MIRA
INFORM REPORT
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Report Date : |
03.11.2006 |
IDENTIFICATION
DETAILS
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Name : |
SUPREME INDUSTRIES LIMITED |
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Registered Office : |
612, Raheja Chambers, Nariman Point, Mumbai
– 400 021, Maharashtra, India |
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Country : |
India |
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Financials (as on) : |
30.06.2006 |
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Date of Incorporation : |
17.02.1942 |
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Com. Reg. No.: |
11-3554 |
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CIN No.: [Company
Identification No.] |
L35920MH1942PLC003554 |
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Legal Form : |
A Public Limited Liability Company. The shares of the
company are listed on the Stock Exchanges. |
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Line of Business : |
Manufacturers
of PVC Pipes & Fittings, Material Handling Crates and Plastic Moulded
Chairs. |
RATING & COMMENTS
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MIRA’s Rating : |
A |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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56-70 |
A |
Financial & operational base are
regarded healthy. General unfavourable factors will not cause fatal effect.
Satisfactory capability for payment of interest and principal sums |
Fairly Large |
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Maximum Credit Limit : |
USD
8000000 |
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Status : |
Good |
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Payment Behaviour : |
Regular
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Litigation : |
Clear |
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Comments : |
Subject
is a well – established and reputed company having fine track. Their trade
relations are fair. Financial position is good. Payments are correct and as
per commitments. The company is doing very well. It can
be considered good for any normal business dealings at usual trade terms and
conditions. It can
be regarded as a promising business partner in a medium to long – run. |
LOCATIONS
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Registered Office : |
612, Raheja Chambers, Nariman Point, Mumbai
– 400 021, Maharashtra, India |
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Tel. No.: |
91-22-22851656/22820072 |
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Fax No.: |
91-22-22851657 |
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E-Mail : |
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Website : |
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Corporate
Office : |
17/18,
Shah Industrial Estate, Veera Desai Road, Andheri (West), Mumbai – 400 053,
Maharashtra |
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Tel.
No.: |
91-22-26322800-806/26734700 |
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Fax
No.: |
91-22-26367057
/ 26367264/26734777 |
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E-Mail
: |
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Corporate
Office : |
1101, 1161 & 1162, Solitaire Corporate
Park,
167, Guru Hargovindji Marg, Andheri Ghatkopar Link Road, Andheri (East), Mumbai 400 093 |
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Tel.
No.: |
91-22-4043 0000 |
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Fax
No.: |
91-22-4043 0099 |
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E-Mail
: |
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Factory
1 : |
·
Andheri, Mumbai, Maharashtra ·
Daman, Union Territory ·
Derabassi, Punjab ·
Durgapur, West Bengal ·
Halol, Gujarat ·
Hosur, Tamilnadu ·
Jalgaon, Maharashtra ·
Kanpur Dehat, Uttar Pradesh ·
Kanhe, Maharashtra ·
Khopoli, Maharashtra ·
Khushkhera, Rajashtan ·
Malanpur 1, Madhya Pradesh ·
Malanpur 2, Madhya Pradesh ·
Nandesari, Gujarat ·
Noida, Uttar Pradesh ·
Pondicherry 1, Union Territory ·
Pondicherry 2, Union Territory ·
Salt Lake, Kolkata, West Bengal ·
Pithampur, Madhya Pradesh ·
Silvassa, Union Territory |
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Branches / Regional Offices |
Located at:- ·
Ahmedabad, Gujarat ·
Bangalore, Karnataka ·
Chennai, Tamilnadu ·
Hyderabad, Andhra Pradesh ·
Kolkata, West Bengal ·
Mumbai, Maharashtra ·
New Delhi |
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The Supreme Group |
Western Region & Corporate Office Solitaire
Corporate Park BLDG. No. 11-01, 11-61, 11-62, 167, Guru
Hargovindji Marg, Andheri-
Ghatkopar Link Road, Chakala, Andheri
(East) Mumbai-400093 Tel. : 91-22-
240430000, 267710000 Fax : 91-22-
240430099, 267710099 E-Mail : info@supreme.co.in |
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Regional Office |
Delhi 518, Osian
Building, 12, Nehru Place New Delhi- 110019 Tel.:
91-11-51618008, 26468445, 26423162,26423163 Chennai New No. 15, Old
No. 9, Urmila House, 3rd Floor,Ark Colony, Eldams Road, Alwarpet,
Chennai-600018 Tel.:
91-44-52132804/5/6 Fax.:
91-4452132809 Kolkata 601,
Central Plaza, 2 / 6.
Sarat Bose Road, Kolkata-700020 Tel.:
91-33-24858840(Dir.), 24858837, 24858839 (Board) Fax.:
91-33- 24858838 |
DIRECTORS
|
Name : |
Mr. B.
L. Taparia |
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Designation : |
Chairman |
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Name : |
Mr. M.
P. Taparia |
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Designation : |
Managing Director |
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Date
of Birth |
22/10/1937 |
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Date
of Appointment |
02/08/1966 |
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Qualification |
B.A |
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`Other
Directorship |
Siltap
Chemicals Limited Supreme
Petrochem Limited Supreme
Capital Management Limited Dherand
Chemical Terminal Limited Kabra
Extrusion Tecknik Limited |
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Name : |
Mr. S.
J. Taparia |
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Designation : |
Executive Director |
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Date
of Birth |
7th
October, 1945 |
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Date
of Appointment |
15th
June 1977 |
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Qualification |
B. E.
(Mach.) |
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`Other
Directorship |
Siltap
Chemicals Limited, Supreme
Petrochem Limited, Supreme
Oriented Films Limited, Supreme
Vinyl Films Limited, Supreme
Capital Management Limited, Supreme
Industries (Goa) Limited, Oriental
Containers Limited, Dherand
Chemical Terminal Limited, Diamond
Dye-Chem Limited, Multilayer
Films Private Limited, Balbheem
Investments & Trading Company Private Limited, Platinum
Granite Private Limited, Suraj
Granite Industry Private Limited, The
Gujarat Textile Private Limited |
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Name : |
Mr. V.
K. Taparia |
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Designation : |
Director |
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Date
of Birth |
26th
October, 1955 |
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Date
of Appointment |
29th
October, 1984 |
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Qualification |
B. Com |
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Other
Directorship |
Supreme
Oriental Films Limited, Siltap
Chemical Limited, Supreme
Vunyl Films Limited, Supreme
Industries (Goa) Limited |
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Name : |
Mr. B.
V. Bhargava |
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Designation : |
Director |
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Name : |
Mr. H.
S. Parikh |
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Designation : |
Director |
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Name : |
Mr. N.
N. Khandwala |
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Designation : |
Director |
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Name : |
Mr. S.
R. Taparia |
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Designation : |
Director |
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Name : |
Mr. E B Desai |
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Designation : |
Director |
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Name : |
Mr. Y P Trivedi |
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Designation : |
Director |
KEY EXECUTIVES
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Name
: |
Mr. O.
P. Roongta |
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Designation
: |
Senior Vice President (Finance & Secretary) |
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Name
: |
Mr. J.
M. Totla |
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Designation
: |
Senior Vice President (Operations) |
MAJOR SHAREHOLDERS
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Names
of Shareholders |
No. of Shares |
Percentage of Holding |
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Promoters |
17 |
44.98 |
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Non Residents Individuals / OCB |
438 |
4.21 |
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Companies |
434 |
13.50 |
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Fll's / Fl's / Mutual Fund / Bank |
15 |
0.08 |
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Individuals |
26051 |
37.23 |
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Total |
26955 |
100.00 |
BUSINESS DETAILS
|
Line of Business : |
Manufacturers
of PVC Pipes & Fittings, Material Handling Crates and Plastic Moulded
Chairs. |
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Products : |
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GENERAL INFORMATION
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No. of Employees : |
2500 |
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Bankers : |
·
Central
Bank of India, Fort, Mumbai - 400
023, Maharashtra ·
State
Bank of India ·
Saraswat
Co-operative Bank Limited ·
Bank
of India ·
ING
Vysya Bank ·
The
Karur Vysya Bank Limited ·
Banque
Nationale De Paris ·
ICICI
Bank Limited ·
Centurion
Bank of Punjab ·
Bank
of Baroda ·
IDBI
Bank Limited ·
Societe
Generale ·
BNP
Paribas ·
UTI
Bank Limited ·
Vijaya
Bank |
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Facilities : |
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Banking Relations : |
Good |
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Auditors : |
Chhogmal
& Company Chartered
Accountants |
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Associates/Subsidiaries : |
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CAPITAL STRUCTURE
Authorised
Capital :
|
No.
of Shares |
Type |
Value |
Amount |
|
30000000 |
Equity Shares |
Rs. 10/- each |
Rs. 300.000 millions |
|
11200000 |
Preference Shares |
Rs. 10/- each |
Rs. 112.000 millions |
|
33800000 |
Unclassified Shares |
Rs. 10/- each |
Rs. 338.000 millions |
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Total |
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Rs. 750.000
millions |
Issued,
Subscribed & Paid-up Capital :
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No.
of Shares |
Type |
Value |
Amount |
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13390837 |
Equity Shares |
Rs. 10/- each |
Rs. 133.906 millions |
|
420000 |
Equity Shares |
Rs. 10/- each |
Rs. 4.200 |
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Total |
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Rs. 138.108 Millions |
FINANCIAL DATA
[all figures are in Rupees
Millions]
ABRIDGED
BALANCE SHEET
|
SOURCES OF FUNDS |
30.06.2006 |
30.06.2005 |
30.06.2004 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
138.108 |
142.300 |
142.300 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
1866.200 |
1977.200 |
1882.100 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
2004.308 |
2119.500 |
2024.400 |
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LOAN FUNDS |
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1] Secured Loans |
1687.926 |
2009.000 |
1640.300 |
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2] Unsecured Loans |
686.942 |
456.400 |
404.300 |
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TOTAL BORROWING |
2374.868 |
2465.400 |
2044.600 |
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DEFERRED TAX LIABILITIES |
428.320 |
0.000 |
0.000 |
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TOTAL |
4807.496 |
4584.900 |
4069.000 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
3592.550 |
3012.200 |
2853.900 |
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Capital work-in-progress |
0.000 |
25.600 |
65.600 |
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|
339.723 |
347.800 |
347.800 |
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DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
982.692
|
746.200
|
561.000 |
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Sundry Debtors |
1118.291
|
899.600
|
801.800 |
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Cash & Bank Balances |
77.079
|
75.200
|
95.700 |
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Loans & Advances |
423.463
|
579.200
|
485.500 |
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Total Current Assets |
2601.525
|
2300.200
|
1944.000 |
|
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Less : CURRENT LIABILITIES & PROVISIONS |
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|
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Current Liabilities |
1512.398
|
954.800
|
1000.100 |
|
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Provisions |
213.904
|
146.100
|
142.200 |
|
Total Current Liabilities |
1726.302
|
1100.900
|
1142.300 |
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Net Current Assets |
875.223
|
1199.300
|
801.700 |
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MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
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TOTAL |
4807.496 |
4584.900 |
4069.000 |
|
PROFIT
& LOSS ACCOUNT
|
PARTICULARS |
30.06.2006 |
30.06.2005 |
30.06.2004 |
|
Sales Turnover [including other income] |
9867.301 |
9504.300 |
9208.400 |
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Profit/(Loss)
Before Tax |
503.282 |
256.500 |
227.400 |
|
Provision
for Taxation |
103.700 |
20.000 |
17.500 |
|
Profit/(Loss)
After Tax |
399.582 |
236.500 |
209.900 |
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|
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Export
Value |
841.992 |
654.218 |
NA |
|
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|
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Import
Value |
1972.212 |
1109.886 |
NA |
|
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|
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|
|
Total
Expenditure |
9530.990 |
9430.200 |
8981.000 |
QUARTERLY
|
PARTICULARS |
|
|
30.09.2006 (1st Quarter) |
|
Sales Turnover |
|
|
2284.800 |
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Other Income |
|
|
90.000 |
|
Total Income |
|
|
2374.800 |
|
Total Expenditure |
|
|
2071.500 |
|
Interest |
|
|
63.900 |
|
Gross Profit |
|
|
239.400 |
|
Depreciation |
|
|
101.500 |
|
Tax |
|
|
39.500 |
|
Reported PAT |
|
|
98.400 |
200609 Quarter 1 - Gross Sales Includes
Plastic Products Rs. 2503.333 million Others Rs. 127.191 million Expenditure
Includes Raw Material Consumed Rs. 1751.820 million (Increase) / Decrease in
Stock in Trade Rs. (245.809) million Employee's Cost Rs. 89.166 million Other
Expenditure Rs. 476.306 million Tax Includes Corporate Tax Rs. 37.50 million
Fringe Benefit Tax Rs. 2.00 million EPS is Basic Status of Investor Complaints
for the quarter ended 30.09.2006 Complaints Pending at the beginning of the
quarter Nil Complaints Received during the quarter 08 Complaints disposed off
during the quarter 08 Complaints unresolved at the end of the quarter Nil 1.
The Company processed 28,677 MT of polymers during the first quarter of the
current year a compared to 25,830 MT in the previous year recording a growth of
11.02%. 2. Exceptional Income of Rs 82.474 million is profit on transfer of
leasehold rights in a plot of land situated at IT Park, Salt Lake (Kolkata),
subject to long term tax liability of Rs. 21.000 million which have been
included under Corporate Tax provision. 3. (a) Shareholders of the Company in
the Annual General Meeting held on 05.10.2006 have approved issuance of fully
paid equity shares of Rs. 10 each as bonus share in the ratio of 1(One) equity
share for every 1(One) existing equity shares of Rs. 10 each held by
capitalising Capital Redemption reserve & Securities premium Account. (b)
The Diluted EPS has been calculated accordingly. 4. The Company is engaged
mainly in processing of polymers and as such is the only reportable segment, as
per Accounting Standard on Segment Reporting (AS-17) issued by ICAI. The
geographical segmentation is not relevant as export turnover is not significant
in respect to total turnover. 5. Provision for Deferred Tax will be ascertained
and accounted for at the end of the year. 6. The figures for the previous
quarter / year have been regrouped / rearranged wherever necessary. 7. The
above financial results, which have been subjected to Limited Review by the
Auditors, have been reviewed by the Audit Committee and approved by the Board of
Directors at their meetings held on 26.10.2006
KEY
RATIOS
|
PARTICULARS |
30.06.2006 |
30.06.2005 |
30.06.2004 |
|
Debt
Equity Ratio |
1.19 |
1.11 |
1.17 |
|
Long
Term Debt Equity Ratio |
0.90 |
1.02 |
1.10 |
|
Current
Ratio |
1.11 |
1.61 |
1.53 |
|
TURNOVER
RATIOS |
|
|
|
|
Fixed
Assets |
1.76 |
1.58 |
1.59 |
|
Inventory
|
13.08 |
14.25 |
17.92 |
|
Debtors |
11.21 |
10.95 |
11.18 |
|
Interest
Cover Ratio |
2.19 |
1.98 |
1.84 |
|
Operating
Profit Margin (%) |
9.03 |
9.79 |
10.03 |
|
Profit
Before Interest and Tax Margin (%) |
5.36 |
5.57 |
5.48 |
|
Cash
Profit Margin (%) |
5.96 |
6.76 |
6.86 |
|
Adjusted
Net Profit Margin (%) |
2.28 |
2.54 |
2.31 |
|
Return
on Capital Employed (%) |
13.62 |
12.06 |
12.01 |
|
Return on Net Worth (%) |
12.76 |
11.67 |
11.09 |
STOCK PRICES
|
Face
Value |
Rs.10/- |
|
High |
Rs.449.70/- |
|
Low |
Rs.446.00/- |
LOCAL AGENCY
FURTHER INFORMATION
History
Incorporated in 1942 at Wadala, Mumbai, Supreme Industries (SIL) was
promoted by the family of Kantilal K Mody. In 1996, the Taparia family took
control of the company through outright purchase of shares. SIL has been
consistently increasing its capacities in the plastics processing industry.
Today it has one of the largest plastic processors in the country, with a
product range catering to both, the industrial and consumer segment.
Over the years, it has gone into almost all segments of plastic products
and put up plants at various locations in the country. It manufactures
injection-moulded items, extruded items, industrial moldings, crates,
furniture, polyethylene foam and polypropylene foam, PVC pipes and fittings,
multi-layer sheets and products thereof, and multi-layer films.The company's
operations are undertaken from Calcutta in West Bengal, Hosur in Tamil Nadu,
Jalgaon and Kanhe in Maharashtra.
The company came out with a rights issue in July 1993 to expand and
upgrade its products and plant equipment. Its products are used as components
in automobile parts; in material handling as crates/boxes; and in furniture as
tables/chairs. In the refrigeration industry, they are used as doors/panels,
and in the packaging industry for packing edible and hydrogenated oils.
The company bought assets of Litelon Private. Limited. in 1996 and
Camphor Allied Products in 1998 that were manufacturers of protective packaging
products. In 2000, it sold its wholly owned subsidiary Premier Lighting
Industries.
Supreme Oriented Films and Supreme Vinyl Films was amalgamted with the
Supreme Industries Limited with the prior approval from the shareholders. The
move is to conslidate the groups plastic packaging business under one company
and also to consolidate its marketing operations. Both the company shareholders
were allotted shares in the ratio of 1:90 for SVFL and 1:22 for SOFL.
Siltap Chemicals Limited amalgamted with the company during the year
2002-03. The ratio is fixed at 1:2 in favour of Supreme industries.
FINANCIAL PERFORMANCE:
The performance of the Company for the financial year 2005-2006 is
reflected by the following key ratios:
During the year, the Company has incurred capital expenditure of Rs. 842.300
Millions to augment the capacities at various plants and to introduce new
products in various product segments. Major capital expenditure was incurred
for the following projects.
v Enhancing the capacity of Plastic piping System.
v Installation of 7 layer state of the art extrusion line in Performance
Packaging Division, 3. Installation of
PVC/ PVDC coating line in PVC Film Division
v Enhancing capacities of Protective Packaging products and
v Enhancing injection moulding capacity at plants located at Noida,
Pondichery and Lalru
v Acquiring Moulds for new products in Furniture & Crates.
The company has initiated plans for development of its properties at
Andheri in Mumbai and evaluating proposals for Salt lake in Kolkatta To pursue
these projects, the company has incurred a capital expenditure of Rs. 176.300
Millions during the year.
As part of its strategy to focus on changing needs of market segments,
the Company has plans for capital expenditure of over Rs. 1200.000 Millions
during 2006-2007. These investments are expected to further improve the
financial performance of the Company in the coming years. The requirement of
additional funds for financing its capital projects will be met by internal
resources and borrowings.
The gross working capital comprising of receivables and inventories as at
30.06.2006 is 21.39.% of net sales as compared to 20.2% of net sales as at
30.06.2005. The Company has adequate facilities granted by the consortium of
bankers for its working capital requirement. The short-term debt rating of P1
has been re-affirmed by CRISIL.
The increasing credit demand from the industry and increase in
administrative rate by Reserve Bank of India at regular intervals has put the
interest rate under pressure.
The Company has restructured its debt profile to reduce the incidence of
interest on operational performance. in spite of increasing rate of interest on
borrowed funds, close monitoring of working capital has resulted into reduction
of interest and financing charges in terms of percent to total income at 2.73%
for the year as compared to previous financial year at 3.04%.
INDUSTRY STRUCTURE AND DEVELOPMENT
The Company is engaged in processing and manufacturing of plastic
products, components and other end-user industry products, and is market leader
in various products. The Company is preferred partner to user industries with
commitment to supply high quality customised products and integrated
services.
India is one of the countries with very low per capita consumption of
plastics. The consumption of plastics in India during the financial year
2005-2006 was around 4.6 Million tons indicating a growth of around 12%
compared to previous year. After several years of low consumption, the industry
appears to have come back to a growth path. They expect that the pace of growth
may continue and per capita consumption of plastics will improve.
India is far behind in export of plastics products due to various
factors. The export of plastics goods from China was around 15 billion Dollars
in the year 2005 against 1 billion Dollar from India in 2005-2006. Considering
the inherent strength of the plastics processing industry in the country, to
adopt to fast changing requirement and its capabilities to deliver customised
products, the exports of value added products are expected to grow once the
concept of SEZ is fully operationalised. They envisage good growth potential
for exports of plastics products from India.
Government of India is taking initiatives to boost the manufacturing
activities in India. Creation of SEZ is one of such initiatives. Introduction
of Value Added Tax (VAT) by most of the states is expected to not only boost
State revenues but will also have positive impact on manufacturing activities.
It is expected that the remaining states will also follow VAT system very soon.
Central Sales Tax (CST), which is a big hindrance in integrating the tax system
in the country, is expected to be abolished in phases over a period of 2 to 3
years. Government has de-reserved 180 items from Small Scale reservation list
and has expressed it's intention to de-reserve the list of remaining 326 items
in near future. Plastics products still constitute major chunk of residual
items in the reserved category. De-reservation thereof is expected to boost
consumption of plastics and trigger export growth of plastics products. This
will create further growth opportunities for the company's business.
The company has taken initiatives to boost its export. Expansion of
capacity of cross laminated products, plastics piping system, flexible
packaging film and opening up of a subsidiary in UAE are some of the
initiatives taken by the company to take its exports to greater heights.
OPERATIONAL PERFORMANCE
PLASTICS PIPING SYSTEMS
The year 2005-2006 was a good financial year for Piping Division. The
prices of PVC resin remained stable and affordable for major part of the year
resulting in the growth of PVC resin consumption in the country at 27%. Against
the national growth by 27%, the company registered a growth of 40%, which is
quite heartening.
The Company has the largest range of products and is a solution provider
offering complete system with an extensive reach in the country. The Company is
respected for its quality and services. These factors have enabled the company
to achieve higher volume growth than the industry growth in this segment.
The Company sold 57215 MT of Pipes and Fittings during the year 2005-2006
against 40854 MT sold during 2004-2005. The company's exports also grew
substantially. The Company has exported 3130 MT of Pipes and Fittings during
the year 2005-2006 against 2120 MT exported during the year 2004-2005
registering a growth of nearly 51 %.
The company has set-up Wholly Owned subsidiary in Sharjah at SAIF Zone
with a view to improve it's share and launch value added products in
international market. The results of which will be seen over coming years. The
focus will continue to increase the products for export.
The Company had planned initially to invest Rs.100.000 Millions during
the year 2005-2006 to increase the capacity of 54000 MT p.a. for PVC Pipes to
66000 MT p.a. However, looking to the robust growth and increasing demand for
Pipes, Company invested Rs. 175.000 Millions and increased the capacity of
Pipes & Fittings to nearly 78000 MT p.a. This helped the Company in meeting
its peak season demand during March-June period.
The required investment is also made to enhance the range of Casing /Bore
well Pipes, Sewerage /Drainage Pipes, Ribbed Screen Casing Pipes, Structured
Wall Well guard Casing Pipes and Structured Wall Ecodrain drainage Pipes.
With the available range of products, Company has developed a product
portfolio of around 4000 items. This is helping Company in attracting new
channel partners.
Company's network is continuously growing. During the current year the
Company aims to increase the network further to ensure that there is no area
left unrepresented and company's products are made available in every nook and
corner of the country.
The Company has commissioned the plant in U.P and expects to have
substantial capacity utilization during the current year. The Company's focus
is to make quality products available to Agriculture and Housing segment at
affordable price in U P and surrounding areas.
The Company's plumbing product range mainly, Indogreen for hot and cold
water and Aquagold for cold water has seen tremendous growth during the year
2005-2006. The sale of these products nearly tripled compared to sale during
the year 2004-2005. The Company strongly believes that these product lines have
high growth potential as they are targeted to replace GI Pipes. The advantages
of Indogreen PPR Pipes and PVC Aquagold Pipes over GI Pipes are numerous. The
system is well accepted in international market. With superior properties, they
also enjoy cost advantage. The Company therefore, has initiated steps further
to enhance the capacity for these product lines to meet the growing demand of
plumbing system.
The Underground Drainage System is proving to be cost efficient based on
life performance. Presently the company is supplying products to Punjab
Sewerage Board and Punjab Health Dept. who in turn are using the Pipes for
Sanitation in 190 Villages as a Pilot project. After completion of this project
and looking to the success of the project, Punjab Govt. is determined to
take-up this project to many other villages. The company is convinced that many
other State Govt. will also follow the same route to improve the hygiene and
sanitation condition in rural India.
The Government is planning to bring millions of hectares of un-irrigated
land under irrigation through irrigation projects. The State Govts are actively
working to ensure that most of the villages are supplied with adequate quality
potable water. There is further thrust on rainwater harvesting and improvement
in sanitation conditions. These initiatives taken by Central and State will see
enormous growth for piping products.
The Government has announced many schemes for improvement of
Primary/Secondary Education, Primary Health Centers and tourism. This has
brought in the latent growth potential through renewed construction activity
for Educational Institutes, Shopping Malls, Hospitals and Five Star Hotels /
Budget Hotels. The country's IT sector is booming. They see now high growth
coming through retail sectors. All these requirements along with infrastructure
projects will ensure that the demand for Piping products will grow steadily
beyond 20% p.a. over next 10 years.
The company has acquired 100 acres of land at Gadegaon, which is 15 km
away from Jalgaon. The company is planning to create world-class production
facility at this new site and intends to invest Rs.500.000 Millions in the
current year. The present manufacturing facilities at Jalgaon Unit are expected
to be shifted to new site by August' 2007. The first phase of production
facilities at the new site is expected to start commercial production in the
first quarter of 2007.
The company enjoys good reputation for its quality, range of products and
services. The brand is recognized as a National Brand ahead of all its
competitors.
CONSUMER PRODUCTS
FURNITURE
The Furniture Division has seen a volume growth of about 6 percent.
Turnover of furniture division has gone up by approx. 11% i.e., from
Rs.1200.000 Millions to Rs.1330.000 Millions. The company continues to
concentrate on its furniture manufacturing activity at 4 locations viz:
Pondicherry, Durgapur (West Bengal), Lalru (Punjab) and Guwahati (Assam).
The company is focusing to broaden the range of value added furniture
products, which help to build the superior brand image of company's products
for its durability and aesthetics. Such products command better price
realization and are relatively less affected by raw material cost volatility.
The share of such products sale had gone upto 13% in value during the year
under review. The company intends to increase share of such products by another
2% in value during next 12 months.
The company's furniture product enjoys good acceptance in the market for
its quality, design, colour and range. The brand is also regarded as a premium
brand in the country. There are now only two brands on all India basis whose
annual turnover in Plastics furniture is more than Rs.1000.000 Milions,
including that of the company.
FOOD SERVICEWARE
Most of the states have streamlined the VAT rates for these products at
4% and that has changed the outlook for food service ware products. The
Company's products are now affordable and the demand for company's products in
domestic market is steadily increasing. During the year 2005-2006 the Company
sold 720 MT in the Domestic Market against 485 MT sold during the year
2004-2005 thus registering a growth of nearly 50%.
Realizing the trend and potential to grow in the domestic market, the
Company has prepared a road map to focus on increasing the sale of these
products in the domestic market. Accordingly orders have been placed for many
new products to be launched in the first quarter of this year.
The enhanced product range will boost domestic sales. The Company expects
to double the domestic sales in the current year. The necessary marketing
network is being put in place to ensure that the Company's products are
available in all the major segments of use.
The company is at an advanced stage of discussions with a major retail
network for show casing its products in shopping malls. This will boost the
domestic sale and with shopping malls coming up in most of the cities and
towns across the country. The Company expects to grow this business
substantially through such retail network as experienced in other
countries.
The Company exported 2026 MT of products in the year 2005-2006 against
1913 MT exported during the last year registering a moderate growth of 6%.
Increasing sales of these products in the domestic market has not diminished
the Company's enthusiasm to further expand its presence in the international
markets.
The company has plans to introduce high value added products in
international Market, which will improve its bottom line. The Company has an
adequate established network of clients in major international markets and
hence achieving annual growth of 20% by volume looks feasible.
INDUSTRIAL PRODUCTS
The demand of industrial products was better. This has resulted in growth
of over 15% in company's industrial component business. Company performed well
in products for automobiles, household appliances and televisions. Prospects
for this year are encouraging. Capacity enhancement activities in Talegaon and
Noida factories are completed. Some additional capacities may also be required
to be created at both these plants. Khushkhera factory at Rajasthan is being
modified to make only auto products and the supplies of auto components from
this plant are expected from September onwards.
Company has started manufacturing TV cabinets at Pondicherry factory and
planning expansion of capacity for industrial moulded products in this factory
during the current year.
Company has successfully started supplies of industrial moulded products
from Durgapur unit, which is running at full capacity. This was earlier done at
Salt Lake Factory in Kolkata. As per indications, industrial activities are
likely to grow in West Bengal and company may be required to look for
expansion.
Soft drink crate business continues to be very slow. Uncertainty still
prevails in this business. In the current year also requirement of soft drink
crates is expected to be low.
Company achieved growth of over 35% in Trade Crate sector. New products
were introduced as planned and manufacturing of these products started at
different zones. Company has set up fabrication facilities (post moulding
activities to add values) at all its manufacturing sites. Company hopes to
maintain similar growth rate for the current year as well.
In Technology Center, the activities mainly confined to designing and
outsourcing moulds from India and abroad. The center has successfully added
various new moulds in industrial products, crates and furniture. As per plans,
company disposed off the machines installed at technology center. Company has
proper tie up for the repairs of the moulds at various units.
PACKAGING PRODUCTS
PACKAGING FILMS
Volume growth was over 40% this year. Growth however was in low value
segments. Besides, raw material costs continued to be very high. Hence, margins
in this business. were under pressure.
7 Layer blown film extruder and 8-colour rotogravure-printing machine
were installed in October 2005. This is the only 7 component 7 layer film line
in the Country. This has taken the company to a leadership position in this
segment. The variety of film structures that can be produced on this equipment
is quite large and comprehensive.
Several new projects have been taken up to package various products in
these films. The Company is getting positive feedback from it's customers. This
should ensure a good growth for value added products from this year
onwards.
Several international customers have given their acceptance to these
value added products. As a result, exports are picking up. Against exports of
160 tonnes last year, the company expects to export over 500 tonnes in this year.
The company expects an overall volume growth of over 25% over the previous year
and more than an equivalent increase in growth of value added products.
PROTECTIVE PACKAGING
Sales in this division grew by 18% in value over the previous year. All,
except the Air Bubble film i.e ABF bottlenecking work taken up were completed
successfully, thereby increasing productivity of non-cross linked and
cross-linked PE foam. Debottlenecking of ABF will be completed in the 1st quarter of this year. Besides, expansions of
cross-linked foam facility in all three plants have taken place between March
& May, this year. The benefits of these expansions would accrue in the
current year.
The two-stage cross-link foam line will be established by Oct this year.
The company has a tie up with M/s Sanwa Kako of Japan who is one of the leaders
in the manufacturing of these products. Their company would get full technical
support and marketing guidance to ensure that the equipments get established
very quickly. The Company has also imported these products to establish the
market so that the Plant gets fully loaded as soon as the production is
started.
The company also plans to start manufacturing extruded cross-linked PE
foam by March 2007. The Company intends to build its market by importing these
products.
Several new products have been launched for use in construction activity
as well as for insulation. Some of these products have been developed based on
the customer's requirements. Response for these products has been good. In view
of increased construction activity in the country, the company expects products
of this segment to do well.
The new facility planned for in Maharashtra would start this year
offering just in time products to customers in this region while saving on
logistics costs.
Several competitors of individual products have mushroomed over the last
two years bringing unhealthy competition in the trade segment. However, the
company has strategized to enhance its product range and technical services to
its customers thereby ensuring continued growth and improved profitability. The
company expects the business to grow by over 25% this year.
RIGID PVC FILM
There was marginal growth of 4% in Rigid PVC film business. Company installed
PVDC coating line during the year and successfully introduced PVC/PVDC film.
The feed back from the customers are encouraging. Company expects to get in to
regular business for this value added product from this year onwards. Company
is looking for opportunities for adding more value added products in this line
of business.
CROSS LAMINATED FILM
The XF division has done well during the year under review despite rising
raw material prices.
The Company uses cross-laminated film for making tarpaulins, bags,
rainwater harvesting sheets and fumigation covers. For the third year in a row
the tarpaulin segment has shown a robust growth. This segment grew by 24% over
the previous year. The division achieved production of 5631 tonnes of XF Film and
products thereof during the year against the production of 5015 tonnes in the
previous year. With the mix of thickness and sizes, the Company could not
produce more than this volume with the current installed capacity for the
year.
The bag business had dropped in the year. This was principally due to a
very large customer switching over to other packing material instead of XF
bags. The Company is working with other industrial raw material producers to
introduce XF bags for their packing requirements. Company expects to make
breakthrough in certain applications in the current year.
The division sold 5680 tonnes of products during the year compared to
4889 tonnes, in the previous year. The Exports increased to 1036 tonnes from
887 tonnes in the previous year.
In the year 2006-2007, the company will be investing around Rs.230.000
Millions to enhance the capacity of cross laminated film products from 6000
tonnes to 10500 tonnes. This enhanced capacity is expected to be fully
operational by the month of April/May 2007.
Due to soaring crude prices the raw material prices are expected to
remain at a high level throughout the year. However, this may not affect the
business in the current year also. There is a growing demand for company's
tarpaulin all over the country. This segment is expected to register growth of
more than 30% in the current year.
With the additional capacity at its disposal, the company is planning to
make all out efforts to push its products in the world market. The Company
expects to increase its export by more then 50% in volume during the current
year. There is increasing acceptance of products in several developed
countries.
The overall business in this division is expected to grow by 30% by
volume in the current year.
INTERNAL CONTROL SYSTEM
The company has adequate internal audit and control systems. Internal
auditors comprising of professional firms of Chartered Accountants have been
entrusted the job to conduct regular audits at all units/locations and report
to the management the lapse, if any. Both internal auditors and statutory
auditors independently evaluate the adequacy of internal control system. Based
on the audit observations and suggestions, follow up and remedial measures are
being taken including review and increase in the scope of coverage, if
necessary. These reports together with remedial measures initiated are finally
reviewed by the Audit Committee of Board of Directors. No serious lapse has
been reported by any of the internal auditors for any of the unit during the
year.
HUMAN RESOURCES
Human resource is considered as key to the future growth strategy of the
Company and looks upon to focus its efforts to further align human resource
policies, processes and initiatives to meet its business needs. In order to
focus on keeping employees abreast of technological and technical developments,
the Company provides opportunity for training and learning within the country
and abroad. Industrial relations at all the units and locations are very
cordial.
The
company’s fixed assets of important value include freehold land, leasehold
land, building, plant,
As per Website Details
Supreme puts in its very best effort to
achieve its goal of impeccable quality and undisputed excellence. It is truly from such efforts that their credentials of leadership have sprung.
Perfection may be elusive,excellence isn't
. And getting better is always within reach. For
a company,
this quest is critical to its existence, and to its future.
For a leader, even more so. As today yields endlessly to tomorrow, this search
for excellence shouldn't stop. And at Supreme, it
never will.
Every company seeks to excel. Yet, they see ourselves as having an even more significant role to play.
By expanding their capabilities in
technology and product development, and exploring new challenges, they hope to
chart a new course of possibilities. Beyond excellence, they seek breakthroughs:
that will enhance their leadership in the industry. "
Founded in 1942, Supreme is an acknowledged leader of India's plastics industry.
Handling volumes of over 100,000 tonnes of
polymers annually, effectively makes us the country's largest plastics
processors.
Not surprisingly, they also offer the widest
and most comprehensive range of plastic products in India.
Their 20 advanced plants are powered by
technology from world leaders, and complement their extensive facilities for R
& D and new product development.
In fact, Supreme is credited with pioneering
several products in India. These include Cross- Laminated Films, HMHD Films,
Multilayer Films, SWR Piping Systems, PP Mats and more.
They are seeking to perform strongly
internationally as well. Exports remain a focal area of their operations, even
as they add newer markets to their list worldwide.
2005 will see The Supreme Group
turnover touch a projected Rs. 23,000 million (USD 500 million).
At Supreme, they aspire to Total Quality.They stand committed to seeing this excellence permeate every aspect of their operations, at everylevel in the organisation.Several of their plants are ISO certified:
for their quality management systems,
safety norms, and environmental
performance standards. It is
indicative of their larger quality consciousness that helps us make superior
products, exceed th expectations of their existing clients, and win new
customers with confidence.
In their endeavour to
contribute their mite to society, and to the environment they operate in, they
have taken several small but meaningful steps.
Take education, for example. Supreme has
established a Sanskrit college, an industrial training institute and medical
institutions in Rajasthan.
Supreme Petrochem has adopted three
villages near its plant in Maharashtra : and is providing drinking water,
constructing classrooms, offering scholarships, even contributing resources for
the local library.
Over 100,000 trees have been planted as
part of a social afforestation programme.
Already accredited with ISO 14001, many of
their units are demonstrating industry best practices of pollution control,
waste management and energy optimization.
Their Technology Centre, near Mumbai,
spearheads their thrust into the area of new product development.
The centre's world class Tool Room
undertakes CAD, CAM and CAE related projects: notably for engineering and
fabricating intricate moulds and dies.
More importantly, the Centre is
equipped with diverse software and systems to design, produce prototypes and
assess quality in a variety of areas. Evaluation is based on simulating
prospective performance of the product before clearing it for commercial
manufacture or use.
The Centre also serves as a facilitator -
as a point of induction for new technologies and adapting them to Indian needs.
Product development teams at all
Supreme Divisions work in synergy with the Centre, to effectively turn specific
customer requirements into precisely tailored products.
At
Supreme, they value people as their most prized asset. Nurturing this resource
is therefore a priority with us.
By providing opportunities for enhancement
of individual skills and personal growth, they seek to synthesize motivation of
the self with the belief in the larger growth of the company.
Employees at all levels are encouraged to
participate in quality management and technological update programmes. They
reward the spirit of dynamism and proactive response, across the board,
in their 2000 strong organisation.
Perseverance. Determination. Integrity. And
award winning excellence to crown it ..... their growth has been fuelled by
potent qualities.
Their turnover touched Rs. 19,300 million
in 2004, contributing to a cumulative growth of 53% over the last five years.
By the year 2010, they anticipate crossing
the Rs. 40,000 million mark.
Group assets currently stand at Rs. 9,200
million.
Consistency of performance and
consolidation of growth have been the distinctive features of their progress
over the years. Today, they continue to move forward with solid expansion plans
underway.
In 2005, Supreme will have invested over
Rs. 1000 million in capacity enhancement programmes in three years alone.
Supreme Petrochem is upgrading its installed capacity to 272,000 TPA, with a
further 40,000 TPA expandable PS facilities under implementation.
From Strength to
Strength
From modest beginnings, as a small single
product company in the 1950s, to a Rs. 20,0000.000 Millions multi-unit
conglomerate with India's largest plastic products portfolio today, the Supreme
Group has certainly come a long way.
This unrelenting growth has come through
diverse efforts: consolidation and expansion, enhancement of capacities,
addition of fresh products and variants, establishment of newer plants, and
occasionally, even acquisition of under-performing but high potential units and
brands.
Understandably, the integration route has
been successfully explored by the Group.
For instance, in a major backward integration
move, Supreme Petrochem Limited.-- and with it, one of India's largest world
class styrenics complexes-- came into being.
Similarly, diversification and horizontal
integration have been fuelled by strategic collaborations with technology
leaders. Two prime examples of this are introduction of multi-layer films and
calendered film products in the country .
The Group has made substantial
complementary investments in R & D. This has not only helped in a thorough
and superior assimilation of cutting edge technologies, but also contributed to
a collateral development of newer and improved products on a continuing basis.
So, while Supreme SWR systems were India's
first viable alternative to conventional GI pipes and fittings, the unflagging
creation of newer fittings keeps an unmatched range growing ever further .
A client-friendly approach, a readiness to
customize and an eagerness to provide all technical support have played no mean
role in propelling Supreme to leadership.
An open mind and receptivity to new ideas
and needs remain hallmarks of the Group's interface with all customers-- in
India and across the globe .
The Supreme Industries Limited has reported
gross turnover and other income of Rs. 4071.300 Millions (including Rs. 167.100 Millions of polymer
trading) in the first 6 months ended 31 st December 2004 of the current year as
against Rs. 4297.300 Millions (including Rs. 352.900 Millions of polymer
trading) during the corresponding period of last year.
Operating profit for the first half of
current year is lower at Rs. 256.300 Millions as against Rs. 325.200 Millions
in last year and the Net Profit is Rs. 51.200 Millions as against Rs. 113.600
Millions in the corresponding period of
previous year .
The first half of the current year has
witnessed steep volatility in polymer prices. The whole of the plastic
processing industry has passed through a bad phase due to such volatility,
which has led to degrowth in consumption of plastics in the Indian economy
inspite of GDP growth in excess of 7%. The overall consumption of majority of
commodity plastics in the last 9 months (April 2004 to December 2004) was
either negative or flat. The prices have since then stabilized and outlook
remains positive for the first half of the calendar year .
Supreme is increasing its capacities in
more value added products and to increase its export capabilities which would
minimize the effects of such volatility in polymer prices. The Company has
planned capex of Rs. 650.000 Millions during the current year, Major capex has
been committed for such value added products and to augment the capacity for
export markets .
The second half of the current year looks
promising and the Company expects to achieve it's financials in line with the
previous year .
Mumbai, For The Supreme Industries Limited
Dated, 31 st January, 2005
Sr. Vice-President (Finance) & Secretary
CMT REPORT [Corruption, Money
laundering & Terrorism]
The
Public Notice information has been collected from various sources including but
not limited to: The Courts, India Prisons Service, Interpol, etc.
1] INFORMATION
ON DESIGNATED PARTY
No records exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist
organization or whom notice had been received that all financial transactions
involving their assets have been blocked or convicted, found guilty or against
whom a judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, blocked, frozen or
ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court
Declaration :
No records exist to suggest that subject is or was the subject of any
formal or informal allegations, prosecutions or other official proceeding for
making any prohibited payments or other improper payments to government
officials for engaging in prohibited transactions or with designated parties.
3] Asset
Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record
on Financial Crime :
Charges or conviction registered
against subject: None
5] Records
on Violation of Anti-Corruption Laws :
Charges or investigation registered
against subject: None
6] Records
on Int’l Anti-Money Laundering Laws/Standards :
Charges or investigation registered
against subject: None
7] Criminal
Records
No
available information exist that suggest that subject or any of its principals
have been formally charged or convicted by a competent governmental authority
for any financial crime or under any formal investigation by a competent
government authority for any violation of anti-corruption laws or international
anti-money laundering laws or standard.
8] Affiliation
with Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation
Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE GOVERNANCE
MIRA
INFORM as part of its Due Diligence do provide comments on Corporate Governance
to identify management and governance. These factors often have been predictive
and in some cases have created vulnerabilities to credit deterioration.
Our
Governance Assessment focuses principally on the interactions between a
company’s management, its Board of Directors, Shareholders and other financial
stakeholders.
CONTRAVENTION
Subject
is not known to have contravened any existing local laws, regulations or
policies that prohibit, restrict or otherwise affect the terms and conditions
that could be included in the agreement with the subject.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US
Dollar |
1 |
Rs.44.45 |
|
UK
Pound |
1 |
Rs.84.83 |
|
Euro |
1 |
Rs.57.12 |
SCORE &
RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
7 |
|
PAID-UP CAPITAL |
1~10 |
7 |
|
OPERATING SCALE |
1~10 |
7 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
7 |
|
--PROFITABILIRY |
1~10 |
7 |
|
--LIQUIDITY |
1~10 |
7 |
|
--LEVERAGE |
1~10 |
7 |
|
--RESERVES |
1~10 |
7 |
|
--CREDIT LINES |
1~10 |
7 |
|
--MARGINS |
-5~5 |
- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
63 |
This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a
composite of weighted scores obtained from each of the major sections of this
report. The assessed factors and their relative weights (as indicated through
%) are as follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit
history (10%) Market
trend (10%) Operational
size (10%)
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial
base with the strongest capability for timely payment of interest and
principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No
caution needed for credit transaction. It has above average (strong)
capability for payment of interest and principal sums |
Large |
|
56-70 |
A |
Financial & operational base are
regarded healthy. General unfavourable factors will not cause fatal effect.
Satisfactory capability for payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal.
Capable to meet normal commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable & favourable factors
carry similar weight in credit consideration. Capability to overcome
financial difficulties seems comparatively below average/normal. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of
interest and principal sums in default or expected to be in default upon
maturity |
Limited with full security |
|
<10 |
C |
Absolute credit risk exists. Caution
needed to be exercised |
Credit not recommended |