Maharashtra. The Company has adequate insurance for its assets and have filed an initial claim of Rs,1092 lacs with the Insurance Company. Your Company is also insured for “Loss of Profit” during the period the plant operations were shut. The Company therefore does not envisage any financial loss on this account. The final report of the surveyor appointed by the Insurers is awaited. In the interim your Company has received an on account claim of Rs, 449 lacs from the Insurance Company.

4. MANAGEMENT DISCUSSION AND ANALYSIS REPORT & CORPORATE GOVERNANCE

Management Discussion and Analysis for the period under review i.e. July 1, 2015 to March 31, 2016 is presented separately in the Annual Report. The Report on Corporate Governance forms an integral part of this Report. The compliance of ‘Corporate Governance'' conditions has also been certified by the Auditors and the same is Annexed to the report on Corporate Governance.

5. HEALTH, SAFETY & ENVIRONMENT

1. Health Safety and Environment Management:

Both the Occupational Health and Safety Management System (OHSMS) and Environmental Management System (EMS) continued to be maintained as per the OhSaS 18001:2007 Standard and ISO 14001:2004 Standard respectively.

SPL has continued implementation of HSE Management Systems under the Guiding Principles of declared “Occupational Health and Safety Policy” and “Environmental Policy”.

HSE Performance Index for the period under review stood to be in ‘Excellent'' range.

2. Highlights of the HSE Activities implemented during the period under review:

Continued implementation of Compliance Management System (CMS) software to track various HSE related statutory compliance.

HSE training conducted as per the Plan. Competence Assessment is done six monthly by practical test. Average competency for last three years is 82.8 % as against targeted 70%.

Procedures for permit to work system, Management and Handling of Hazardous Wastes, Management of Change and SOPs for Plant Operations are revised and implemented based on internal audits and reviews.

External Audit of Integrated Management System was conducted by BVC Auditors during March 2016. No major non conformity observed.

Quantitative Risk Assessment done by M/s.Chilworth Technology (Pvt) Ltd in November 2015.

On Site Emergency Management Plan is revised by incorporating results of Risk Registers, Observations from mock drills, as well as provision from applicable legal requirements.

In order to check adequacy of emergency planning, preparedness and response mechanisms, total 24 nos of “Department Level Mock Drills” were conducted in addition to two six monthly full scale mock drills.

Environmental Monitoring for effluents and emissions are done (self as well as MOEF approved third party) as per the Environmental Monitoring Plan which was developed in consultation with MPCB Officials. All the parameters are found within the prescribed limits.

Medical examinations (annual comprehensive and six monthly periodic) for all SPL and contract employees completed during June 2015 and Dec 2015 respectively. No occupational ill health observed during the examination.

Safety Committee Meetings, Management Review Meetings, and Monthly Performance Review Meetings are conducted as per schedule and required actions have been taken on all the points.

6. DIRECTORS AND KEY MANAGERIAL PERSONNEL

Shri M P Tarparia (DIN 00112461) and Shri S J Taparia (DIN 00112513), Directors of the Company retire by rotation and being eligible offer themselves for reappointment.

A brief resume of the Directors eligible for re-appointment is given in the report on Corporate Governance.

During the period under review i.e. July 1, 2015 to March 31, 2016 Dr. S Sivaram (DIN 00009900) was appointed as an Independent Director by the Members to hold office for a consecutive period up to September 21, 2019. The members also re-appointed Shri Rajan B Raheja (DIN 0037480) and Shri B L Taparia (DIN 00112438) as Non Executive Non-Independent Directors liable to retire by rotation. Shri Hasmukh Shah resigned from the Board of Directors of the Company w.e.f. April 7, 2016. The Board places on record it''s appreciation of his invaluable guidance and contribution to the Company as a member of the Board of Directors and its various Committees.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Companies Act, 2013 and the Listing Agreement with the Stock Exchanges.

Your Company has in place criteria for evaluation of performance of the Board, Independent Directors and Non-Independent Directors approved by the Nomination and Remuneration Committee. Annual evaluations of the Board and of the Directors were carried out as follows: The Independent Directors, in their meeting evaluated the performance of the Board, the Chairperson and the Non-independent Directors while the Nomination and Remuneration Committee evaluated the performance of all the Directors. The Board evaluated the performance of the Independent Directors.

The criteria/policies of the Company for selection of Directors and Remuneration Policy for Directors, Key Managerial Personnel and other Employees are attached herewith marked as Annexure-1 The details of the Familiarization Programme for Independent Directors are placed on the website of the Company and can be accessed at http:// supremepetrochem.com/pdf/Familiarisation-Programme-For-Independent-Directors.pdf

7. DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 134 (5) of the Companies Act, 2013, your Directors confirm that:

(a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

(b) the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period;

(c) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

(e) the directors, have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively.

(f) the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

8. TRANSFERS TO INVESTOR EDUCATION AND PROTECTION FUND

Your Company transferred an aggregate amount of Rs,26.07 lacs during the period under review i.e. July 1, 2015 to March 31, 2016 to the Investor Education and Protection Fund. The aggregate amount transferred to the fund since January 2002 is Rs, 271.33 lacs.

The unclaimed dividends on equity shares paid in October 2009 will be due for transfer to the Fund in November 2016. Investors who have not yet claimed these dividends are requested to contact either the Companies'' Secretarial Department or the R & T Agents.

9. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO

Information as per Section 134(3)(m) read with COMPANIES DISCLOSURE OF PARTICULARS IN THE REPORT OF THE (BOARD OF DIRECTORS) RULE 8 OF THE COMPANIES (ACCOUNTS) RULES, 2014 forms part of the DIRECTORS'' REPORT for the period under review i.e. July 1, 2015 to March 31, 2016.

A. CONSERVATION OF ENERGY

At the plant in Amdoshi, Maharashtra

Various Energy Conservation Programmes were implemented during the period under review i.e. July 1, 2015 to March 31, 2016 which resulted in savings of energy to the extent of 164877 KWH.

Energy Conservation Programmes namely consisted of following :

1. Use of LED Tube Lights in place of conventional Tube Lights.

2. Use of Variable Frequency Drives (VFDs)

3. Use of high efficiency electrical motors and transformers.

Use of Alternate Energy Sources

Use of natural gas is being made to generate Captive

Power to the extent of 2 MW.

At the plant in Manali, Chennai

SPL, Chennai continued its efforts in bringing down unit energy consumption and furnace oil consumption. By improving operations and implementation of various energy conservation efforts, unit furnace oil consumption has been reduced. The revamp of the existing effluent treatment plant and the addition of a set of ultra filtration and R.O. units last year resulted in achievement of “Zero liquid discharge”.

B. TECHNOLOGY ABSORPTION

Technology sourced from NOVA Chemical Inc. (for Polystyrene and food grade EPS) and SH Chemical Co. (for EPS) have since been successfully absorbed.

C. FOREIGN EXCHANGE EARNINGS AND OUTGO

(Rs, In lacs)

Foreign exchange earnings and outgo

2015-16 (9 months)

a.

Foreign exchange inflow

47247.85

b.

CIF value of imports including

capital goods

161567.32

c.

Expenditure in foreign currency

553.42

10. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

In terms of the provisions of Section 197(12) of the Companies Act, 2013, read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules are provided in the Annual Report. Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in the Annual Report. Having regard to the provisions of the first proviso to Section 136(1) of the Companies Act, 2013 and as advised, the Annual Report excluding the aforesaid information is being sent to the members of the Company.

The said information is available for inspection at the registered office of the Company during working hours and any member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request. The full Annual Report including the aforesaid information is being sent electronically to all those members who have registered their email addresses and is available on the Company''s website.

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

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

Not Applicable

b. The percentage increase in remuneration of Manager, CFO and Company Secretary

Designation

% increase in remuneration in the financial year

Manager (up to 29/02/2016)

12.42

Chief Financial Officer

10.05

Company Secretary

10.20

c. The percentage increase in the median remuneration of employees in the financial year : 13%

d. The number of permanent employees on the rolls of Company: 343

e. The explanation on the relationship between average increase in remuneration and Company performance: On an average, employees received an annual increase of 10%. The operating profits before interest, depreciation and tax was Rs, 10584.07 lacs compared to Rs, 9638.09 lacs in the previous year despite losses incurred in the first quarter due to fall in crude and consequent fall in Styrene Monomer and your Company''s product prices. The increase in remuneration is in line with the market trends. The increments are also linked to Company''s performance, apart from an individual''s performance.

f. Comparison of the remuneration of the key managerial personnel against the performance of the Company:

Aggregate remuneration of Key Managerial Personnel (KMP) during the period under review i.e.July 1, 2015 to March 31, 2016 (Rs, In lacs)

312.72

Revenue (Rs, In lacs)

206805.25

Remuneration of KMPs (as % of revenue)

0.15

Profit before Tax (PBT) (Rs, In lacs)

8355.65

Remuneration of KMP (as % of PBT)

3.74

g. Variations in the market capitalisation of the Company, price earnings ratio as at the closing date of the current financial year i.e. from July 1, 2015 to March 31, 2016 and previous financial year:

Particulars

March 31,

June 30,

%

2016

2015

Change

Market capitalization

(Rs, In lacs)

105428.39

80627.39

23.52

Price earnings ratio

18.80

22.58

(16.74)

h. Percentage increase over decrease in the market quotations of the shares of the Company in comparison to the rate at which the Company came out with the last public offer:

Particulars

March 31,

February 21,

%

2016

1994 (IPO)

Change

Market Price (BSE)

108.90

10

989.00

Market Price (NSE)

109.25

10

992.50

i. Comparison of each remuneration of the key managerial personnel against the performance of the Company:

Manager*

Chief

Financial

Officer

Company

Secretary

Remuneration during the period under review i.e. July 1, 2015 to March 31, 2016 (Rs, In lacs)

126.09

154.69

31.94

Revenue (Rs, In lacs)

206805.25

Remuneration as a % of revenue

0.06

0.08

0.02

Profit before tax (PBT) (Rs, In lacs)

8355.65

Remuneration (as % of PBT)

1.51

1.85

0.38

* Up to February 29, 2016 j. The key parameters for any variable component of remuneration availed by the directors:

Not Applicable

k. The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year

None.

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

The Company affirms that the remuneration is as per the remuneration policy of the Company.

II. AUDITORS AND AUDITORS’ REPORT Statutory Auditors

The members in the Annual General Meeting have appointed M/s. G M Kapadia & Co., Chartered Accountants, Membership No. 048243 as Statutory Auditors of the Company to hold office until the conclusion of the Annual General Meeting to be held in the calendar year 2018. In accordance with the first proviso of Section 139(1) of the Companies Act, 2013 the appointment of the Auditors is to be ratified by members at every Annual General Meeting. The Auditors have confirmed their eligibility to the effect that the ratification of their appointment, if made, would be within the prescribed limits of the Companies Act, 2013 and that they are not disqualified for such appointment. There are no qualifications or adverse remarks in the auditors'' report.

Cost Auditors

Cost Auditors'' report for the year 2014-15 was filed with the authorities on December 22, 2015 well within the due date. M/s.Kishore Bhatia & Associates, Cost Accountants have been appointed as Cost Auditors to audit the cost accounts of the Company for the period July 1, 2015 to March 31, 2016.

Secretarial Auditors

The Company had appointed M/s. Parikh & Associates, Company Secretaries to conduct secretarial audit for the period under review i.e. July 1, 2015 to March 31, 2016. The secretarial audit report for the financial year ended March 31, 2016 is annexed hereto marked as Annexure-2. The Secretarial Auditors'' Report does not contain any qualifications or adverse remark.

12. RELATED PARTY TRANSACTIONS

Transactions with related parties during the financial year were in the ordinary course of business and on an arm''s length basis. During the year the Company had not entered into any contract or arrangement with related party which would be considered as material in accordance with the policy of the Company on materiality of related party transactions.

The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company''s website at the link: http://supremepetrochem.com/pdf/Policy-On-Dealing-With-Related-Party-Transactions.pdf. Information on related party transactions are given in Annexure-5 in Form AOC-2 forming part of this report.

13. CORPORATE SOCIAL RESPONSIBILITY

Corporate Social Responsibility Committee has formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company. This Policy has been approved by the Board. The CSR Policy is available on the Company''s website at the link: http:// supremepetrochem.com/pdf/Corporate-Social-Responsibility.pdf

The Company has indentified the following areas for its CSR activities:

(i) promoting preventive health care and sanitation and making available safe drinking water.

(ii) promoting education, including special education and employment enhancing vocation skills, livelihood enhancement projects, granting of scholarships and building/improving infrastructure at educational institutions.

(iii) protection of national heritage, art and culture including restoration of buildings and sites of historical importance and works of art; setting up public libraries.

(iv) contribution to the Prime Minister''s National Relief Fund or any other fund set up by the Central Government for socio-economic development and relief and welfare of the Schedule Caste, the Scheduled Tribes, other backward classes, minorities and women.

(v) contributions or funds provided to technology incubators located within academic institutions which are approved by the Central Government.

(vi) ensuing environmental stability, ecological balance, conservation of natural resources and maintaining quality of soil, air and water.

(vii) rural development projects.

(viii) Slum rehabilitation.

These activities will be carried out in the villages in proximity to your Company''s plants in Maharashtra and Tamil Nadu.

The report on CSR activities during the year under review is given in Annexure-4 to this report.

14. RISK MANAGEMENT

Business Risk Evaluation and Management is an ongoing process within the Company. The Company has a robust risk management framework to identify, monitor and minimize risk as also identify business opportunities. As a process, the risks associated with the business are prioritized based on Severity, Likelihood and Effectiveness of current detection.

Risk Management approach is composed of three components:

1) Risk Governance

2) Risk Identification

3) Risk Assessment and Control

Each risk factor is monitored periodically by the Management, any event arising from these, likely to impact operations are reported to the Board.

15. INTERNAL FINANCIAL CONTROLS

Your Company has in place adequate internal financial controls with reference to financial statements. The Company''s internal auditors carry out regular checks on the adequacy of the internal financial controls. Company has specific internal auditors for functions such as excise, service tax, VAT and financial controls and systems.

16. VIGIL MECHANISM / WHISTLE BLOWER POLICY

Your Company has established a vigil / whistle blower mechanism which provides a channel to any employer / director to report to the Management concerns about unethical behavior, actual or suspected fraud or violation of code of conduct or policy. The mechanism provides for adequate safe guards against victimization of the whistle blower and also provides for direct access to the Chairperson/CEO/Chairperson of the Audit Committee in exceptional cases.

17. MEETINGS OF THE BOARD

Five meetings of the Board of Directors were held during the year. For further details please refer to the report on corporate governance in this annual report.

18. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENT

There are no loans, guarantees or investments under Section 186 of the Companies Act, 2013 as on March 31,

2016.

19. EXTRACT OF ANNUAL RETURN

The extract of the Annual Return in Form MGT-9 is annexed herewith as Annexure-3 to this annual report.

20. GENERAL

No disclosure or reporting is required of the following items as there were no transactions on these items during the year under review.

(i) Issue of equity shares with differential rights as to dividend, voting or otherwise.

(ii) Issue of shares (including sweat equity shares) to employees of the Company under any scheme.

(iii) No significant or material order were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company''s operations in future.

The Company does not have any Associate/Joint Venture Subsidiary Companies.

There were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal Act, 2013) during the year under review.

ACKNOWLEDGEMENT

The Directors are thankful to its Bankers, Customers, Suppliers and other Business Associates/Stakeholders for their continued co-operation and support extended to your Company and to the employees for their dedicated and sincere services to the Company.

For and on behalf of the Board

M. P. Taparia

Chairperson

Place: Mumbai

Date : April 20, 2016


Jun 30, 2015

Dear Members,

The Directors are pleased to present the twenty sixth Annual Report and the Company's audited financial statements for the financial year ended June 30, 2015.

1. FINANCIAL RESULTS

(Rs. in lacs)

2014-2015 2013-2014

Income (net of excise) 265253.76 326429.78

Profit before Tax (net of prior period adjustments) 5613.88 4430.32

Tax expenses (net of short/ excess provisions of earlier year) 2043.76 1371.33

Profit after tax 3570.12 3058.99

Balance brought forward from Previous Year (net of adjustment relating to transitional provision) 3336.74 4090.01

Amount available for appropriation 6906.86 7149.00

Appropriation thereof :

Dividend on equity shares (including corporate dividend tax) 1742.21 1693.54

Transfer to general reserve 2000.00 1500.00

Balance carried forward 3164.65 3955.46

2. DIVIDEND

Your Directors recommend a dividend of Rs. 1.50 per equity share for the year 2014-2015. The dividend subject to approval of members at the Annual General Meeting shall be paid to the members whose names appear in the register of members as on date of applicable book closure.

3. REVIEW OF OPERATIONS

The continuous fall in the price of crude oil during October 2014 to December 2014 quarter resulted in a sharp correction in the price of Styrene Monomer (SM) the main raw material for your Company's products. Styrenics market started stabilizing from mid-February and this bought back the customers to the market and encouraged them to start stocking. With improved sentiments in the market place and increased demand your Company could recover the losses incurred during first half of the year under review and earn profits before tax of Rs. 5629.33 lacs for the year. Due to fall in the price of Styrene Monomer, the end product prices also fell resulting in lower revenue numbers.

Sales volume of all products put together including exports was lower by 4.5% as compared to the previous year due to fall in exports. Domestic market volumes were up by 6.7% during the year under review. Exports volumes however, dropped to 25.5% of total sales volumes during the year from 33.3% in the previous year.

Domestic market of Polystyrene (PS) grew by 7.5% during 2014-15 as against a negative growth of 9.7% in the previous year. Expandable Polystyrene (EPS) market grew by 6.5% in 2014-15 in comparison to a degrowth of 5.2% in the previous year. Lower prices of EPS buoyed demand from the cold storage, construction and packaging sectors. Continuous efforts to increase the usage of EPS in construction sector were made during the year.

Exports of PS to Europe was affected due to weakness of Euro currency which made your Company's products far less competitive in comparison to local European product. Exports to Nigeria, Tunisia and Egypt were low due to political unrest and weak economic conditions in these countries. Similarly, non-applicability of concessional duty on Indian exports to Turkey vis-a-vis other exporting countries like Egypt and Korea also adversely affected your Company's export to Turkey, a key market for your company's exports.

XPS sales volume grew by 35% during the year under review. The distribution network has increased your Company's share in various regions of the country. Continued improvement in quality has made your Company the first choice XPS supplier to major and prestigious building projects

4. BUY BACK OF SECURITIES

The Company's offer to Buy Back its equity shares from the open market through stock exchanges on BSE Limited and the National Stock Exchange of India Limited, in accordance with the provisions of the Companies Act, 2013 and the SEBI (Buy Back of Securities) Regulations, 1998 at a price not exceeding Rs. 70/- per share closed on October 31,2014 (The Buy Back opened on May 9, 2014). The Company was able to Buy Back and extinguish 3,36,655 shares thereby reducing the Company's share capital from Rs. 9683.86 lacs to Rs. 9650.20 lacs. The total amount spent on the Buy Back was Rs. 219.24 lacs including brokerage and other charges.

5. MANAGEMENT DISCUSSION AND ANALYSIS REPORT & CORPORATE GOVERNANCE

Management Discussion and Analysis for the year under review as stipulated under clause 49 of the Listing Agreement with Stock Exchanges is presented separately in the Annual Report. The Report on Corporate Governance Forms an integral part of this report. The compliance of 'Corporate Governance' conditions has also been certified by the Auditors and the same is Annexed to the report on Corporate Governance.

6. HEALTH, SAFETY & ENVIRONMENT

1. Health Safety and Environment Management:

Both the Occupational Health and Safety Management System (OHSMS) and Environmental Management System (EMS) continued to be maintained as per the OhSaS 18001:2007 Standard and ISO 14001:2004 Standard respectively.

Your Company has continued implementation of HSE Management Systems under the Guiding Principles of declared "Occupational Health and Safety Policy" and "Environmental Policy".

HSE Performance Index for the period under review stood in 'Excellent' range.

2. Highlights of the HSE Activities implemented during the period under review:

Your Company has additional risk controls (design / engineering) in Manufacturing Plants. It has implemented Compliance Management System (CMS) software to track various HSE related statutory compliance. HSE training is conducted as per the plan. Competence Assessment is done six monthly by practical tests.

The procedures for permit to Work System, Management and Handling of Hazardous Wastes, Management of Change and SOPs for Plant Operations are revised and implemented based on internal audits and reviews. The external audit of Integrated Management System was conducted by BVC Auditors during February 2015 and no major non conformity was observed.

Your Company's on Site Emergency Management Plan was revised by incorporating results of risk registers, observations from mock drills, as well as provision from applicable legal requirements. In order to check adequacy of emergency planning, preparedness and response mechanisms, 24 "Department Level Mock Drills" were conducted in addition to two six monthly full scale mock drills. Environmental Monitoring for effluents and emissions are done (self as well as MoEF approved third party) as per the Environmental Monitoring Plan which was developed in consultation with MPCB Officials. All the parameters are found within the prescribed limits.

The annual comprehensive and six monthly periodic medical examinations for all your Company's employees and contract employees were completed in December 2014 and June 2015 respectively. No occupational ill health was observed during the examination.

The Safety Committee Meetings, Management Review Meetings, and Monthly Performance Review Meetings were conducted as per schedule and required actions were taken on all the points.

7. DIRECTORS AND KEY MANAGERIAL PERSONNEL

Shri Rajan B. Raheja (DIN: 00037480) and Shri B. L. Taparia (DIN: 00112438), Directors of the Company retire by rotation and being eligible offer themselves for re-appointment.

A brief resume of the Directors eligible for re-appointment is given in the report on Corporate Governance.

During the year under review Shri Hasmukh Shah (DIN 00152195), Shri R Kannan (DIN 00380328), Shri M S Ramachandran (DIN 00943629), Shri Nihalchand Chauhan (DIN 00021782) and Ms. Ameeta Parpia (DIN 02654277) were appointed as Independent Directors by the Members to hold office for a period of 5 years upto September 21, 2019. The members also re-appointed Shri M P Taparia (DIN 00112461) and Shri S J Taparia (DIN 00112513) as Non-Executive Non-Independent Directors liable to retire by rotation. Dr. S. Sivaram (DIN 00009900) was appointed as Additional Director during the year under review to hold office upto the date of the ensuing Annual General Meeting. Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement with the Stock Exchanges it is proposed to appoint Dr. S Sivaram as an Independent Director on the Board of the Company. The resume of Dr. S Sivaram is given in the notice of the Annual General Meeting.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Companies Act, 2013 and Clause 49 of the Listing Agreement with the Stock Exchanges.

Your Company has in place criteria for evaluation of performance of the Board, Independent Directors and Non-Independent Directors approved by the Nomination and Remuneration Committee. Annual evaluation of the Board and of the Directors were carried out as follows: The Independent Directors, in their meeting evaluated the performance of the Board, the Chairperson and the Non- independent Directors while the Nomination and Remuneration Committee evaluated the performance of all the Directors. The Board evaluated the performance of the Independent Directors.

Shri N Gopal, Manager, Shri Rakesh Nayyar, Chief Financial Officer and Shri Ravi V Kuddyady, Company Secretary were appointed as Key Managerial Personnel of the Company by the Board of Directors during the year under review. The criteria/policies of the Company for selection of Directors and Remuneration Policy for Directors, Key Managerial Personnel and other Employees are attached herewith marked as Annexure-1 The details of the Familiarisation Programme for Independent Directors are placed on the website of the Company and can be accessed at http:// supremepetrochem.com/pdf/Familiarisation-Programme- For-Independent-Directors.pdf

8. DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134 (5) of the Companies Act, 2013, your Directors confirm that:

(a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

(b) the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period;

(c) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

(e) the directors, have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and are operating effectively.

(f) the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

9. TRANSFERS TO INVESTOR EDUCATION AND PROTECTION FUND

Your Company transferred an aggregate amount of Rs. 21.54 lacs during the year to the Investor Education and Protection Fund. The aggregate amount transferred to the fund since January 2002 is Rs. 245.26 lacs.

The unclaimed dividends on equity shares paid in October 2008 will be due for transfer to the Fund in November 2015. Investors who have not yet claimed these dividends are requested to contact either the Company's Secretarial Department or the R & T Agents.

10. FIXED DEPOSIT SCHEME

In accordance with the terms and conditions governing the Fixed Deposit Scheme and pursuant to provisions of section 74 of the Companies Act, 2013 your Company has exercised the option to repay on March 31,2015 all the Fixed Deposits with accrued interest as at the end of March 31,2015. Accordingly, your Company has repaid all outstanding Fixed Deposits by March 31,2015.

11. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO

INFORMATION AS PER SECTION 134(3)(m) READ WITH COMPANIES DISCLOSURE OF PARTICULARS IN THE REPORT OF THE (BOARD OF DIRECTORS) RULE 8 OF THE COMPANIES (ACCOUNTS) RULES, 2014 AND FORMING PART OF THE DIRECTORS' REPORT FOR THE YEAR ENDED JUNE 30, 2015.

A. CONSERVATION OF ENERGY

At the plant in Amdoshi, Maharashtra

Various Energy Conservation Programmes were implemented during the year July 2014 to June 2015 which resulted in savings of energy to the extent of 5,72,229 KWH.

Energy Conservation Programmes namely consisted of following :

1. Use of LED Tube Lights in place of conventional Tube Lights.

2. Use of Variable Frequency Drives (VFDs)

3. Use of high efficiency electrical motors and transformers.

Use of Alternate Energy Sources

Use of natural gas is being made to generate Captive Power to the extent of 2 MW.

At the plant in Manali, Chennai

SPL, Chennai continued its efforts in bringing down unit energy consumption and furnace oil consumption. By improving operations and implementation of various energy conservation efforts, unit furnace oil consumption has started coming down from May-2015 onwards. In the area of water conservation, a revamp of the existing effluent treatment plant was done. A set of ultra filtration and R.O units were added resulting in achievement of "Zero liquid discharge".

B. TECHNOLOGY ABSORPTION

Technology sourced from NOVA Chemical Inc. (for Polystyrene and food grade EPS) and SH Chemical Co. (for EPS) have since been successfully absorbed.

C. FOREIGN EXCHANGE EARNINGS AND OUTGO

(Rs. In lacs)

Foreign exchange earnings and outgo 2014-15

a. Foreign exchange inflow 50148.09

b. CIF value of imports including capital goods 217981.99

c. Expenditure in foreign currency 562.61

12. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

In terms of the provisions of Section 197(12) of the Companies Act, 2013, read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules are provided in the Annual Report. Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in the Annual Report. Having regard to the provisions of the first proviso to Section 136(1) of the Companies Act, 2013 the Annual Report excluding the aforesaid information is being sent to the members of the Company.

The said information is available for inspection at the registered office of the Company during working hours and any member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request. The full Annual Report including the aforesaid information is being sent electronically to all those members who have registered their email addresses and is available on the Company's website.The information required under Section 197 of the Act read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given below:

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

Not Applicable

b. The percentage increase in remuneration of Manager, CFO and Company Secretary

Name Designation % increase in remuneration in the financial year

Shri N Gopal Manager 16.98

Shri Rakesh Chief

Nayyar Financial Officer 15.64

Ravi V Company

Kuddyady* Secretary —

* Since appointed w.e.f. 22.04.2015 the same is not comparable

c. The percentage increase in the median remuneration of employees in the financial year : 10.7%

d. The number of permanent employees on the rolls of Company : 346

e. The explanation on the relationship between average increase in remuneration and Company performance:

On an average, employees received an annual increase of 10%. The operating profits before interest, depreciation and tax was Rs. 9653.51 lacs compared to Rs. 9557.15 lacs in the previous year despite losses incurred in the second quarter due to fall in crude and consequent fall in Styrene Monomer prices. The increase in remuneration is in line with the market trends. The increments are also linked to Company's performance, apart from an individual's performance.

f. Comparison of the remuneration of the key managerial personnel against the performance of the Company:

Aggregate remuneration of Key Managerial Personnel (KMP) in FY'15 (Rs. In lacs) 324.02

Revenue (Rs. In lacs) 265253.76

Remuneration of KMPs (as % of revenue) 0.12

Profit before Tax (PBT) (Rs. In lacs) 5613.88

Remuneration of KMP (as % of PBT) 5.77

g. Variations in the market capitalisation of the Company, price earnings ratio as at the closing date of the current financial year and previous financial year:

Particulars June 30, June 30, % Change 2015 2014

Market capitalization (Rs. In lacs) 80627.39 87382.52 (7.73)

Price earnings ratio 22.58 28.66 (21.21)

h. Percentage increase over decrease in the market quotations of the shares of the Company in comparison to the rate at which the Company came out with the last public offer:

Particulars June 30, February 21, % Change 2015 1994 (IPO)

Market Price (BSE) 83.65 10 736.50

Market Price (NSE) 83.55 10 735.50

i. Comparison of the remuneration of the key managerial personnel against the performance of the Company:

N Gopal Rakesh Nayyar Ravi V Manager Chief Financial Kuddyady Officer Company (Company Secretary Secretary upto (w.e.f 22.04.2015) 22.04.2015)

Remuneration in FY'15 (Rs. In lacs) 154.78 158.08 11.16

Revenue (Rs. in lacs) 265253.76

Remuneration as a % of revenue 0.06 0.06 —

Profit before tax (PBT) (Rs. In lacs) 5613.88

Remuneration (as % of PBT) 2.76 2.82 —

j. The key parameters for any variable component of remuneration availed by the directors:

Not Applicable

k. The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year

None.

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

The Company affirms that the remuneration is as per the remuneration policy of the Company.

13. AUDITORS AND AUDITORS' REPORT

Statutory Auditors

The members in the Annual General Meeting have appointed M/s. G M Kapadia & Co., Chartered Accountants, Membership No.048243 as Statutory Auditors of the Company to hold office until the conclusion of the Annual General Meeting to be held in the calendar year 2018. In accordance with the first proviso of Section 139(1) of the Companies Act, 2013 the appointment of the Auditors is to be ratified by members at every Annual General Meeting. The Auditors have confirmed their eligibility to the effect that the ratification of their appointment,if made, would be within the prescribed limits of the Companies Act, 2013 and that they are not disqualified for such appointment. There are no qualifications or adverse remarks in the auditors' report.

Cost Auditors

Cost Auditors' report for the year 2013-14 was filed with the authorities on December 9, 2014 well within the due date. M/s.Kishore Bhatia & Associates, Cost Accountants have been appointed as Cost Auditors to audit the cost records of the Company for the period July 1, 2014 to June 30, 2015.

Secretarial Auditors

The Company had appointed M/s. Parikh & Associates, Company Secretaries to conduct secretarial audit for the financial year 2014-15. The secretarial audit report for the financial year ended June 30, 2015 is annexed hereto marked as Annexure-2. The Secretarial Auditors' Report does not contain any qualifications or adverse remark.

14. RELATED PARTY TRANSACTIONS

Transactions with related parties during the financial year were in the ordinary course of business and on an arm's length basis. During the year the Company had not entered into any contract or arrangement with related party which would be considered as material in accordance with the policy of the Company on materiality of related party transactions.

The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company's website at the link: http://supremepetrochem.com/pdf/Policy-On- Dealing-With-Related-Party-Transactions.pdf. Information on related party transactions are given in Annexure-3 in Form AOC-2 forming part of this report.

15. CORPORATE SOCIAL RESPONSIBILITY

Corporate Social Responsibility Committee has formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company. This Policy has been approved by the Board. The CSR Policy is available on the Company's website at the link: http:// supremepetrochem.com/pdf/Corporate-Social- Responsibilitv.pdf

The Company has indentified the following areas for its CSR activities:

(i) promoting preventive health care and sanitation and making available safe drinking water.

(ii) promoting education, including special education and employment enhancing vocation skills, livelihood enhancement projects, granting of scholarships and building/improving infrastructure at educational institutions.

(iii) protection of national heritage, art and culture including restoration of buildings and sites of historical importance and works of art; setting up public libraries.

(iv) contribution to the Prime Minister's National Relief Fund or any other fund set up by the Central Government for socio-economic development and relief and welfare of the Schedule Caste, the Scheduled Tribes, other backward classes, minorities and women.

(v) contributions or funds provided to technology incubators located within academic institutions which are approved by the Central Government.

(vi) ensuing environmental stability, ecological balance, conservation of natural resources and maintaining quality of soil, air and water.

(vii) rural development projects.

(viii) Slum rehabilitation.

These activities will be carried out in the villages in proximity to your Company's plants in Maharashtra and Tamil Nadu. The Company is creating a team to undertake approved CSR activities in a planned and efficient manner. The report on CSR activities during the year under review is given in Annexure-4 to this report.

16. RISK MANAGEMENT

Business Risk Evaluation and Management is an ongoing process within the Company. The Company has a robust risk management framework to identify, monitor and minimise risk as also identify business opportunities. As a process, the risks associated with the business are prioritised based on Severity, Likelihood and Effectiveness of current detection.

Risk Management approach is composed of three components:

1) Risk Governance

2) Risk Identification

3) Risk Assessment and Control

Each risk factor is monitored periodically by the Management Committee and any event arising from these, likely to impact operations are reported to the Board.

17. INTERNAL FINANCIAL CONTROLS

Your Company has in place adequate internal financial controls with reference to financial statements. The Company's internal auditors carry out regular checks on the adequacy of the internal financial controls. Company has specific internal auditors for functions such as excise, service tax, VAT and financial controls and systems.

18. VIGIL MECHANISM / WHISTLE BLOWER POLICY

Your Company has established a vigil / whistle blower mechanism which provides a channel to any employer / director to report to the Management concerns about unethical behavior, actual or suspected fraud or violation of code of conduct or policy. The mechanism provides for adequate safe guard against victimisation of the whistle blower and also provides for direct access to the Chairman/CEO/Chairman of the Audit Committee in exceptional cases.

19. MEETINGS OF THE BOARD

Five meetings of the Board of Directors were held during the year. For further details please refer to the report on corporate governance in this annual report.

20. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENT

There are no loans, guarantees or investments under Section 186 of the Companies Act, 2013 as on June 30, 2015.

21. EXTRACT OF ANNUAL RETURN

The extract of the Annual Report in Form MGT-9 is annexed herewith as Annexure-5 to this annual report.

22. GENERAL

No disclosure or reporting is required of the following items as there were no transactions on these items during the year under review.

(i) Issue of equity shares with differential rights as to dividend, voting or otherwise.

(ii) Issue of shares (including sweat equity shares) to employees of the Company under any scheme.

(iii) No significant or material order were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future.

The Company does not have any Associate/Joint Venture Subsidiary Companies.

There were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal Act, 2013 during the year under review.

23. CHANGE IN FINANCIAL YEAR

In accordance with the provisions of Section 2(41) of the Companies Act, 2013, the financial year of your Company is being changed to April-March instead of the existing July-June financial year. The financial year 2015-2016 will therefore comprise of nine months commencing from July 1,2015 and end of March 31,2016.

24. ACKNOWLEDGEMENT

The Directors are thankful to its Bankers, Customers, Suppliers and other Business Associates/Stakeholders for their continued co-operation and support extended to your Company and to the employees for their dedicated and sincere services to the Company.

For and on behalf of the Board M. P. Taparia Chairman

CIN : L23200MH1989PLC054633

Registered Office :

Solitaire Corporate Park, Building No. 11, 5th Floor, 167, Guru Hargovindji Marg, Andheri-Ghatkopar Link Road, Chakala, Andheri (East), Mumbai - 400 093 Phone : 91 22 67091900; Fax : 91 22 40055681 email : [email protected] website: www.supremepetrochem.com

Date : July 21,2015


Jun 30, 2014

Dear members,

The Directors take pleasure in presenting the twenty fifth Annual Report together with Audited Accounts of your Company for the year ended June 30, 2014.

1. financial results

(Rupees in lacs) 2013-2014 2012-2013

Income (Net of Excise) 326429.78 296715.90

Profit before Tax 4399.01 10998.96

Tax expenses 1390.11 3732.45

Profit after tax 3008.90 7266.51 Prior period income (net) 50.09 15.82

Balance brought forward 3058.99 7282.33 from Previous Year

Amount available for 7149.00 1 0922.42 appropriation

Appropriation thereof : Dividend on equity shares 1693.54 2832.41 (including corporate dividend tax)

Transfer to general reserve 1500.00 4000.00

Balance carried forward 3955.46 4090.01

2. DIVIDEND

Your Directors recommend a dividend of Rs. 1.50 per equity share for the year 2013-2014. The dividend subject to approval of members at the annual general meeting in September 2014, shall be paid to the members whose names appear in the register of members as on date of applicable book closure.

3. REVIEW OF OPERATIONS

The markets for your Company''s products continued to be weak in the year under review due to high inflation, wild fluctuations in rupee value, lower growth in industrial production, low consumer confidence and poor offtake of consumer durables. The domestic Polystyrene (PS) and Expandable Polystyrene (EPS) markets declined by 9.5% and 5.2% respectively during the year under review.

The traditional export markets continued to be affected due to uncertain economic and political situation in these markets. Your Company could increase its exports of PS and EPS by changing the focus to other markets/ customers.

The Speciality Polymers and Compounds (SPC) business recorded a marginal increase of 4.6% in volume whereas the Extruded Polystyrene Insulation Board (XPS) business has shown healthy growth over the previous year.

Despite the weak economic conditions in both domestic and international markets your Company could maintain its volumes with a marginal decline of 0.8% during the year under review. With the installation of stable Government at centre, continued excise duty relief to the consumer durables market, increased disposable income in the hands of consumers and improvement in consumer confidence it is expected that the sales volume of your Company''s products will be better in 2014-15 as compared to the year under review.

4. MANAGEMENT DISCUSSION AND ANALYSIS REPORT & CORPORATE GOVERNANCE

Management Discussion and Analysis for the year under review and the report on Corporate Governance as stipulated under clause 49 of the Listing Agreement with Stock Exchanges are presented separately in the Annual Report. The compliance of ''Corporate Governance'' conditions has also been certified by the Auditors and the same is annexed to the report on Corporate Governance.

5. HEALTH, SAFETY & ENVIRONMENT

Both the Environmental Management System and Occupational Health and Safety Management System continued to be maintained by your Company as per the ISO 14001:2004 Standard and OHSAS 18001:2007 Standard respectively.

Your Company has continued implementation of HSE Management Systems under the Guiding Principles of declared ''Occupational Health and Safety Policy'' and ''Environmental Policy''.

HSE Performance Index for the period under review was in the "Excellent" Range.

Your Company has completed 5002 Accident Free Days as on 30th June 2014 which amounts to 13.30 million man-hours of accident free operation.

6. DIRECTORS

Shri M. P. Taparia and Shri S. J. Taparia, Directors of the Company retire by rotation and being eligible offer themselves for re-appointment.

A brief resume of the Directors eligible for re-appointment is given in the report on Corporate Governance.

Shri Satish Raheja resigned from the Board of Directors of the Company w.e.f. May 27, 2014 for personal reasons. The Board places on record it''s appreciation of his invaluable guidance and contribution to the Company as a member of the Board of Directors.

Pursuant to the provisions of the Companies Act, 2013 and of the revised clause 49 of the Listing Agreement with the Stock Exchanges your Company proposes to appoint Shri Hasmukh Shah, Shri R Kannan, Shri M S Ramchandran Shri Nihalchand Chauhan and Ms. Ameeta Parpia as Independent Directors on the Board of the Company. The resume of the Directors is given in the notice of the Annual General Meeting.

7. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, your Directors confirm that:

(i) in the preparation of the annual accounts, applicable accounting standards have been followed, with proper disclosure of any departures;

(ii) the accounting policies are consistently applied and reasonable, prudent judgement and estimates are made so as to give a true and fair view of the state of affairs of the Company at the end of the financial year;

(iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) that the Directors have prepared the accounts on a going concern basis.

8. TRANSFERS TO INVESTOR EDUCATION AND PROTECTION FUND

Your Company transferred an aggregate amount of Rs. 21.77 lacs during the year to the Investor Education and Protection Fund. The aggregate amount transferred to the fund since January 2002 is Rs. 223.72 lacs.

The unclaimed dividends on equity shares paid in November 2007 will be due for transfer to the Fund in December 2014. Investors who have not yet claimed these dividends are requested to contact either the Company''s Secretarial Department or the R & T Agents.

9. FIXED DEPOSIT SCHEME

The outstanding fixed deposits as on June 30, 2014 were Rs. 4.33 crores including due but unclaimed deposits aggregating Rs. 24.31 lacs out of which 9 deposits aggregating Rs. 2.12 lacs have been paid as on the date of this report. There are no claimed and unpaid deposits. Pursuant to provisions of Section 74 of the Companies Act, 2013 your Company proposes to repay all outstanding fixed deposits by March 31, 2015.

10. CONVERSATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO

Information as per Section 217(1)(e) of the Companies Act, 1956 read together with Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is Annexed hereto forming part of this report.

11. PERSONNEL

Your Company continues to maintain harmonious industrial relations throughout the year. The Directors acknowledge the sincerity and dedication of the employees.

As required by the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of employees are set out in the Annexure to the Directors'' Report. However, as per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956 the Report and the Accounts is being sent to all shareholders of the Company excluding the aforesaid information.

Any shareholder interested in obtaining such particulars may write to the Secretary at the Registered Office of the Company.

12. AUDITORS'' REPORT

There are no qualifications or adverse remarks in the auditors'' report.

13. COST AUDITORS

The Cost Audit Report for the year 2012-13 was filed with the authorities on the due date, December 27, 2013. Kishore A. Bhatia, Cost Accountant has been appointed to audit the cost accounts of the Company for the period July 01, 2013 to June 30, 2014.

14. CHANGE OF REGISTERED OFFICE

Almost all the major activities of the Company are carried out from its Corporate office at Andheri (East), Mumbai. It is therefore proposed for administrative convenience to shift the registered office of the Company to Solitaire Corporate Park, Building No. 11, 5th floor, 167, Guru Hargovindji Marg, Andheri-Ghatkopar Link Road, Chakala, Andheri (East), Mumbai- 400 093 w.e.f from October 1, 2014.

15. ACKNOWLEDGEMENT

The Directors are thankful to its Bankers, Customers, Suppliers and other Business Associates/Stakeholders for their continued co-operation and support extended to your Company.

For and on behalf of the Board

M. P. Taparia Chairman

Place : Mumbai Date : July 18, 2014


Jun 30, 2013

The Directors take pleasure in presenting the twenty fourth Annual Report together with Audited Accounts of your Company for the year ended June 30,2013.

1. FINANCIAL RESULTS

(Rupees in lacs)

2012-2013 2011-2012

Income (Net of Excise) 297254.42 227915.98

Profit before Tax 11004.96 4777.71

Tax expenses 3738.45 1440.25

Profit after tax 7266.51 3337.46

Prior period adjustments (15.82) 199.99

Balance brought forward 7282.33 3137.47 from Previous Year

Amount available for 10922.42 7715.73 appropriation

Appropriation thereof:

Dividend on equity shares 2832.41 1575.64 (including corporate dividend tax)

Transfer to general reserve 4000.00 2500.00

Balance carried forward 4090.01 3640.09

2. DIVIDEND

Your Directors recommend a dividend of Rs. 2.50 per equity share for the year 2012-2013. The dividend subject to approval of members at the annual general meeting in October 2013, shall be paid to the members whose names appear in the register of members as on date of applicable book closure.

3. REVIEW OF OPERATIONS

The year under review was a difficult year with consumer confidence being low, high commodity prices, inflation and sharp depreciation of rupee value. Under these difficult times your Company could manage to grow its volumes by 6.9% over the previous year. This growth was very low compared to the target fixed by the Company for the previous year. This fall in volume growth compared to target was mainly on account of de-growth in domestic Polystyrene and Special Polymer Compounds demand and lower than expected growth in Expandable Polystyrene and export markets. Growth in exports was affected due to continued uncertainty in political and economic situation in various regions of the global economy, bilateral trade agreements between Polystyrene exporting countries in South and North East Asian markets and major Polystyrene consuming countries like Turkey and European Union. In view of the current economic and political situation in the country your Company expects to grow its volumes by about 15% during the year 2013-14.

In Extruded Polystyrene Insulation Board (XPS) the Company is now focusing more on creating a retail sales network to tap into this large potential. The plant loading will improve significantly once the retail segment picks up.

4. MANAGEMENT DISCUSSION AND ANALYSIS REPORT & CORPORATE GOVERNANCE

Management Discussion and Analysis for the year under review and the report on Corporate Governance as stipulated under clause 49 of the Listing Agreement with Stock Exchanges are presented separately in the Annual Report. The compliance of ''Corporate Governance'' conditions has also been certified by the Auditors and the same is annexed to the report on Corporate Governance.

5. HEALTH, SAFETY & ENVIRONMENT

Both the Environmental Management System and Occupational Health and Safety Management Systems continued to be maintained by your Company as per ISO 14001:2004 Standards and OHSAS 18001:2007 specifications respectively. Your Company has continued implementation of HSE Management System under the guiding principles of declared ''Occupational Health & Safety Policy'' and ''Environmental Policy''.

HSE performance index for the period under review stood to be in ''excellent'' range.

Your Company has completed 4637 accident free days as on June 30, 2013 which amounts to 12.46 million man- hours of accident free operation.

6. DIRECTORS

Shri M. S. Ramachandran, Shri Rajan B. Raheja, Shri B. L. Taparia and Shri Nihalchand Chauhan, Directors of the Company retire by rotation and being eligible offer themselves for re-appointment.

A brief resume of the Directors eligible for re-appointment is given in the report on Corporate Governance.

Shri Aziz Parpia, who has been a Director of the Company since inception resigned on April 24, 2013 on account of advancing age. The Board places on record it''s appreciation of his invaluable guidance and contribution to the Company as a member of the Board of Directors and its various Committees.

Ms. Ameeta Parpia was appointed as Director of your Company in the casual vacancy created by the resignation of Shri Aziz Parpia, w.e.f. April 24,2013.

7. DIRECTORS* RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, your Directors confirm that:

(i) in the preparation of the annual accounts, applicable accounting standards have been followed, with proper disclosure of any departures;

(ii) the accounting policies are consistently applied and'', i reasonable, prudent judgement and,estimates are ¦. made so as to give a true and fair view of the state of affairs of the Company at the end of the financial year;

(iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) that the Directors have prepared the accounts on a going concern basis.

8. TRANSFERS TO INVESTOR EDUCATION AND PROTECTION FUND

Your Company transferred an aggregate amount of Rs. 1.12 lacs during the year to the Investor education and Protection Fund. The aggregate amount transferred to the fund since January 2002 is Rs.201.95 lacs.

The unclaimed dividends on equity shares paid in November 2006 will be due for transfer to the Fund in December 2013. Investors who have not yet claimed these dividends are requested to contact either the Company''s Secretarial Department or the R & T Agents.

9. FIXED DEPOSIT SCHEME

The outstanding fixed deposits as on June 30,2013 were Rs. 10.27 crores including 121 due but unclaimed deposits aggregating Rs. 45.89 lacs out of which 15 deposits aggregating Rs.7.3 lacs have been paid as on the date of this report. There are no claimed and unpaid deposits.

10. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO

Information as per Section 217(1)(e) of the Companies Act, 1956 read together with Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is Annexed hereto forming part of this report.

Uj PERSONNEL-'' . ^

" Your Compaiy continues tb maintain harmonious industrial relations throughout the year. The Directors acknowledge the sincerity and dedication of the employees.

As required by the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of employees are set out in the Annexure to the Directors'' Report. However, as per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956 the Report and the Accounts is being sent to all shareholders of the Company excluding the aforesaid information.

Any shareholder interested in obtaining such particulars may write to the Secretary at the Registered Office of the Company.

12. AUDITORS'' REPORT

There are no qualifications or adverse remarks in the auditors'' report.

13. COST AUDITORS

The Cost Audit Report for the year 2011-12 was filed with the authorities on January 10,2013. The due date for the same was February 28, 2013. Kishore A. Bhatia, Cost Accountant has been reappointed to audit the cost accounts of the Company for the period July 01,2012 to June 30, 2013.

14. ACKNOWLEDGEMENT

The Directors are thankful to its Bankers, Customers, Suppliers and other Business Associates/Stakeholders for their continued co-operation and support extended to your Company. For and on behalf of the Board

M. P. Taparia

Chairman

Place : Mumbai

Date : July 17, 2013


Jun 30, 2012

The Directors take pleasure in presenting the twenty third Annual Report together with Audited Accounts of your Company for the year ended June 30, 2012.

1. FINANCIAL RESULTS

(Rupees in lacs)

2011-2012 2010-2011

Income (Net of Excise) 227915.98 195236.79

Profit before Tax 4777.72 12844.98

Tax expenses 1440.25 4074.69

Profit after tax 3337.47 8770.29

Prior period adjustments 199.99 (1.22)

Balance brought forward 3137.48 3960.55 from Previous Year

Amount available for 7715.73 12729.62 appropriation

Appropriation thereof :

Dividend on equity shares 1575.64 3151.36 (including corporate dividend tax)

Transfer to general reserve 2500.00 5000.00

Balance carried forward 3640.09 4578.26

Your Directors recommend a dividend of Rs. 1.40 per equity share for the year 2011-2012.

2. REVIEW OF OPERATIONS

The new plants for Expandable Polystyrene (including Cup Grade EPS) at your Company's existing site in Maharashtra commenced commercial production from February 2012. The plants are stabilised and products have been well accepted in both the domestic and export markets with your Company receiving repeat orders from its customers in overseas markets.

The increase in installed capacity of Speciality Compounds and Polymers (SPC) to 33500 TPA was implemented in January 2012 by installing 4 new lines.

Domestic Polystyrene market grew by only 1.2% during the year under review due to low growth of economy. Exports from India were substantially lower due to the unrest in the Gulf countries and continuing economic crisis in many European countries. High input prices plus weak rupee squeezed margins during the year under review.

Cup Grade has received good response from the export markets with repeat orders from certain customers. However, there were certain logistics issues in exports of EPS causing delays in the shipments. The same have recently been resolved.

Specialty Polymers and Compounds business of your Company recorded a drop of approx. 20% in volume over the previous year due to political/economic uncertainty in major export markets and difficult business environment in the country.

Extruded Polystyrene Insulation Board (XPS) production was streamlined with environment friendly blowing agent. Your Company's XPS boards under brand name 'INSUBOARD' were successfully used in several large commercial projects, green buildings and in cold storages across the Country. With increased product awareness demand is slowly growing with good response from all parts of the country.

3. MANAGEMENT DISCUSSION AND ANALYSIS REPORT & CORPORATE GOVERNANCE

Management Discussion and Analysis for the year under review and the report on Corporate Governance as stipulated under clause 49 of the Listing Agreement with Stock Exchanges are presented separately in the Annual Report. The compliance of 'Corporate Governance' conditions has also been certified by the Auditors and the same is annexed to the report on Corporate Governance.

4. HEALTH, SAFETY & ENVIRONMENT

Both the Environmental Management System and Occupational Health and Safety Management Systems continued to be maintained by your Company as per ISO 14001:2004 Standards and OHSAS 18001:2007 specifications respectively. Your Company has continued implementation of HSE Management System under the guiding principles of declared 'Occupational Health & Safety Policy' and 'Environmental Policy'.

HSE performance index for the period under review stood to be in 'excellent' range.

Your Company has completed 4272 accident free days and 11.28 million accident free man hours as on June 30, 2012.

5. DIRECTORS

Shri S. J. Taparia, Shri Satish Raheja, Shri Hasmukh Shah and Shri Aziz Parpia, Directors of the Company retire by rotation and being eligible offer themselves for re-appointment.

A brief resume of the Directors eligible for re-appointment is given in the report on Corporate Governance.

6. DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, your Directors confirm that:

(i) in the preparation of the annual accounts, applicable accounting standards have been followed, with proper disclosure of any departures;

(ii) the accounting policies are consistently applied and reasonable, prudent judgement and estimates are made so as to give a true and fair view of the state of affairs of the Company at the end of the financial year;

(iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) that the Directors have prepared the accounts on a going concern basis.

7. TRANSFERS TO INVESTOR EDUCATION AND PROTECTION FUND

Your Company transferred an aggregate amount of Rs. 49.99 lacs during the year to the Investor Education and Protection Fund. The aggregate amount transferred to the fund since January 2002 is Rs. 200.82 lacs.

The unclaimed dividends on equity shares paid in October 2006 will be due for transfer to the Fund in November 2013. Investors who have not yet claimed these dividends are requested to contact either the Company's Secretarial Department or the R & T Agents.

8. FIXED DEPOSIT SCHEME

The outstanding fixed deposits as on June 30, 2012 were Rs. 1919.77 lacs. There were 123 due but unclaimed deposits aggregating Rs. 36.80 lacs out of which 3 deposits aggregating Rs. 0.65 lacs have been paid as on the date of this report. There are no claimed and unpaid deposits.

9. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO

Information as per Section 217(1)(e) of the Companies Act, 1956 read together with Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is Annexed hereto forming part of this report.

10. PERSONNEL

Your Company continues to maintain harmonious industrial relations throughout the year. The Directors acknowledge the sincerity and dedication of the employees.

As required by the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of employees are set out in the Annexure to the Directors' Report. However, as per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956 the Report and the Accounts is being sent to all shareholders of the Company excluding the aforesaid information.

Any shareholder interested in obtaining such particulars may write to the Secretary at the Registered Office of the Company.

11. STATUTORY AUDITORS

The retiring auditors M/s. Parikh & Shah, Chartered Accountants having furnished the necessary certificate u/s. 224(1-B) of the Companies Act, 1956 are eligible for re-appointment. The members are requested to re-appoint the auditors. There are no qualifications or adverse remarks in the auditors' report.

12. COST AUDITORS

The Cost Audit Report for the year 2010-11 was filed with the authorities on December 24, 2011. The due date for the same was December 27, 2011. Kishore A. Bhatia, Cost Accountant has been reappointed to audit the cost accounts of the Company for the period July 01, 2011 to June 30, 2012.

13. ACKNOWLEDGEMENT

The Directors are thankful to its Bankers, Customers, Suppliers and other Business Associates/Stakeholders for their continued co-operation and support extended to your Company.

For and on behalf of the Board

M. P. Taparia

Chairman

Mumbai - 400 021

Date : July 18, 2012


Jun 30, 2011

Dear Members,

The Directors take pleasure in presenting the twenty second Annual Report together with Audited Accounts of your Company for the year ended June 30, 2011.

1. FINANCIAL RESULTS

(Rupees in lacs)

2010-2011 2009-2010

Income (Net of Excise) 194760.83 161455.34

Profit before Tax 12844.98 9018.40

Tax expenses 4074.69 2960.61

Profit after tax 8770.29 6057.79

Prior period adjustments (1.22) (10.30)

Balance brought forward from 3960.55 1945.66

Previous Year

Amount available for 12729.62 7993.15

appropriation

Appropriation there of :

Dividend on equity shares 3151.36 2032.61

(including corporate dividend tax)

Transfer to general reserve 5000.00 2000.00

Balance carried forward 4578.26 3960.55

The performance for the year under review was best so far. The return on net worth before and after tax increased to 43.89% and 29.97% respectively. Return on average capital employed increased to 30.02%. Your Directors recommend a dividend of Rs.2.80 per equity share for the year 2010-2011.

2. REVIEW OF OPERATIONS

The domestic Polystyrene market grew by 15% during the year under review while your Company's Polystyrene sales grew by 18.7% compared to the previous year. This growth was driven by growth in the market for refrigerators, water purifiers and foamed disposable wares. Export volumes increased marginally by 8.6% due to geo-political events in the Middle East and North Africa. Net realisations however showed market improvement due to the policy of selective acceptance of orders giving high net back.

Speciality Polymers and Compounds business grew by 35% in the domestic market due to demand for compounds used in appliances and water purifiers. Additive master batch business doubled over the previous year on acquisition of new domestic and export customers.

Expandable Polystyrene (EPS) production at the Chennai Plant has been optimised. EPS sales grew by 34% over the previous year.

Extruded Polystyrene Insulation boards (XPS) production was further optimised in the year under review.

3. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review as stipulated under clause 49 of the Listing Agreement with Stock Exchanges is presented separately forming part of the Annual Report.

4. HEALTH & SAFETY

Your Company has continued implementation of HSE Management System under the guiding principles of declared 'Occupational Health & Safety Policy' and 'Environmental Policy'. Both the Environmental Management System and Occupational Health and Safety Management Systems continued to be maintained as per ISO 14001:2004 Standards and OHSAS 18001:2007 specifications respectively.

HSE performance index for the period under review stood to be in 'excellent' range.

Your Company has completed 3907 accident free days and 10.26 million accident free man hours as on June 30, 2011.

5. DIRECTORS

Shri B. L. Taparia, Shri Nihalchand Chauhan, Shri R. Kannan and Shri M. P. Taparia, Directors of the Company retire by rotation and being eligible offer themselves for re-appointment.

A brief resume of the Directors eligible for re-appointment is given in the report on Corporate Governance.

6. SUBSIDIARY COMPANIES

As informed in the last report your Company decided not to proceed with SEZ project. It was therefore decided to wind up subsidiary Companies set up for this purpose.

The applications of the Subsidiary Companies viz. "SPL Industrial Park Limited" and "SPL Industrial Support Services Limited" made to Government of India, Ministry of Corporate Affairs for striking off their names from the Register under the Easy Exit Scheme were approved. The consolidated accounts of your Company and the erstwhile subsidiaries are therefore not annexed to this Annual Report. The names of both the Companies were struck off w.e.f. March 15, 2011 and April 23, 2011 respectively.

7. DIRECTORS' RESPONSIBILITY STATEMENT

Your Directors confirm that:

(i) in the preparation of the annual accounts, applicable accounting standards have been followed, with proper disclosure of any departures;

(ii) the accounting policies are consistently applied and reasonable, prudent judgement and estimates are made so as to give a true and fair view of the state of affairs of the Company at the end of the financial year;

(iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) that the Directors have prepared the accounts on a going concern basis.

8. CORPORATE GOVERNANCE

Your Company continued to implement Corporate Governance practices during the period in line with the requirements of Clause 49 of the Listing Agreement with the Stock Exchanges. A separate section titled 'Corporate Governance' has been included in this annual report. The compliance of 'Corporate Governance' conditions has also been certified by the Auditors and the same is annexed to the report on Corporate Governance.

9. TRANSFERS TO INVESTOR EDUCATION AND PROTECTION FUND

Your Company transferred an aggregate amount of Rs.0.10 lacs during the year to the Investor Education and Protection Fund. The aggregate amount transferred to the fund since January 2002 is Rs.150.83 lacs.

The unclaimed dividends on equity shares paid in October 2004 and May 2005 will be due for transfer to the Fund in November 2011 and June 2012 respectively. Investors who have not yet claimed these dividends are requested to contact either the Company's Secretarial Department or the R & T Agents.

10. UNCLAIMED SHARES

SEBI vide its circular dated December 16, 2010 amended Clause 5 A to the Equity Listing Agreement with the Stock Exchanges laying down uniform procedure for dealing with unclaimed shares. There were 1091 shareholders with 99650 unclaimed shares on the date of this report. Your Company has sent reminders as stipulated in Clause 5 A to these members at the address given in the application form. If no response is received the Company shall, in conformity with Clause 5 A transfer the unclaimed shares to one folio in the name of Unclaimed Shares Suspense Account.

11. FIXED DEPOSIT SCHEME

The outstanding fixed deposits as on June 30, 2011 were Rs.2215.57 lacs. There were 112 due but unclaimed deposits aggregating Rs.28.88 lacs out of which 4 deposits aggregating Rs.1 lacs have been paid as on the date of this report. There are no claimed and unpaid deposits.

12. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO

Information as per Section 217(1)(e) of the Companies Act, 1956 read together with Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is Annexed hereto forming part of this report.

13. PERSONNEL

Excellent relations were maintained throughout the year. The Directors acknowledge the sincerity and dedication of the employees which has contributed to the improved operating results.

As required by the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of employees are set out in the Annexure to the Directors' Report. However, as per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956 the Report and the Accounts is being sent to all shareholders of the Company excluding the aforesaid information.

Any shareholder interested in obtaining such particulars may write to the Secretary at the Registered Office of the Company.

14. AUDITORS

The retiring auditors M/s. Parikh & Shah, Chartered Accountants having furnished the necessary certificate u/s. 224(1-B) of the Companies Act, 1956 are eligible for re-appointment. The members are requested to re-appoint the auditors. There are no qualifications or adverse remarks in the auditors' report.

15. APPOINTMENT OF COST AUDITORS

The Central Government has by its order no. 52/120/ CAB-2010 dated December 16, 2010 as clarified by letter dated June 01, 2011 directed a cost audit of the cost accounts maintained by the Company. Kishore A. Bhatia, Cost Accountant has been appointed to audit the cost accounts of the Company for the period July 01, 2010 to June 30, 2011. Audit report will be filed with the authorities within the stipulated time.

16. ACKNOWLEDGEMENT

The Directors are thankful to its Bankers, Customers, Suppliers and other Business Associates/Stakeholders for their continued co-operation and support extended to your Company.

For and on behalf of the Board

M. P. Taparia

Chairman

Place : Mumbai

Date : July 18, 2011


Jun 30, 2010

The Directors take pleasure in presenting the Twenty First Annual Report together with Audited Accounts of your Company for the year ended June 30, 2010.

1. FINANCIAL RESULTS (Rupees in Lacs)

2009-2010 2008-2009

Income (Net of Excise) 161,271.10 139,496.39 Profit before Tax 9,018.40 3,500.57

Tax expenses 2,960.61 1,566.99

Profit after tax 6,057.79 1,933.58

Prior period adjustments (10.30) (15.14)

Balance brought forward

from Previous Year 1,945.66 2,160.19

Amount available for

appropriation 7,993.15 4,078.63

Appropriation thereof:

Dividend on equity shares

(including corporate

dividend tax) 2,032.60 1,132.97

Transfer to general reserve 2,000.00 1,000.00

Balance carried forward 3,960.55 1,945.66

Your Directors recommend a dividend of Rs. 1.80 per equity share for the year 2009-2010.

2. REVIEW OF OPERATIONS

The domestic Polystyrene market grew by 8.5% during the year under review due to all round growth in demand in all product segments. Your Company consciously followed the strategy of exporting only to those countries which gave better netback. This resulted in lower export quantities of 43913 M.T. as compared to 50307 M.T. for the previous year. Demand estimates for the current year continue to remain on a high growth path.

The installed capacity of the Expandable Polystyrene (EPS) plant in Chennai has increased to 27700 TPA from June 1,2010. Your Company is progressively increasing the production rate to achieve optimum capacity utilization. The outlook for the domestic market for EPS remains positive.

Commercial production of Extruded Polystyrene Board (XPS) commenced from August 2009 and commercial supplies have started. The marketing network is being progressively established. Your Company is focusing on exports to those countries which have mandated insulation in buildings for energy conservation.

Specialty Polystyrene (SPS) business witnessed healthy growth during the year under review. The domestic sale grew by 36% whereas the exports grew by 48%. Considering the anticipated growth your Company plans to upgrade SPS capacity by establishing more lines.

3. BUY BACK OF EQUITY SHARES

The offer for buy-back of equity shares which commenced On December 31, 2008 closed on December 04, 2009.

Your Company has bought back and extinguished 1537907 equity shares reducing the paid-up share capital of your Company from Rs. 9,837.65 Lacs to Rs.. 9,683.86 Lacs.

4. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review as stipulated under clause 49 of the Listing Agreement with Stock Exchanges is presented separately forming part of the Annual Report.

5. HEALTH & SAFETY

Your Company has continued implementation of HSE Management System under the guiding principles of declared Health & Environmental Policy. Both the Environmental Management System and Safety Management Systems continue to be maintained as per ISO:14001 Standard and OHSAS:18001 specifications.

HSE performance index for the period under review was in the excellent range.

Your Company has completed 3244 accident free days and 9.6 million accident free man hours as on June 30, 2010.

6. DIRECTORS

Shri Hasmukh Shah, Shri Aziz Parpia, Shri M. S. Ramachandran and Shri Rajan B. Raheja, Directors of the Company retire by rotation and being eligible offer themselves for re-appointment.

A brief resume of the Directors eligible for re-appointment is given in the report on Corporate Governance.

7. SUBSIDIARY COMPANIES

The two subsidiaries of your Company viz. SPL Industrial Park Limited and SPL Industrial Support Services Limited have not yet undertaken any activities. The Ministry of Corporate Affairs, Government of India by letter dated June 23, 2010 has exempted your Company from attaching a copy of the Balance Sheet and the Profit and Loss Account of the subsidiary companies and other documents required to be attached under Section 212(1) of the Companies Act, 1956 to the Annual Report of your Company. Accordingly, the said documents are not being attached with the Balance Sheet of the Company. A gist of the financial performance of the subsidiary companies is contained in the report. The Annual Accounts of the subsidiaries are open for inspection by any member/investor and the Company will make available these documents/details upon request by any Member of the Company or to any investor of its subsidiaries who may be interested in obtaining the same. Further, the annual accounts of the subsidiary companies will also be kept for inspection by any investor at the Corporate Office of the Company and that of the subsidiary companies.

8. CONSOLIDATED ACCOUNTS

In accordance with the requirements of Accounting Standards AS21 issued by the Institute of Chartered Accountants of India, the consolidated accounts of your Company and its two subsidiaries are annexed to this Annual Report.

9. DIRECTORS RESPONSIBILITY STATEMENT

Your Directors confirm that:

(i) in the preparation of the annual accounts, applicable accounting standards have been followed, with proper disclosure of any departures;

(ii) the accounting policies are consistently applied and reasonable, prudent judgement and estimates are made so as to give a true and fair view of the state of affairs of the Company at the end of the financial year;

(iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) that the Directors have prepared the accounts on a going concern basis.

10. CORPORATE GOVERNANCE

Your Company continued to implement Corporate Governance practices during the period in line with the requirements of Clause 49 of the Listing Agreement with the Stock Exchanges. A separate section titled Corporate Governance has been included in this annual report. The compliance of Corporate Governance conditions has also been certified by the Auditors and the same is annexed to the report on Corporate Governance.

11. TRANSFERS TO INVESTOR EDUCATION AND PROTECTION FUND

Your Company has transferred an aggregate amount of Rs. 150.73 Lacs till date to the Investor Education and Protection Fund since January 2002.

12. FIXED DEPOSIT SCHEME

The outstanding fixed deposits as on June 30, 2010 were Rs. 2069.50 Lacs. There were 124 due but unclaimed deposits aggregating Rs. 27.95 Lacs out of which 18 deposits aggregating Rs. 4.58 Lacs have been paid as on the date of this report. There are no claimed and unpaid deposits.

13. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO

Information as per Section 217(1)(e) of the Companies Act, 1956 read together with Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is Annexed hereto forming part of this report.

14. PERSONNEL

Excellent relations were maintained throughout the year. The Directors acknowledge the sincerity and dedication of the employees which has contributed to the improved operating results.

As required by the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of employees are set out in the Annexure to the Directors Report. However, as per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956 the Report and the Accounts is being sent to all shareholders of the Company excluding the aforesaid information.

Any shareholder interested in obtaining such particulars may write to the Secretary at the Registered Office of the Company.

15. AUDITORS

The retiring auditors M/s. Parikh & Shah, Chartered Accountants having furnished the necessary certificate u/s. 224(1-B) of the Companies Act, 1956 are eligible for re-appointment. The members are requested to re-appoint the auditors. There are no qualifications or adverse remarks in the auditors report.

16. ACKNOWLEDGEMENT

The Directors take this opportunity to thank the Companys Bankers for their guidance and support. The Directors are also thankful to Suppliers, Customers and other Business Associates for their continued co-operation and support extended to your Company.

For and on behalf of the Board

M. P. Taparia

Chairman

Place: Mumbai

Date : July 20, 2010

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