To the Members
The Directors are pleased to present you the 24th Annual Report of Apollo Micro SystemsLimited ("the Company or AMS") along with the audited financial statements forthe financial year ended March 31 2021.
1. FINANCIAL RESULTS
The audited financial statements of the Company as on March 31 2021 are prepared inaccordance with the relevant applicable Ind AS and Regulation 33 of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 ("SEBI ListingRegulations") and provisions of the Companies Act 2013 ("Act").
The summary of financial performance (standalone & consolidated) for the FinancialYear ended March 31 2021 and the corresponding figures for the Financial Year ended March31 2020 are as under:
(Figures in Indian "Rs")
|Particulars ||Consolidated* ||Standalone || |
| ||2020-21 ||2020-21 ||2019-20 |
|Revenue from Operations ||2030720827 ||2030720827 ||2459041260 |
|Other Income ||6386356 ||6356545 ||15957933 |
|Total Revenue ||2037107183 ||2037077373 ||2474999193 |
|Cost of materials Consumed ||1594191148 ||1594191148 ||1921800418 |
|Changes in inventories of finished goods WIP stock- in trade ||(85836056) ||(85836056) ||(120694406) |
|Employee Benefit Expenses ||68615701 ||68615701 ||76244152 |
|Other Expenses ||68499018 ||68410265 ||95040631 |
|Earnings Before Interest Tax Depreciation & Amortization (EBITDA) ||391637371 ||391696314 ||502608398 |
|Financial charges ||160168471 ||160165780 ||151044733 |
|Depreciation ||86901827 ||86901827 ||98954464 |
|Profit or Loss Before exceptional and extraordinary items and tax ||144567074 ||144628707 ||252609201 |
|Exceptional Items ||0.00 ||0.00 ||0.00 |
|Profit or Loss Before tax (PBT) ||144567074 ||144628707 ||252609201 |
|Tax Expenses: a) Current Tax ||12144827 ||12164758 ||38014414 |
|b) Earlier Tax Adjustments ||0.00 ||0.00 ||36856052 |
|c)Deferred Tax ||29914212 ||29914212 ||37625958 |
|Total Tax Expense ||42059039 ||42078970 ||112496424 |
|Net Profit or Loss After Tax (NP) ||102508034 ||102549737 ||140112777 |
|Earnings Per Share (Basic) ||4.94 ||4.94 ||6.75 |
|Earnings Per Share (Diluted) ||4.94 ||4.94 ||6.75 |
(Previous year figures have been regrouped wherever necessary to confirm to the currentyear's presentation)
The financial statements for the year ended March 31 2021 and March 31 2020 have beenprepared as per the Ind AS (Indian Accounting Standards). There are no material changesand commitments affecting the financial position of the Company between the end of thefinancial year and the date of this report.
*There was no consolidation of accounts for the financial year 2019-20.
2. COMPANY'S PERFORMANCE
During the year under review FY 2020-21 the standalone performance of your company wasreported as under:
The revenue from operations is Rs 2030720827/- against Rs 2459041260/- in theprevious year. The Earnings Before Interest Tax Depreciation & Amortization("EBITDA") has been reduced by Rs 22.07% to Rs 391696314/- against Rs502608398/- in the previous year. The Profit before Tax ("PBT") for the yearunder review is Rs 144628707/- as against Rs 252609201/- in the previous year. TheNet profit of the Company for the year under review has been reduced by 26.81% to Rs102549737/- against Rs 140112777/- in the previous year. The Earning per Share("EPS") of the Company for the year under review is Rs 4.94/- per sharebasic& diluted.
The key aspects of your Company's consolidated performance during the FY 2020-21 are asfollows:
The revenue from operations is Rs 2030720827/-. The Earnings Before Interest TaxDepreciation & Amortization ("EBITDA") is Rs 391637371/-. The Profitbefore Tax ("PBT") for the year under review is Rs 144567074/-. The Netprofit of the Company for the year under review is Rs 102508034/-. The Earning perShare ("EPS") of the Company for the year under review is Rs 4.94/- per sharebasic & diluted. There was no consolidation of accounts for the financial year2019-20.
3. COVID-19 IMPACT FY 2020-21
The COVID-19 pandemic has once again given a hit to the economy. The subsequent wavehas seen a typical trend in which there were distributed lockdowns compared to a commonlockdown which has further affected as different regions opened in different periods andnot allowing a full potential bounce back of the economy. However a huge adaption has comeinto place which could be a good learning curve for future waves expected to hit due todifferent variants.
Our R&D team continued their work from home even inspite of these odds. Althoughthe manufacturing activity has got affected the R&D continued its operations and wehave been successful in foraying into newer opportunities and new technologies. It is aknown fact that manufacturing sector cannot do work from home model and it has naturallygot affected and the impacted our top line and bottom line but we have not left ourselvesin dismay and continued to mutually encourage ourselves and incubated new ideas for ourfuture growth. We have also unlocked a new model of reaching out to customers via videoconference mode to review the development activity along with customer rather thanreaching out to them personally rather than loosing productive time in travel. We believethis has definitely helped our teams work life. We look this pandemic on positive terms tolead a new way of running the business process although there was an affect on projecttimelines and overall performance in terms of financial numbers. We strongly believe thatthese new changes adapted by our company will be beneficial for future
4. BUSINESS OUTLOOK
The economy has started to come back to its normalcy although in a grip of fear ofdifferent variants and waves to hit the world and in turn hit the economy once again. Itdid happen once again with new waves hitting in the beginning of the financial year andexpectations of one more wave to hit the financial year is also not far. We shouldappreciate that people are coming forward to get vaccinated and awareness has increased inrural and urban areas. The significant and positive sign is that industry once againstarted reviving although top and bottom lines have taken a hit yet art to live withdevil which would continue to be there for a longer time is learned which is definitely anencouragement sign for the industry.
We should also appreciate the initiatives taken by Indian Government on more selfreliance where the global trades have shut down. As a popular saying goes by"Necessity is the mother of invention" we in India are also working towards aresilient and self reliant country both in terms of developing technology and alsoemerging to be global manufacturing hub which is a wonderful growth sign for futuregenerations.
It's a well known fact that we are the largest importer of weapons and weapon systemsand platforms in the world. This although is a feather in the cap yet it is not good forfuture generations. This is understood by visionaries and a focussed approach to lay aroad map to encourage Indigenous systems has been designed and the Indian Defence LabsDefence PSU's and many other Private Giants including majority contribution from MSME'shas grown and their decades of efforts and turmoil has started giving results byencouraging procurement of Indigenous weapons in the country. The recent large scaleorders places by Indian Forces on various weapons and platforms is a testimony for thatand is a huge encouragement and sign of relief for relentless efforts invested by allstake holders for past several decades and also a great sign in encouraging new players toenter into this ocean of opportunities with their unique knowledge and expertise.
In this context it should also be noted that the Government of India has set specifictargets for exporting Indigenous weapons and Platforms to various friendly countries.
The pandemic has given lifetime lessons to everyone i.e. in surviving in difficulttimes and also to sustain in future. We have also seen that markets like Medicalelectronics which were dominated by Foreign players is now slowly getting into track andlot of Indian companies are entering into this business. Although these players would takefew years to get stabilised in this business we see a big opportunity in this arena. Wehave also started specific medical electronics vertical and foresee great potential in thefuture.
5. CREDIT RATING
During the year under review your Company has obtained the Credit Rating from AcuiteRating & Research Limited ("credit rating agency") to Rs 157.50 Crores Lineof Credit (short term & long term) of the Company which is as follows:
|Long-Term Rating ||ACUITE BBB- (pronounced ACUITE triple B MINUS) |
|Short-Term Rating ||ACUITE A3 (pronounced ACUITE A three) |
The outlook on the long-term rating has been assigned as "Stable" by thecredit rating agency.
6. SHARE CAPITAL
(a) Changes in Capital structure of the Company
During the financial year 2020-21 there has been no change in the Capital Structure ofthe Company. There was no public issue rights issue bonus issue sweat equity issue orpreferential issue etc. during the year. The Company has not issued shares withdifferential voting rights or sweat equity shares. During the year under review noemployee stock options were granted in accordance with ESOS scheme of the Company.
(b) Status of Shares
As the members are aware the Company's shares are compulsorily tradable in electronicform. Out of the total paid up capital representing 20763886 equity shares thefollowing equity shares of the Company are in dematerialized and physical form as on March31 2021:
|Sr. Capital Details No ||No. of Shares ||% of Total issued Capital |
|1. Held in dematerialised form in CDSL ||3855280 ||18.56 |
|2. Held in dematerialised form in NSDL ||16898598 ||81.38 |
|3. Physical ||10008 ||0.06 |
|Total ||20763886 ||100.00 |
Note: Pursuant to the amendment in Regulation 40 of the SEBI Listing Regulations datedJune 8 2018 & SEBI date extension circular dated Dec 03 2018 has mandated thattransfer of securities would be carried out in dematerialized form only effective April01 2019. So it is requested to all the Members holding the shares in physical form todematerialize the same for giving effect to any transfer of company's securities.
7. EXTRACT OF THE ANNUAL RETURN [SECTION 134 (3) (a) & SECTION 92(3)]
As per the requirements of Section 92(3) of the Act and Rules framed there under theextract of the annual return for FY 2020-21 is given in ANNEXURE -A in theprescribed Form
No.MGT-9 which is a part of this annual report.
8. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS [SECTION 134 (3) (b)]:
During the year under review four (4) meetings of the Board of Directors of theCompany were held on June 26 2020 August 29 2020 November 12 2020 and February 122021. The attendance of Directors for the above meetings is given in the
Corporate Governance Report that forms part of this annual report. The maximum intervalbetween any two meetings did not exceeded 120 days except the gap between the meeting heldon June 26 2020 from previously held meeting for which relaxation was granted by Ministryof Corporate Affairs ("MCA") due COVID -19 outbreak vide General Circular No.11/ 2020 dated 24th March 2020.
The Detailed information of meetings of board of directors is given in the CorporateGovernance Report annexed to this annual report.
In terms of requirements of Schedule IV of the Act a separate meeting of IndependentDirectors held on March 22 2021 to review the performance of the Non-IndependentDirectors; the Chairperson; the entire Board and its Committees thereof and; assess thequality quantity and timelines of the flow of information between the Management and theBoard.
9. DIRECTOR'S RESPONSIBILITY STATEMENT [SECTION 134 (3) (c) & 134(5)]
Pursuant to Section 134(5) of the Companies Act 2013 (the "Act") the Boardof Directors to the best of its knowledge and ability confirm that: (a) in thepreparation of the annual accounts for the period ended March 31 2021 the applicableaccounting standards had been followed along with proper explanation relating to materialdepartures; (b) the directors have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the company at the end of thefinancial year and of the profit of the company for that period; (c) the directors havetaken proper and sufficient care for the maintenance of adequate accounting records inaccordance with the provisions of this Act for safeguarding the assets of the company andfor preventing and detecting fraud and other irregularities; (d) the directors haveprepared the annual accounts on a going concern basis; (e) the directors have laid downinternal financial controls to be followed by the company and that such internal financialcontrols are adequate and were operating effectively; (f) the directors have devisedproper systems to ensure compliance with the provisions of all applicable laws and thatsuch systems were adequate and operating effectively.
10. DETAILS OF FRAUDS REPORTED BY AUDITORS UNDER SECTION 143(12) OTHER THAN THOSE WHICHARE REPORTABLE TO THE CENTRAL GOVERNMENT [SECTION 134 (3) (ca)]:
During the year under review Statutory Auditor and Secretarial Auditor have notreported any incident of fraud under section 143(12) of the Act.
11. STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS [SECTION 134 (3)(d)]
The Company has received and taken on record the declarations received from theIndependent Directors of the
Company as required pursuant to section 149(7) of the Act stating that meet thecriteria of independence as provided in section 149 (6) of the Act as amended andRegulation 16(1) (b) of the SEBI Listing Regulations as amended.
The Board took on record the declaration and confirmation submitted by the independentdirectors regarding their meeting the prescribed criteria of independence afterundertaking due assessment of the veracity of the same as required under Regulation 25 ofthe SEBI Listing Regulations.
12. FAMILIARISATION PROGRAMME
In compliance with the requirements of the SEBI Listing Regulations the Company hasput in place a familiarisation programme for the Independent Directors to familiarise themwith their roles rights and responsibilities as Independent Directors the working of theCompany nature of the industry in which the Company operates business model and so on.The same is also available on the Company website www.apollo-micro.com under theSection "Investors".
13. COMMITTEES OF THE BOARD
The Board of Directors has constituted various mandatory and non-mandatory Committeesto deal with specific areas and activities which concern the Company and requires a closerreview. The Committees are formed with approval of the Board and function under theirrespective Charters. These Committees play an important role in the overall management ofday-to-day affairs and governance of the Company. The Board Committees meet at regularintervals and take necessary steps to perform its duties entrusted by the Board. TheMinutes of the Committee Meetings are placed before the Board for noting. The Boardcurrently has the following Committees:
(a) Audit Committee
The Audit Committee was constituted by our Board in accordance with Section 177 of theCompanies Act 2013 and Regulation 18 of the SEBI Listing Regulations. The compositionquorum terms of reference function powers roles and scope are in accordance withSection 177 of the Act and the provisions of Regulation 18 of the SEBI ListingRegulations. All the members of the committee are financially literate and Mrs. KarunasreeSamudrala Chartered Accountant the Chairman of the Committee is an Independent Directorand possesses the relevant financial expertise.
The details regarding composition terms of references powers functions scopemeetings and attendance of members are included in Corporate Governance Report which formspart of the Annual Report.
(b) Corporate Social Responsibility (CSR) Committee
The Company believes in undertaking business in such a way that it leads to overalldevelopment of all stake holders and society. The Company considers social responsibilityas an integral part of its business activities and endeavours to utilize allocable CSRbudget for the benefit of society.
The CSR Committee has been constituted as required under the provisions of section 135of the Act. The details regarding composition objectives powers functions scopemeetings and attendance of members are included in Corporate Governance Report which formspart of the Annual Report.
The Committee formulated and recommended to the Board the CSR Policy. On therecommendations of the CSR Committee the Board approved and adopted the CSR Policy of theCompany. The Corporate Social Responsibility Policy is posted under the Investors sectionof the Company's website at:http://www.apollo-micro.com/investor_relations/CSR-Policy.pdf.
As per Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules 2014annual report on CSR is prepared and the same is enclosed as Annexure-B to thisReport.
(c) Stakeholder's Relationship Committee
Stakeholder's Relationship Committee has been constituted by the Board in accordancewith Section 178 (5) of the Act.
The details regarding composition terms of references powers functions scopemeetings attendance of members and the status of complaints received during the year areincluded in Corporate Governance Report which forms part of the Annual Report.
(d) Nomination and Remuneration Committee
The Nomination and Remuneration Committee has been constituted by the Board inaccordance with section 178 of the Act and Regulation 19 of SEBI Listing Regulations.
The details regarding composition terms of references powers functions scopemeetings and attendance of members are included in Corporate Governance Report which formspart of the Annual Report.
Policy on Remuneration of Directors KMPs and other employees
The Policy of the Company on remuneration of Directors KMPs Senior Management andother employees including criteria for determining quali cations positive attributesindependence of a Director and other matters provided under sub-section (3) of section 178is made available on the Company's website www.apollo-micro. com under the section"Investors". The website link ishttp://apollo-micro.com/wp-content/uploads/2017/09/ REMUNERATION_POLICY.pdf.
(e) Risk Management Committee
The Risk Management Committee was constituted pursuant to resolution of the Boardwhich has been entrusted with the responsibility to assist the Board in overseeing andapproving the Company's enterprise wide risk management framework.
The details regarding composition terms of references powers functions scopemeetings and attendance of members are included in Corporate Governance Report which formspart of the Annual Report.
(f) Executive Committee of Directors & CFO
The Executive Committee of Directors and Chief Financial Officer (CFO) ("ExecutiveCommittee") has been formed by the Board under the provisions of Section 179(3) ofthe Act and rules made there under in order to have the timely and expeditious executionof routine financial matters.
The details regarding composition terms of references powers responsibilitiesscope meetings and attendance of members are included in Corporate Governance Reportwhich forms part of the Annual Report.
14. EXPLANATIONS OR COMMENTS BY THE BOARD ON EVERY QUALIFICATION RESERVATION ORADVERSE REMARK OR DISCLAIMER MADE [SECTION 134 (3) (f)]:
By the Statutory Auditor in their Report: has no qualification or adverse remarks
By Company Secretary in Practice in Secretarial Audit Report: has no qualification oradverse remarks except on reduction of promoter shareholding which was reduced by 1000000shares and which was self-explanatory.
15. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186 [SECTION 134 (3)(g)]
During the financial year 2020-21 the Company has not given any loans or guarantees toany person or other bodies corporate or acquired securities of any other body corporate asreferred to in Section 186 of the Act and the Companies (Meetings of Board and its Powers)Rules 2014. Further the company has not made any investment during the period underreview.
However the Company has subscribed for 210940 equity shares of Ananya SIP RFTechnologies Private Limited"("ASIP RF") amounting to Rs. 13289220/-through which 51% stake in the ASIP RF has been acquired in compliance with theprovisions of Section of 179 (2) (e) of the Companies Act 2013.
16. SUBSIDIARIES JOINT VENTURES AND ASSOCIATES [RULE 8(5)(iv) OF COMPANIES (ACCOUNTS)RULES 2014]
Your Company has one (1) subsidiary company. During the year under review M/s AnanyaSIP RF Technologies Private Limited (CIN: U74990TG2015PTC097610) has become the subsidiaryof the Company by virtue of acquiring 51% stake in the aforementioned Company with effectfrom 3rd August 2020. Further the Company does not have any joint ventures/ AssociateCompanies during the year under review.
Pursuant to the provisions of Section 129 134 and 136 of the Act read with rules madethereunder and Regulation 33 of the SEBI Listing Regulations the Company has preparedconsolidated financial statements of the Company and a separate statement containing thesalient features of financial statement of subsidiary in Form AOC-1 forms part of thisAnnual Report as Annexure-C.
The annual financial statements and related detailed information of the subsidiarycompanies shall be made available to the members of the holding and subsidiary companyseeking such information on all working days during business hours. The financialstatements of the subsidiary company shall also be kept for inspection by any membersduring working hours at the Company's registered office and that of the subsidiary companyconcerned.
In accordance with Section 136 of the Act the audited financial statements includingconsolidated financial statements and related information of the Company and auditedaccounts of its subsidiary are available on website www.apollo-micro. com. Pursuant toSection 134 of the Act read with rules made thereunder the details of developments ofsubsidiary of the Company are covered in the Management Discussion and Analysis Reportwhich forms part of this Report.
17. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES [SECTION 134 (3) (h)]
All related party transactions entered into by the Company during the financial year2020-21 were in the ordinary course of business and on arm's length basis and incompliance with the applicable provisions of the Act and the SEBI Listing Regulations.During the financial year under review none of the transactions entered into with relatedparties were material as defined under the Act and SEBI Listing Regulations.
The particulars of contract or arrangements entered into by the Company during thefinancial year 2020-21 with related parties referred to in sub-section (1) of section 188of the Companies Act 2013 including certain arm's length transactions under third provisothereto has been disclosed in Form No. AOC -2 attached to the Board's report as Annexure-D.The Policy on Related Party Transactions as approved by the Board is uploaded on theCompany's website www.apollo-micro.com under the Section "Investors".
18. RESERVES [SECTION 134 (3) (j)]
During the financial year 2020-21 the Board of Directors has not recommended transferof any amount of profit to any reserves. Hence the amount of profit for the financialyear under review has been carried forward to the Statement of Profit and Loss.
19. DIVIDEND [SECTION 134 (3) (k)]
Please refer to the Supplemental Directors Report dated 12th August 2021 as stated inpage no. 51.
20. DIVIDEND DISTRIBUTION POLICY
Pursuant to Regulation 43A of the SEBI Listing Regulations mandates top 500 ListedCompanies based on their market capitalization to formulate Dividend Distribution Policy.As per Regulation 43A of SEBI Listing Regulations your company has voluntarily adoptedthe Dividend Distribution policy.
Accordingly the policy was adopted to set out parameters and circumstances that willbe taken into account by the Board in determining the distribution of dividend to theshareholders. The Policy is also available on the Company's website under the web linkhttp://apollo-micro.com/investors. The Policy is also annexed herewith as Annexure-Eto the Board's Report.
21. MATERIAL CHANGES AND COMMITMENTS IF ANY [SECTION 134 (3) (l)]
There were no material changes and commitments affecting the financial position of theCompany which have occurred between the end of the financial year of the company to whichthe financial statements relate and the date of this report.
22. CONSERVATION OF ENERGY TECHNICAL ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO [SECTION 134 (3) (m)]:
The Company continues its efforts to reduce and optimize the energy consumption at itsmanufacturing facility.
A. Conservation of Energy
The operations of the company are not energy intensive. Adequate measures are taken toconserve and reduce the energy consumption like usage of LED Lights and power savingcentralized air conditioners.
Research & Development
During the year under review we have developed critical technologies. We haveinitiated the development of new technologies in Electro-mechanical actuators for variousweapon platforms and also for Aircraft Landing gear systems. This is going to reap hugebenefits for the company's growth. We have started seeing the results in which some of thesystems are used in trials and are successful and we foresee a huge market potential forthese systems. It is important to mention the contributions of our Naval Systems groupwhich has once again proven their mettle by re-configuring technologies for differentplatforms. They have also successfully participated in offshore sea trials of weaponswhich is a feather on cap to the existing contributions.
A new spectrum of technologies are developed which are state of the art modular andcompetent enough to meet global requirements. These technologies are a strong foundationsfor upcoming business growth and sustenance and we foresee the results to hit intobusiness by Fiscal 2023. We have spent Rs. 134127215/- towards our R&D activitiesin this Financial Year.
B. Technical Absorption
The Company works on in house Technology.
C. Foreign Exchange Earnings and Outgo:
Foreign Exchange outgo and earnings
|Particulars ||Year ended March 31 2021 ||Year ended March 31 2020 |
|Value of imported raw-materials on CIF basis ||Rs 210443678/- ||Rs 166588143/- |
|Other Expenses: Foreign Travel Expenses ||Rs 270000/- ||Rs 737366/- |
|Earnings in foreign currency: || || |
|FOB Value of Exports ||-- ||-- |
|For Services Rendered ||-- ||-- |
23. ANNUAL EVALUATION ON PERFORMANCE [SECTION 134(3) (p)]:
Pursuant to the provisions of the Act and SEBI Listing Regulations the Board hascarried out an annual evaluation of performance of its own the Committees thereof and theDirectors.
The Board is pleased to report that the result thereof show that the Company iswell-equipped in the management as well as the governance aspects.
The Independent Directors at their separate meeting held on March 22 2021 reviewed theperformance of Non-Independent Directors (Executive & Non- Executive) Chairpersonperformance of the Board as a whole and its various committees and also assessed thequality quantity and timelines of flow of information between the Company Management andthe Board.
The Independent Directors expressed their satisfaction on the overall functioning andeffectiveness of the Board Committees and performance of individual Non-Independent Boardmembers and the Chairman.
The Board (excluding the Independent Directors being evaluated) has evaluated theperformance of the Independent Directors on parameters such as Knowledge ExperienceIntegrity Independence of judgment adherence to Code of Conduct Corporate GovernanceContribution attendance& level of participation and fulfilment of IndependenceCriteria etc in accordance with the Company's "Policy for evaluation of Directors andKey Managerial Personnel and other employees".
The Board has expressed its satisfaction to the performance of the IndependentDirectors and appreciated the level of participation of Independent Directors.
24. EMPLOYEE STOCK OPTIONS SCHEME [RULE 12(9) OF COMPANIES (SHARE CAPITAL ANDDEBENTURES) RULES 2014]:
The Company has in place the Employee Stock Option Scheme 2018 (ESOS-2018) to attractreward motivate and retain its employees who have shown high levels of individualperformance and for the unusual efforts put in by them to improve the operational andfinancial performance of the Company which ultimately contributes to the success of theCompany.
During the financial year 2020-21 no grant of options was made to the employees of thecompany under the ESOS scheme. The disclosures according to the provisions of the Act andSEBI (Share Based Employee Benefits) Regulations 2014 as on March 31 2021 with regard tothe Apollo Employee Stock Option Scheme 2018 (ESOS-2018) are annexed to this Report as Annexure-F.
25. CHANGE IN THE NATURE OF BUSINESS [RULE 8(5) (ii) OF COMPANIES (ACCOUNTS) RULES2014]
There is no change in the nature of the business of the Company during the financialyear 2020-21.
26. CHANGE IN THE DIRECTORS OR KEY MANAGERIAL PERSONNEL [RULE 8(5)(iii) &8(5)(iii)(a) OF COMPANIES (ACCOUNTS) RULES 2014]
The composition of the Board is in conformity with Regulation 17 of the SEBI ListingRegulations and Section 149 of the Companies Act 2013. There is an optimum combination ofExecutive and Non-Executive Directors. The Company has
6 (six) Directors as on March 31 2021. Out of the 6 (six) Directors 3 (three) areExecutive Directors 2(two) Non-Executive- Independent Directors and 1 (one) Non-Executive Non Independent Director.
During the financial year 2020-21 there were no appointments or resignation on theBoard of the Company.
Pursuant to the provisions of the Section 149 of the Act the Independent Directorshave submitted declarations that each of them meets the criteria of independence asprovided in Section 149(6) of the Act along with the rules framed under the SEBI ListingRegulations. There has been no change in the circumstances affecting their status asIndependent Directors of the Company.
Ministry of Corporate Affairs vide its Notification number G.S.R. 804(E) dated October22nd 2019 had amended the Companies (Appointment and Qualification of Directors) Rules2014 and its amendment thereof requiring the registration of Independent Directors in thedatabank maintained by the Indian Institute of Corporate Affairs ("IICA") andpassing the online proficiency self-assessment test conducted by the IICA within two(2)year from the date of inclusion of his/her name in the data bank.
-Mr. Raghupathy Goud Theegala Independent Director has duly registered his name in thedata bank of IICA w.e.f February 25 2020 and the passing of the online proficiencyself-assessment test is still pending. As per the the Companies (Appointment andQualification of Directors) Rules 2014 the date up to which proficiency test can bepassed is February 24 2022.
-Mrs. Karunasree Samudrala Independent Director has duly registered her name in thedata bank of IICA w.e.f February 25 2020 and passed the online proficiencyself-assessment test on April 10 2020.
In opinion of the Board they ful ll the conditions speci ed in the Act and the Rulesmade there under for the appointment as Independent Directors and are independent of themanagement.
The Independent Director's possess the relevant integrity expertise experience andproficiency.
During the year under review the non-executive directors the Company had no pecuniaryrelationship or transactions with the Company other than sitting fees commission if any.
During the financial year 2020-21 there was no change in the Key Managerial Persons(KMP's) of the Company.
Retire by rotation
Mrs. Sri Lakshmi Reddy Vangeti (DIN: 02757567) retires by rotation at the ensuing 24thAnnual General Meeting and being eligible offers herself for reappointment.
Additional information on reappointment of Mrs. Sri Lakshmi Reddy Vangeti as directorand as required under regulation 36 of the SEBI Listing Regulations is given in the Noticeconvening the forthcoming AGM.
27. DEPOSITS [RULE 8(5) (v) OF COMPANIES (ACCOUNTS) RULES 2014]
The Company has not accepted any deposits within the meaning of Section 73 of the Actread with the Companies (Acceptance of Deposits) Rules 2014. There are no unpaid orunclaimed deposits as the Company has never accepted deposits within the meaning of theAct and the rules made there under.
28. SIGNIFICANT AND MATERIAL ORDERS [RULE 8(5) (vii) OF COMPANIES (ACCOUNTS) RULES2014]
During the financial year 2020-21 the Company hasn't received any significant andmaterial orders that impact the going concern status and company's operations in future.
29. INTERNAL FINANCIAL CONTROLS [RULE 8(5)(viii) OF COMPANIES (ACCOUNTS) RULES 2014]
The Company has kept in place adequate financial controls to check and control anydefects and frauds in the Company. Adequate internal control systems commensurate with thenature of the Company's business its size and complexity of its operations are in placeand have been operating satisfactorily. Internal control systems comprising policies andprocedures are designed to ensure reliability of financial reporting timely feedback onachievement of operational and strategic goals compliance with policies procedureapplicable laws and regulations and that all assets and resources are acquiredeconomically used efficiently and adequately protected.
The Board of Directors of the Company have adopted various policies like Related PartyTransactions Policy Vigil Mechanism Policy and such other procedures for ensuring theorderly and efficient conduct of its business for 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.
30. PARTICULARS OF EMPLOYEES
The information required under section 197(12) of the Act read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 respectivelyare given in Annexure-G which forms partof this
The statement containing names of top ten employees in terms of remuneration drawn andthe particulars of employees as required under Section 197(12) of the Act read with Rule5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 is provided in a separate annexure forming part of this report. Further thereport and the accounts are being sent to the Members excluding the aforesaid annexure. Interms of Section 136 of the Act the said annexure is open for inspection and any Memberinterested in obtaining a copy of the same may write to the Company Secretary.
31. AUDITORS AND AUDIT REPORT
(a) Statutory Auditors & their Reports
M/s. S T Mohite & Co. (FRN 011410S) Hyderabad were appointed as Statutory Auditorsof the Company in the adjourned Annual General Meeting held on August 26 2017 for aperiod of 5 Years and holds office until the conclusion of the 25th Annual General Meetingto be held in the calendar year 2022 (subject to ratification by the shareholders at eachAnnual General Meeting) on such remuneration as may be determined by the Board. Pursuantto notification dated May 7 2018 issued by the Ministry of Corporate Affairs New Delhirequirement to place the matter relating ratification to appointment of Auditors bymembers at every Annual General Meeting is omitted.
Further M/s. S T Mohite & Co. have confirmed their eligibility for theirappointment as Statutory Auditors and the same are within the limits as specified insection 141 of the Companies Act 2013 and have also confirmed that they are notdisqualified from continuing as Auditors of the Company.
The Notes on financial statement referred to in the Auditors' Report areself-explanatory and do not call for any further comments.
The statutory auditors' report is forming the part of this report. The notes onfinancial statements referred to in the Auditors' Report are self-explanatory and do notcall for any further comments. There are no specifications reservations adverse remarkson disclosure by the statutory auditors in their report. They have not reported anyincident of fraud to the Board of the Company during the year under review.
(b) Internal Auditors
As per the provisions of Section 138 of the Companies Act 2013 and the rules madethere under the Board of Directors had appointed M/s Surya Pavan & Co CharteredAccountants Vijayawada (ICAI Firm Registration No. 015612S) as Internal Auditor toconduct the internal audit of the Company for the Financial Year 2020-21.
The Internal Audit Report for the Financial Year 2020-21 issued by M/s Surya Pavan& Co Chartered Accountants Vijayawada is submitted which is self-explanatory and donot call for any further explanation of the Board.
(c) Cost Auditors
As per Cost Audit applicability cost compliance is not applicable for FY 2020-21 asthe Company status is considered as "small enterprise" as per MSME guidelines/circular till 31st March 2021. Hence the maintenance of cost records as specified by theCentral Government under sub section (1) of section 148 of the Act was not required.
(d) Secretarial Auditors
As per the provisions of Section 204 of the Companies Act 2013 and the rules madethere under the Board of Directors had appointed Mr. Venkatesh Reddy Datla PracticingCompany Secretary Hyderabad (Membership No: 36504; CP No: 14074) as Secretarial Auditorto conduct the Secretarial audit of the Company for the Financial Year 2020-21.
The Secretarial Audit Report pursuant to the provisions of Section 204 read withSection 134(3) of the Companies Act 2013 issued by Mr. Venkatesh Reddy Datla PracticingCompany Secretary in Form MR-3 for the financial year 2020-21 is annexed to the Board'sReport as Annexure-H
The secretarial auditors' report is forming the part of this report. The observationwith respect to compliance in the secretarial auditors' report is self-explanatory and donot call for any further comments. There are no specifications reservations adverseremarks on disclosure by the secretarial auditors' in their report. They have not reportedany incident of fraud to the Board of the Company during the year under review.
Further the Board has approved the re- appointment of Mr. Venkatesh Reddy DatlaPracticing Company Secretary Hyderabad (Membership No: 36504; CP No: 14074) as theSecretarial Auditor of the Company for the Financial Year 2021-22.
32. MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis Report ("MD&A") for the year underreview as stipulated under the SEBI Listing Regulations is presented in a separate sectionforming part of this Annual Report.
33. REPORT ON CORPORATE GOVERNANCE
The Company has complied with the Corporate Governance requirements under the CompaniesAct 2013 and as stipulated under the SEBI Listing Regulations. A separate section titledCorporate Governance Report as Annexure-I under the SEBI Listing Regulations alongwith a Corporate Governance Certificate from the Practicing Company Secretary in the Annexure-Jand CFO Certification in compliance with Regulation 17(8) of SEBI Listing Regulations inthe Annexure-K forms the part of this report.
34. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. To maintain its objectivity and independence the InternalAudit Functions reports to the Board including Audit Committee of the Company. Based onthe report of internal audit function process owners undertake corrective action in theirrespective areas and thereby strengthen the controls.
35. VIGIL MECHANISM
The Company's Board of Directors pursuant to the provisions of Section 177(9) of theAct read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules 2014 hasframed Whistle Blower Policy' for Directors and employees of the Company. The policyis to provide a mechanism which ensures adequate safeguards to employees and Directorsfrom any victimisation on raising of concerns of any violations of legal or regulatoryrequirements incorrect or misrepresentation of any financial statements and reports andso on. The employees of the Company have the right/ option to report theirconcern/grievance to the Chairman of the Audit Committee. The Company is committed toadhere to the highest standards of ethical moral and legal conduct of businessoperations. The Whistle Blower Policy is hosted on the Company's websitewww.apollo-micro.com under the section "Investors".
36. INVESTORS EDUCATION AND PROTECTION FUND (IEPF)
Pursuant to section 124 of the Act Dividends that are unclaimed for a period of sevenyears are required to be transferred to the IEPF established by the Government of India.During the year under review there was no outstanding amount of unclaimed dividends whichwas liable to be transfer to the IEPF.
37. HUMAN RELATIONS
The Company continues to have cordial and harmonious relationship with its employeesand thank all employees for their cooperation and the contribution towards harmoniousrelationship and progress of the company.
38. POLICY ON SEXUAL HARASSMENT
Your Company is committed to provide work environment that ensures every employee istreated with dignity and respect and afforded equitable treatment. The Company is alsocommitted to promoting a work environment that is conducive to the professional growth ofits employees and encourages equality of opportunity and will not tolerate any form ofsexual harassment and to take all necessary steps to ensure that its employees are notsubjected to any form of harassment.
Thus in order to create a safe and conducive work environment the Company has in placea policy for prevention of sexual harassment in accordance with the requirements of theSexual Harassment of women at workplace (prevention Prohibition & Redressal) Act2013.
Further the Company has complied with provisions relating to constitution of InternalComplaints Committee ("ICC") under
Sexual Harassment of women at workplace (Prevention Prohibition & Redressal) Act2013. The Committee has been set up to redress complaints received regarding sexualharassment. The detail of the committee members is available on the website of the Companywww.apollo-micro. com under the section "Investors". All employees (permanentcontractual trainees temporary) are covered under this policy. During the year underreview there were no cases filed under the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013.
The Directors thank all customers bankers investors shareholders vendors and otherstakeholders for their continued support and patronage during the year under review. TheBoard appreciates its employees for their efforts hard work and dedication which enabledthe Company to achieve the targets and recognitions.
| ||For and on behalf of the Board || |
| ||APOLLO MICRO SYSTEMS LIMITED || |
| ||Sd/- ||Sd/- |
|Place: Hyderabad ||Karunakar Reddy Baddam ||Krishna Sai Kumar Addepalli |
|Date: 29th June 2021 ||Managing Director ||Whole Time Director (Operations) |
| ||DIN: 00790139 ||DIN: 03601692 |