MIRA
INFORM REPORT
|
Report Date : |
05.12.2008 |
IDENTIFICATION
DETAILS
|
Name : |
SUPREME INDUSTRIES LIMITED |
|
|
|
|
Registered Office : |
612, Raheja Chambers Nariman point, Mumbai - 400021, Maharashtra |
|
|
|
|
Country : |
India |
|
|
|
|
Financials (as on) : |
30.06.2008 |
|
|
|
|
Date of Incorporation : |
17.02.1942 |
|
|
|
|
Com. Reg. No.: |
11-003554 |
|
|
|
|
CIN No.: [Company
Identification No.] |
L35920MH1942PLC003554 |
|
|
|
|
TAN No.: [Tax
Deduction & Collection Account No.] |
MUMT01228D |
|
|
|
|
Legal Form : |
Public Limited Liability Company. The shares of the company are listed on the Stock Exchanges. |
|
|
|
|
Line of Business : |
Manufacturers of PVC Pipes & Fittings, Material Handling Crates and Plastic Moulded Chairs. |
RATING &
COMMENTS
|
MIRA’s Rating : |
A |
RATING
|
STATUS |
PROPOSED
CREDIT LINE |
|
|
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 |
|
|
|
|
|
|
Maximum Credit Limit : |
USD 12530000 |
|
|
|
|
Status : |
Good |
|
|
|
|
Payment Behaviour : |
Regular |
|
|
|
|
Litigation : |
Clear |
|
|
|
|
Comments : |
Subject is a well-established and reputed company of Supreme Group, controlled and managed by Taparia’s. The company’s shares are listed on the Stock Exchanges.
Available information indicates high financial responsibility of the company. Financial position of the company is good. Payments are usually correct and as per commitments.
The company can be considered normal for business dealings at usual trade terms and conditions. |
LOCATIONS
|
Registered Office : |
612,
Raheja Chambers, Nariman Point, Mumbai - 400 021, Maharashtra, India |
|
Tel. No.: |
91-22-22851656/
22820072/ 22851159-60 |
|
Fax No.: |
91-22-22851657 |
|
E-Mail : |
|
|
Website : |
|
|
|
|
|
Corporate Office : |
1101,
1106, Solitaire Corporate Park, 167, Guru Hargovindji Marg, Andheri Ghatkopar
Link Road, Andheri (E), Mumbai - 400 093, Maharashtra, India |
|
Tel. No.: |
91-22-40430000/
67710000 |
|
Fax No.: |
91-22-40430099/
67710099 |
|
|
|
|
Factory : |
v Daman ( Union Territory ) v Derabassi ( Punjab ) v Durgapur ( West Bengal ) v Guwahati ( Assam ) v Gadegaon (Maharashtra) v Halol ( Gujarat) v Hosur ( Tamil Nadu ) v Jalgaon Unit I ( Maharashtra ) v Jalgaon Unit II ( Maharashtra) v Kanhe ( Maharashtra ) v Kanpur ( Uttar Pradesh ) v Khopoli ( Maharashtra ) v Khushkheda ( Rajasthan ) v Malanpur 1 ( Madhya Pradesh ) v Malanpur 2 ( Madhya Pradesh ) v Nandesari ( Gujarat) v Noida ( Uttar Pradesh ) v Pondicherry ( Union Territory ) v Silvassa ( Union Territory ) |
|
|
|
|
Branch Office: |
Located at: v Ahmedabad v Bangalore v Chennai v Cochin v Hyderabad v Indore v Kolkata v Mumbai v New Delhi v Kanpur v Pune |
|
|
|
|
Regional Offices
: |
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.: 91-44-42030971 Fax.: 91-44-52132809 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 |
|
Designation : |
Chairman |
|
Date of Birth/Age : |
25.11.1934 |
|
Qualification : |
B.Com |
|
Date of Appointment : |
15.06.1977 |
|
Chairman /
Director of other companies
: |
1. Supreme Petrochem Limited 2. Supreme Capital Management Limited 3. Varali Investment and Trading Company Private Limited 4. Multilayer Films Private Limited |
|
|
|
|
Name : |
Mr.
M P Taparia |
|
Designation : |
Managing Director |
|
Date of Birth/Age : |
22.10.1937 |
|
Qualification : |
B.A. |
|
Date of Appointment : |
02.08.1966 |
|
Chairman /
Director of other companies
: |
1. Supreme
Petrochem Limited 2. Supreme Capital
Management Limited 3. Rama Newsprit
and Paper Limited 4. SPL
Industrial Park Limited 5. SPL
Industrial Support Services Limited 6. Kabra
Extrusion Technik Limited 7. Multilayer
Films Private Limited 8. Jagatguru
Investment and Trading Company Private Limited |
|
|
|
|
Name : |
Mr. S.J. Taparia, |
|
Designation : |
Executive Director |
|
|
|
|
Name : |
Mr.
V K Taparia, |
|
Designation : |
Executive Director |
|
|
|
|
Name : |
Mr. B V Bhargava |
|
Designation : |
Director |
|
Date of Birth/Age : |
16.04.1936 |
|
Qualification : |
M. Com., L.L.B |
|
Date of Appointment : |
25.09.1996 |
|
|
|
|
Name : |
Mr. E B Desai |
|
Designation : |
Director |
|
Date of Birth/Age : |
01-04-1931 |
|
Qualification : |
B A., L.L B. (Hons) |
|
Date of Appointment : |
30.08.2003 |
|
|
|
|
Name : |
Mr. H S Parikh |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. N N Khandwala |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. S R Taparia |
|
Designation : |
Director |
|
Date of Birth/Age : |
24.10.1928 |
|
Qualification : |
B A. |
|
Date of Appointment : |
10.09.1966 |
|
Chairman /
Director of other companies
: |
1. Permanent Magnets Limited 2. Venu Plantations Limited |
|
|
|
|
|
|
|
Name : |
Mr.
Y P Trivedi |
|
Designation : |
Director |
|
Date of Birth/Age : |
06.01.1929 |
|
Qualification : |
B
Com L. L. B. |
|
Date of Appointment : |
30.08.2003 |
KEY EXECUTIVES
|
Name : |
Mr.
O P Roongta |
|
Designation : |
Senior Vice - President (Finance) and Secretary |
|
|
|
|
Name : |
Mr.
J M Totla |
|
Designation : |
Senior Vice - President (Operations) |
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
As on 30.06.2008
|
Names of Shareholders |
No. of Shares |
Percentage |
|
Promoters |
12424878 |
44.98 |
|
Non Residents Individuals / OCB |
653707 |
2.37 |
|
Companies |
3771357 |
13.65 |
|
Fll's / Fl's / Mutual Fund / Bank |
873237 |
3.16 |
|
Individuals |
9898495 |
35.84 |
|
Total |
27621674 |
100.00 |
BUSINESS DETAILS
|
Line of Business : |
Manufacturers of PVC Pipes & Fittings, Material Handling Crates and Plastic Moulded Chairs. |
||||||||||
|
|
|
||||||||||
|
Products : |
v Moulded Furniture v Moulds v Storage and Material Handling Crates v Petrochemicals v Cross Laminated Films and Products v Food Service ware v Packaging Films v Industrial and engineering Moulded Products v Calendered Rigid PVC Films v Protective Packaging Products v Plastics Piping Systems |
||||||||||
|
|
|
||||||||||
|
Exports : |
|
||||||||||
|
Countries : |
v Middle East v Sri Lanka v UK v Australia v USA v Singapore |
||||||||||
|
|
|
||||||||||
|
Imports : |
|
||||||||||
|
Countries : |
v Singapore v Kuwait |
||||||||||
|
|
|
||||||||||
|
Terms : |
|
||||||||||
|
Selling : |
Advance Payment or Credit (60 days) |
||||||||||
|
|
|
||||||||||
|
Purchasing : |
Credit (30/60 days) or Cash |
PRODUCTION STATUS
As on 30.06.2007
|
Particulars |
Unit |
Installed
Capacity |
Actual
Production |
|
Injection Moulded Products |
MT |
61500 |
37847.584 |
|
Extruded Products |
MT |
119842 |
87558.447 |
|
Machinery & Moulds |
Nos |
NA |
860 |
GENERAL
INFORMATION
|
No. of Employees : |
2500 |
|||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||||||||||||||||||||||
|
Bankers : |
v Central Bank of India, Fort, Mumbai 400 023, Maharashtra, India v State Bank of India v Bank of India v ING Vysya Bank v BNP Paribas v ICICI Bank Limited v Bank of Baroda v IDBI Bank Limited v Axis Bank Limited v Vijaya Bank |
|||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||||||||||||||||||||||
|
Facilities : |
Notes: 1. Working
Capital Loans from Banks (A) are secured / to be secured against hypothecation
of stocks and Book Debts, Second / subservient charge on all movable Plants,
Machineries and Moulds (except Plant, Machineries and Moulds at PVC Film Unit
at Malanpur and Khopoli Unit) and immovable properties of the Company
Situated at various locations [except properties at Andheri, Jalgaon, PVC
Film Unit at Malanpur, Khopoli and Pondicherry — I], both present and future. 2. Term Loans
from financial institutions and banks [B(a) to B(k)] are secured / to be
secured on first pari passu charge basis, as under: (a) Immovable
properties of the company, situated at various locations, both present and
future, subject to the exclusion of properties, as mentioned above. (b) Movable properties
viz. plant, machineries and moulds of the company, both present and future,
subject to exclusions as mentioned above, and second / subservient charge on
Current Assets of the Company. (c) Term loans
from Banks [B(l) and B(m)] are secured on first pari passu charge basis by
exclusive mortgage over the immovable property of the Company situated at
Andheri (W) at Mumbai. 3. Certain of
these loans are personally guaranteed by three Directors, which is counter
guaranteed by the Company.
|
|||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
Banking Relations
: |
Good |
|
|
|
|
Auditors : |
|
|
Name : |
Chhogmal
and Company Chartered
Accountants |
|
|
|
|
Associates/Subsidiaries : |
Ř Supreme Petrochem Limited Ř Supreme Capital Management Limited Ř Multiplayer Films Private Limited Ř Varali Investment and Trading Company Private Limited Ř Jagatguru Investment and Trading Company Private Limited Ř Balabheem Investment and Trading Company Private Limited Ř Platinum Granite Private Limited Ř Platinum Plastics and Industries Private Limited Ř Suraj Packaging Private Limited Ř Supreme Industries (Goa) Limited Ř The Supreme Industries Overseas FZE Ř R G Sabhu 612, Raheja Chambers, Nariman Point,
Mumbai - 400 021,
Maharashtra, India Tel No.: 91-22-22851656 Fax No.: 91-22-22851657 |
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 |
|
|
Total |
|
Rs.750.000 millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
27621674 |
Equity Shares |
Rs.10/- each |
Rs.276.217 millions |
Note:
Previous Year 1,38,10,837 Nos. Equity Shares of Rs.10 each Fully Paid Up
(including 1,88,87,209 Nos. Shares issued as fully paid Bonus Shares out of
Reserves) Add: NIL Nos. (Previous Year 1,38,10,837 Nos.) Equity Shares of Rs.10
each Fully Paid Up Bonus shares issued during the year
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
30.06.2008 |
30.06.2007 |
30.06.2006 |
|
|
SHAREHOLDERS FUNDS |
|
|
|
|
|
1] Share Capital |
276.217 |
276.217 |
138.108 |
|
|
2] Share Application Money |
0.000 |
0.000 |
0.000 |
|
|
3] Reserves & Surplus |
2229.939 |
1987.857 |
1866.200 |
|
|
4] Accumulated Losses |
0.000 |
0.000 |
0.000 |
|
|
NETWORTH |
2506.156 |
2264.074 |
2004.308 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
2722.621 |
2012.857 |
1687.926 |
|
|
2] Unsecured Loans |
280.582 |
270.326 |
686.942 |
|
|
TOTAL BORROWING |
3003.203 |
2283.183 |
2374.868 |
|
|
DEFERRED TAX LIABILITIES |
522.809 |
473.320 |
428.320 |
|
|
|
|
|
|
|
|
TOTAL |
6032.168 |
5020.577 |
4807.496 |
|
|
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
4640.868 |
3365.898 |
3267.677 |
|
|
Capital work-in-progress |
684.129 |
865.654 |
324.873 |
|
|
Assets held for disposal |
248.632 |
308.667 |
NA |
|
|
|
|
|
|
|
|
INVESTMENT |
339.535 |
341.786 |
339.723 |
|
|
DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
1566.948
|
1102.221
|
982.692
|
|
|
Sundry Debtors |
1368.223
|
1252.174
|
1118.291
|
|
|
Cash & Bank Balances |
283.355
|
142.265
|
77.079
|
|
|
Other Current Assets |
0.000
|
0.000
|
0.000
|
|
|
Loans & Advances |
893.872
|
556.280
|
423.463
|
|
Total
Current Assets |
4112.398
|
3052.940
|
2601.525 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Current Liabilities |
3786.555
|
2733.778
|
1512.398
|
|
|
Provisions |
206.839
|
180.590
|
213.904
|
|
Total
Current Liabilities |
3993.394
|
2914.368
|
1726.302
|
|
|
Net Current Assets |
119.004
|
138.572
|
875.223
|
|
|
|
|
|
|
|
|
MISCELLNEOUS EXPENDITURE |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
6032.168 |
5020.577 |
4807.496 |
|
PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
30.06.2008 |
30.06.2007 |
30.06.2006 |
|
|
Sales Turnover |
13102.210 |
11616.606 |
9820.639 |
|
|
Other Income |
89.391 |
66.676 |
46.662 |
|
|
Total Income |
13191.601 |
11683.282 |
9867.301 |
|
|
|
|
|
|
|
|
Profit/(Loss) Before Tax |
753.983 |
734.936 |
295.882 |
|
|
Provision for Taxation |
242.900 |
233.400 |
(103.700) |
|
|
Profit/(Loss) After Tax |
511.083 |
501.536 |
399.582 |
|
|
|
|
|
|
|
|
Earnings in Foreign Currency : |
|
|
|
|
|
|
Export Earnings |
657.881 |
835.900 |
841.992 |
|
Total Earnings |
657.881 |
835.900 |
841.992 |
|
|
|
|
|
|
|
|
Imports : |
|
|
|
|
|
|
Raw Material and Consumed |
5251.736 |
2900.589 |
1778.573 |
|
|
Stores & Spares |
12.471 |
3.947 |
2.714 |
|
|
Capital Goods |
178.459 |
295.116 |
190.925 |
|
Total Imports |
5442.666 |
3199.652 |
1972.212 |
|
|
|
|
|
|
|
|
Expenditures : |
|
|
|
|
|
|
Cost of Materials |
8674.944 |
7795.648 |
6518.495 |
|
|
Manufacturing Expenses |
2989.453 |
2524.668 |
2329.481 |
|
|
Interest |
389.792 |
330.057 |
269.604 |
|
|
Depreciation & Amortization |
395.104 |
402.459 |
413.410 |
|
Total Expenditure |
12449.293 |
11052.832 |
9530.990 |
|
KEY RATIOS
|
PARTICULARS |
30.06.2008 |
30.06.2007 |
30.06.2006 |
|
Debt-Equity
Ratio |
1.12 |
1.11 |
1.19 |
|
Long
Term Debt-Equity Ratio |
1.12 |
0.89 |
0.90 |
|
Current
Ratio |
0.90 |
0.88 |
1.11 |
|
TURNOVER
RATIOS |
|
|
|
|
Fixed
Assets |
1.73 |
1.71 |
1.53 |
|
Inventory |
9.82 |
11.14 |
11.36 |
|
Debtors |
10.00 |
9.80 |
9.73 |
|
Interest
Cover Ratio |
2.84 |
2.86 |
2.19 |
|
Operating
Profit Margin(%) |
11.76 |
11.78 |
10.42 |
|
Profit
Before Interest And Tax Margin(%) |
8.75 |
8.32 |
6.19 |
|
Cash
Profit Margin(%) |
6.92 |
7.14 |
6.88 |
|
Adjusted
Net Profit Margin(%) |
3.90 |
3.68 |
2.65 |
|
Return
On Capital Employed(%) |
22.93 |
21.80 |
13.66 |
|
Return
On Net Worth(%) |
21.70 |
20.32 |
12.85 |
LOCAL AGENCY
FURTHER INFORMATION
HISTORY:
Incorporated in 1942 at Wadala, Mumbai, Subject was promoted by the
family of Kantilal K Mody. In 1996, the Taparia family took control of the
company through outright purchase of shares. Subject 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 Jul.'93 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.
Oriented Films and Vinyl Films was amalgamted with the subject 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 subject.
FINANCIAL RESULTS
Exceptional Income
(net) of Rs.0.463 Million during the year consists of:
(a) Rs.21.874
Millions consists of Profit accrued on receipt of non-refundable consideration
in entirety towards the proposed sale of plot of Land held by the company in
Haryana.
(b) Rs17.853
Millions expenses / loss incurred pursuant to relocating / re-layout of entire
Plant and Machinery and other Infrastructure at its units at MIDC Jalgaon due
to setting up new green field mega projects at Gadegaon, Taluka Jamner,
District Jalgaon (Maharashtra)
(c) Rs.3.558
Millions amount paid towards additional compensation on settlement of workers
demand at Pondicherry Unit I.
PROPERTY
DEVELOPMENT
The
construction of Commercial Complex at Corporate site is progressing smoothly.
The P.T. slab of 4th floor has been completed and Casting of slab of 5th floor
is in progress. The entire Complex is likely to be fully completed in April/ 7
June,2009 quarter. The proposed Commercial Complex is being Registered with
“The Indian Green Building Council (IGBC)” for getting “Green Building Certification”,
thereby qualifying the Complex for Gold Rating. The proposed Commercial Complex
to be styled as “Solaris” shall be consisting of saleable area of about
2,70,000 sq. ft. with ultra luxurious and lavish amenities, tech-savvy energy
saving and eco friendly features, confirming to the LEED standards and
magnificently designed, “Solaris” will be a State of the Art Commercial Complex
and it will be a landmark by itself, when ready for occupation. Capital
Expenditure on the project till 30th June, 2008, is Rs.441.9 Millions and the
total cost of the project is likely to be between Rs.900 Millions to Rs.950
Millions.
MANAGEMENT
DISCUSSION AND ANALYSIS
SUPREME PETROCHEM
LIMITED (SPL)
Supreme Petrochem Limited(SPL),
a company jointly promoted by the company and R Raheja Group, is expanding it’s
capacity of compounded plastics to 25000 TPA from 15000 TPA. The company is
also installing a plant to produce 5000 TPA of Extruded Polystyrene Foam
sheets. This has excellent insulation property and is an energy saving
material. The company has now taken steps to merge it’s Chennai company – SPL
Polymers Limited – with itself. That company is producer of EPS plastics raw
material.
OVERVIEW
The Indian economy
during the last four years witnessed a GDP growth of around 9% annually. This
has happened for the first time in their country where the GDP is growing
around 9% continuously for four years. In spite of high crude prices and
inflationary trend, as experienced all over the world, their economy may grow
this year i.e. 08-09 also by around 8%. Considering the inflationary trend in
the economy, the expectation of such GDP growth is quite promising.
This has proved
that the economy has tremendous potential. The country is experiencing growth
impulses in several segments of it’s economy.
The Company
invested a sum of Rs.2750 Millions in the year 2006-07 and 2007-08. Considering
the growth potential, the Company has made further plans to invest around
Rs.1250 Millions in the year 2008-09. These investments will be in production
mode in phases spread over the entire year.
The Company’s,
ultra modern commercial complex at Veera Desai Road, Andheri ( West), Mumbai is
under construction. This 11 storied office complex was earlier scheduled to be
ready by December 2008. Due to acute shortage of construction workers, the
contractor was notable to complete the building as per the earlier schedule
given by them. It is expected that the building will be ready for occupation
during April/June 2009 quarter.
The Company has
succeeded in divesting its PVC film business at Malanpur, FSW business at
Daman. In the divestment programme the Company has plans to part with the
flexible film business and building at Pondicherry unit 1 where industrial
activity was closed long back.
The Company is in
negotiation for selling its flexible film business and building at Pondicherry
unit - 1. The Company may realise around Rs.350 Millions by sale of these
assets. That will also release working capital involved in running flexible
film business segment.
The Company has
made large investments in last two years in its Plastic piping system, Cross
Laminated film, Protective packaging Products, Industrial products, Material
handling systems and furniture product segments. There is need and opportunity
to further increase the reach of these product segments to meet demand in
several sectors of the economy. Considering the potential, the Company has
planned to invest further monies in these product segments during the current
year.
INDUSTRY STRUCTURE
AND DEVLEOPMENT
Plastics raw
material prices have gone up between 27% to 46% during Jan/June 2008. Inspite
of such a steep
increase, the
demand for plastics products has not gone into de-growth mode. Only the growth
percentage has gone down. The demand growth of plastic products even at such
high prices has demonstrated the strength of the
role played by
Plastics in their economy . For several applications, plastics still is a
material of choice in comparison with products made from conventional
materials.
In their Company’s
product segments, the increase in raw material costs could be transferred to
the product pricing within a time lag of 2 to 5 weeks. Definitely, such steep increase
has hurt the growth of various applications. This has overall slackened the
growth of plastics consumption in the country’s economy. Growth consumption of
plastics which was around 13% in the year 2007-08 may come down to around 8% in
the current year.
This steep
increase has also resulted in substantial increase in the working capital
requirements leading to higher interest cost.
The Government has
moved in a positive manner last year by reducing the Excise duty from 16% to
14%. Central Sales Tax ( CST ) was also reduced from 3% to 2% with effect from
1st June 2008. These moves have partly mitigated the hardship caused due to
increased cost of raw material. To give right fillip to Manufacturing sector
which is growing by single digit and to compete with cheap imports of products,
it is expected from the Government to move quickly to reduce excise duty from
14% to 8% and C.S.T. to be made zero from the current level of 2%.
The indirect taxes
in India are still very high. A moderate rate of taxes will not only boost the
excise revenue of the Government but also open huge investment opportunities in
many manufacturing sectors which in turn will increase the employment potential
substantially. National Policy on Petrochemicals adopted by the Cabinet last
year has committed to reduce indirect taxes on plastics to a moderate level at
a faster pace. It is expected that the Government will implement this Policy
without any delay to enable the economy to reap substantial benefits accruing
by increasing the consumption of plastics in the country.
Plastics have a
great role to play in boosting agriculture production, augmenting potable water
supply, in housing construction and in infrastructure development. All these
four segments, are most critical in the BHARAT NIRMAN initiative of their
country.
PRODUCT GROUPS
Product Group wise
share in turnover for the last two years (% of value)
The net turnover
of the Company was Rs.13191.6 Millions
(including Rs.971.5 Millions by way of Polymer trading and other non Plastics
products) as against Rs.11683.3 Millions (including Rs.720.6 Millions by way of
Polymer trading and other non-plastics products) of the previous year.
The Company has
processed 133026 tons of Polymers as against 120798 tons of Polymers (excluding
discontinued businesses) in the previous year. This reflects a growth of 10.12%
in Polymer consumption. The Company exported goods worth US $ 16.83 milion as
against US $ 14.52 million (excluding discontinued businesses) in the previous
year registering a growth of 15.91%. Profit before interest, depreciation and
exceptional items and taxes during the year have gone up by 12.05% from Rs.1363
Millions to Rs.1527.2 Millions during the year.
COMPANY’S STRENGTH
AND GROWTH DRIVERS
Manufacturing
sites
The Company has 18
manufacturing sites spread at various places in the country.
Distribution
Network
The Company
considers its distributors as its partners in progress and has built up
excellent relationship with them. The Company is continuously adding to the list
of distributors. The Company provides training to it’s distributors and their
team members to ensure proper service to the ultimate customers.
Growth Drivers
The Company is
continuously innovating to increase share of specialty products in each products
segment to meet demanding specifications from it’s end users. The proportion of
such business is growing in each product segment.
OPERATIONAL
PERFORMANCE
PLASTICS PIPING
SYSTEMS
PLASTIC PIPING
DIVISION
The Financial
Year 2007-2008 has been an eventful
year in the history of Plastic Piping Division. The Company received the power
supply of 132 KVA power line at Gadegaon mega plastics complex by end
October’07, which will ensure least disruption of power supply. The Company could
install and commission all the utilities by end of November’07. The Company
started shifting of it’s existing Pipe plant from Jalgaon MIDC site to Gadegaon
complex with effect from 1st Decemer’07. Entire shifting activities
were completed within two weeks. However, commissioning of the plants at
Gadegaon took nearly four weeks and by the time the normal production started,
it was end January’08. Meanwhile the additional plants ordered towards capacity
expansion were also arriving at sight. The Company commissioned them one after
the other. The entire expansion activities were completed by end April’08.
The production of
Piping Division was completely disrupted in the month of December’07 and by the
time the normal production was established and sufficient level of inventory
was created, it was end February’08. This had resulted into disruption in the
supply chain for nearly three months. This not only has affected Company’s
business but also affected the channel partners who are solely dependant on the
supply of Piping products from the Company.
After shifting of
Pipe plant from Jalgaon MIDC, the Company has planned re-structuring and
re-layout of Injection moulding Division at Jalgaon. The re-structuring
activity at Jalgaon was completed by April’08. The additional machines which
were ordered for augmenting the Injection moulding capacity were also
commissioned in the month of April’08.
While the Company
was busy in commissioning the new plant, the raw material situation started to
become very volatile. The Government of India imposed anti-dumping duty
effective 21st January’08 on imports from several countries which were major
exporters of PVC resin to India. This has severely affected the availability of
PVC resin and the costs soared. Beginning of March’08 the local raw material
prices started to increase and continued upto end of June’08. The total price
increase was nearly Rs.0.016 Million PMT i.e. 35% in a span of 4 months. Such a
steep increase in such a short time was unparallel in the history of plastics
raw material pricing. This has led to stagnation and uncertainty at market
place. The PVC resin consumption which increased by 8% to 9% between April’07
to March’08 was reduced to zero in the quarter April to June’08. The disruption
in supply chain during December’07 to February’08 and the phenomenal rise in
the raw material prices between March’08 to June’08 affected the business
volume severely. The Plastic Piping Division has ended up the year with a
nominal volume growth of 6.27%.
NEW LAUNCHES
i) CPVC SYSTEM
The Company has
launched CPVC, Hot and Cold Water plumbing system under the brand name of
LIFELINE during the plumbing exhibition at Mumbai in February’08. Initially the
Company launched the product only in South India and then started feeding rest
of India by June’08. The product was received well on All India basis at the
market place. Currently the Company has launched only plumbing system upto 2
inch as per copper tube standard. The Company has plans to introduce CPVC
system as per ASTM standard and increase the range upto 4" in the near
future.
ii) HDPE PIPES SYSTEM
The Company has
introduced PE pipes from 20 mm to 315 mm dia for various applications.
The Company has introduced
products in PE 63, PE 80 and PE 100 grades depending on the nature of
application and customer requirement. The Company is in the process of
acquiring BIS certification for PE pipes upto 315 mm dia for water supply,
sewage and sprinkler application which is expected to be received by
September’08. The Company has also applied to Telecom authority for approval of
the supply of PE Cable Duct pipes. The necessary formalities are completed. The
approval is expected by September’08.
Meanwhile, the company
is also exploring the possibility of expanding the range upto 400 mm dia. This
will enable the company to participate in the majority of Infrastructure, water
supply and sewage projects. The Company is also exploring the use of PE pipes
for Irrigation/sprinklers and Bore Well – column pipe etc. To supply complete
system inclusive of fittings, Company has undertaken a plan to launch Injection
moulded and fabricated fittings in the year 2008-2009.
iii) INJECTION MOULDED INSPECTION CHAMBERS.
The Company has
launched Injection moulded Inspection Chambers under the brand name of Ultra.
In 315 mm dia. The Company will be able to give 5 different configurations
while in 250 mm dia the Company has two configurations which can meet the
Housing requirements.
The Company has
also launched 450 mm dia Inspection Chambers which can find usage in large
Housing complexes and multi storied apartments. The product has been well
received at the market place and the Company will be able to supply complete
product line for Under Ground Sewage system based on the Ultra Chambers and
Ecodrain pipes.
iv) ROTATIONAL MOULDING
The Company has
installed a pilot plant to develop products related to Under Ground Drainage
and Sewage system. 600 mm dia Inspection Chambers with the relevant
configurations have already been launched. The Company has plans to develop
large dia meter manhole and septic tank by Rotational Moulding to make NUDrain
system complete in all aspects.
In Building and
installation category of products the plumbing products have shown significant
growth. With the increase in metal prices, plastic plumbing products are
finding more and more acceptance and the Company expects good growth in
plumbing as well as in Hot and Cold water plumbing segment.
Similarly PE Pipes
will boost the supply in Civil and Infrastructure segment replacing expensive
metal pipes with better properties to meet critical functional requirements.
The Company aims
to increase the capacity of PE pipes as the market develops.
The Turnover of specialty
products increased from 12.70% to 13.90% during the year . The Company is
investing monies and augmenting marketing resources to increase this to 18% in
the next two years. The working of Kanpur plant has been quite satisfactory.
The plant has achieved around 90% of its capacity utilization. The entire
production was sold in the North Indian market so that the product can reach at
a lower transport cost with a short time gap.
The Company
continues its thrust on exports. The Company received the prestigious Top
Exporters Award once again in the segment of Pipes and Fittings.
CONSUMER PRODUCTS
FURNITURE
Turnover of
Furniture Business has gone up from Rs.1380 Millions to Rs.1470 Millions. The
Company has restricted its furniture manufacturing activity at three locations
only viz: Pondicherry (U.T.), Durgapur (West Bengal), Lalru (Punjab). North
East market will be catered from Durgapur and Pondy factories. There was a
steep increase of almost Rs. 27 per Kg i.e 40% in raw material prices within a
short span of two months.
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. Company has planned to further
increase the Premium Item Range by launching new products. Company is the only
supplier of Painted Upholstered Plastics Chairs. The share of such products
sale was 19% in value during the year. The Company intends to increase share of
such products by another 3% in value during next twelve months.
The Company has
now more than 160 Exclusive Franchisee Show Rooms on All-India basis displaying
entire range of Supreme Furniture to a customer in a comfortable ambience. The
Company’s furniture products enjoy good acceptance in the market for its
quality, design, color and range. Supreme brand is also perceived as a premium
brand in the country.
The Company also intends
to explore the addition of certain related items for trading through existing
channel partners.
MAT BUSINESS
Business was down
by around 6% in the year. Demand continued to be good in the export market.
However, continuous labour unrest at their ancillary manufacturers plant,
reduced the availability of product. Their ancillary unit now confirms that
they have arrived at an appropriate settlement with their workers and would be
in a position to regulate the supply from hereon. In view of good demand and
adequate supplies they hope to fare much better this year.
INDUSTRIAL
PRODUCTS
The Division grew
over 7% in value term over previous year. Business from the Auto sector for the
Company almost remained at the levels of last year. However, Appliances sector
(i.e Air conditioning etc.) performed exceedingly well. Consumer electronics
demand was less in comparison to previous year.
The Company
expects better growth this year. Company has received new business from
existing customers and has added new customers as well. The Company has bagged
order from Tata Motors for their prestigious Global Truck Project constituting
more than 65 parts. A dedicated plant is being set up at Jamshedpur with a
Capital Outlay of about Rs.170 Millions to meet this demand. The plant will go
into production coinciding with start of Tatas world Truck project at
Jamshedpur. The business from this plant is likely to exceed Rs2000 Millions in
4 to 5 years after it goes in to production. Apart from this, Company also
bagged order for parts for one new vehicle from Tata Motors to be manufactured
at its Pune Plant. New business has been added in electronics segment also.
The Company has
started an Assembly unit at Nasik to cater requirements of Dash Boards and few
more assembled parts for Scorpio model of MandM. The Company has decided to
modernize Durgapur plant for streamlining its operations for auto parts. This
will be completed by December 08.
The supply from
Khushkhera factory at Rajsthan has been fully streamlined and the unit has
acquired all important certificates in the area of QMS (Quality Management
System) EMS (Environment Management System) and Safety, Health and Hygiene. In
line with the Company’s policy, to implement QMS and EMS, drive has been taken
to upgrade systems at all locations. Paint shop at Noida factory has been
upgraded to handle more volumes and improve Quality and Productivity and has
been operationalised successfully. Augmentation of paint shop at Talegaon has
been completed and will go into production during this year.
In order to meet
requirement of high gloss with increased Aesthetic value for TV front cabinets
of LCD Models, Company has acquired a new technology of Steam Moulding. This
process eliminates need for painting of moulded parts. They expect good growth
in this during current year.
The Company has
taken and is in the process of taking various actions to become solution
provider from just part supplier. Towards this move, the Company has
established a centralized Technical Centre at its Talegaon unit. This will
improve Company’s Design and Engineering capabilities and is expected to become
a catalyst in getting additional business from Automotive OEM’s with initial
orders already received from M and M.
The Company is
aggressively persuing its Re-engineering efforts to the suppliers of World
Class plastics parts and Assembly System. Towards achieving this goal,
following actions have been initiated for taking up in future.
a) Technical
Tie-up with International Design Houses to improve design and Engineering
capability.
b) Acquiring new
technologies to graduate from Parts Supplier to Assembly System Supplier to
Industries.
c) Capability
enhancement by acquiring latest technology machines.
d) Replacement of
old and inefficient machines by modern and efficient machines.
e) Establishing
modern Quality Control Labs to facilitate in house testing and validation of
Industrial parts.
f) Installation of
improved material handling and storage systems to facilitate effective
Inventory Management.
g) Improving soft
as well as technical skills of Human Resources.
h) Effective space
utilization by better Inventory Management, re- laying of factories to have
single piece flow concept and persuing Lean Management practices.
MATERIAL HANDLING
DIVISION
This Division
achieved a growth of about 56% in value terms and 27% in volume terms during
last year for Material Handling business.
The Company
launched 25 new moulds of Crates for varying applications during the year from
different manufacturing locations. Theirs is the only Company giving variety of
Crates from six manufacturing sites spread across the country to cater the All
India Market and none of the competitors has so many of their own production
facilities. This helps their Company in servicing the clients in least lead
time at most economical cost.
The Company has
set up fabrication facility to cater to tailor made needs of customers not only
at the manufacturing location but also at other places. These are value added
products. The Company expects to do business of value added products to the
tune of 20% which was 13% last year.
The Company has
become main supplier of material handling system to majority of Retail Chain
and Logistic companies.
The Company is
planning to launch few more models of Crates for which order for the necessary
moulds have been placed.
The Company has
started a new production facility at their mega complex at Gadegaon near
Jalgaon. This facility is now fully operational. Geographically it is the most
suitable site to service all India market effectively.
The Company has
also installed a Roto Moulding machine at Gadegaon and has organized moulds of
Crates and Dust Bins to be launched during Sept’08. The Company has also plans
to launch Roto Moulded Pallets.
The Company is
also the first Company to Launch Injection Moulded Pallets in India
successfully by installing bigger capacity Injection Moulding Machine of 2800
Ton. They have also broadened the range by introducing five newer models to
cater to specific needs for a variety of applications. The Company has started
marketing of mobile garbage bins.
The Company also
intends to market other material handling products in this year. At appropriate
time the Company may decide to manufacture these products in the country.
PACKAGING PRODUCTS
PACKAGING FILMS
Volume grew by 2%
while value sale grew by over 17%.Business for Multilayer films grew by 35%.
However, businesses for commodity products were down. The Company also reduced
its dependence on doing job work for a certain customer. Films for several new
applications were developed in this year which will enhance the customer base
and reduce the job work being done.
The Company has
planned to divest this business as it is an insignificant player in this
business.
PROTECTIVE
PACKAGING PRODUCTS
The division
recorded a value growth of 15 % and a volume growth of 10% in the year.
Vanilla products
such as EPE and Air bubble, suffered growth as competition from the unorganized
sector was intense. However the division has taken several measures to overcome
this problem and is set on a growth path. Cross linked PE block foam capacity
was increased in line with increase in demand and high capacity utilization. A
growth of 23% was recorded and further growth of over 20% is expected in this
year. The division has introduced several new grades to meet the technical
requirements of its customers. The process of developing new products continue
to bring higher value to the division.
As certain
environmental clearances were not received for their Urse plant, extruded cross
linked foam could not be started on schedule. Due to further expected delay the
division shifted this plant from Urse to Malanpur and commenced production by
March 08. It is to the credit of the technical team that the equipment could
produce saleable product from day one incurring a wastage of only 1 MT
comparable to international standards. The product has been well accepted. The
process of validation of their product is on and they hope that most HVAC (
Heat Ventilation and air-conditioning) consultants would be approving this
product before the end of this calendar year. They hope that the plant’s
capacity of 500 Tons per annum will be fully utilized by then. The division
would then extend this product manufacturing in other regional locations.
The division
continues with its commitment to be an innovative cost effective solution
provider in the areas of protective packaging , civil and insulation. To
enhance this effort, the division has added and is adding several new
converting equipments to make specialized end products for the customer.
Alongwith their packaging designing and product up gradation capabilities ,
these new facilities will add great value to the customer as well as the bottom
line of the division.
Also the division
has made a modest beginning of offering turnkey packaging solutions to its
customers. Besides offering packaging design and product, the division will
also source other packaging materials from other manufacturers and become a one
source supplier for all packaging needs of its customer along with doing the
packaging physically.
The division has
also tied up with several world renowned manufacturers of speciality foams to
market their products. After seed marketing and assessing the potential market
of these products, the Company would look to manufacture these products, with
know how from those companies. The Company is also in talks with several other
world leaders to further enhance its product portfolio. The division is also
undergoing market studies to identify new products to meet the demanding
expectations of its customers.
The division has
in-house designed and developed a PE foam extruder to manufacture 0.5 density
foam in 25 kg mł density, unique not only in the country, but also
internationally. The benefits of this development should accrue in the coming
year.
The division has
also developed recently a speciality product made from airbubble film for
underdeck insulation. This material was hitherto imported in the country. This
product is gaining acceptance and should soon be a well established product for
this application. Its Hosur unit has successfully worked on saving power and
fuel. By incorporating boiler condensed hot water recovery system and necessary
modification in the process profile, this unit would save 52,000 litres of
diesel consumption against a consumption of 210,000 litres last year. This
system has been adapted at Malanpur unit and would further reduce the consumption
of diesel. By improving efficiencies and process improvements the power
consumption dropped from 0.79 units per kg to 0.73 units per kg and is expected
to drop further in this year.
Urse unit could
not be started due to delays in getting environmental clearances. This is
however expected shortly and manufacturing should commence by the second
quarter of this financial year.
Due to a very
steep rise in prices of polymers in the last quarter of the financial year and
the non acceptance of OE customers to accept any price increase, margins were
under severe pressure. In spite of that the division maintained its operating
profit. Price increases are now getting in place and this will restore the
previous profitability of the division. With several of the above mentioned
efforts the division is poised for a growth of over 15% in volume in this year
CROSS LAMINATED
FILM
The Company uses
cross laminated film for making Tarpaulins, bags, rainwater harvesting systems,
fumigation covers and for varieties of agricultural applications.
The product sales
increased by 35% during the year. The Company sold 8948 tons of products
against 6639 tons during the previous year. The increased installed capacity
was fully utilised during the year. The fabrication capacity was also increased
with new sites at Gadegaon in Maharashtra and at Pondicherry. However demand
for the product outpaced the supply and the orders to the tune of Rs.140
Millions have been carried forward to the next year. Export increased to 1392
tons against 1072 tons of the previous year. The volume in export was
restricted due to non-availability of the product.
Encouraged by the
overwhelming demand for the product and to increase market share, the Company
has decided to further increase the installed capacity by 4000 MT with capital
outlay of Rs.250 Millions. Orders for the equipments have already been placed
and the capacity will be operational by the end of March 2009 in phases. The
Company has taken further steps to install additional balancing equipments with
an outlay of Rs.110 Millions in this year which will also be operational in the
last quarter of 2008-09. It will enable the Company to produce around 13000
tons of products during 2008-09 and about 17000 tons during the year 2009-2010.
The Company’s
collaborators are in the advanced stage of inventing next generation XF film
with further superior properties. The Company has entered into agreement with
them to enjoy an exclusive right to produce the same in India and SAARC
countries. The Company expects to launch one of the products of new technology
i.e. Cross Line Bonded Film in the April/June 2009 quarter.
PLASTIC RAW
MATERIAL
Starting the year
2008, Polymer prices in line with the increase in the crude oil prices started
increasing. The prices of various raw materials between Jan 2008 to June 2008
have gone up between 27% to 46%.The increase in the raw material prices was
more steep between April to June 2008. This has led to severe demand
contraction for plastics products through out the country.
The world economy
which had grown 4.9% in the year 2007 is slated to grow by around 4% in the
current year due to high inflationary trend and recession in USA. The demand
for plastics raw material was outstripping the supply upto May 08. The Company is
now seeing the trend of demand contraction.
The prices of
Polymers stopped rising since July 08. The price of crude oil which has gone
upto USD 147 per barrel has also come down to around USD 125 per barrel. It is
expected that the oil prices may drop further in the near future. In turn, it
may facilitate the reduction in polymer prices.
There was
depreciation of Indian rupee by around 8% in last quarter ie. April/June 2008.
This has exacerbated the cost of plastics raw material further where the local
prices are fixed in line with the landed cost of imported material. The Company
was able to transfer the increased cost of raw materials along with the
operating margin within two to five weeks time lag for most of its products.
This increase in raw material costs and foreign exchange loss due to
depreciation of Rupee have impacted operating margins by about 2% during the
last quarter of the year .
FINANCE
Since January,
2008, the trend of hardening of interest rates continued, due to inflationary
concerns and increase in benchmark rates (including Repo rates and CRR) by RBI
at regular intervals putting constraint on credit growth and squeezing
liquidity from the system. The average interest rates of the outstanding
interest bearing liabilities at the year end of the last three years i.e. as on
30.06.2006, 30.06.2007 and 30.06.2008 were 7.81%, 9.12% and 10.76%
respectively. It clearly shows that the rates of interest have been increasing
for the last three years and the trend is likely to remain firm in the near
future also.
The unprecedented
rise in crude oil prices and consequent increase in the polymer prices,
particularly during the last quarter (from April 2008 to June 2008) has
necessitated higher working capital requirements on account of higher values of
inventories and Book debts, as compared to the previous year.
As per past
practice, the Company continued to avail major part of its Working Capital
through placement of CPs / NCDs at a considerable lower interest rates. In the
prevailing circumstances, the Company has managed the interest cost reasonably
well.
The Company enjoys
excellent relations with its Bankers and has been able to negotiate various
banking facilities favourably.
CRISIL has
assigned A+/Stable Rating to Working Capital Borrowings which indicates
adequate safety with regard to timely payment of interest and principal, for
aggregate Fund Based and Non Fund Based facilities. In respect of the Short
Term Debt Programme the Rating of “P1” has been assigned by CRISIL, which
indicates that the degree of safety with regard to timely payment of interest
and principal on the instrument is very strong.
Contingent
Liabilities
Rs.
in millions
|
|
30.06.2007 |
30.06.2006 |
|
Bills / Cheques discounted |
121.407 |
84.086 |
|
Guarantees given by Banks |
29.494 |
53.744 |
|
Disputed demand of lease rent differential not acknowledged as debt |
21.311 |
21.311 |
|
Claims against the company including show cause cum demand notices from Central Excise Department not acknowledged as debts |
76.539 |
57.563 |
|
Disputed sales Tax / Entry Tax Demands |
77.900 |
41.485 |
|
Disputed Sales Tax /Entry Tax Demands |
112.015 |
27.431 |
|
Other Claims against the company not acknowledged as debts |
5.994 |
5.675 |
|
Total |
474.920 |
321.555 |
The company has imported capital goods under the Export Promotion Capital Goods Scheme of the Government of India, at concessional rate of duty on an understanding to fulfill qualified exports of which remaining future obligation aggregates to Rs. 1172.425 millions (Previous Year Rs. 605.555 millions). Non fulfillment of such future obligation, if any options /right to the government to confiscate capital goods imported under the said license and other penalties under the above referred scheme.
AUDITED FINANCIAL RESULTS
|
Particulars |
|
30.06.2008 (audited) (Rs.In Million) |
30.09.2008 (Reviewed) (Rs.In Million) |
|
Net Sales/ Income from Operations |
|
13102.210 |
2944.951 |
|
Other Income |
|
89.391 |
13.421 |
|
Total Income |
|
13191.601 |
2958.372 |
|
Goods Consumption |
|
|
|
|
Raw Material Consumed |
|
7871.963 |
2095.899 |
|
Cost of goods traded |
|
982.747 |
57.062 |
|
Increase/(Decrease) in Finished Goods |
|
(179.766) |
211.879 |
|
|
|
8674.944 |
1941.082 |
|
Employees’ Cost |
|
544.175 |
141.204 |
|
Other Expenditure |
|
2445.278 |
583.950 |
|
Total Expenditure before Interest |
|
11664.397 |
2666.236 |
|
Operating Profit |
|
1527.204 |
292.136 |
|
Interest |
|
389.792 |
120.871 |
|
Profit before Depreciation & Tax |
|
1137.412 |
171.265 |
|
Depreciation |
|
395.104 |
107.163 |
|
Profit Before Tax |
|
742.308 |
64.102 |
|
Exceptional Income |
|
0.463 |
62.000 |
|
Provision for Taxation |
|
|
|
|
Corporate Tax |
|
176.400 |
19.500 |
|
Deferred Tax |
|
54.500 |
0.00 |
|
Fringe Benefit Tax |
|
12.000 |
3.000 |
|
Net Profit for the year |
|
499.871 |
103.602 |
|
Excess provision of earlier years w/back |
|
11.213 |
- |
|
Net Profit available for appropriation |
|
511.084 |
103.602 |
|
Paid up Equity Share Capital (Face Value Rs.10/-) |
|
276.217 |
276.217 |
|
Reserve Excluding Revaluation Reserve |
|
2200.449 |
- |
|
Earning Per share – Basic & Diluted (Rs.) (Before Exceptional Income) |
|
1.849 |
1.51 |
|
Earning Per share – Basic & Diluted (Rs.) (After Exceptional Income) |
|
1.850 |
3.75 |
|
Cash earning per share – Basic & Diluted (Rs.) Public Shareholding |
|
3.281 |
7.63 |
|
No. of Share |
|
15196796 |
15196796 |
|
% of Shareholding |
|
55.02% |
55.02% |
SEGMENTWISE REVENUE, RESULTS AND CAPITAL EMPLOYED
|
Particulars |
|
30.06.2008 (audited) (Rs.In Million) |
30.09.2008 (Reviewed) (Rs.In Million) |
|
Segment Revenue |
|
|
|
|
Net Sales/ Other Income from each Segment |
|
|
|
|
Plastics Products |
|
12172.896 |
2894.597 |
|
Polymer Trading |
|
971.472 |
58.726 |
|
Unallocated |
|
47.233 |
5.049 |
|
Total |
|
13191.601 |
2958.372 |
|
|
|
|
|
|
SEGMENT RESULTS |
|
|
|
|
Profit before tax and interest from each segment |
|
|
|
|
Plastics Products |
|
1055.711 |
180.343 |
|
Polymer Trading |
|
34.717 |
1.051 |
|
Unallocated |
|
41.672 |
3.579 |
|
Total |
|
1132.100 |
184.973 |
|
Less: Interest |
|
389.792 |
120.871 |
|
Total Profit
Before Tax |
|
742.308 |
64.102 |
|
Capital Employed |
|
|
|
|
Segment Assets – Segment Liabilities |
|
|
|
|
Plastics Products |
|
5033.332 |
6513.507 |
|
Polymer Trading |
|
47.665 |
19.972 |
|
Other than segments |
|
824.884 |
875.133 |
|
Total |
|
5905.881 |
7408.612 |
Note:
1. The company has discontinued its businesses of Rigid PVC Films and Food Serviceware Divisions since May, 2007 and June, 2007 respectively. Excluding these discontinued businesses, comparative figures of Total Income, Operating Profit and Profit Before Tax were :
|
|
4th
Quarter ended 30.06.2008 |
4th
Quarter ended 30.06.2007 |
Year
ended 30.06.2008 |
Year
ended 30.06.2007 |
|
Total Income |
4441.224 |
3535.403 |
13191.602 |
10928.071 |
|
Operating Profit |
542.491 |
495.274 |
1524.202 |
1305.793 |
|
Profit Before Tax |
320.765 |
288.265 |
742.307 |
651.091 |
|
|
|
|
|
|
2. The Company processed 1,33,026 MT of polymers during the year against 1,20,798 MT ( Excluding discontinued businesses) in the previous year recording a growth of 10.12%.
3. Exceptional Income (net) of Rs.0.463 Million during the year consists of :
(a) Rs.21.874 Millions consists of profit accrued on receipt of non-refundable consideration in entirety towards the proposed sale of plot of land held by the company in Haryana
(b) Rs.17.853 Millions expenses/loss incurred pursuant to relocating/re-layout of entire plant and machinery and other infrastructures at its units at MIDC Jalgaon due to setting up new green field mega project at Gadegaon, Taluka Jamner, District Jalgaon ( Maharastra)
(c) Rs.3.558 Millions amount paid towards additional compensation on settlement of workers' demand at Pondicherry Unit I.
4. Construction of Commercial Complex at Company’s site at Andheri (Mumbai) consisting of saleable area of about 2,70,000 sq. ft. which was slightly delayed due to non availability of labourers is now progressing well. Total estimated cost of the project is around Rs.900 Millions. And likely to be ready by April-June,09.
5. The Company is engaged mainly in production of plastic products and as such is the only reportable segment as per Accounting Standard on Segment Reporting (AS-17) issued by ICAI.The geographical segmentation is not relevant as export turnover is not significant in respect to total turnover. However there is significant turnover of Polymer trading activity, hence the same has been shown as a seperate segmental activity under ' Polymer Trading' as distinct from 'Plastic Products'.
6. Tax provision has been made on the basis of the estimated tax liability for the year ended 31st March2008 as per the provisions of the Income Tax Act, 1961. The company has also provided for deferred tax liability in the current year in accordance with provisions of Accounting Standard 22 (AS22) on Accounting for Taxes on Income issued by the Institute of Chartered Accountants of India.
7. The Board of Directors has recommended payment of final dividend @ 45% i.e. Rs. 4.50 per equity share on 2,76,21,674 Equity shares of Rs.10/- each for the year ended 30th June, 2008 which together with interim dividend of 35% i.e. Rs.3.50 per equity share and tax on distribution of dividend absorb a sum of Rs.258.528 Millions as against Rs.240.319 Millions in previous year.
8. Investor complaints during the quarter; Opening balance: Nil, Received during the quarter : 3 , Pending as on 30th June 2008: Nil .
9. The figures for the previous quarter/year have been regrouped/rearranged wherever necessary.
The above financial statement has been reviewed by the audit
committee and approved by the Board of Directors at their meetings held on 4th
August, 2008.
Contingent
Liabilities
Rs.
in millions
|
|
30.06.2007 |
30.06.2006 |
|
Bills / Cheques discounted |
121.407 |
84.086 |
|
Guarantees given by Banks |
29.494 |
53.744 |
|
Disputed demand of lease rent differential not acknowledged as debt |
21.311 |
21.311 |
|
Claims against the company including show cause cum demand notices from Central Excise Department not acknowledged as debts |
76.539 |
57.563 |
|
Disputed sales Tax / Entry Tax Demands |
77.900 |
41.485 |
|
Disputed Sales Tax /Entry Tax Demands |
112.015 |
27.431 |
|
Other Claims against the company not acknowledged as debts |
5.994 |
5.675 |
|
Total |
474.920 |
321.555 |
The company has imported capital goods under the Export Promotion Capital Goods Scheme of the Government of India, at concessional rate of duty on an understanding to fulfill qualified exports of which remaining future obligation aggregates to Rs. 1172.425 millions (Previous Year Rs. 605.555 millions). Non fulfillment of such future obligation, if any options /right to the government to confiscate capital goods imported under the said license and other penalties under the above referred scheme.
Fixed assets:
v Freehold Land
v Leasehold Land
v Buildings
v Plant, Machinery and Electrical Installations
v Moulds and Dies
v Furniture, Fixture and Office Equipments
v Vehicles
v Sundry Equipments
As per Website:
Company Profile
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 them the country's largest plastics processors.
Not surprisingly, they also offer the widest
and most comprehensive range of plastic products in India.
Their 18 advanced plants are powered by technology from world leaders,
and complement their extensive facilities for R and 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.
2009 will see The Supreme Group turnover
touch a projected Rs.21,000 million (USD 500 million).
Quality
Philosophy:
At Supreme, they aspire to Total Quality.
They stand committed to seeing this excellence
permeate every aspect of their operations, at every level in the organization
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 them make superior products, exceed the expectations
of their existing clients, and win new customers with confidence.
Social
Responsibility:
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.
Research and Development:
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.
Human Resource Development:
At Supreme, they
value people as their most prized asset.
Nurturing this
resource is therefore a priority with them.
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.
Group:
From modest beginnings, as a small single product company in the 1950s, to a Rs.20000 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 .
Press
Releases
Mumbai, 4th August, 2008: Supreme Industries Limited, India’s leading processor of plastics,
reported a Net profit of Rs.511.1 Millions (incl. exceptional income of Rs.0.5
Million) for the year ended June 30, 2008, as compared to Rs.501.5 Millions
(incl. exceptional income of Rs.104.3 Millions) for the corresponding year in
2007. Profit before depreciation and exceptional items and taxes during the
year have gone up by 12% from Rs.1363 Millions in 2006-07 to Rs.1527.2 Millions
during the year. Net revenues for the year 07-08 stood at Rs.13190 Millions as
compared to Rs.11680 Millions for the preceding year. EPS excluding exceptional
income (Net of taxes) for the year 2007-08 stood at Rs.18.50 as compared to
Rs.15.25 for the preceding year.
The Board of Directors of the Company in its meeting held on 4th August,
2008 has recommended final Dividend of Rs.4.50 per Equity Share which after
considering the interim dividend of Rs.3.50 per share, total dividend for the
year comes to Rs.8.00 per Equity Share i.e. 80%, as compared to total Dividend
of Rs.7.50 per Equity Share i.e. 75%, in previous year. Total Dividend payout
including Corporate Dividend Tax would be Rs.258.5 Millions.
The Company has bagged order from Tata Motors for their prestigious
Global Truck Project constituting more than 65 parts. A dedicated plant is
being set up at Jamshedpur with a Capital Outlay of about Rs.170 Millions to
meet this demand. The plant will go into production coinciding with start of
Tatas world Truck project at Jamshedpur. The business from this plant is likely
to exceed Rs.2000 Millions in 4 to 5 years after it goes in to production.
Supreme Industries invested a sum of Rs.2750 Millions in the year
2006-07 and 2007-08. The Company has set-up Green field Mega Project at Gadegaon.
Production has been stabilized during the year at Gadegaon. At Gadegaon the
products manufactured / to be manufactured will be pipes from varied polymers,
Material handling products, Inspection Chambers, Sewerage products and
fabricated products from Cross Laminated film. During the current year Company
has envisage Capex of around Rs.1250 Millions.
About Supreme
Industries Limited
Supreme Industries Limited is India’s leading processors of plastics,
offering the widest and the most comprehensive range of plastic products in
India. The company operates in various segments viz. Plastics Piping System,
Packaging Products, Industrial Components, Material handling system, Cross
Laminated Polyethylene Films and Products thereof and Furniture.
Supreme Industries has 18 technologically advanced manufacturing
facilities located at various places spread across the country. The company has
built up excellent relationships with its distributors and also providing
orientation to them, in order to ensure proper service to ultimate customers.
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 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 :
The 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.
The 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.49.79 |
|
UK Pound |
1 |
Rs.73.37 |
|
Euro |
1 |
Rs.63.08 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
8 |
|
PAID-UP CAPITAL |
1~10 |
8 |
|
OPERATING SCALE |
1~10 |
8 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
7 |
|
--PROFITABILIRY |
1~10 |
8 |
|
--LIQUIDITY |
1~10 |
7 |
|
--LEVERAGE |
1~10 |
8 |
|
--RESERVES |
1~10 |
7 |
|
--CREDIT LINES |
1~10 |
8 |
|
--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 |
|
69 |
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 |
|
NR |
In view of the lack of information, they have no basis upon which to
recommend credit dealings |
No Rating |
|