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Aplab Ltd.

BSE: 517096 Sector: Engineering
NSE: APLAB ISIN Code: INE273A01015
BSE 00:00 | 28 Jun 19.75 -0.75
(-3.66%)
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NSE 05:30 | 01 Jan Aplab Ltd
OPEN 19.75
PREVIOUS CLOSE 20.50
VOLUME 200
52-Week high 31.20
52-Week low 16.65
P/E 12.34
Mkt Cap.(Rs cr) 20
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 19.75
CLOSE 20.50
VOLUME 200
52-Week high 31.20
52-Week low 16.65
P/E 12.34
Mkt Cap.(Rs cr) 20
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Aplab Ltd. (APLAB) - Director Report

Company director report

To the Members

Your Directors present their 56th Annual Report of the Company together withthe Audited Statements of Assets & Liabilities and Profit & Loss Account for theyear ended 31st March 2021.

FINANCIAL RESULTS

The Company's financial performance for the year under the review along with previousyear figures are given hereunder:

Particulars Year ended 31.03.2021 Year ended 31.03.2020
Net Sales /Income from
Business Operations 5301.59 5159.50
Other Income 201.84 347.43
Total Income 5503.43 5506.93
Interest 626.29 621.00
Profit / (Loss) before
Depreciation 68.55 128.04
Less Depreciation 37.92 102.25
Profit / (Loss)after depreciation and Interest 30.64 25.79
Less Current Income Tax - -
Less Deferred Tax - -
Net Profit (Loss) after Tax 30.64 25.79
Dividend (including
Interim if any and final ) - -
Net Profit / (Loss) after dividend and Tax 30.64 25.79
Amount transferred to General Reserve - -
Balance carried to Balance Sheet 30.64 25.79
Earning in Rupee per share (Basic) 0.61 0.52
Earning in Rupee per Share(Diluted) 0.61 0.52

1. REVIEW OF BUSINESS OPERATIONS AND FUTURE PROSPECTS

COVID 19 Pandemic and its adverse impact on our operation

As a result during the National lockdown the company's units were shut down from 21stMarch 2020.

Later with the permission of the authorities operations restarted on 8thJune 2020 but 10% reduced strength. Even now the lockdown is not called off but the unitsare still functioning at approx 50% of its capacity. During this period all precautionarymeasures for business continuity were taken without compromising on the safety norms laiddown by the Government of India.

I am proud to inform you that your Company has been providing remote support servicesto customers through the lockdown. The Company's recurring revenue from Annual Maintenanceand Support contracts is also expected to remain intact but the realization of revenue mayget delayed due to the lockdown. The travel restrictions imposed in various jurisdictionshave however impacted our ability to provide onsite services. This may delay milestonesignoffs and revenue receipts in some cases. Most of Company's customers and clients havedelayed product and services procurement decisions during the lockdown. There is novisibility on appetite for investments in new projects. This will impact revenueprospects at least during the first half of FY 2020-2021. However defense spendingwhich makes up a large portion of our revenues can be expected to remain at levels likeprior years.

The company's order book is very promising and reflects the trust of the market in thecompany its technology and the product quality. That's why the pending orders in our bookare more than 50% of the sale of the company during the year.

One may therefore wonder why then we make such low volume of sale resulting in lowerprofit? The only reason is the poor cash flow. It traps us from pushing the production andexecute more of the large orders on hand. Careful study of our operation reveals a greatpotential for the company getting out of red. There are Old losses but matter little interms of the company's operation. In fact they will help us when we make operationalprofit.

Aplab is shifting its operation in a bigger facility in Digha a suburb of Navi Mumbaiby August 2021. We also have a firm contract for sale of the present factory real estatein Thane which we do not need for our operation. Once we realize the sale proceeds for theexcess real estate our bank loans will be a small part of the working capital whichlargely comprises of the loans given to the company by the majority promoters of thecompany. That should happen during the next few months if the pandemic gets over.

Government wants the nation to be Atmanirbhar self-reliant. Since our birth Aplab hasworked not only to be self-reliant in the field of electronic systems but also developedexpertise to make our company technologically most advanced in the country and thusmaintain high product quality with long endurance. Aplab has been atmanirbhar for theR&D and producing high quality products. Aplab earned its reputation based on ourproduct quality. I hope the country realizes our technology contribution and success inreducing country's dependence on import. The present cashflow problems will soon be overafter property sale realization.

Till then our bank needs to support us especially since they know that we will soonbounce back to become a profitable high technology company.

Even though your company was profitable during the year we are aware that it is onaccount of sale of one of our excess property sale and we have not yet made tradingprofit. Distress on liquidity continues to haunt us since we cannot execute large orderson hand and realize the embedded high profits.

Fund liquidity will improve only when the Thane property is sold. Unfortunately theCorporation Bank for reasons known to them had been delaying grant of NOC to sell. Weare however lucky that we have large orders on hand for power systems for military use aswell as for banking automation products.

I am hopeful of operational improvement during the year. We have done comprehensivere-structuring the company's operations reducing the costs revamping the marketing withfocus on growth in profitable business expanding the distributor network strengtheningMIS to improve operational efficiency etc. But cash flow will soon ease up after salesrealization of the property. After that there would be remarkable improvement when cashflow eases which is essential for increasing the production and execution very profitablebusiness in hand. From the sales proceeds of Thane premises there will be reduction in theinterest burden which will help us create a positive cash flow

2. MANAGEMENT DISCUSSUION AND ANALYSIS: a) Industry structure and developments

The Industrial Electronics market consists of international and regional vendors.Before the breakout of COVID-19 pandemic a modest growth rate in the electronics marketwas witnessed globally. After the pandemic the global electronics industry has faced adual impact due to disruption in supply chain and multi fold increase in freight costsresulting in erosion of margins. Locally too the scene is no different.

More efforts will be put in Research & Development and workforce management.Transitions and transformations will be the order of the day. These developments will bedominated by businesses that strategize in the shorter terms and that are managed withwell-defined visions. b) Opportunities and Threats.

One of the biggest opportunities of the Covid-19 crisis is that several big buyers arecontemplating exiting China and looking elsewhere. India has a major opportunity waitingto be tapped. If India can capitalize on this opportunity the ‘Make in India'programme announced earlier by the Prime Minister can get a big boost.

Following Prime Minister Narendra Modi's call to go ‘vocal for local' throughAtmanirbhar Bharat Abhiyan (Self-Reliant India Mission) finance minister NirmalaSitharaman announced a slew of measures specific to defense production and procurement.These measures in tandem with other policy initiatives of the past six years have thepotential to promote self-reliance and transform India into a major defense manufacturinghub. The FM's announcement of a ban on import of certain items to be notified andindigenous manufacturing of spares that have been hitherto imported for domesticproduction are expected to provide the necessary direction. Company has a strong presencein the defense related market and its products are highly appreciated. Company feelsoptimistic on this front.

c) Since the MSME sector would be worst hit government has announced various measuresfor hand-holding this sector through troubled times.

Some of the measures announced are collateral free automatic loan with 100% guaranteedby the government and which will enjoy a moratorium of 12 months; tenders upto Rs 200 Crrelating to government procurement will not be global tenders anymore; Rs 20000 Cr willbe infused as subordinate debt for stressed MSME through central government SME trust andother reliefs. Company is in the process of evaluating which of these will be mostbeneficial and will take necessary steps in the right direction.

The major setback is that the production facilities of the electronics parts have beenhalted owing to the logistics slowdown and unavailability of workforce. The economy andindustry will require lot of time to recover after being shut down for more than three tofour months d) Segment–wise or product-wise performance.

The company has only one segment of electronic equipment which includes a range ofproducts end sales in this sector are visible and promising.

e) Outlook

India is pitching itself as an alternative Business Continuity Plan destination asmultinationals rethink their sourcing plans and re-organize supply chains. India stands atthe pedestal of a new growth curve of rapid industrialization. In the COVID-19 pandemicscenario India has projected a more resilient and diversified economy to fight the crisisand is projected as a major attractive destination. India on account of its largedomestic market and low-cost production base is well-positioned to host new investmentsin a range of sectors which include electronics and consumer appliances and telecomequipment. This could lead to a competitive environment and will intensify a rise inproduct extensions technological innovations and strategic M&A activities. Goingdigital and social distancing will continue to be the norm for some more time.

The company's operations are not dependent on migrant work force. Once the lockdownnorms are eased the Company is hopeful of resuming operations at the pre-covid19 levels.By taking advantage of the measures announced by the government the Company willendeavour to cover lost ground in the shortest possible time.

f) Risks and concerns

The major concern is to continue operations despite the adverse impact caused due toCovid-19 disruptions and the biggest risk is losing customers to competitors. Every playerin the marker locally and globally has been hit very badly and so in order to stabilizeourselves will focus on sprucing up their efficiency and become very competitive in termsof pricing and time lines.

g) Internal control systems and their adequacy

Company has adequate internal control system to optimize the use and protection ofassets facilitate accurate and timely compilation of financial statements and managementreports and ensure compliance with statutory laws regulations and Company policies. Themanagement regularly reviews actual performance with reference to budgets and forecast.The Company has implemented internal control system at all levels and is confidentthat Internal control systems implemented are adequate. But continuous efforts are beingmade to improve further wherever possible.

h) Discussion on financial performance with respect to operational performance.

The Company continues to be cash strapped. Despite regular orders in hand the Companyis unable to honour the commitments due to poor cash flow. The support of the promoters inthe form of unsecured loan continues.

i) Material developments in Human Resources / Industrial Relations front includingnumber of people employed.

Your Company continued its activities during the year in a cordial atmosphere withutmost cooperation amongst employees. The management is committed to promote safetyoccupational health and proper environment in design planning training and execution ofall tasks. The company's total head count stood at 350 as on March 31 2021.

3. Details of changes in key financial ratios are furnished below

Ratio Year Ended 31st March 2021 Year Ended 31st March 2020
Debtors Turnover 0.29 0.37
Inventory Turnover 1.50 1.21
Interest coverage (0.42) 1.16
Current ratio 0.59 0.61
Debt Equity Ratio (2.75) (2.70)
Operating Profit Margin(%) (0.73) (5.68)
Net Profit Margin (%) (0.75) 0.40
Return on net worth (%) (1.48) (0.79)

4. DIVIDEND

Dividend is not recommended during the year since entire accumulated losses are notwiped yet. (Previous Year – Nil)

5. TRANSFER OF DIVIDEND TO INVESTOR EDUCTION AND PROTECTION FUND

In terms of Section 125 of the Companies Act 2013 no unclaimed or unpaid Dividend duefor remittance to the Investor Education and Protection Fund established by the CentralGovernment since the company have not been declaring any dividend after 2008-09.

6. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OFTHE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THESE FINANCIALSTATEMENTS RELATE AND THE DATE OF THE REPORT

The business of the company has been disrupted by the coronavirus pandemic since theend of the last quarter of the year under review. Entire first quarter of the financialyear 2021-2022 was under lockdown and this will have an adverse impact on the currentyears' performance. The management is striving hard to ensure that all the stake holdersoptimize their contribution to minimize the adverse impact.

7. RECLASSIFICATION OF ZEE ENTERTAINMENT ENTERPRISES LIMITED

An application was made to BSE for reclassifying ZEE Entertainment Enterprises Limitedfrom Promoter Category to a Public Category. The application was approved by BSE.

8. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS ANDOUTGO

The information pertaining to conservation of energy technology absorption Foreignexchange Earnings and outgo as required under Section 134 (3)(m) of the Companies Act2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 is furnished in Annexureto the Directors' Report and is attached to this report.

9. STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICYOF THE COMPANY

Risk Management Committee is operating throughout the year to identify and evaluateelements of business risks.

10. DETAILS OF POLICY DEVELOPED AND

IMPLEMENTED BY THE COMPANY ON ITS CORPORATE SOCIAL RESPONSIBILITY INITIATIVE

Due to the losses incurred since last many years till previous year during the yearunder review Corporate Social Responsibility could not be implemented. However onimproved performances the same will be implemented.

11. PARTICULARS OF LOANS GUARANTEES OR

INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT 2013

The particulars of Loans Guarantees or Investments made under Section 186 arefurnished in Notes to Financial Statement attached to this report.

12. RELATED PARTY TRANSACTIONS

All transactions entered with Related Parties were on arm's length basis and in theordinary course of business. There were no material significant related party transactionsmade by the company during the year under review with Promoter/Directors or Key ManagerialPersonnel. All related party transactions are placed before the Audit Committee and hasalso been placed at the Board Meeting for approval and omnibus approval was obtained on ayearly basis for transactions which are of repetitive nature. The policy on related partytransactions as approved by the Board has been uploaded on the website of the company.Form AOC-2 is not annexed with the Directors' Report for the current year since therelated party transactions are mentioned in the Notes to Accounts attached with thisreport.

13. SALE OF COMPANY PREMISE FOR PAYMENT OF

STATUTORY LIABILITIES

Sale of Thane premises has been executed during current year however the final paymentis yet to be realized since the payments are scheduled in tranches depending on completionof various approvals and formalities. The covid 2019 has affected this process badly. Thetransaction is expected to be completed during the current year. This proceeds will helpreducing interest burden of bank loans.

14. EXPLANATION OR COMMENTS ON

QUALIFICATIONS RESERVATIONS OR ADVERSE REMARKS OR DISCLAIMERS MADE BY THE AUDITORS ANDTHE PRACTICING COMPANY SECRETARY IN THEIR REPORTS

Statutory Auditors and Secretarial Auditors have qualified their reports for ImpairmentLoss of receivables not provided negative networth and backlog of statutory liabilities.

The Board felt that provision for impairment will be made in the years ahead. With thecurrent Rights Issue of Equity Shares networth has improved to some extent. With orderson hand better profits will be made in the current year which will enable improvement innetworth along with payment of statutory liabilities. Rights Issue have also reduced thesestatutory liabilities.

15. COMPANY'S POLICY RELATING TO DIRECTORS

APPOINTMENT PAYMENT OF REMUNERATION AND DISCHARGE OF THEIR DUTIES

The Company's Policy relating to appointment of Directors payment of Managerialremuneration Directors' qualifications positive attributes independence of Directorsand other related matters as provided under Section 178(3) of the Companies

Act 2013 is being practiced due to inadequate profit the present Executive Directoris not drawing any remuneration.

16. ANNUAL RETURN

The extracts of Annual Return pursuant to provisions of section 92 read with rule 12 ofthe companies (Management and Administration) Rules 2014 is furnished in Annexure –B and attached to this report.

17. NUMBER OF BOARD MEETINGS CONDUCTED

DURING THE YEAR UNDER REVIEW

The Board met 7 (seven) times during the financial year 2020-21 i.e. on 27thMay 2020 30th July 2020 3rd September 2020 14thSeptember 2020 11th November 2020 2nd February 2021 and 12thFebruary 2021. In respect of such meetings proper notices were given in time and theproceedings were properly recorded and signed in the Minutes Book maintained for thepurpose. No Circular Resolutions were passed by the company during the financial yearunder review.

The Board confirms compliance of Secretarial Standards issued by Institute of CompanySecretaries of India (ICSI).

18. CORPORATE GOVERNANCE REPORT

In terms of SEBI CIRCULAR CIR/CFD/POLICYCELL/7/ 2014 dated September 15 2014 which waseffective October 1 2014 the Clause 49 of the Listing Agreement shall be applicable toall companies whose equity shares are listed on a recognized stock exchange. Howevercompliance with the provisions of erstwhile Clause 49 shall not be mandatory for the timebeing in respect of the following class of companies: Companies having paid up equityshare capital not exceeding Rs.10 Crore and Net Worth not exceeding Rs.25 Crore as on thelast day of the previous financial year; provided that where the provisions of Clause 49becomes applicable to a company at a later date such company shall comply with therequirements of Clause 49 within six months from the date on which the provisions becameapplicable to the company. In view of the above your company is not required to annex theCorporate Governance Report to the Directors Report for the year ended March 31 2021.

19. DIRECTORS RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 134(5) of the Companies Act 2013 theBoard hereby submits its responsibility Statement:

(a) In the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;

(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 at the end of the financial year and ofthe profit and 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 this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;

(d) The directors had prepared the annual accounts on a going concern basis; and

(e) The directors in the case of a listed company had laid down internal financialcontrols to be followed by the company and that such internal financial controls areadequate and were operating effectively. Internal financial control means the policies andprocedures adopted by the Company for ensuring the orderly and efficient conduct of itsbusiness including adherence to Company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information.

(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.

20. SUBSIDIARIES JOINT VENTURES AND ASSOCIATE

COMPANIES

The Company has no subsidiary company and no joint ventures during the year underreview

21. DEPOSITS

The Company has neither accepted nor renewed any deposits during the year under review.

22. DIRECTORS

441 shares are held by the Independent Directors. The details of Promoter Shareholdingare available in MGT-9 annexed to this report.

In accordance with the provisions of the Companies Act 2013 Mrs. Amrita P. Deodhar(DIN: 00538573) is liable to retire by rotation at the forthcoming Annual General Meetingand being eligible has offered herself for re-appointment.

23. DECLARATION OF INDEPENDENT DIRECTORS

The Independent Directors have submitted their disclosures to the Board that theyfulfill all the requirements as stipulated in Section 149(6) of the Companies Act 2013 soas to qualify themselves to be appointed as Independent Directors under the provisions ofthe Companies Act 2013 and the relevant rules.

24. STATUTORY AUDITORS

At the 55th Annual General Meeting held on 30th September 2020M/s Puranik Kane & Co. Chartered Accountants (Registration no. 120215W) are appointedas the Statutory Auditors of the Company a period of five years to carry out the auditfrom financial year 2020-2021 to 2024-2025 and shall hold office as such till conclusionof the Annual General Meeting that will be held for adoption of financial statements forthe year 2024-2025. The remuneration payable to the Auditor is commensurate with the auditwork assigned to them.

25. DISCLOSURE OF COMPOSITION OF AUDIT

COMMITTEE AND PROVIDING VIGIL MECHANISM

The Audit Committee consists of the following members i Dr. S.K. Hajela (DIN: 01001987)ii Mrs. Amrita P. Deodhar (DIN: 00538573) iii Mr. Dinesh Kotecha (DIN:02115860) The abovecomposition of the Audit Committee consists of independent Directors viz. Mr. Dinesh A.Kotecha (DIN: 02115860) and Dr. S.K. Hajela (DIN: 01001987) who form the majority.

The Company has established a vigil mechanism and overseas through the committee thegenuine concerns expressed by the employees and other Directors. The Company has alsoprovided adequate safeguards against victimization of employees and Directors who expresstheir concerns. The Company has also provided direct access to the chairman of the AuditCommittee on reporting issues concerning the interests of co employees and the Company.

26. SHARES a. BUY BACK OF SECURITIES

The Company has not bought back any of its securities during the year under review. b.SWEAT EQUITY

The Company has not issued any Sweat Equity Shares during the year under review. c.BONUS SHARES

No Bonus Shares were issued during the year under review.

d. RIGHT ISSUE OF EQUITY SHARES

The Company has made Rights Issue in the ratio of 1:1 shares to the existingshareholders whose names were appearing in the Register of Members as on 8thJune 2021. The issue was oversubscribed by 72% and on 8th July 2021 the shares wereallotted to the members. With this the paid-up capital of the company became 10.00 Crores e.EMPLOYEES STOCK OPTION PLAN

The Company has not provided any Stock Option Scheme to the employees.

27. DISCLOSURE UNDER THE SEXUAL HARASSMENT

OF WOMEN AT WORK PLACE (PREVENTION PROHIBITIONAND REDRESSAL ACT 2013)

The Company has in place an Anti Sexual Harassment Policy in line with the requirementsof the Sexual Harassment of Women at the work place (Prevention Prohibition andRedressal) Act 2013. All employees (permanent contractual temporary trainees) arecovered under this policy. No sexual harassment complaints were received during the year2020-21.

28. PERSONNEL

Industrial relations during the year remained cordial. The Board appreciates thewilling co-operation and team spirit in the organization at all levels.

Statement under section 134(3) of the Companies Act 2013 read with rule 5(2) of theCompanies (appointment and remuneration of managerial personnel) rules 2014 givingdetails of employees who were employed throughout the year and were in receipt ofremuneration not less than Rs. 10200000/- p.a. or Rs. 850000/- p.m. if employed forpart of the year is not attached to this report as there are no employees in thiscategory.

29. ACKNOWLEDGEMENTS

Your Directors place on record their sincere thanks to Bankers Business AssociatesConsultants Employees and various Government Authorities for their continued supportextended to your Company's activities during the year under review. Your Directors alsoacknowledges gratefully the shareholders for their support and confidence reposed on yourCompany.

For and on behalf of the Board of Directors

P.S. Deodhar

Chairman & Managing Director

DIN: 00393117

Date: 13th August 2021

Place: Thane

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