Supreme Industries Ltd:Annual Report 2023-24 Analysis

Supreme Industries Ltd.: A Comprehensive Overview #

About the Company #

Year of Establishment and Founding History:

Supreme Industries Ltd. was established in 1942 by Shri Bansilalji V. Doshi. Initially, it started as a partnership firm dealing in trading cloth and later ventured into plastics processing in 1951.

Headquarters Location and Global Presence:

The company is headquartered in Mumbai, India. While primarily focused on the domestic market, Supreme Industries has a presence in international markets through exports.

Company Vision and Mission:

• Vision: To be a leading provider of innovative plastic products, known for quality, sustainability, and customer satisfaction.
• Mission: To continuously improve operations, innovate products, and deliver value to stakeholders.

Key Milestones in Their Growth Journey:

• 1942: Established as a trading firm.
• 1951: Ventured into plastics processing.
• 1986: Became a public limited company.
• Expanded into various product segments, including industrial and consumer products.
• Established multiple manufacturing facilities across India.

Stock Exchange Listing Details and Market Capitalization:

Supreme Industries Ltd. is listed on the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). Check real-time stock market data for the most current market capitalization.

Recent Financial Performance Highlights:

Refer to the company’s latest annual reports and quarterly results for up-to-date financial performance figures regarding revenue, profit, and key financial ratios.

Management Team and Leadership Structure:

Refer to the company’s official website for the most current information.

Any Notable Awards or Recognitions:

Refer to the company’s official website and annual reports for up-to-date awards and recognitions.

Their Products #

Complete Product Portfolio with Categories:

Supreme Industries offers a wide range of plastic products across various segments:

• Plastic Piping Systems: Pipes, fittings, and accessories for plumbing, drainage, and agriculture.
• Industrial Packaging: Protective films, containers, and other packaging solutions.
• Consumer Products: Furniture, storage solutions, and other household items.
• Protective Packaging: Bubble films and other protective packaging materials.
• Composites: Fiber-reinforced plastic (FRP) products.

Manufacturing Facilities and Production Capacity:

Supreme Industries operates multiple state-of-the-art manufacturing facilities across India. Refer to company presentations and reports for more information.

Quality Certifications and Standards:

Supreme Industries holds various quality certifications, including ISO certifications, demonstrating its commitment to quality management systems.

Any Unique Selling Propositions or Technological Advantages:

• Extensive product portfolio catering to diverse industries.
• Strong brand reputation built on quality and reliability.
• Pan-India distribution network.
• Investments in R&D to develop innovative plastic products.

Recent Product Launches or R&D Initiatives:

Refer to the company’s press releases and annual reports for information.

Primary Customers #

Target Industries and Sectors:

Supreme Industries serves a diverse range of industries, including:

• Agriculture: Irrigation systems and agricultural films.
• Infrastructure: Piping solutions for construction and infrastructure projects.
• Packaging: Packaging solutions for various industries.
• Consumer Goods: Plastic products for household and consumer use.
• Automotive: Automotive components and materials.

Geographic Markets (Domestic vs. International):

Primarily focused on the domestic Indian market, with exports to select international markets.

Major Client Segments (agricultural, industrial, residential, etc.):

• Agricultural: Farmers, agricultural businesses, and irrigation companies.
• Industrial: Manufacturers, construction companies, and infrastructure developers.
• Residential: Homeowners, contractors, and retailers of consumer products.

Distribution Network and Sales Channels:

Supreme Industries has a widespread distribution network across India, including distributors, dealers, retailers, and direct sales channels.

Major Competitors #

Direct Competitors in India and Globally:

• Astral Poly Technik
• Finolex Industries
• Prince Pipes and Fittings
• Wavin

Competitive Advantages and Disadvantages:

• Advantages: Wide product portfolio, strong brand reputation, extensive distribution network, and focus on R&D.
• Disadvantages: Susceptible to fluctuations in raw material prices (polymers), competitive intensity in certain product segments.

How They Differentiate From Competitors:

• Focus on innovation and new product development.
• Emphasis on quality and reliability.
• Strong distribution network enabling wider reach.
• Diversified product portfolio catering to different industries.

Future Outlook #

Expansion Plans or Growth Strategy:

• Expanding manufacturing capacity to meet growing demand.
• Focusing on new product development and innovation.
• Strengthening distribution network and market reach.
• Exploring opportunities in adjacent product categories.

Sustainability Initiatives or ESG Commitments:

Refer to the company’s official website and sustainability reports for up-to-date sustainability initiatives.

Industry Trends Affecting Their Business:

• Growing demand for plastic products in various industries.
• Increasing focus on sustainability and eco-friendly materials.
• Government initiatives promoting infrastructure development and agriculture.
• Fluctuations in raw material prices (polymers).

Long-Term Vision and Strategic Goals:

• To maintain leadership in the Indian plastics industry.
• To expand into new markets and product segments.
• To enhance sustainability and environmental performance.
• To deliver superior value to stakeholders.

Comprehensive Performance Overview #

3-Year Trend Analysis of Key Financial Metrics #

• Total Income: Increased consistently. FY2023-24: ₹10,251.98 crores, FY2022-23: ₹9,283.35 crores, FY2021-22: 6383.59 crores.
• Operating Profit (EBITDA): Significant growth. FY2023-24: ₹1,666.32 crores, FY2022-23: ₹1,281.84 crores, FY2021-22: 1312.74 Crores.
• Profit Before Tax (PBT): Marked increase. FY2023-24: ₹1,351.83 crores, FY2022-23: ₹1,010.43 crores, FY2021-22: 1077.91 Crores.
• Profit After Tax (PAT): Increased Y-o-Y. FY2023-24: ₹1,016.17 crores, FY2022-23: ₹764.47 crores, FY 2021-22: 801.38 Crores.
• Polymers Processed (MT): Shows growth, FY 2023-24: 645302, FY 2022-23: 505995, FY 2021-22: 400166.
• Product Sales(MT): Shows Growth, FY 2023-24: 639701, FY 2022-23: 506501, FY 2021-22: 393908
• Sales: Shows continuous growth, FY 2023-24: 10134.20 Crores, FY 2022-23: 9201.49 Crores, FY 2021-22: 7772.81
• Market Capitalizaton: shows growth, 2023-24: 53703.78 Crores, 2022-23: 31904.70, 2021-22: 25954.77.
• ROACE: Increased, 2023-24: 31.70%, 2022-23: 27.26%, 2021-22: 41.78%.
• ROANW: Increased, 2023-24: 24.36%, 2022-23: 21.14%, 2021-22: 32.04%

Business Segment Performance #

• Plastics Piping System: Volume growth of 33.5%, with 501,001 tons sold. Value-added products represented 41% of sales, a slight decrease in share but a 23% volume increase. 3815 new products added.
• Consumer Products (Furniture): No growth in value, negligible volume growth. Operating margins and Return on Capital Employed improved by 2% due to a focus on value-added items.
• Industrial Products:
  • Industrial Components: Revenue de-growth of 3.5% due to a slowdown in the appliances sector, but a 9% growth in the Auto sector.
  • Material Handling Products: Moderate volume growth of 11%, revenue growth of 4%. Industrial crates grew by 5%, industrial repetitive use pallets by 22% in volume and industrial roto pallets have shown a growth of 23%.
  • Composite LPG Cylinders: Plant running at 50% capacity due to lower-than-expected orders from IOCL.
• Packaging Products:
  • Performance Films: 2% volume growth, driven by high-barrier EVOH/Nylon films. Exports remained stable.
  • Protective Packaging Products: 11% revenue growth, 15% volume growth.
    • Protec segment: 15% value growth, 17% volume growth.
    • Civil segment: 11% value growth, 17% volume growth.
    • Insulation segment: 3% value growth.
    • Retail: 11% value growth.
  • Cross Laminated Film: Volume growth of 1.02% and value growth of 3.28%. Exports grew by 8.75%.

Major Strategic Initiatives and Their Progress #

• Geographic Expansion: Acquired a unit in Sangli (Maharashtra). New greenfield sites planned in Bihar and Andhra Pradesh.
• New Unit: One unit added via acquisition in Sangli. New unit at Malanpur is going in operation in Q2 of FY 2024-25.
• Capacity Expansion: Ongoing brownfield expansions at new sites. Expansion of PVC, HDPE, and water tank capacities at Erode. Capacity increases planned for PVC, cPVC, DWC pipes, and fittings at multiple locations.
• Product Diversification: Introduction of new products like CableShield electrical conduits, CopperShield, and Optimus water tanks, PVC-O pipes, and expansion of the sprinkler irrigation system. Development of new plastic fittings and a PP low-noise drainage system.
• Digital Initiatives: Increased spending on brand awareness (₹141 crores, up from ₹97 crores). Launch of a Loyalty App for retailers and plumbers. Increased focus on digital marketing and social media presence.
• Sustainability initiatives: Focus on scientific based long-term Net Zero emissions target. LCA done on key building products. Solar capacity increase and planning of additional 33.75 Mwp captive solar power, PPA signed for six locations, hybrid power supply at Erode. Water conservation measures, and waste management measures.

Risk Landscape Changes #

• Raw Material Price Volatility: PVC prices experienced a “roller coaster” mode.
• Counterfeit Products: The company is actively dealing with counterfeit products, especially in the pipe segment.
• Geopolitical Risks: Slowdown in project execution in the Middle East affected export market.
• Increased competition: From local unorganised players manufacturing plastic furniture by using reprocessed polymers.

ESG Initiatives and Metrics #

• Environmental:
  • Commitment to long-term Net Zero emission target. Life Cycle Assessment (LCA) of key building products.
  • Increased solar energy capacity from 28.05 MW to 34.05 MW in FY24, with plans to reach 42 MWp by 2024-25. Green energy utilization increased by 21% in FY 23-24.
  • Greenhouse Gas emission avoided increased by 29% in FY 2023-24.
  • Water conservation measures and audits implemented. Waste management practices and focus on product recyclability.
• Social:
  • CSR initiatives through Supreme Foundation, focusing on education, healthcare, and sanitation.
  • Employee well-being programs and training. Zero fatalities reported.
  • No reported complaints related to discrimination, child labor, or forced labor.
• Governance:
  • Compliance with all applicable laws and regulations.

Management Outlook #

• Expects volume growth in excess of 20% during the current year (FY2024-25).
• Continued investment in capacity expansion (brownfield and greenfield).
• Focus on increasing market reach and penetration.
• Emphasis on value-added products and new product development.
• Commitment to sustainability and ESG initiatives.

Detailed Analysis #

Financial Position Analysis: Supreme Industries Limited #

Balance Sheet Analysis #

3-Year Comparative Analysis of Assets, Liabilities, and Equity (Consolidated) #

(₹ in Crores)

Significant Changes in Major Line Items (>10% YoY) #

• Non-Current Assets (2023-2024): Increased by 17.63%, primarily due to increase in Property, Plant & Equipment, and Intangible Assets.
• **Current Assets (2023-2024):**Increased by 14.21% primarly due to increase in Cash & Cash Equivalents, due to increase in sale.
• Equity (2023-2024): Increased by 16.05% primarily due to increase in retained earnings.
• Non-Current Assets (2022-2023): Increased by 4.55%, primarily due to additions in property, plant & equipment.
• Equity (2022-2023): Increased by 8.19% primarily due to profit for the year.
• Current Liabilities (2022-2023): Increased by 54.86%
• Current Assets (2022-2023): Increased by 3.5%.

Working Capital Trends (Consolidated) #

• Working capital has increased, indicating improved short-term liquidity.

Asset Quality Metrics (Consolidated) #

• Trade receivables - credit impaired, has remained almost stable, it shows effective credit risk management policies in place.
• Provision for doubtful debts has increased, indicating an increase in credit risk related to assets.

Debt Structure and Maturity Profile (Consolidated) #

The Company has remained long-term debt-free. As such, a maturity profile table is not applicable. There is short-term finance costs associated with leases, other financial liabilities.

Off-Balance Sheet Items (Consolidated) #

• Contingent liabilities related to bills discounted, have decreased significantly.
• Contingent liabilities for Disputed demands and Other Claims increased.

Financial Analysis: The Supreme Industries Limited #

Profitability Ratios (3-Year Trends) #

(Consolidated Basis)

• Return on Equity (ROE): 24.36% (FY23-24), 21.14% (FY22-23). ROE has increased.
• Return on Average Capital Employed (ROACE): 31.70% (FY23-24 excluding exceptional items), 27.26%(FY22-23). ROACE is improving.
• Operating Profit Margin: 15.10% (FY23-24), 12.93% (FY22-23). The operating margin has improved.
• Net Profit Margin: 9.91% (FY23-24), 8.23% (FY22-23). The net profit margin shows improvement.

Liquidity Metrics #

(Consolidated Basis)

• Current Ratio: 2.58 (FY23-24), 2.53 (FY22-23). The current ratio is stable.
• Cash Ratio Approximation: (Cash + Cash Equivalents + Current Investment) / Current Liabilities = 1.84.

Efficiency Ratios #

(Consolidated Basis)

• Inventory Turnover: 5.00 (FY23-24), 4.99 (FY22-23). Inventory turnover is stable.
• Debtors Turnover Ratio: 20.21 (FY23-24), 19.20 (FY22-23). The debtors turnover ratio has slightly improved.

Leverage Metrics #

(Consolidated Basis)

• Debt/Equity Ratio: 0.00 (FY23-24 and FY22-23).
• Interest Coverage Ratio: 95.12 (FY23-24), 148.62 (FY22-23). The interest coverage ratio decreased during the year 23-24 as compared to previous year.

Working Capital Ratios #

(Consolidated Basis)

• Net Capital Turnover Ratio: 5.40(FY23-24), 5.73(FY22-23), the ratio has been slightly decreased.
• Number of Days of accounts payable: 49(FY23-24), 42(FY22-23).

Business Segments #

Plastics Piping Systems #

Revenue and Profitability #

• Volume growth of 33.5% during FY2023-24, reaching 501,001 tons sold.
• Value-Added Products share of total sale at 41%, a decrease from previous year’s 44%; although sale of these products grew by 23% by Volume.

Market Share and Competitive Position #

• Identified as a market leader in the segment.
• The Company successfully facing the menance of counterfiet product in this segment.

Key Products/Services Performance #

• HDPE Pipes showed high growth.
• Blow Moulded Water Tanks business grew by 46.8% in volume.
• cPVC system sales grew by 14% in volume.
• Braided and Plain Hoses successfully launched.
• Electrofusion Olefins fittings and compression molded fitting successfully launched.
• Cable shield conduit system successfully launched.
• OPVC pipes was acquired and will be added to existing capacity.
• FlameGuard cPVC system registered a growth of 50%.
• New manufacturing unit set up for Industrial and ball valves.
• Gas Piping system will be launch during the year 24-25.
• PP silent pipe system to be launched in coming years.
• Company is coming up with new Windows and Door Business.

Geographic Distribution and Market Penetration #

• Expanded manufacturing reach with a new unit in Sangli (Maharashtra).
• Operates from 29 manufacturing sites across 12 States and Union Territories.
• Plans to add greenfield sites in Bihar and Andhra Pradesh.
• Manufacturing facilities strategically located to service customers efficiently.
• Increased capacity at Erode (Tamil Nadu) plant.
• Kharagpur plant fully operational, additional land acquired for expansion.
• DWC pipe manufacturing will be expanded in the North and South Zones.
• Export market experienced degrowth due to slower project execution in the Middle East.
• Exporting to 62 countries.

Segment-wise CAPEX and ROIC #

• CAPEX of R 453 crores incurred during FY2023-24, which included acquisition of undertaking of M/s Parvati Agroplast at Sangli (Maharashtra).
• Total installed capacities for Plastic Piping System is expected to reach about 835,000 MT per annum by 31st March, 2025.

Operational Efficiency Metrics #

• Added 3815 products to the range, reaching a total portfolio of 13,888 products.

Growth Initiatives and Challenges #

• Focus on expanding product portfolio and adding SKUs.
• Plans to add new piping systems.
• Expanding manufacturing reach with new facilities.
• Plans to increase DWC pipe production at various locations.
• Actively promoting product awareness and brand.
• Strengthening relationships with influencers (architects, plumbers).
• Dealing with counterfeit product issues.
• Plans to launch Loyalty Program for plumbers and retailers.
• Expects around 25% volume growth in the current year.

Consumer Products (Furniture) #

Revenue and Profitability #

• No growth in value terms, negligible growth in volume terms.
• Improved operating margin by 2% over the previous year.

Market Share and Competitive Position #

• Positioned as a premium furniture manufacturer.
• Facing strong competition from unorganized players.

Key Products/Services Performance #

• Focus on premium products, Almirah, Blow Molded Tables, and School Furniture.
• Introduced 20 new models, including trend-setting designs.

Geographic Distribution and Market Penetration #

• Manufactures furniture at 7 locations across India.
• Added 64 retail showrooms, totaling over 300.
• Started business with retailers such as Metro & Spencer.

Operational Efficiency Metrics #

• Increased retail presence by adding new retail outlets.
• Increasing direct channel partners, during year increased from 1440 to 1493.

Growth Initiatives and Challenges #

• Focus on product innovation and design.
• Plans to increase retail penetration by adding 1000 more outlets to existing 14569 Retail Counters.
• Utilizing digital marketing (Facebook, Instagram, online store).

Industrial Products #

Industrial Components #

Revenue and Profitability #

• Revenue de-grew by 3.5% in value terms, due to lower average raw material prices.
• Auto sector achieved 9% growth in revenue.

Market Share and Competitive Position #

• “Excellent” rating from regular customers.

Key Products/Services Performance #

• Executed orders for EVM and VVPAT sub-assemblies.

Operational Efficiency Metrics #

• Focused on improving Productivity, Quality, Energy Conservation, and Cost reduction.

Growth Initiatives and Challenges #

• Expanding into new sectors (Telecom, Infrastructure, Construction, Defense).
• Investing in capacity balancing and expansions.

Material Handling Products #

Revenue and Profitability #

• Volume growth of 11%, revenue growth of 4%.
• Industrial Crates registered a 5% volume growth.
• Industrial repetitive use pallets: revenue growth of 10%, volume growth of 22%.
• Roto moulded pallets: volume growth of 23%, value growth of 31%.
• Fisheries crates: revenue growth of 7%, volume growth of 18%.

Market Share and Competitive Position #

• Trusted associate and supplier to major soft beverage companies.

Key Products/Services Performance #

• Focus on high-quality products for F&V sector, achieving double-digit growth.
• Strong performance in Dustbin models.

Geographic Distribution and Market Penetration #

• Plans to add newer markets in western coastal areas.

Operational Efficiency Metrics #

• Regularly adding suitable products to geographically located units.

Growth Initiatives and Challenges #

• Expanding product range of Dustbin models.
• Lost substantial business in export pallets to local competition.
• Plans to manufacture pallets in other regions for cost competitiveness.

Composite LPG Cylinders #

Key Products/Services Performance #

• Doubled plant capacity in the previous year.
• Working with IOCL on strategies to promote use.

Growth Initiatives and Challenges #

• Exploring applications for other gases.
• Seeking new export markets.
• Working on certification for high-pressure cylinders.

Packaging Products #

Performance Films Packaging Products #

Revenue and Profitability #

• Volume growth of 2%.

Key Products/Services Performance #

• Major contributions from High Barrier EVOH/Nylon films.
• Oil & Dairy industry growth of 4% in Volume.
• Registered trademarks for seven products.

Geographic Distribution and Market Penetration #

• Exports maintained similar volumes to the previous year.
• Positive feedback from key export markets.
• Pursuing opportunities in USA, Europe, and African markets.

Operational Efficiency Metrics #

• Registered under Extended Producer Responsibility (EPR).

Growth Initiatives and Challenges #

• Plans for volume and value growth through customer base expansion in India and abroad.

Protective Packaging Products #

Revenue and Profitability #

• Sales growth of 11% in value terms, 15% in volume terms.

Key Products/Services Performance #

• Protec segment: 15% growth in value, 17% in volume.
• Civil segment: 11% growth in value, 17% in volume.
• Insulation segment: 3% growth in value.
• Retail (Consumer Products): 11% growth in value.
• Exports segment: 5% degrowth.
• Developed new Capcell grades.

Geographic Distribution and Market Penetration #

• Added 48 new distributors, totaling 205.
• Added 735 new retailers, totaling 6186.
• Started CSD business, expanding to more SKUs.
• Entered e-commerce platforms (Amazon, Flipkart, Myntra).
• Export sales person shifted to Dubai.

Operational Efficiency Metrics #

• Upgraded mixing line at Jadcherla.
• Installed waterjet machines at Hosur.

Growth Initiatives and Challenges #

• Plan to add 2 new Capcell press, new NBR and XLPE lines at Jadcherla.
• New EPE extruder at Malanpur.
• New XLPE line installation at Malanpur
• New Capcell press and EPE line at Kharagpur.
• Additional plant in Western Region.
• Expansion with upgraded technology.
• Plan for three new fabrication units.

Cross Laminated Film #

Revenue and Profitability #

• Volume growth of 1.02%, value growth of 3.28%.

Market Share and Competitive Position #

• Facing competition from look-alike products.

Key Products/Services Performance #

• Fabricated product sales increased.
• Bag business growing.

Geographic Distribution and Market Penetration #

• Exports grew by 8.75%.
• Presence in 35 countries.

Growth Initiatives and Challenges #

• Plans to increase reach to more countries and customers.
• Thrust on promoting fabricated products for newer applications.
• Installation of equipment for manufacturing Cross Plastics.

Risk Assessment by Segment #

Plastics Piping Systems #

Strategic Risks #

• Severity: High. Dependence on government infrastructure projects (Nal-Se-Jal, Swatch Bharat Abhiyan, housing) makes the segment vulnerable to shifts in policy or funding.
• Likelihood: Medium. Government focus on these sectors is currently strong, but priorities can change.
• Trend: Increasing. Growing reliance on government initiatives increases exposure.
• Mitigation Strategies: Diversification into new applications (gas piping, industrial valves), expansion into new geographic markets (Bihar, Andhra Pradesh), and introduction of new systems.
• Control Effectiveness: Moderate. New product development and market expansion are ongoing but take time to yield significant results.
  • Potential financial impact: significant changes in PVC prices.

Operational Risks #

• Severity: Medium. Raw material (PVC) price volatility directly impacts profitability. Competition from unorganized players using reprocessed materials is also a concern.
• Likelihood: High. PVC price fluctuations are frequent.
• Trend: Fluctuating. PVC prices experienced a “roller coaster” mode, creating instability.
• Mitigation Strategies: Expanding product portfolio, value-added products (41% of sales, down from 44%), geographic expansion for cost-effective servicing, combating counterfeit products, and increasing channel partner strength.
• Control Effectiveness: Moderate. Value-added product focus is partially offsetting the impact, but raw material volatility remains a major factor.
  • Capex of R 453 crores was incurred in this division.

Financial Risks #

• Severity: Medium.
• Likelihood: Medium.
• Trend: Stable.
• Mitigation Strategies: Not directly addressed in the provided information for this segment specifically.

Compliance/Regulatory Risks #

• Severity: Low.
• Likelihood: Low.
• Trend: Stable.
• Mitigation Strategies: BIS certification for multiple products (DWC HDPE Pipes, cPVC Pipes, Fittings) , NSF Testing process.

Emerging Risk #

• Life Cycle Assessment of key building products.
• Net Zero Emission Target.

Consumer Products (Furniture) #

Strategic Risks #

• Severity: Medium. Intense competition from the unorganized sector using reprocessed materials, impacting pricing and margins.
• Likelihood: High. The presence of unorganized players is a persistent challenge.
• Trend: Stable. Competition remains a significant factor.
• Mitigation Strategies: Focus on premium products, expansion of product range (Almirah, Blow Molded Tables, School Furniture), increased retail presence, and online sales.
• Control Effectiveness: Partially Effective. Premium product focus is improving margins, but competition remains intense.

Operational Risks #

• Severity: Low.
• Likelihood: Low.
• Trend: Stable.

Financial Risks #

• Severity: Low.
• Likelihood: Low.
• Trend: Stable.

Compliance/Regulatory Risks #

• Severity: Low.
• Likelihood: Low.
• Trend: Stable.

Industrial Products #

Industrial Components #

Strategic Risks #

• Severity: Medium. Dependence on the appliance sector (Air Conditioners, Coolers), which experienced a slowdown.
• Likelihood: Medium. Sector-specific demand fluctuations are common.
• Trend: Decreasing, due to expansion into Auto.
• Mitigation Strategies: Diversification into new sectors (Telecom, Infrastructure, Construction, Defence, Machine building).
• Control Effectiveness: Partially Effective. New sector penetration is showing progress, but reliance on core sectors remains.

Operational Risks #

• Severity: Low.
• Likelihood: Low.
• Trend: Improving, The Company is accelerating its efforts to improve Productivity, Quality, Energy Conservation, Cost reduction.

Financial Risks #

• Severity: Low.
• Likelihood: Low.
• Trend: Stable.

Compliance/Regulatory Risks #

• Severity: Low.
• Likelihood: Low.
• Trend: Stable.

Material Handling Products #

Strategic Risks #

• Severity: Medium. Revenue fluctuations due to a loss of substantial business in export pallets.
• Likelihood: High.
• Trend: Decreasing.
• Mitigation Strategies: The division is planning to manufacture pallets in other regions.
• Control Effectiveness: To be determined.

Operational Risks #

• Severity: Low.
• Likelihood: Low.
• Trend: Stable.

Financial Risks #

• Severity: Low.
• Likelihood: Low.
• Trend: Stable.

Compliance/Regulatory Risks #

• Severity: Low.
• Likelihood: Low.
• Trend: Stable.

Composite LPG Cylinders #

Strategic Risks #

• Severity: High. Underutilization of plant capacity (50%) due to lower-than-expected orders from major customer (IOCL).
• Likelihood: High. Dependence on a single large customer creates significant vulnerability.
• Trend: Stable, pending additional orders.
• Mitigation Strategies: Exploring applications for other gases, adding new customers, and focusing on export markets.
• Control Effectiveness: Low. Market development is in progress, but current capacity utilization remains low.

Operational Risks #

• Severity: Low.
• Likelihood: Low.
• Trend: Stable.

Financial Risks #

• Severity: Low.
• Likelihood: Low.
• Trend: Stable.

Compliance/Regulatory Risks #

• Severity: Low.
• Likelihood: Low.
• Trend: Stable.

Packaging Products #

Performance Films Packaging Products #

Strategic Risks #

• Severity: Medium.
• Likelihood: Medium.
• Trend: Increasing.
• Mitigation Strategies: Focus on high-barrier EVOH/Nylon films for food industry applications (increased shelf life, recyclability).
• Control Effectiveness: Partially Effective. Growing demand from the oil & dairy industry.

Operational Risks #

• Severity: Low
• Likelihood: Low.
• Trend: Stable.

Financial Risks #

• Severity: Low.
• Likelihood: Low.
• Trend: Stable.

Compliance/Regulatory Risks #

• Severity: Medium. Compliance with Extended Producer Responsibility (EPR) for plastic waste management.
• Likelihood: Medium. Ongoing need for monitoring and adaptation to regulations.
• Trend: Stable.
• Mitigation Strategies: EPR registration and support for government initiatives on plastic waste management.
• Control Effectiveness: High. The company is registered and actively participating.

Protective Packaging Products #

Strategic Risks #

• Severity: Medium.
• Likelihood: Medium.
• Trend: Decreasing.
• Mitigation Strategies. Expanding fabrication business.
• Control Effectiveness: Partially.

Operational Risks #

• Severity: Low.
• Likelihood: Low.
• Trend: Stable.

Financial Risks #

• Severity: Low.
• Likelihood: Low.
• Trend: Stable.

Compliance/Regulatory Risks #

• Severity: Low.
• Likelihood: Low.
• Trend: Stable.

Cross Laminated Film #

Strategic Risks #

• Severity: Medium. Competition from look-a-like products in the tarpaulin segment.
• Likelihood: High. The presence of cheaper alternatives is a continuing threat.
• Trend: Stable.
• Mitigation Strategies: Focus on quality, product differentiation, and timely delivery.
• Control Effectiveness: Partially Effective. Customers are returning due to quality issues with competitors, but competition remains.

Operational Risks #

• Severity: Low.
• Likelihood: Low.
• Trend: Stable.

Financial Risks #

• Severity: Low.
• Likelihood: Low.
• Trend: Stable.

Compliance/Regulatory Risks #

• Severity: Low.
• Likelihood: Low.
• Trend: Stable.

Financial Analysis of The Supreme Industries Limited #

Plastics Piping Systems #

Long-Term Strategic Goals and Progress #

• Expanding market reach, particularly in under-represented areas, and increasing manufacturing capacity.
• Adding a new unit through acquisition in Sangli (Maharashtra) & expansions at existing plants (Erode, Kharagpur).
• Plans for additional Greenfield sites (Bihar, Andhra Pradesh, & another unit in the Western region) and a Windows & Doors facility at Kanpur Dehat.
• Total planned capacity by March 31, 2025, is 835,000 MT per annum.
• Committing to further investment for brownfield expansion in its existing unit, along with plans to set up an additional greenfield unit.

Competitive Advantages and Market Positioning #

• Market leader with the largest portfolio (13,888 SKUs, with significant additions during the year).
• Geographically diverse manufacturing (29 sites, pan-India) provides cost and service advantages.
• Strong focus on brand awareness and influencer engagement.

Innovation Initiatives and R&D Effectiveness #

• Continuously expanding product portfolio with new SKUs and systems (3815 products added).
• New product introductions: uPVC/PP CableShield electrical conduits, CopperShield water tanks, Optimus overhead water tanks, PVC-O pipes, Upgradation of Nu-drain, Sprinkler irrigation system.
• Efforts focused on cost reduction, quality improvement, waste management, and process optimization.

Management’s Track Record in Execution #

• Capacity expansions and new product launches are ongoing.
• Operationalization of new plants (Erode, Kharagpur) demonstrates execution capability.
• Sales volume grew by 33.5%.
• New product additions (Electrofusion Olefins fittings, Gas Piping System, PP Silent pipe system, Valves) are ongoing.

Capital Allocation Strategy #

• Significant Capex of Rs. 453 crores incurred during the year, focused on capacity building, range increases, and the acquisition of an undertaking.

M&A Strategy and Execution #

• Acquired M/s Parvati Agro Plast at Sangli to boost the production of OPVC pipes.

Consumer Products (Furniture) #

Long-Term Strategic Goals and Progress #

• Focus on growth within a competitive market.
• Leveraging its brand as a premium furniture manufacturer.
• Increasing product range in segments such as Premium Products, Almirah, Blow Molded Tables & School Furniture.
• Expanding retail presence and digital marketing.

Competitive Advantages and Market Positioning #

• Positioned as a premium furniture manufacturer with a strong brand image.
• Diverse manufacturing technologies (Gas Injection Molding, Blow Molding, Roto Molding) provide an advantage.

Innovation Initiatives and R&D Effectiveness #

• 20 new models were introduced during the year, including trend-setting designs.
• Investment committed for 10 new models in the near future.

Management’s Track Record in Execution #

• Retail showroom expansion (64 added, total of 300).
• Actively pursuing online presence (own store, e-commerce platforms).
• Engagement with modern trade retailers (Metro, Spencer) is initiated.

Organizational Changes and Their Impact #

• Focus on institutional sales yielded encouraging results.

Industrial Products #

Industrial Components #

Long-Term Strategic Goals and Progress #

• Focus on diversifying the customer base beyond the Appliances sector, targeting sectors like Telecom, Infrastructure, Construction, Defence, and Machine Building.

Competitive Advantages and Market Positioning #

• Enjoys “Excellent” ratings from regular OEM customers for quality, delivery, cost, and development.

Management’s Track Record in Execution #

• Successfully executed orders for EVM and VVPAT sub-assemblies.
• Continuous efforts on operational efficiency (productivity, quality, energy conservation, cost reduction).

Material Handling Products #

Long-Term Strategic Goals and Progress #

• Focusing on providing solutions using Plastics Pallets for warehousing and transit use, enhance customer experience.

Competitive Advantages and Market Positioning #

• Focused on providing superior quality with timely service.

Management Track Record in Execution #

• Regular addition of products to units to add its customer base, registering high double-digit growth.

Composite LPG Cylinders #

Long-Term Strategic Goals and Progress #

• Expanding the customer base beyond the primary customer (IOCL), targeting other OMCs and export markets.

Management’s Track Record in Execution #

• Doubled plant capacity last year, facing underutilization due to lower-than-expected IOCL orders.
• Exploring applications for other gases and new customers.

Packaging Products #

Performance Films Packaging Products #

Long-Term Strategic Goals and Progress #

• Focusing on High Barrier EVOH/Nylon films, targeting the food industry with emphasis on shelf life and recyclability.
• Expanding exports in key markets.

Competitive Advantages and Market Positioning #

• Trademarks for seven products were registered to increase product differentiation.

Management’s Track Record in Execution #

• Registered under Extended Producer Responsibility (EPR).

Protective Packaging Products #

Long-Term Strategic Goals and Progress #

• Focus on growth in Protec, Civil, and Retail segments.
• Adding fabrication capabilities.

Innovation Initiatives and R&D Effectiveness #

• New product development in Capcell, NBR yoga mats, and various specialized grades.

Management’s Track Record in Execution #

• Expansion of distribution network.

Cross Laminated Film #

Long-Term Strategic Goals and Progress #

• Focus on increasing fabricated product sales, targeting direct customers.
• Expanding export markets.

Management’s Track Record in Execution #

• Equipment for manufacturing Cross Plastics is in the final stages of installation.

Bath Fitting and Sanitaryware #

Long term strategic goals and progress #

• To aggressively grow the widest plastic based product range.

Innovation Initiatives and R&D effectiveness #

• A dedicated product development team in Pune is working on bringing new and innovative products.

Management’s Track Record in Execution #

• The division tied up with SATO Lixil Company and Seventurns private limited. Second manufacturing unit has been setup at Durgapur.

Windows and Door Business #

Long-term strategic goal and progress #

• Company has taken up to set up a Window manufacturing unit at Kanpur Dehat.

Overall Group Level #

Capital Allocation Strategy #

• The company funded a Capex of ₹541 crores entirely from internal accruals.
• Planned Capex of ₹1500 Crores for FY 2024-25, also to be funded internally.

Organizational Changes and Their Impact #

• Supreme Foundation’s activities are indicative of a growing focus on CSR and social development.

Sustainability #

• Increasingly focused on sustainability, evidenced by commitments to Net Zero emissions, investments in renewable energy (solar capacity), and water conservation measures.
• Awards and recognitions in sustainability are being achieved.

ESG Framework #

Environmental Metrics and Targets #

• Committed to a long-term Net Zero emission target, aligning with SBTi criteria.
• Solar energy capacity increased from 28.05 MW in FY23 to 34.05 MW in FY24.
• Green energy utilization increased by 21% from 44.6 Million kwh (FY22-23) to 53.73 Million KWH (FY23-24).
• Avoided emissions increased by 29%, from 29,883 tCO2e in FY22-23 to 38,476 tCO2e in FY23-24.
• Scaling up rooftop solar installations with a target of 42 Mwp by 2024-25.
• Signed PPA of 57.86 million solar unit, 92 lakh Hybrid Unit and 13 lakh Hybrid unit.
• Water intensity (KL/MT) decreased year on year.
• Greenhouse Gas emission of (Scope-1+2) increased by 29% as compared to previous year.
• Group Renewable kwh has increased by 21% as compared to previous year.
• Wind energy contributes 2.78% of total energy consumption.

Social Responsibility Programs #

• The Supreme Foundation supports education in Rajasthan by providing teachers, resources, and infrastructure improvements in government schools.
• The Foundation supports Sanskrit education and digital education initiatives.
• Healthcare support is provided for marginalized communities, including mobile dispensaries and health awareness programs.
• Projects are in progress for public amenities and rural development, aligning with the Swachh Bharat Abhiyan.
• CSR amount spent during FY 2023-24, totalled R21.57 Cr.
• Village health improvement programs and public convenience facilities are provided.

Governance Structure and Effectiveness #

• The Board of Directors has a dual-layer structure, with Board Committees (Audit, Stakeholders Relationship, Nomination & Remuneration, CSR, Risk Management).
• The Board met 5 times during FY2023-24.
• The Nomination and Remuneration Committee conducted performance evaluations of the Board, its Committees, and individual Directors.
• The Audit Committee reviews internal financial controls, audit recommendations, and risk management policies.
• A Vigil Mechanism Policy is in place for reporting concerns.
• A Risk Management Committee oversees risk management framework and mitigating actions.
• SEBI Regulations on prevention of Insider trading, the Company has adopted a code of conduct.

Sustainability Investments and ROI #

• Increased solar energy capacity from 28.05 MW to 34.05 MW, with further increases planned. PPA’s of solar and hybrid units was signed.
• Investment in renewable energy is highlighted as part of decarbonization efforts.
• The company’s 14 energy intensive units are equipped with EnMs certification ISO 50001, focusing on reduction of energy consumption.
• Received multiple awards for energy management and sustainability.

ESG Ratings and Peer Comparison #

• Received the Global Sustainability Leadership Award, CII 24th National Award for Excellence in Energy Management 2023, and the SEEM National Energy Management Award 2022.

Regulatory Compliance and Future Preparations #

• Complies with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
• Reports no significant or material orders from regulators impacting going concern status.
• Aligning with SBTi for Net Zero emission targets, indicating preparation for future climate-related regulations.
• Life Cycle Assessments (LCAs) are conducted on key building products, suggesting proactive engagement with product sustainability.
• Transferred 337560 Nos of Equity Shares to IEPF Accounts pursuant to provisions of section 124(6).
• Framing strategies and guidelines to address plastic waste management in line with EPR Rules 2016.

Financial Analysis and Future Outlook #

Plastics Piping Systems #

Management Guidance and Assumptions #

• Management expects a volume growth exceeding 20% for FY 2024-25.
• They foresee continued strong demand driven by government initiatives (Jal Jeevan Mission, Swatch Bharat Abhiyan, affordable housing, smart cities).
• A range-bound and affordable price level for plastic raw materials is assumed.

Market Growth Forecasts #

• The PVC resin consumption in the country grew by approximately 7.7% in FY 2023-24.
• Real estate sector growth, particularly large projects, is expected to boost demand for branded plastic piping products.
• The government-announced initiative for household gas pipeline connections is expected to generate incremental product demand.

Planned Strategic Initiatives #

• Capacity expansion, through brownfield expansions at existing and new plants, as well as new greenfield sites in Bihar and Andhra Pradesh.
• Expand manufacturing reach with new units for PVC Profiles.
• Expanded product portfolio with new SKUs, systems, and applications, including DWC pipes, Cable Ducting system, PPR pipe systems, specialized valves, and gas piping systems.
• Increased export business in various overseas markets.
• Strengthened influencer engagement (plumbers, architects, contractors).
• Increased digital marketing efforts and loyalty programs.
• Combating counterfeit products.
• Launched overhead tanks with unique characteristics (CopperShield, Optimus).
• Launched copperShield tanks, PERT/AL/PERT pipe system.
• uPVC / PP Cableshield was introduced.

Capital Expenditure Plans #

• A capex of ₹453 crores was incurred in this division during FY 2023-24.
• Significant expansion is planned for OPVC pipe manufacturing.
• Planned capacity increases for PVC pipes, HDPE pipes, and water tanks, across multiple locations.
• Total installed capacities of Plastic Piping System are to reach 835,000 MT per annum by 31st March 2025.

Efficiency Improvement Targets #

• Focus on optimizing the potential of new sites that became operational in FY 2022-23.
• Cost efficiencies are expected through servicing regional markets from geographically spread manufacturing facilities.

Potential Challenges and Opportunities #

• Challenges: Volatility in PVC raw material prices and frequent variations can unstable distribution networks. Competition from unorganized players selling counterfeit products is a significant challenge. Slow down in middle east projects.
• Opportunities: Growth in organized housing construction driven by RERA. Government push for infrastructure development provides a significant demand opportunity.

Scenario Analysis and Sensitivity #

• Scenario- Volume and product value reduction: Because of changes in market price, volume and product value reduced by 26% and 11%.
• Sensitivity to Raw Material Prices: Significant fluctuations in PVC resin prices (a key raw material) directly impact profitability. A downward trend in PVC prices was observed, but distribution network stability is affected by frequent variations.
• Sensitivity to Government Spending: Growth is highly correlated with government spending on infrastructure, water, and sanitation projects. Delays or reductions in government funding could negatively impact demand.
• Sensitivity to Raw Material Prices Fluctuation: The company can achieve the changes in overall variance of 10 R/Kg.

Consumer Products (Furniture) #

Management Guidance and Assumptions #

• Focus on increasing sales of value-added items to improve operating margins and maintain a premium position.

Market Growth Forecasts #

• Plastic furniture industry is witnessing strong competition from unorganized sector.

Planned Strategic Initiatives #

• Launch of new and innovative models.
• Increased visibility through retail showrooms.
• Increased business from the institutional segment.
• Expansion of retail outlets.
• Digital marketing activities on social media and an online store.
• Partnerships with modern trade retailers (Metro, Spencer).

Capital Expenditure Plans #

• Investment is planned in new models and for additional showrooms.

Efficiency Improvement Targets #

• Operating margin and ROACE improvement are expected.

Potential Challenges and Opportunities #

• Challenges: Intense competition from unorganized players using reprocessed polymers is a significant challenge.
• Opportunities: The innovative capabilities of the brand can enhance growth.

Scenario Analysis and Sensitivity #

• Scenario- Stagnation of Growth: The segment witnessed no increase in terms of value and little growth in terms of volume.
• Sensitivity to Consumer Spending: Demand is sensitive to discretionary consumer spending, which can be impacted by economic conditions.
• Sensitivity to competition Competition will decrease because of focus on premium product, Almirah.

Industrial Products #

Industrial Components #

Management Guidance and Assumptions #

• Expects medium- and long-term scenarios to remain bullish, supported by government reforms and a positive economic outlook.

Market Growth Forecasts #

• The appliances sector experienced de-growth of 7%.
• The auto sector demonstrated growth of 9%.

Planned Strategic Initiatives #

• Focus on diversifying the customer base beyond appliances, targeting sectors like telecom, infrastructure, construction, defense, and machine building.

Capital Expenditure Plans #

• Judicious investments in capacity balancing and expansions, including machines with the latest technology.

Efficiency Improvement Targets #

• Focus on improving productivity, quality, energy conservation, and cost reduction.

Potential Challenges and Opportunities #

• Challenges: Dependence on the cyclical appliances sector. Tapering off of air conditioner and cooler demand in the first half of the year.
• Opportunities: Positive demand scenario in the auto sector. Expanding into new sectors presents growth opportunities.

Scenario Analysis and Sensitivity #

• Scenario- Decline in revenue: Due to lower average raw materials and slower-than-expected execution of product lines, overall revenue fell 3.5% for the year.
• Sensitivity to Specific Industries: Highly sensitive to the performance of the appliances and automotive sectors.

Material Handling Products #

Management Guidance and Assumptions #

• Aiming to enhance customer experience and confidence in the segment.

Market Growth Forecasts #

• FMCG, white goods, and E-commerce sectors experienced stagnation, impacting demand for crates.

Planned Strategic Initiatives #

• Focus on providing solutions using plastic pallets for warehousing and transit.
• Expanding range of dustbin models.
• Strengthening the network in this sector.

Capital Expenditure Plans #

• Plans to manufacture export pallets in other regions to remain cost-competitive.

Efficiency Improvement Targets #

• Continuous efforts to provide superior quality and timely service.

Potential Challenges and Opportunities #

• Challenges: Loss of substantial business in export pallets to local competition in the Southern and Eastern markets.
• Opportunities: Growth in the automobile, engineering, and roto-molded pallet segments. Focus on food and beverage sector and specific high-quality crates. Return of soft drink and beverage companies to returnable glass bottles is increasing demand for plastic crates.

Scenario Analysis and Sensitivity #

• Scenario- Moderate revenue growth: Revenue and volume grew at 4% and 11%.
• Sensitivity to Specific Industries: Demand is tied to the performance of the automotive, engineering, FMCG, and food and beverage sectors.

Composite LPG Cylinders #

Management Guidance and Assumptions #

• Expects continued orders from IOCL and potential expansion to other Oil Marketing Companies (OMCs).

Market Growth Forecasts #

• Dependent on IOCL’s purchasing and adoption of composite cylinders, as well as exploration of other gases and new customers.

Planned Strategic Initiatives #

• Strategies to promote composite cylinders with IOCL.
• Focus on new export markets.
• Certification for high-pressure cylinders.

Capital Expenditure Plans #

• Plant capacity was doubled in the previous year.

Efficiency Improvement Targets #

• Aim to increase capacity utilization.

Potential Challenges and Opportunities #

• Challenges: Plant running at about 50% capacity due to lower-than-expected orders from IOCL.
• Opportunities: Potential for increased orders from IOCL, expansion to other OMCs, and growth in export markets. New applications for other gases.

Scenario Analysis and Sensitivity #

• Scenario- Capacity Utilization at Similar Levels: Expecting continued similar levels of capacity utilization.
• Sensitivity to Major Customer: Highly dependent on orders from IOCL.

Packaging Products #

Performance Films Packaging Products #

Management Guidance and Assumptions #

• The Company expects to achieve volume and value growth, due to an increase in customer base and the food industry.

Market Growth Forecasts #

• Oil & Dairy Industry Showed a 4% increase in Volume.

Planned Strategic Initiatives #

• Registration under Extended Producer Responsibility (EPR).

Potential Opportunities #

• High Barrier EVOH/Nylon films saw growth.
• Positive feedback from key export markets.

Scenario Analysis and Sensitivity #

• Scenario- Slight Growth: Sales Volume increased by 2%.
• Sensitivity to Food Industry: Performance is tied to demand from the food industry.

Protective Packaging Products #

Planned Strategic Initiatives #

• Added new customers.
• Started CSD business and retailing on Ecom platforms.

Capital Expenditure Plans #

• New Capcell press orders.
• New NBR line and XLPE line planned.
• Planned 3 new fabrication units.
• Intends to add one more unit in Western region to manufacture foams.

Efficiency Improvement Targets #

• Upgraded version of mixing line at Jadcherla was installed.

Potential Opportunities #

• Growth across multiple segments (Protec, Civil, Insulation, Retail).

Scenario Analysis and Sensitivity #

• Scenario- Growth: Overall business grew by 15%.
• Sensitivity to Multiple Segments: Dependent on the performance of various end-use segments.

Cross Laminated Film #

Management Guidance and Assumptions #

• Aims to achieve substantial growth in exports.

Market Growth Forecasts #

• Below normal and erratic rains impacted demand for tarpaulin.

Planned Strategic Initiatives #

• Focus on fabricated products.
• Added Three countries in the fold thereby, increasing its presence.

Capital Expenditure Plans #

• All equipments for manufacturing Cross Plastics is in the final stages of installation.

Potential Challenges and Opportunities #

• Challenges: Competition from look-alike products.
• Opportunities: Potential for growth in fabricated products. Expected increase in tarpaulin demand due to predicted above-normal rains.

Scenario Analysis and Sensitivity #

• Scenario- Negligible volume and revenue: Growth was negligible.
• Sensitivity to Rainfall: Demand for tarpaulin is highly sensitive to rainfall patterns.

Overall Sensitivity Analysis #

• Raw Material Price Volatility: Fluctuations in the price of polymers (especially PVC) impact profitability.
• Government Spending: Infrastructure spending by the government is a major driver for several segments.
• Economic Growth: Overall economic growth influences demand, especially in consumer-driven segments.
• Competition: Intense competition, particularly from unorganized players, poses a risk.
• Currency Fluctuations: Exchange rate volatility (Rupee vs. USD) affects import costs and export competitiveness.
• Regulations: Changes and enforcements impact all segments of operations, specifically, water and waste management.

Audit and Compliance #

Audit and Regulatory Analysis #

Auditor’s Opinion and Qualifications #

• The Independent Auditors’ Report expresses an unqualified opinion on the standalone and consolidated financial statements, indicating a true and fair view in conformity with Indian Accounting Standards (Ind AS).
• The Auditor’s report includes “Other matter” relating to branch audits conducted by other auditors.
• The Auditor’s Report does not include any adverse remarks.
• There were no qualifications in the Secretarial Audit Report.

Key Accounting Policies and Changes #

• The financial statements adhere to Ind AS, historical cost convention (with exceptions for certain financial instruments and defined benefit plans at fair value).
• Revenue recognition occurs upon transfer of control of goods or services to the customer.
• Depreciation is provided on the straight-line method, applying useful lives as per Schedule II of the Companies Act, 2013.
• Inventories are valued at the lower of cost and net realizable value.
• Foreign currency transactions are recorded at the exchange rate on the transaction date.
• There are no indication of a change in Accounting Policies.

Internal Control Effectiveness #

• The Auditor’s Report (Annexure ‘B’) provides an unqualified opinion on the adequacy and operating effectiveness of the Company’s internal financial controls over financial reporting.
• The company’s audit committee review the adequacy of internal control systems and financial reporting.
• The Company has an Internal Financial Control system and Standard Operating Procedures.

Regulatory Compliance Status #

• The Company has complied with the requirements of regulatory authorities on capital markets.
• The Company has complied with the provisions of section 185 & 186 of the Act to the extent applicable.
• The company has complied with all the requirements of Regulation 17 and 27 and clause (b) to (i) of sub-regulation 46 of SEBI.

Legal Proceedings and Their Potential Impact #

• Pending litigations are disclosed in Note 37 of the standalone financial statements.
• Most of the litigation issues pertain to the interpretation of GST, Central Excise/Income Tax, Sales Tax, and Entry Tax laws, with management opining many cases will not be sustainable.
• The amount of claims is disclosed in the Note 37

Related Party Transactions #

• All related party transactions were conducted on an arm’s length basis, and in the ordinary course of business and in line with the threshold of materiality defined in the Company’s policy on Related Party Transactions
• There were no transactions with related parties qualifying as material transactions.
• Related party transaction details are provided in Note 39 of the standalone financial statements and Form AOC-2 (Annexure VI to the Board’s Report).

Subsequent Events #

• No material changes or commitments affecting the financial position of the Company occurred after the balance sheet date (31st March, 2024) that requires disclosure.
• The Board of Directors has proposed a final dividend of ₹ 22 per share, subject to shareholder approval.

Analysis of Accounting Quality and Regulatory Risk Assessment #

• Accounting Quality: The unqualified audit opinion, adherence to Ind AS, and consistent application of accounting policies support a high level of accounting quality. The use of external auditors for branch audits and independent valuers for business combinations further enhances the reliability of financial reporting.
• Regulatory Risk: The Company demonstrates a robust approach to regulatory compliance, supported by its compliance with SEBI regulations, credit rating affirmations, and the absence of any non-compliances raised by regulatory authorities. The proactive management of legal proceedings suggests a moderate regulatory risk profile. The transition to an audit trail-enabled accounting system enhances data integrity and reduces the risk of non-compliance with emerging regulatory requirements.