TO THE MEMBERS
Your Directors are pleased to present the 43rd Annual Report together withthe Audited Standalone & Consolidated financial statements for the financial yearended March 31 2017.
| || |
| ||2016-17 ||2015-16 ||2016-17 |
|Gross Revenue ||25417 ||27017 ||25428 |
|Profit before depreciation and tax ||2323 ||3354 ||2325 |
|Less: Depreciation ||420 ||296 ||420 |
|Profit before income tax ||1903 ||3058 ||1905 |
|Less: Tax ||653 ||1048 ||653 |
|Net profit for the year ||1250 ||2010 ||1252 |
|Add: Balance brought forward from the previous year ||4825 ||4226 ||4825 |
|Add: Transferred from revaluation reserve ||100 || ||100 |
|Amount available for appropriation ||6175 ||6236 ||6177 |
|Appropriations: || || || |
|- Total Dividend ||324 ||757 ||324 |
|- Corporate Dividend Tax ||69 ||154 ||69 |
|- General reserve ||- ||500 ||- |
|- Balance carried forward to Balance Sheet ||5782 ||4825 ||5784 |
|Total ||6175 ||6236 ||6177 |
The Consolidated Financial Statements have been prepared in accordance with theprovisions of Schedule III of the Companies Act 2013 and Accounting Standards issued bythe Institute of Chartered Accountant of India and the provisions of SEBI (ListingObligation and Disclosure Requirements) Regulations 2015 and form part of Annual Report.OPERATIONS
During the year 2016-17 the production of synthetic blended yarn was marginally loweri.e. 169 lakh kgs as compared to 176 lakh kgs in 2015-16. The gross revenue alsodecreased by 5.92% from Rs.270 crores to Rs.254 crores. This was due to a reduction in thesale volume and the prices of finished products. Net profits also reduced from Rs.20.10crores in 2015-16 to Rs.12.50 Crores in 2016-17 which was mainly due to the effect ofdemonetisation. The profitability was further effected due to an increase in the powercost.
TRANSFER TO RESERVES
No amount has been transferred to General Reserve for the Financial Year 31st March2017.
The export turnover decreased to Rs.202.00 lakhs from Rs.258.00 lakhs in the previousyear due to global recession.
EXPANSION AND MODERNIZATION
The company continues to modernize its plant and machinery and add balancing equipment.The production capacity increased from 52976 to 55584 spindles during the Financial Year2016-17.
The company has replaced 7632 spindles along with other balancing machinery formodernization of plant & machinery and completed upgradation of effluent treatmentplant to the level of zero liquid discharge in the year 2016-17. This would enable thecompany to improve productivity as well as quality of its products and fulfill requirementunder Rajasthan Pollution Control Act.
The company has a further plan to replace 25 TFO machines 8 Auto coners and 6 cheesewinding machines with energy efficient and high production machines. This would enable thecompany to reduce cost of production & improve quality of its product.
The Company has one subsidiary i.e. APM Finvest Limited. It is not a materialsubsidiary in terms of sub- regulation (1)(c) of Regulation 16 of Securities and ExchangeBoard of India (Listing Obligations and Disclosure Requirements) Regulations 2015("Listing Regulations").
In accordance with Section 129(3) of the Companies Act 2013 ("Act") and Rule5 of the Companies (Accounts) Rules 2014 and relevant Accounting Standards("AS") the Company has prepared consolidated financial statements of theCompany and its subsidiary company which form part of the Annual Report. A statement inForm AOC-I containing salient features of the financial statements of the subsidiarycompany is annexed as Annexure - I to this report. In accordance with provisions ofSection 136(1) of the Act the Annual Report of the Company containing therein thestandalone and consolidated financial statements and audited financial statement of thesubsidiary has been placed on the website of the Company www.apmindustries.co.in.
The Government of India has implemented Good & Service Tax (GST) in July 2017.This is a landmark reform and in the long run will provide significant growth stimulus tobusiness but may create some short term disruptions.
The company's performance in the current year is expected to be satisfactory.
Your company has not accepted any public deposits during the Financial Year and assuch no amount of principal or interest was outstanding as on March 31 2017.
Your Directors in its meeting held on 11 November 2016 had paid an Interim Dividend @75% i.e. Rs 1.50 per equity share of face value of Rs 2.00 each. The Board of Directorshave now recommended a final dividend of 25% i.e. Rs 0.50 per equity shares of face valueof Rs 2.00 each subject to approval of the shareholders. The total Dividend for FinancialYear 2016-17 is 100% i.e. Rs 2.00 per equity share. DIRECTORS' RESPONSIBILITY STATEMENT Inaccordance with the provisions of Section 134(3) (c) of the Companies Act 2013 the Boardhereby submits its responsibility Statement:
(a) in the preparation of the annual accounts for the year ended March 31 2017 theapplicable accounting standards had been followed and there are no material departuresfrom the same;
(b) the Directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company as at March 31 2017 and of the profitand loss of the company for that period;
(c) the Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the company and for preventing and detecting fraud and otherirregularities;
(d) the Directors had prepared the annual accounts on a going concern basis;
(e) the Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and
(f) the Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
INTERNAL FINANCIAL CONTROLS
The Company uses ERP (Enterprise Resource Planning) system to record data foraccounting and to connect to different locations for efficient exchange of information.The Company has in place adequate internal financial controls with reference to financialstatements. During the year such controls were tested and no reportable material weaknessin the design or operation was observed. The Company Internal Auditors have conductedperiodic audit to provide reasonable assurance that the Company's established policies andprocedures have been followed. The Audit Committee reviewed the internal controls andfinancial reporting issues with Internal Auditors and Statutory Auditors.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
i. The members in their 42nd Annual General Meeting held on 24.09.2016approved the change in designation of Shri R K Rajgarhia as Chairman of the Company andShri Hari Ram Sharma as Managing Director of the Company.
ii. The Company has received declarations from all the Independent Directors of theCompany confirming that they meet the criteria of Independence as prescribed both underthe Companies Act 2013 and Regulation 16(b) of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.
iii. As per the provisions of Companies Act 2013 Shri R K Rajgarhia retires byrotation at the ensuing Annual General Meeting and being eligible seeks re-appointment.The Board recommends his re-appointment.
iv. Pursuant to the provisions of the Companies Act 2013 and Regulation 34 of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the Nomination andRemuneration Committee has carried out evaluation of every Director's performance. TheIndependent Directors in a separate meeting have also carried out the performanceevaluation of the Non-Independent Directors and the Board as a whole and of the Chairmanof the company and have reviewed the performance of the Secretarial Department. Theperformance evaluation of all the Independent Directors has been done by the entire Boardexcluding the Director being evaluated. The Directors expressed their satisfaction withthe evaluation process".
In accordance with the provision of Section 139 of the Companies Act 2013 read withthe Companies (Audit and Auditors) Rules 2014 M/s Chaturvedi & Co. CharteredAccountants (Firm Registration No. 302137E) completes its term as the Statutory Auditorsof the Company at the conclusion of the ensuing Annual General Meeting ("AGM")of the Company.
Your Directors on recommendation of the Audit Committee seek approval of the Membersat the ensuing AGM of the Company for appointment of M/s. Chaturvedi & PartnersChartered Accountants (Firm Registration No.307068E) for an initial term of five (5)consecutive years. M/s. Chaturvedi & Partners Chartered Accountants have confirmedtheir eligibility and willingness for appointment as Statutory Auditors of the Companyunder the provisions of the Companies Act 2013 and Rules framed thereunder. Accordinglya resolution proposing appointment of M/s. Chaturvedi & Partners CharteredAccountants (Firm Registration No.307068E)as the Statutory Auditors of the Company for aterm of five (5) consecutive years from the conclusion of the 43rd AGM till theconclusion of the 48th AGM of the Company pursuant to Section 139 of the Companies Act andRules framed thereunder on such remuneration as may be decided by Board of Directors ofthe Company is set out in the resolution included in the Notice convening the AGM of theCompany. As per provisions of Section 139(1) of the Act their appointment for the abovetenure is subject to ratification by Members at every AGM.
The Board of Directors places on record its appreciation for the services rendered byM/s Chaturvedi & Co. Chartered Accountants as the Statutory Auditors of the Company.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s RSM & Co. Company Secretaries New Delhi to undertake the SecretarialAudit of the Company for the financial year ended 31.03.2017. The Report of theSecretarial Audit Report is annexed herewith as ANNEXURE - II to this Report.
Pursuant to provisions of Section 148 of the Companies Act 2013 the Board ofDirectors has re-appointed Shri N K Goel Cost Accountant Delhi as Cost Auditor of theCompany for the financial year 2017-18.
Pursuant to provisions of Section 138 of the Companies Act 2013 the Board ofDirectors has re-appointed M/s TN Chaturvedi & Co. Chartered Accountant Delhi asInternal Auditors of the Company for the financial year 2017-18.
The Auditors' Report read with notes to the financial statements is self-explanatoryand does not call for any further explanations by the Board. The Auditor's Report does notcontain any qualification reservation or adverse remark.
The Board of Directors duly met 5 (Five) times in respect of which proper notices weregiven and the proceedings were properly recorded and signed. The Board has complete accessto all information with the Company. All Board meetings are governed by a structuredagenda which is backed by comprehensive background information.
COMMITTEES OF THE BOARD
Currently the Board has five committees they are:
- AUDIT COMMITTEE
The Audit Committee meets at due intervals to conduct the required business. TheCommittee comprises of Independent Directors namely Shri K R Gupta (Chairman) Shri R RBagri Shri S G Rajgarhia and Smt Uma Hada as other members.
The composition role functions and powers of the Audit Committee are in accordancewith the applicable laws and the listing agreements with the Stock Exchange.
- CSR COMMITTEE
The Corporate Social Responsibility Committee comprises of three members. Shri R KRajgarhia is the Chairman and the other members of the Committee are Shri R R Bagri andShri H R Sharma. The Annual Report on CSR activities is annexed herewith marked asANNEXURE - III to this Report.
- NOMINATION AND REMUNERATION COMMITTEE
The Nomination and Remuneration Committee comprises of four members. Shri K R Gupta isthe Chairman and the other members of the Committee are Shri R K Rajgarhia Shri R R Bagriand Smt Uma Hada. The policies of the Company are attached herewith marked as ANNEXURE -IV to this Report.
- STAKEHOLDER RELATIONSHIP COMMITTEE
The Stakeholder Relationship Committee comprises of three members. Shri K R Gupta isthe Chairman and the other members of the Committee are Shri R R Bagri and Shri H RSharma. The Committee looks into the mechanism of redressal of grievances of shareholders.
- RISK MANAGEMENT COMMITTEE
The Risk Management Committee comprises of three members. Shri R R Bagri is theChairman and the other members of the Committee are Shri H R Sharma and Shri C S Vijay.The Committee is analyzing and managing the opportunity and threats faced by the company.
i) CORPORATE SOCIAL RESPONSIBILITY
The Policy on Corporate Social Responsibility may be accessed on the Company's websiteat the link http://apmindustries.co.in/ Annual%20Reports/Policy-CSR.pdf
ii) RISK MANAGEMENT POLICY
Risk Management is continuous process of analyzing and managing the opportunities andthreats faced by the Company in its efforts to achieve its goals and to ensure thecontinuity of the business. The Risk Management Policy may be accessed on the Company'swebsite at the link http://apmindustries.co.in/ Annual%20Reports/Policy-RM.pdf
iii) VIGIL MECHANISM
The Company has a Whistle Blower Policy to deal with instances of unethical behavioractual or suspected fraud or violation of the company's code of conduct. The Policy onVigil Mechanism / Whistle Blower may be accessed on the Company's website at the linkhttp://apmindustries.co.in/Annual%20Reports/Policy-WBM.pdf
iv) RELATED PARTY TRANSACTIONS
All transactions entered into with Related Parties as defined under the Companies Act2013 and Regulation 23 of SEBI (Listing Obligation and Disclosure Requirements)Regulations 2015 during the financial year were in the ordinary course of business and onan arm's length pricing basis and do not attract the provisions of Section 188 of theCompanies Act 2013. All related party transactions during the year 2016-17 are disclosedin Form No. AOC - 2 in ANNEXURE - V. Suitable disclosure as required by the AccountingStandards (AS18) has been made in the notes to the Financial Statements. The Board hasapproved a policy for related party transactions which has been uploaded on the Company'swebsite at the link http://apmindustries.co.in/ Annual%20Reports/Policy-RPT.pdf
v) PREVENTION OF SEXUAL HARASSMENT
The Company is committed to provide a protective environment at workplace for all itswomen employees. To ensure that every woman employee is treated with dignity and respectand as mandated under "The Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013" the Company has in place a formal policy forprevention of sexual harassment of its women employees.
The policy may be accessed on the Company's website at the linkhttp://apmindustries.co.in/Annual%20Reports/Policy- PSH.pdf.
Your Directors further state that during the year under review there were no casesfiled pursuant to the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013.
vi) NOMINATION AND REMUNERATION POLICY
The Board has on the recommendation of Nomination and Remuneration Committee framed apolicy for selection and appointment of Directors Senior Management and theirremuneration. The policy may be accessed on the Company's website at the linkhttp://apmindustries.co.in/Annual%20Reports/ Policv-NCR.pdf
vii) POLICY FOR DETERMINING MATERIALITY FOR DISCLOSURES
This policy applies to disclosure of events affecting APM Industries limited. Thepolicy may be accessed on the Company's website at the linkhttp://apmindustries.co.in/Annual%20Reports/Policv- DME.pdf
viii) DOCUMENTS RETENTION AND ARCHIVAL POLICY
This policy deals with retention and archival of corporate records of APM IndustriesLimited. The policy may be accessed on the Company's website at the linkhttp://apmindustries.co.in/ Annual%20Reports/Policv-POD.pdf
ix) POLICY - DETERMINING MATERIAL SUBSIDIARY
The Objective of this Policy is to determine the "Material Subsidiaries of theCompany" and to provide the Governance Framework for Subsidiaries. The policy may beaccessed on the Company's website at the link http://apmindustries.co.in/Annual%20Reports/Policv-DMS.pdf PARTICULARS OF LOAN GUARANTEES OR INVESTMENTS Details ofLoans Guarantees and Investments covered under the provisions of Section 186 of theCompanies Act 2013 are given in the notes to the Financial Statements.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
The prescribed details as required under Section 134(3) (m) of the Companies Act 2013read with the Companies (Accounts) Rules 2014 are annexed as ANNEXURE - VI to thisReport. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
Particulars of remuneration paid to the employees as required to be disclosed undersection 197(12) of the Act read with Rule 5 of the Companies (Appointment &Remuneration of Managerial Personnel) Rules 2014 are set out in ANNEXURE - VII attachedhereto and form part of this Report.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT 9 is annexedherewith as ANNEXURE - VIII.
The Company has implemented Corporate Governance practices. The report on CorporateGovernance as stipulated under the Listing Agreement forms an integral part of thisReport. The requisite certificate from the Auditors of the Company confirming compliancewith the conditions of Corporate Governance is attached to the Report on CorporateGovernance as ANNEXURE - IX to this Report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management's Discussion and Analysis Report for the year 2016-17 under review asstipulated under Regulation 34(e) of SEBI (Listing Obligation and Disclosure Requirements)Regulations 2015 with the Stock Exchanges is presented in a separate section formingpart of the Annual Report.
The Company's credit rating impute by rating agency as given below:
|Facilities ||Rating1 |
|Long Term Bank Facilities ||CARE BBB+ [Triple B Plus] |
|Short Term Bank Facilities ||CARE A2 [A TWO] |
MATERIAL CHANGES AND COMMITMENTS AFTER THE END OF FINANCIAL YEAR
No material changes or commitments affecting the financial position of the Companyhave occurred between the end of the financial year of the company to which the financialstatements relate i.e. Change in nature of business No changes has been made in nature ofbusiness carried out by 31st March 2017 and the date of the Board's Report. STATEMENT
Statements in the Board's Report and the Management Discussion & Analysisdescribing the Company's objectives expectations or forecasts may be forward-lookingwithin the meaning of applicable securities laws and regulations. Actual results maydiffer materially from those expressed in the statement. Important factors that couldinfluence the Company's operations include global and domestic demand and supplyconditions affecting selling prices of finished goods input availability and priceschanges in government regulations tax laws economic developments within the country andother factors such as litigation and industrial relations.
No significant or material orders were passed by the regulators or Courts or Tribunalswhich impact the going concern status and Company's operation in future.
The Directors express their appreciation for the support received from Associates ofthe Company Shareholders Vendors Customers and other Stakeholders.
| ||For and on behalf of the Board |
| ||R K Rajgarhia |
|Place : New Delhi ||Chairman |
|Dated : August 11 2017 ||DIN : 00141766 |