APM Industries Limited
The Board of Directors are pleased to present the 45th Annual Report of the Companytogether with the Audited Financial Statements for the financial year (FY) ended March 312019.
1. FINANCIAL SUMMARY
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Note: 1. The financial result has been prepared in accordance with the Indianaccounting standard (Ind. As) specified in the Companies (Indian Accounting standard)Rules - 2015 (as amended) under Section 133 of the Companies Act 2013 and otherrecognized accounting practices and policies to the extent applicable.
2. Pursuant to the Scheme of Arrangement (the scheme') under Section 230 to 232of the Companies Act 2013 between APM Industries Ltd. (AIL) (Demerged Company') andAPM Finvest Ltd. (AFL) (Resulting Company') as approved by the National Company LawTribunal (NCLT) Jaipur on May 24 2019. i. All the properties and liabilities ofwhatsoever nature and kind and wheresoever situated of the Finance and Investmentundertaking of AIL as on the appointed date (April 01 2018) have been transferred to AFLat their respective book values as appearing in the books of accounts of AIL. ii. Thedifference between the values of assets and liabilities transferred amounting to Rs. 7283lakhs (including 200 lakhs investment in AFL) pursuant to the scheme is appropriated andadjusted against reserves as decided by the Board of Directors of AIL pursuant to thescheme. iii. As consideration for the transfer and vesting of the finance and investmentundertaking AFL has issued 1 equity share of face value of Rs. 2/- at par to theshareholders of AIL for every 1 Share of Rs. 2/- held by them on the record date June 182019 in AIL.
3. Pursuant to the scheme as approved by NCLT APM Finvest Ltd. ceased to besubsidiary of AIL from the appointed date i.e. April 01 2018. Accordingly the Company isnot required to present its consolidated financial statements as on and for the year endedMarch 31 2019.
4. In view of the Demerger of Finance and Investment undertaking with effect from April01 2018 (the appointed date) the figures of the year ended March 31 2019 do not includethe figures of Finance and Investment undertaking. Hence these figures are not comparablewith the figures of corresponding year ended March 31 2018.
2. STATE OF COMPANY AFFAIRS & OPERATIONS
Our Company operates in two business segment - Yarn & Finance and Investment till31.03.2018. Pursuant to the scheme of arrangements under Section 230 to 232 of theCompanies Act 2013 between APM Industries Ltd. (Demerged Company') and APM FinvestLtd. (Resulting
Company') as approved by NCLT Jaipur the operations of the Finance and Investmentdivisions has been demerged w.e.f. 01.04.2018 hence in the financial year 2018-19 theCompany operates only under one segment i.e. yarn.
The Profit Before Tax and Profit After Tax for the year under review for the yarnbusiness amounted to Rs. 811 lakhs and Rs. 734 lakhs respectively as compared to Rs. 1209lakhs and Rs. 720 lakhs in the previous financial year.
The performance of the Company has been comprehensively discussed in the ManagementDiscussion and Analysis Report' forming part of this Annual Report.
3. CHANGE IN THE NATURE OF BUSINESS IF ANY
There is no change in the nature of business of your Company during the year underreview except transfer of Finance and Investment undertaking to APM Finvest Ltd. witheffect from 01.04.2018.
4. TRANSFER TO RESERVES
The Company has transferred Rs. 5000 lakhs to the General Reserves during the currentfinancial year.
During the Financial Year 2018-19 the export turnover was NIL as compared to Rs. 76lakhs in the previous year due to global recession.
6. EXPANSION AND MODERNIZATION
The Company continues to modernize its plant and machinery and adding balancingequipment. The production capacity remains 55584 spindles during the Financial Year2018-19.
The Company has replaced 4 automatic cone winding machines with 3 imported automaticcone winding machines. The Company has further installed 1 speed frame machine 4 two forone twisters 1 gas fired boiler & other balancing equipment for moderation of plant& machinery.
The Company has also installed sewing thread dyeing & cone/ tube winding machinehaving a capacity 30 MT/ month & developed a new product (sewing thread).
The Company has further planned to instal 1800 KW ground/rooftop solar power plantreplacing 33 KV Power Supply System to 132 KV Power Supply System and energy efficientheat recovery and heating solution for dyeing process to save energy cost. This wouldenable the Company to save cost of production & increased profitability.
The Board of Directors recommend dividend of Rs. 0.50 per equity share (i.e. 25%) onface value of Rs. 2/- each for the financial year 2018 19 subject to approval ofthe members.
The above proposal for declaration of dividend forms part of the Notice of the 45thAnnual General Meeting and the relevant Resolution is recommended for the members'approval therein.
8. SCHEME OF ARRANGEMEMT
The Scheme of Arrangement among APM Industries Limited ("Demerged Company")and APM Finvest Limited ("Resulting Company") and their respective shareholdersand creditors in accordance with Sections 230-232 of the Companies Act 2013 for thedemerger of Finance & Investment Undertaking' ("Demerged Undertaking') ofAPM Industries Limited ("Demerged Company") and subsequent amalgamation ofDemerged Undertaking with its wholly owned subsidiary APM Finvest Limited ("ResultingCompany") has been approved by the Hon'ble National Company Law Tribunal("Tribunal") Jaipur Bench vide its order dated 24th May 2019 and the appointeddate was April 01 2018.
The Board of Directors of the Resulting Company allotted 21611360 (Two Crore SixteenLakh Eleven Thousand Three Hundred and Sixty) Equity Shares of Rs.2/- (Rupees Two) eachdistinctively numbered from 1 (one) to 21611360 (Two Crore Sixteen Lakh Eleven ThousandThree Hundred and Sixty) (both inclusive) to the shareholders of the Demerged Companywhose name appear in the Register of Members of APM Industries Limited as on the RecordDate i.e. June 18 2019 in the following ratio:-
"1 (One) Equity Shares of face value of Rs. 2 (Rupees Two) each at par inResulting Company for every 1 (One) Equity Shares of face value of Rs. 2 (Rupees Two) eachheld by them in Demerged Company."
9. CAPITAL STRUCTURE
Authorised Share Capital
As on the date of Board Report the authorised Equity Share Capital of the Company hasbeen decreased from Rs. 70000000/- to Rs. 45000000/- on account of demerger ofFinance & Investment Undertaking' of APM Industries Limited. Consequently as atMarch 31 2019 the authorized Equity Share Capital was Rs. 45000000/- comprising of22500000 equity shares of Rs. 2/- each and Preference Share Capital was Rs.30000000/-comprising of 300000 preference shares of Rs. 100/- each.
Paid up Share Capital
The Paid-up share capital as at March 31 2019 stands at Rs. 43222720/- comprisingof 21611360 equity shares of Rs. 2/- each fully paid up.
The Company had one wholly owned subsidiary namely "APM Finvest Limited"registered with Reserve Bank of India as Non-Banking Financial Company. As per theScheme of Arrangement becoming effective w.r.t. demerger among APM Industries Limited(Demerged Company') and APM Finvest Limited (Resulting Company') and theirshareholders and creditors for demerger of Finance and Investment Undertaking of DemergedCompany and subsequent amalgamation with the Resulting Company the entire pre schemeallotted equity share capital of APM Finvest Limited which was held by the DemergedCompany either itself or through its nominee shall stand cancelled. With respect to theschme of de-merger APM Finvest Limited is not the wholly owned subidiary of APMIndustries Ltd. with effect from April 01 2018.
11. DIRECTORS AND KEY MANAGERIAL PERSONNEL Appointment Re-appointment and Resignation
Shri Shri Gopal Rajgarhia will retire at the ensuing Annual General Meeting (AGM) andbeing eligible has offered himself for reappointment. The Board recommends hisre-appointment. Brief resume of Shri S G Rajgarhia with other details as stipulated inRegulation 36(3) of the SEBI Listing Regulations 2015 are provided in the Noticeconvening the 45th AGM.
Ms. Jyoti Upadhyay Company Secretary and Compliance Officer has resigned from theCompany with effective from March 16 2019. In order to fill the vacancy caused due to theresignation of Ms. Jyoti Upadhyay the Board in its Meeting held on May 29 2019 hasappointed Ms. Neha Jain as the Company Secretary and Compliance Officer and alsodesignated her as Key Managerial Personnel of the Company.
Shri Khushi Ram Gupta and Shri Ram Ratan Bagri Non Executive Independent Directors ofthe Company completed their first term as Independent Director on March 31 2019. Pursuantto the provisions of Companies Act 2013 Articles of Association of the Company and basedon the recommendation of the Nomination and Remuneration Committee the Board of Directorsvide resolution dated February 26 2019 approved the re-appointment of Shri Khushi RamGupta and Shri Ram Ratan Bagri as Non Executive Independent Director for a second termw.e.f. April 01 2019 up to March 31 2024 subject to the approval of the members of theCompany by Special Resolution.
Declaration by Independent Directors
All Independent Directors have given declaration that they meet the criteria ofindependence as provided under Section 149 of the Act and Regulation 16 of the SEBIListing Regulations 2015.
Annual Performance Evaluation of the Board
A statement on annual evaluation by the Board of its performance and performance of itsCommittees as well as Individual Directors forms part of the Corporate Governance Reportattached to this report.
Meetings of the Board
During the FY 2018-19 six (6) meetings of the Board of Directors were held. Thedetails of Board Meetings and the attendance of Directors are provided in the CorporateGovernance Report attached to this Report.
12. DEPOSIT UNDER CHAPTER V OF THE COMPANIES ACT 2013
During the financial year the Company has not accepted any deposits within the meaningof Section 73 & 76 of the Companies Act 2013 read with the Rules made thereunderand therefore no amount of principal or interest on deposit was outstanding as of theBalance Sheet date.
13. AUDITORS & AUDIT REPORTS Statutory Auditors
In terms of the provisions of Section 139 of the Companies Act 2013 M/s. Chaturvedi& Partners Chartered Accountants (Firm Registration No. 307068E) were appointed asthe Company's Statutory Auditors by the shareholders at their 43rd AGM held onSeptember 25 2017 for a period of five years i.e. till the conclusion of 48thAGM. The appointment of Auditors is required to be ratified by Members at every AnnualGeneral Meeting.
In accordance with the Companies (Amendment) Act 2017 enforced on May 7 2018 by theMinistry of Corporate Affairs the appointment of Statutory Auditors is not required to beratified at every AGM. Hence the appointment of M/s. Chaturvedi & Partners CharteredAccountants has not been placed for ratification as Statutory Auditors before the membersat ensuing AGM.
The reports of Statutory Auditors on Financial Statements for the financial year2018-19 forms part of the Annual Report. There are no qualifications reservationsadverse remarks disclaimer or emphasis of matter in the Auditors' Reports.
In terms of provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hadappointed M/s. RSM & Co. Company Secretaries to undertake the Secretarial Audit ofthe Company for the financial year ended March 31 2019. The Secretarial Audit Report isattached as Annexure-1 to this report and does not contain any qualificationreservation or adverse remark or disclaimer.
Shri Naresh Kumar Goel Cost Accountant (Membership No. 9876) carried out the costaudit for applicable business during the year. The Board has on the recommendation of theAudit Committee reappointed him as Cost Auditor of the Company for the financial year2019-20.
The remuneration payable to the Cost Auditors is required to be placed before theMembers in a general meeting for their ratification. Accordingly a Resolution seekingMembers' ratification for the remuneration payable to Shri Naresh Kumar Goel CostAccountant is included at Item No.6 of the notice convening the Annual General Meeting.
Pursuant to Section 148 of the Act your Company carries out an annual audit of costaccounts. The Cost Audit Report of your Company for financial year 2018 was filed withthe Ministry of Corporate Affairs through Extensive Business Reporting Language (XBRL) byShri Naresh Kumar Goel Cost Accountant. Further the cost accounts and records asrequired to be maintained under Section 148 of the Act are duly made and maintained by theCompany.
In terms of provisions of Section 138 of the Companies Act 2013 the Board ofDirectors has re-appointed M/s M M Sharma & Co. Chartered Accountants (FirmRegistration No. 001797N) as an Internal Auditors of the Company for the financial year2019-20.
14. DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134 of the Companies Act 2013 with respect to Directors'Responsibility Statement it is hereby confirmed that:
in the preparation of the annual accounts the applicable explanation relatingto material departures; the Directors had selected such accounting policies andapplied them consistently and made judgments andestimates that are reasonable and prudentso as to give a true and fair view of the state of affairs of the Company at the end ofthe financial year i.e. March 31 2019 and of the profit of the Company for the year endedMarch 31 2019; the Directors had taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of this Actfor safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities; the Directors have prepare the annual accounts on a going concernbasis; the Directors had laid down internal financial controls to be followed bythe Company and that such internal financial controls are adequate and were operatingeffectively and the Directors had devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.
15. INTERNAL FINANCIAL CONTROLS
The details on Internal Financial Control System and their adequacy are provided in theManagement Discussion and Analysis Report of the Company which forms part of the AnnualReport.
16. DETAILS OF FRAUDS REPORTED BY AUDITORS
There were no frauds reported by the Statutory Auditors under the provisions of Section143(12) of the Companies Act 2013 and the Rules made there under.
17. DISCLOSURES OF ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNALS
There were no significant and material orders passed by the regulators or courts ortribunals impacting the going concern status of the Company and its operations in future.
18. CORPORATE SOCIAL RESPONSIBILITY Corporate Social Responsibility (CSR')Committee
In compliance with the requirements of Section 135 of the Companies Act 2013 read withthe applicable rules made there under the Company has a duly constituted CSR Committee.The details of the Committee are provided in the Corporate Governance Report of theCompany which forms part of the Annual Report.
The contents of the CSR Policy of the Company as approved by the Board on therecommendation of the CSR Committee is available on the website of the Company and can beaccessed through the web link:http://apmindustries.co.in/wp-content/uploads/2017/08/Policy-CSR.pdf
CSR initiatives undertaken during the financial year 2018-19
The Annual Report on CSR Activities undertaken by Company during the financial year2018-19 is annexed as Annexure-2 which forms part of this Report.
During the financial year 2018-19 the Company has spent Rs. 53.73 lakh on CSRactivities.
19. COMMITTEES OF BOARD
The Company has the following comittees of the Board of Directors and the detailspertaining to such committees are mentioned in the Corporate Governance Report whichforms part of the Annual Report.
Nomination and Remuneration Committee
Stakeholders Relationship Committee
Corporate Social Responsibility Committee
20. LISTING OF SECURITIES
As on the date of this report the Company has its Equity Shares listed on the BSELimited. The Company has paid the Annual Listing
Fees for the financial year 2019-20 for all its listed securities to the StockExchange.
21. NOMINATION AND REMUNERATION POLICY
In terms of the provisions of Section 178(3) of the Act and Regulation 19 read withPart D of Schedule II to the Listing Regulations the NRC is responsible for formulatingthe criteria for determining qualification positive attributes and independence of aDirector. The NRC is also responsible for recommending to the Board a policy relating tothe remuneration of the Directors Key Managerial Personnel and other employees. TheNomination and Remuneration Policy is enclosed in Annexure-3 as a part of thisreport in compliance with Section 134(3) of the Companies Act 2013.
The Nomination and Remuneration Policy of the Company is available on the website ofthe Company at http://apmindustries.co.in/wp-content/uploads/2019/08/Policy-NRC.pdf
22. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
The Company had formulated a policy on Related Party Transactions (RPTs')dealing with the review and approval of RPTs. Prior omnibus approval is obtained for RPTswhich are of repetitive nature. All RPTs are placed before the Audit Committee for reviewand approval. All RPTs entered into during FY 2018-19 were in the ordinary course ofbusiness and on arm's length basis. No material RPTs were entered into during FY 2018-19by the Company as defined in the Policy on RPTs. Accordingly the disclosure of RPTs asrequired under Section 134(3)(h) of the Act in Form AOC 2 is not applicable. YourDirectors draw attention of the members to Note No. 50 to the Financial Statements whichsets out the Related Party disclosures.
23. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS ANDOUTGO
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-4 to thisReport.
24. PARTICULARS OF EMPLOYEES
Disclosure with respect to the remuneration of Directors and Employees as requiredunder Section 197 (12) of the Companies Act 2013 and Rule 5 of the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 as amended is annexed as Annexure-5which forms part of this Report.
In terms of the second proviso to Section 136 of the Act the Reports and Accounts arebeing sent to the shareholders excluding the information required under Rule 5(2) and (3)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014. Anyshareholder interested in obtaining the same may write to the Company Secretary at theRegistered Office of the Company. The said information is available for inspection by theMembers at the Registered Office of the Company on any working day of the Company upto thedate of the 45th Annual General Meeting.
25. EXTRACT OF ANNUAL RETURN
Pursuant to Section 92(3) and Section 134(3)(a) the extract of the Annual Return as onMarch 31 2019 in Form No. MGT 9 is attached as Annexure-6 to this Report.Additionally your Company has also placed a copy of annual return for the financial year2017-18 on its website at http://apmindustries.co.in/wp-content/uploads/2019/08/AR_2018.pdf.
26. CORPORATE GOVERNANCE
As a responsible corporate citizen the Company is committed to maintain the higheststandards of Corporate Governance and believes in adhering to the best corporate practicesprevalent globally. A detailed Report on Corporate Governance pursuant to the requirementsof Regulation 34 read with Schedule V of the SEBI Listing Regulations 2015 is attachedto this Report as Annexure-7. A certificate from the Practicing Company Secretaryconfirming compliance with the conditions of Corporate Governance as stipulated in ClauseE of Schedule V to the SEBI Listing Regulations 2015 is attached to the CorporateGovernance Report.
The Board Members and Senior Management Personnel have affirmed compliance with theCode of Conduct for Directors and Senior Management for the year ended March 31 2019. Acertificate from the Managing Director confirming the same is attached to the CorporateGovernance Report.
A certificate from the Managing Director and CFO confirming correctness of thefinancial statements adequacy of internal control measures etc. is also attached to theCorporate Governance Report.
27. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report for the financial year 2018-19 asstipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015is attached to this Report as Annexure-8.
28. VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has established a vigil mechanism for Directors and Employees by adoptingWhistle Blower Policy which is available on the website of the Company and web linkthereto is http:// apmindustries.co.in/wp-content/uploads/2017/08/Policy-WBM.pdf
29. PARTICULARS OF LOAN GUARANTEES OR INVESTMENTS
Details of loans guarantees/ securities and investments along with the purpose forwhich the loan guarantee or security is proposed to be utilized by the recipient havebeen disclosed in Notes to the Financial Statements.
30. MATERIAL CHANGES AND COMMITMENTS
Due to the Scheme of Arrangement w.r.t Demerger the Finance and Investmentundertaking' of the APM Industries Limited has been demerged and subsequent amalgamationwith APM Finvest Limited. Accordingly all assets and Liabilities of Finance andInvestment undertaking of the Company have been transferred to APM Finvest Limited.
31. COMPLIANCE WITH SECRETARIAL STANDARDS
The Company confirms compliance with the applicable requirements of SecretarialStandards 1 and 2.
32. ANNUAL EVALUATION OF BOARD PERFORMANCE AND PERFORMANCE OF ITS COMMITTEES ANDINDIVIDUAL DIRECTORS
The Board of Directors has carried out an annual evaluation of its own performanceBoard Committees and individual Directors pursuant to the provisions of the Act andListing Regulations.
The performance of the Board was evaluated by the entire Board after seeking inputsfrom all the Directors on the basis of criteria such as the Board composition andstructure effectiveness of Board processes information and functioning etc. Theperformance of the Committees was evaluated after seeking inputs from the Committeemembers on the basis of criteria such as the composition of Committees effectiveness ofCommittee meetings etc. The above criteria are based on the Guidance Note on BoardEvaluation issued by the Securities and Exchange Board of India on 5th January 2017. In aseparate meeting of Independent Directors performance of Non-Independent Directors theBoard as a whole and the Chairman of the Company after taking into account the views ofExecutive Directors and Non-Executive Directors was evaluated. The Board and the NRCreviewed the performance of individual directors on the basis of criteria such as thecontribution of the individual director to the Board and Committee meetings likepreparedness on the issues to be discussed meaningful and constructive contribution andinputs in meetings etc. In the Board meeting that followed the meeting of the IndependentDirectors and meeting of the NRC the performance of the Board its Committees andindividual Directors was also discussed. Performance evaluation of Independent Directorswas done by the entire Board excluding the Independent Director being evaluated.
33. DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION& REDRESSAL) ACT 2013
The Company has Zero Tolerance towards any action on the part of any employee which mayfall under the ambit of Sexual Harassment' at workplace and is fully committed touphold and maintain the dignity of every women executive working in the Company. TheCompany's Policy provides for protection against sexual harassment of women at workplaceand for prevention and redressal of such complaints. Further the Company has compliedwith provisions relating to the constitution of Internal Complaints Committee under theSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.
34. INVESTOR SERVICES
In its endeavour to improve investor services your Company has taken the followinginitiatives:
An Investors Section on the website of the Company (www.apmindustries.co.in) hasbeen created.
There is a dedicated e-mail id email@example.com for sendingcommunications to the Company Secretary.
Members may lodge their requests complaints and suggestions on this e-mail as well.
Your Directors acknowledge with gratitude the cooperation and assistance received fromthe Central and State Government Authorities. Your Directors thank the ShareholdersFinancial institutions Banks/ other Lenders Customers Vendors and other businessassociates for the confidence reposed in the Company and its management and look forwardto their continued support. The Board places on record its appreciation for the dedicationand commitment of the employees at all levels which has continued to be our majorstrength. We look forward to their continued support in the future.
| ||For and on behalf of the Board |
| ||Rajendra Kumar Rajgarhia |
|Place : New Delhi ||Chairman |
|Dated: August 01 2019 ||DIN : 00141766 |