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Apcotex Industries Ltd.

BSE: 523694 Sector: Others
NSE: APCOTEXIND ISIN Code: INE116A01024
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VOLUME 1077
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P/E 26.65
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OPEN 478.00
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VOLUME 1077
52-Week high 508.40
52-Week low 282.00
P/E 26.65
Mkt Cap.(Rs cr) 1,000
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Apcotex Industries Ltd. (APCOTEXIND) - Director Report

Company director report

TO THE MEMBERS

Your Directors have pleasure in presenting to you the Thirty First Annual Report of theCompany and the Audited Financial Statement for the year ended 31st March 2017.

A. COMPANY PERFORMANCE FINANCIAL HIGHLIGHTS

Particulars 2016-17 2015-16 Growth %
(Rs. In Lacs) (Rs. In Lacs)
GROSS SALES 43163.43 29772.38 44.98
Gross Profit Before Depreciation 3718.04 4479.20 (16.99)
Finance cost and Tax but after prior years' adjustments
Less: a) Depreciation 1210.02 894.44
b) Finance Cost 286.31 242.01
Profit Before Tax 2221.71 3342.75 (33.54)
Less : a) Provision for Tax 517.59 966.13
b) MAT Credit Entitlement (254.31) -
c) Adjustment for Deferred 1015.56 (90.48)
Tax Liability
d) Prior Period Tax Expenses (966.13) -
Profit After Tax 1909.00 2467.10 (22.62)
Add: Balance brought forward 4474.73 3930.83
from the Previous Year
Disposable Profit 6383.73 6397.93 (0.22)
Recommended Appropriations:
a) Dividend 933.21 933.21
b) Tax on Dividend 189.98 189.98
c) Transfer to General Reserve 400.00 800.00
Balance carried forward to 4860.54 4474.73
Balance Sheet
6383.73 6397.93

DIVIDEND

Your Directors have recommended a dividend @ Rs.4.50/- (Rupees Four and fifty paise)(Previous year Rs.4.50/- (Rupees Four and fifty paise) per Equity Share of Rs.5/- each forthe financial year 2016-17. Dividend if approved will absorb a sum of Rs. 1123.19 lacs(including Dividend Distribution Tax of Rs.189 lacs) out of the net profits after tax asabove and will be paid to those shareholders whose names appear on the Register of Memberson Thursday 10th day of August 2017.

TRANSFER TO RESERVE

The appropriations for the year are:

Rs. in lacs

Particulars Year ended 31st March 2017
Net Profit after tax for the year 1909.00
Balance of Reserve at the beginning of the year 3203.72
Transfer to General Reserve 400.00
Balance of Reserve at the end of the year 3603.72

B. MANAGEMENT DISCUSSION AND ANALYSIS

The company manufactures and markets a range of

Emulsion Polymers - Synthetic Latexes Synthetic Rubber and Nitirle Rubber.

I. CURRENT SCENARIO

Your Company is one of the leading producers of emulsion polymer products namelySynthetic Latexes (Vinyl Pyridine Latex Carboxylated Styrene Butadiene Latex StyreneAcrylic Latex Nitrile Latex etc.) and Synthetic Rubber (High Styrene Rubber NitrileButadiene Rubber NBR Powder and Nitrile Polyblends) in India. The Company has one of thebroadest ranges of products in the industrial segments and caters to a wide range ofindustries. Your Company's Synthetic Latex products are used among other applicationsfor tyre cord dipping paper and paperboard coating carpet backing concretemodification/water proofing non-wovens textile finishing paints etc. Various grades ofSynthetic Rubber find application in products such as footwear automotive componentsrice rolls moulded items v-belts conveyor belts hoses etc.

The Company's major raw materials are petrochemical products and its business could bevulnerable to high volatility in the prices of crude oil and its downstream products.

Over the years a number of steps have been taken by the management to improve theoperational efficiency of the Company in different functions like marketing humanresource development production process utilities etc.

Your Company's plant at Taloja is recipient of Total Productive Maintenance (TPM)Excellence in Consistent TPM Commitment Award - Category A by the Japan Institute of PlantMaintenance (JIPM). TPM has helped the company significantly in improving efficiencies inthe plant and in operations and rationalizing costs. The Taloja plant has successfullycompleted re-certification of the integrated ISO 9001 ISO 14001 and OHSAS 18001. It hasalso successfully completed recertification by Indian Chemical Council (ICC) to use the"Responsible Care" logo.

The above initiatives are also being implemented at the recently acquired plant atValia Ankleshwar Gujarat.

II. OPERATIONS DURING THE FINANCIAL YEAR 2016-17.

After amalgamation of wholly owned subsidiary viz. Apcotex Solutions India PrivateLimited which was made effective from 1st December 2016 the Company achieved Gross ValueSales of Rs. 43163.43 lacs during the financial year compared to Rs. 29772.38

lacs in the preceding year on standalone basis. The company exported its products worthRs. 4014 lacs during the financial year. The sales of Synthetic Latex products were lowerduring the financial year due to strike of unionized workmen at Taloja plant for almost 2months and intermittent stoppages of production at one of our major customer's plant.

There was a continuous thrust from the management to develop a strong research anddevelopment and technical service team to develop new products for export markets explorenew applications and understand better the changing customer needs.

Profits before tax were lower by 33% to Rs. 2221.71 lacs as compared to Rs 3342.75lacs during the previous year due to strike at Taloja Plant and intermittent stoppages ofpro duction at one of our major customer's plant. Due to the recently acquired companythere were some one time post-acquisition and merger expenses which also put some pressureon the bottom line. Your Company was also successful in turning around a loss-making assetin a very short period of time. In spite of the challenging year EBITDA decreased by only17% from Rs 4479.20 lacs in the previous year to Rs 3718.04 lacs during the financialyear 2016-17.

Profit after tax stood at Rs.1909.00 lacs as compared to Rs. 2467.10 lacs in theprevious year.

The Balance Sheet of the Company is also quite healthy with zero debt reasonableworking capital cycle and cash/liquid Investments valued at about Rs.35 crore based on NAVas on 31st March 2017.

Your Directors consider Company's performance as satisfactory.

NEW LOGO

Your Company is proud to inform that the management has adopted a new logo for theCompany as a part of the ongoing evolution of business.

Over the last few years your company has grown and changed dramatically and during FY2015-16 your Company acquired Omnova Solutions India Pvt. Ltd. which immensely helped toexpand the product basket. It was a perfect time to evaluate our company's brand and logoto ensure it is in sync with who we are and where we are heading. After carefulconsideration the Company chose a new logo the shape of which not onlyrepresents theletter "A" but also the upwardly mobile nature of the Company. At the same timethe curved stroke and colours used in gradient depict flexibility and adaptability whichis essential for success. The colours green and blue symbolizes the importance of theeco-system and environment for our Company. We have also retained the same font and redcolour of "apcotex" in the logo to ensure that we remember our roots and values.

III. MERGER

The Scheme of Amalgamation of wholly owned subsidiary viz. Apcotex Solutions IndiaPrivate Limited with the Company was approved by the Honorable High Court judicature atBombay on 27th October 2016 and was made effective from 1st December

2016 with appointed date as 31st March 2016 by filing the High Court orderwith Ministry of Corporate Affairs (MCA).

The Board of Directors of your Company on 31st March

2017 has approved the Scheme of Amalgamation of Saldhar Investment and Trading CompanyPrivate Limited the holding company of Apcotex Industries Limited (holding 51.10% paid-upshare capital) with the Company from 31st March 2017. Your Company is inprocess of making an application to Stock exchanges for their consent before filingpetition before National Company Law Tribunal (NCLT) Mumbai Bench.

IV. OUTLOOK

In light of the acquisition of Omnova Solutions India Private Limited in Financial Year(FY) 2015-16 and subsequent merger in 2016-17 the Company expects FY 2017-18 to be anexciting year in spite of a few challenges. The Company will explore introducing newproducts and focusing on exports as short term future growth drivers for the Company. Inthe medium to long term the Company is exploring adding new capacities for currentproducts new adjacent businesses as well as opportunities for inorganic growth.

With the Company's continuous endeavour to enhance efficiencies at all levels andfunctions your Directors view the prospects for the financial year 2017-18 with cautiousoptimism.

V. RISKS AND CONCERNS

The Company has laid down a well-defined Risk Management Framework covering the riskrisk exposure potential impact and risk mitigation process. Major risks identified by thebusiness and functions are systematically addressed through mitigating actions oncontinuing basis. These are discussed at the meetings of the Audit Committee and the Boardof Directors of the Company.

The Company's Risk Management Committee periodically reviews the risks in theorganization identifies new risk areas develops action plans and monitors and reportsthe compliance and effectiveness of the policy and procedure to the Audit Committee andBoard.

The Audit Committee and Board review the risks and suggest steps to be taken to controland mitigate the same through a properly defined framework.

The Company's Board of Directors perceives the following risks as current high risksareas:

1) Credit Risk:

The management has adopted the stringent credit policy due to which the bad debtswritten off is only Rs.36.22 lacs - 0.11% of Sales Turnover during past 3 years. Thecredit period and the exposure limits are reviewed regularly. Taking the credit report ofnew customers and for existing customers once in 2-3 years to understand their creditworthiness. The supplies are stopped once the overdue outstanding exceeds the set limit.Deposits / bank guarantees are obtained from the dealers / consignment agents wherevernecessary. The overdue outstanding list is reviewed by the seni or S ales Managers andManaging Director on a weekly basis. One of the largest customer in paper/paperboardsegment is facing financial problem and overdue outstanding is about Rs.11 crore.

2) Procurement Risk:

Presently the Company is procuring major quantity of Butadiene from IOCL OPAL and onavailability basis from RIL and Haldia. Butadiene availability in India is now fairlysufficient. Styrene is not manufactured in India hence completely imported and ourquantities are large. Acrylonitrile (ACN) is also not manufactured in India hence iscompletely imported but our quantities are small so we should be able to get thismaterial. To mitigate the risk of availability of material same are sourced from multisources viz bulk suppliers dealers and imports.

A system has been set to constantly monitor inventories and prices. The company hasmaintained relation with domestic and overseas suppliers for regular supplies ofmaterials.

3) Safety Risk:

The Company has several safety measures in place. Consent to operate for Taloja plantis valid upto 30th March 2021. The Consent to operate Valia Plant is valid till9th November 2019. The safety committee meets regularly and conducts the mockdrills to check the preparedness in the organisation to face any eventuality. To track thecompliances in the organisation implemented software called Total Compliance which helpsto escalate the non-compliance to higher-ups.

The Company has taken adequate Insurance policies for covering the floods earthquakeand terrorism for appropriate amount.

4) Strike Risk:

The unionised workmen at Taloja Plant were on strike for 51 days in Q4 of FY 2016-17. Anew action plan is being prepared to mitigate the risks faced during the strike period.Even though the impact is high it has been somewhat reduced due to the secondmanufacturing plant which allowed the Company to make some products in our other facility.There is no insurance policy to cover the loss of profit on account of strike.

VI. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Internal checks and controls covering operations of the Company are in place and areconstantly being improved upon. Adequate system exists to safeguard company's assetsthrough insurance on reinstatement basis and maintenance of proper records. The companyhas well defined procedures to execute financial transactions.

Internal audit is being conducted by an independent firm of Chartered Accountants. Theinternal auditor monitors and evaluates the efficiency and adequacy of internal controlsystems in the organisation its compliance with operating systems accounting proceduresand policies of the Company. Based on the observations of the internal auditor theprocess owners undertake the corrective actions and improvements in their respectiveareas. Significant audit observations and corrective actions thereupon are presented tothe Audit Committee.

The Partners of both Statutory and Internal Auditor attend all the Audit Committeemeetings.

VII. DEVELOPMENT OF HUMAN RESOURCE / INDUSTRIAL RELATIONS

The company continuously monitors its Human Resource requirement to ensure that it hasadequate te human skills commensurate with its needs.

Cordial relations exist between the employees at various levels and the management.

To upgrade human skills and improve their efficiencies the company continuouslyorganizes workshops on different management areas and also deputes employees to externalworkshops and seminars. CAUTIONARY STATEMENT

Statement in this Management Discussion and Analysis describing the Company'sobjectives projections estimates expectations or predictions may be"forward-looking statements" within the meaning of applicable securities lawsand regulations. Actual results could differ materially from those expressed or implied.Important factors that could make a difference to the company's operations include rawmaterial availability and prices cyclical demand movements in company's principalmarkets changes in Government regulations tax regimes economic developments within andoutside India and other incidental factors.

C. WIND POWER

The Wind Turbine Generator installed at Sadawaghapur Taluka - Patan District SataraMaharashtra has generated gross revenue of about Rs.135.00 lacs during the financial year(previous year Rs. 95.05 lacs) and same is netted-off against the power cost.

D. DISCLOSURES UNDER COMPANIES ACT 2013

I. ENERGY TECHNOLOGY & FOREIGN EXCHANGE

Information sought under the provisions of Section 134 (3) (m) of the Companies Act2013 read with Rule 8 of the Companies (Accounts) Rules 2014 regarding conservation ofenergy technology absorption and foreign exchange earnings and outgo are given in theAnnexure I forming part of this report.

II. EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the annual return is enclosed in AnnexureII.

III. CHANGES IN THE SHARE CAPITAL

The paid-up Equity Share Capital as on 31st March 2017 is Rs.1036.90 lacscomprising of 20737984 equity shares of Rs.5/- each.

IV. NUMBER OF BOARD MEETINGS

The Board meets at regular intervals to discuss and decide on the Company / businesspolicy and strategy apart from other Board business. During the financial year underreview the Board of Directors met 6 (six) times. The intervening gap between the meetingswas within the period prescribed under the Companies Act 2013.

The details of the Board meetings and the attendance of Directors are provided in theCorporate Governance Report.

V. COMPOSITION OF AUDIT COMMITTEE

The Audit Committee comprises of Mr. M G Patel Mr. Kamlesh Vikamsey Mr. GirishChoksey and Mrs. Priyamvada Bhumkar. Mr. M G Patel is the Chairman of the Committee. Mr.M G Patel Mr. Kamlesh Vikamsey and Mrs. Priyamvada Bhumkar are the Non-ExecutiveIndependent Directors. More details on the committee are given in the Corporate GovernanceReport.

All the recommendations of the audit committee are accepted by the Board.

VI. BOARD INDEPENDENCE

The definition of Independence of Directors is derived from Regulation 16 (1) (b) ofSEBI Listing Obligation and Disclosure Requirment (LODR) Regulations 2015 and Section149(6) of the Companies Act 2013. Based on the confirmation / disclosures received fromthe Independent Directors under Section 149(7) of the Companies Act 2013 and onevaluation of the relationships disclosed the following Non-Executive Directors areIndependent in terms of 16 (1) (b) of

SEBI (LODR) Regulations 2015 and Section 149(6) of the Companies Act 2013;

1. Mr. M G Patel

2. Dr. S. Sivaram

3. Mr. Shailesh Vaidya

4. Mr. Kamlesh Vikamsey

5. Mrs. Priyamvada Bhumkar

In compliance with Schedule IV of the Companies Act 2013 and Rules thereunder theIndependent Directors met on 8th February 2017 and discussed issues asprescribed under the schedule IV of the Companies Act 2013 and also discussed variousother issues.

VII. ANNUAL EVALUATION BY THE BOARD

In compliance with the Companies Act 2013 and Regulation 19 (4) read with Schedule IIPart - D of SEBI (LODR) Regulations 2015 the Board has carried out the annualperformance evaluation of its own performance the Directors individually as well as theevaluation of Committees. A structured questionnaire was prepared after taking intoconsideration inputs received from the Nomination & Remuneration Committee memberscovering various aspects of the Board's functioning such as adequacy of composition ofBoard and Committees Board communication timeliness and unbiased information of rightlength and quality of information Board culture execution and performance of specificduties obligations and governance.

A separate exercise was carried out to evaluate the performance of individual Directorsincluding the Chairman of the Board who were evaluated on parameters such as attendanceand participation in the discussion and deliberation at the meeting understanding roleand responsibilities as board member demonstration of knowledge skill and experiencethat make him/her a valuable resource for the board.

The performance evaluation of the Independent Directors was carried out by the entireBoard. The performance evaluation of the Chairman and the Non-Executive Directors wascarried out by the Independent Directors who also reviewed the performance of theSecretarial Department. The Directors expressed their satisfaction with the evaluationprocess.

VIII. NOMINATION AND REMUNERATION POLICY

The Nomination and Remuneration policy of the Company for Directors Key ManagerialPersonnel (KMP) and Senior Personnel of the Company is enclosed as Annexure III to thisReport.

Disclosure pertaining to remuneration and other details as required under section 197(12) of the act

read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is enclosed as Annexure IV to this Report.

IX. COMMENTS ON AUDITORS REPORT

There are no qualifications reservations or adverse remarks on disclaimers made byM/s. Kalyaniwalla & Mistry LLP Chartered Accountant Statutory Auditors in theirreport and by Mr. Mahesh Hurgat Company Secretary in Practice in his Secretarial Auditreport.

The Statutory Auditors have not reported any incident of fraud to the Audit Committeeof the Company during the year under review.

X. RELATED PARTY TRANSACTIONS

All the related party transactions are entered on arm's length basis and are incompliance with the applicable provisions of the Companies Act 2013 and the SEBI (LODR)Regulations 2015. There are no materially significant related party transactions enteredinto by the Company with Promoters Directors or Key Managerial Personnel etc. which mayhave potential conflict with the interest of the company at large.

All new related party transactions are first approved by the Audit Committee andthereafter placed before the Board for their consideration and approval. A statement ofall related party transactions is presented before the Audit Committee meeting onquarterly basis specifying the nature value and terms and conditions of thetransactions.

The particulars of Contracts or arrangements with related parties referred to inSection 188(1) read with Rule 15 of The Companies (Meetings of Board and Its Powers)Rules 2014 is appended to this report in prescribed Form AOC 2 as Annexure V . QPC iThe Related Party Transaction Policy as approved by the Board is uploaded on thecompany's website at the following web link http://www.apcotex.com/policy/ RelatedParty Transaction Policy.pdf

XI. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There have been no material changes and commitments if any affecting the financialposition of the Company which have occurred between the end of the financial year of theCompany to which the financial statements relate and the date of the report.

XII. VIGIL MECHANISM

The Company has established a vigil mechanism for Directors and Employees to reporttheir genuine concerns in compliance with provision of section 177 (10) of Companies Act2013 and Regulation 22 of SEBI (LODR) 2015. The details of same are given in the CorporateGovernance Report annexed to this Report.

XIII. CORPORATE GOVERNANCE

The Company has always strived to adopt appropriate standards for good CorporateGovernance.

Detailed report on the Corporate Governance and Management Discussion Analysis formpart of this report. A certificate from the Practicing Company Secretary regardingcompliance of conditions of Corporate Governance as stipulated under Regulation 34 (3)read with Schedule V of SEBI (LODR) Regulations 2015 is annexed to the said Report.

E. CORPORATE SOCIAL RESPONSIBILITY

The Company has constituted a Corporate Social Responsibility (CSR) Committee incompliance with Section 135 of the Companies Act 2013. On the recommendation of the CSRcommittee the Board has approved the CSR policy of the Company which is published on theCompany's website.

The Company has under taken projects in the areas of Healthcare Education andVocational Training for village women and social projects around the area surrounding thefactory.

CSR committee planned activities which could not be completed due to following reasonwhich has resultant into short fall in CSR spend to the extent of Rs.31.97 lacs for thefinancial year 2016-17.

1. Delay in inauguration of St. Jude's new Centre at Cotton Green Mumbai which wasscheduled to be operational during April/May 2016 started its operation during March2017.

2. The CSR Team was diverted this year due to integration of newly acquired companyviz. Omnova Solutions India Private Limited the ensuring merger process as well as thestrike at the Taloja Plant

The details of CSR activities as required under Section 135 of the Companies Act 2013are provided in CSR Report which is annexed herewith as Annexure VI.

F. FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS

The company conducts the Familiarisation program when new Director(s) is/are appointedduring the year. The Program aims to provide insights into the Company to enable theIndependent Directors to understand its business in depth to familiarize them with theprocess business and functionaries of the Company and to assist them in performing theirrole as Independent Directors of the Company. The Company's Policy of conducting theFamiliarisation Program has been disclosed on the website of the Company at http://www.apcotex.com/policy/Familiarisation Programme Independent.pdf

G. CODE OF CONDUCT FOR PREVENTION OF INSIDER TRADING

The Board of Directors has adopted the Insider Trading Policy in accordance with therequirement of the SEBI (Prohibition of Insider Trading) Regulations 2015. The insidertrading policy of the Company lays down guidelines and procedures to be followed anddisclosures to be made while dealing with the shares of the Company. The policy has beenformulated to regulate monitor and ensure reporting of deals by employees and maintainthe highest ethical standards of dealing in Company securities.

H. INTERNAL FINANCIAL CONTROLS

The Company has adopted policies and procedures for ensuring the orderly and efficientconduct of its business including adherence to the Company's policies the safeguardingof its assets the prevention and detention of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialdisclosures. These are reviewed periodically and made part of work instructions or processin the company.

The Company periodically conducts physical verification of inventory fixed assets andcash on hand and matches them with the books of account. Explanations are sought for anyvariance noticed from the respective functional heads.

I. DIRECTORS RESPONSIBILITY STATEMENT

The Directors confirm:

I. That in the preparation of the annual accounts the applicable accounting standardshad been followed along with proper explanation relating to material departures;

II. That they have selected such accounting policies and applied them consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the company at the end of the financial year and of theprofit and loss of the company for that period;

III. That they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;

IV. That they have prepared the annual accounts on a going concern basis;

V. That they have laid down internal financial controls to be followed by the companyand that such internal financial controls are adequate and were operating effectively; and

VI. That they have devised proper system to ensure compliance with the provisions ofall applicable laws

and that such systems were adequate and operating effectively.

J. DISCLOSURE IN TERMS OF THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013

The Company takes all necessary measures to ensure a harassment free workplace and hasinstituted an Internal Complaints Committee for redressal of complaints and to preventsexual harassment. No complaints relating to sexual harassment were received during theyear.

K. FIXED DEPOSITS MATURED BUT NOT CLAIMED

Company has no Fixed Deposits at the end of the financial year. The Central Bureau ofInvestigation (CBI) has instructed the Company not to repay the proceeds of four fixeddeposits amounting to Rs.48000/- and accrued interest of Rs.22491/- thereon. Thesedeposits matured during the first week of December 2002 and continue to remain with theCompany.

L. INSURANCE

All insurable assets of the Company including inventories buildings plant andmachinery etc. as also liability under legislative enactments are insured onreinstatement basis after due valuation of assets by an external agency. The Company alsoholds a Loss of Profit Policy for the financial year 2017-18.

M. ECOLOGY AND SAFETY

Company ensures safe healthy and eco-friendly environment at its plant and surroundingarea. Company continually works towards identification and reduction of risks andprevention of pollution at its plant and its surroundings.

Members of the Safety Committees of the Company's Taloja Plant and Valia Plant havebeen regularly reviewing the safety measures and their implementation to ensure adequatesafety in material handling and processing control of pollution caused by liquideffluents dust and emissions from chimney etc. Samples are periodically drawn and thereports submitted to the Pollution Control Board indicating compliance with the standards.

Consent has been obtained from Maharashtra Pollution Control Board to operate theplant at Taloja till 30th March 2021.

N. PERSONNEL

The information required under Section 197 of the Companies Act 2013 and read withRule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014are given in Annexure IV.

The information required pursuant to Section 197 of the Companies Act 2013 read withRule 5(2) & 5(3) of The Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 in respect of employees of your company is available for inspectionby the members at registered office of the company during business hour on working days upto the date of the ensuing Annual General Meeting. If any member is interested inobtaining a copy thereof such member may write to the company secretary whereupon a copywould be sent.

O. DIRECTORS & KEY MANAGERIAL PERSONNEL Retirement by Rotation:

In accordance with the provisions of Section 152(6) of the Companies Act 2013 andArticles of Association of the Company Mr. Girish Choksey (DIN 00246196) will retire byrotation at the ensuing Annual General Meeting of the Company and being eligible offerhimself for reappointment. The Board recommends his reappointment.

The background of the Director(s) proposed for appointment / re-appointment is givenunder the Corporate Governance section of the Annual Report.

P AUDITORS

I. Pursuant to provisions of Section 139(1) of the Companies Act 2013 M/s.Kalyaniwalla & Mistry LLP Chartered Accountants (Firm Registration no.104607W/W100166) were appointed as Statutory Auditors of the Company to hold the officetill the conclusion of the Annual General Meeting during the year 2018 subject toratification at every Annual General Meeting.

The Company has received letter from the Statutory Auditors to the effect that theirappointment if made would be within the prescribed limit under Section 141 (3) (g) ofthe Companies Act 2013 and that they are not disqualified from the appointment.

Your Board recommends the ratification of appointment of M/s. Kalyaniwalla & MistryLLP Chartered Accountants (Firm Registration no. 104607W/W100166) Mumbai as StatutoryAuditors of the Company for the financial year 2017-18 and to hold the office till theconclusion of the next Annual General Meeting during the year 2018.

II. Pursuant to provisions of Section 204 of the Companies Act 2013 the Board ofDirectors have appointed Mr. Mahesh Hurgat Practicing Company Secretary to conduct theSecretarial audit and his Report on the Company's Secretarial Audit is appended to thisReport as Annexure VII.

Q. CEO & CFO CERTIFICATION

Certificate from Managing Director and Chief Financial Officer of the Company pursuantto the Regulation 17 (8) read with Schedule II of SEBI (LODR) Regulations 2015 for thefinancial year 2016-17 under review was placed before the Board of Directors of theCompany at its meeting held on 5th May 2017.

R. ACKNOWLEDGEMENT

Your Directors take this opportunity to express their deep sense of gratitude to StateBank of India Standard Chartered Bank Citi Bank various departments of State / CentralGovernment and local authorities for their continued guidance and support.

We would also like to place on record our sincere appreciation for the commitmentdedication and hard work put in by every member of the Apcotex family. To allshareholders we are deeply grateful for the confidence and faith that you have alwaysreposed in us.

The accompanying Annexure I to VII are an integral part of this

Director Report.

FOR AND ON BEHALF OF THE BOARD
ATUL C CHOKSEY
CHAIRMAN
Mumbai: 5th May 2017 DIN:00002102