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Apollo Pipes Ltd.

BSE: 531761 Sector: Industrials
NSE: APOLLOPIPE ISIN Code: INE126J01016
BSE 00:00 | 20 Jan 585.10 2.85
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NSE 00:00 | 20 Jan 586.45 -1.00
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OPEN 602.00
PREVIOUS CLOSE 582.25
VOLUME 3738
52-Week high 680.05
52-Week low 214.00
P/E 41.26
Mkt Cap.(Rs cr) 2,301
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 602.00
CLOSE 582.25
VOLUME 3738
52-Week high 680.05
52-Week low 214.00
P/E 41.26
Mkt Cap.(Rs cr) 2,301
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Apollo Pipes Ltd. (APOLLOPIPE) - Director Report

Company director report

To the members of Apollo Pipes Limited

Your Directors are pleased to present the 35th Annual Report on thebusiness and operations of your Company along with the Audited Financial Statement for thefinancial year ended March 312021.

FINANCIAL PERFORMANCE:

The Company's financial performance for the year under review alongwith the previous year's figures is given hereunder:

(Rs. In Lakh)

Particulars 1 FY 2020-21 1 1 FY 2019-20
Gross sales 51806.83 40795.81
Add : Other income 841.14 1013.27
Total revenue 52647.98 41809.08
Operating expenses 44381.80 36160.67
EBIDTA 8266.17 5648.41
Less : Finance cost 436.26 606.76
Less : Depreciation and amortisation 1762.76 1269.98
Profit before tax (PBT) 6067.16 3771.67
Less : Tax expense 1619.72 919.09
Profit after tax for the year (PAT) 4447.43 2852.58
Prior period adjustments - -
Add: Profit brought forward 9270.03 6575.50
Final dividend on equity shares - 131.09
Tax on dividends - 26.96
Balance carried over to balance sheet 13717.46 9270.03

The Company's gross turnover in financial year 2020-21 increasedsignificantly by 27% from RS. 40795.81 lakh to RS. 51806.83 lakh. The EBIDTA has beenincreased by 46% from RS. 5648.41 lakh to RS. 8266.17 lakh for the year under review.The net profit of the Company has also increased by 56% from RS. 2852.58 lakh to RS.4447.43 lakh during the year under review.

DIVIDEND

The Board of Directors of the Company has deemed it prudent not torecommend any dividend for the financial year under report and to retain the profits inorder to mitigate the adverse impact caused by the outbreak of Covid-19 pandemic and toaugment the resources for meeting the future business objectives

Pursuant to Regulation 43A of the SEBI (Listing Obligations &Disclosure Requirements) Regulations 2015 (as amended) the Company has DividendDistribution Policy. During the year there have been no changes to the policy. Hence thesame is not annexed to this report however same is available on our website athttps://www.apollopipes.com/media/product/2135595372_ DividendDistributionPolicy.pdf.

TRANSFER TO RESERVES

The Board of Directors of your Company has decided not to transfer anyamount to the Reserves for the year under review.

OVERVIEW

The Indian economy was expected to contract of earlier years in FY21.India announced the largest lockdown in the world that extended more than 5 weeks whichbrought the wheels of the economy to a grinding halt.

Lives and livelihoods were severely impacted. Businesses struggled.Consumer confidence plummeted. And India reported it's a 24% plus GDP contraction in Q1 ofFY21 - the highest quarterly GDP contraction since independence.

A resurgent India bounced back with vigour. The wheels of the economygathered momentum. The phased unlocking enabled businesses to capitalise on the pent updemand. Moreover the geo-political issues prevailing in the global landscape and theChina+1 strategy adopted by a number of global conglomerates created considerable growthopportunities for India Inc.

The nation reported a GDP growth of 1.6% in the fourth quarter of FY21.

BUSINESS PERFORMANCE

FY21 was one of uncertain operations as pandemic and the lockdownhalted operations for close to a month. The subsequent drop in demand impacted theCompany's operations initially. But it recovered smartly in the second half of the year ascommercial activity picked up and demand resurfaced. Sales in the second half of thefiscal stood at 24432 MT - 6.68% higher than the production in the first half of FY21.

Despite the initial operational challenges the Company reported a 27%increase in Revenue from Operations from Rs 408 crore in FY20 to Rs 518 crore in FY21.This jump was contributed by growing sales volumes and a larger proportion of value-addedproducts.

In line with the Company's long-term strategy of widening its productoffering it launched water tanks in North India. The product received an overwhelmingresponse from the markets. To the extent that Apollo Pipes needed to create capacities forwater tanks in our other manufacturing units.

The Company prudently utilised the cash flow between retiring high-costdebt even as it invested in capacity enhancement. In addition the Company undertookimportant measures to create awareness about its products among discerning customers inkey markets.

PROSPECTS

Government programmes such as the programme - Jal Jeevan Mission (Urban& Rural) - promise to provide piped water supply and tap connections to all householdsin smaller cities and town over the next four years. This is expected to open largeopportunities over the medium-term.

PROJECTS

In keeping with the growing demand for the Company's products -primarily tanks and fittings - the Company undertook and successfully completed itsbrownfield manufacturing extensions across facilities located at Dadri Tumkur andSikanderabad. The Company's greenfield facility at Raipur is expected to commenceoperation in FY22.

COVID-19: THE SECOND WAVE

India was hit hard by the second wave of the pandemic in April 2021.The state governments announced simultaneous lockdowns across the country. Major impact ofCovid-19 has been felt in the first quarter with both revenue and profit being affected.With opening of domestic market post lockdown in June 2021 business prospects andperformance is expected to improve gradually from the second quarter of FY22 onwards.

INTERNAL FINANCIAL CONTROL

The Company has in place adequate internal financial controls withinthe meaning of Section 134(5)(e) of the Companies Act 2013. For the financial year endedMarch 31 2021 the Board is of the opinion that the Company had sound Internal FinancialControls commensurate with the size and nature of its operations and are operatingeffectively and no reportable material weakness was observed in the system during theyear.

Based on annual Internal Audit programme as approved by Audit Committeeof the Board regular Internal Audits are conducted covering all offices factories andkey areas of the business. Findings are placed before Audit Committee which reviews anddiscusses the actions taken with the management. The Audit Committee also reviews theeffectiveness of Company's internal controls and regularly monitors implementation ofaudit recommendations.

ANNUAL RETURN

In accordance with the provisions of Section 134 (3)(a) of theCompanies Act 2013 the Annual Return as required under Section 92 of the Act for thefinancial year 2020-21 is available on Company's website at https://www.apollopipes.com/media/product/1224662331 Annual Return for FY 2020-21.pdf

SUBSIDIARIES COMPANIES JOINT VENTURES AND ASSOCIATES

During the year under review the Company had no subsidiary jointventure(s) or associate(s) Companies. Hence disclosure in form AOC-1 is not applicable tothe Company.

DEPOSITS

Your Company has neither accepted nor renewed any public depositswithin the meaning of Section 73 of the Companies Act 2013 read with Companies(Acceptance of Deposits) Rules 2014 during the year under report.

SHARE CAPITAL

As on March 312021 the authorized share capital of the Company stoodat C165500000/- (Rupees Sixteen Crore and Fifty Five Lakh only) divided into16550000 (One Crore Sixty Five Lakh and Fifty Thousand only) equity shares of C10(Rupees Ten Only) each.

The paid up Equity Share capital of the Company as on March 31 2021was RS. 131094020/- (Rupees Thirteen Crore Ten Lakh Ninety Four Thousand and Twentyonly) divided into 13109402 (One Crore Thirty One Lakh Nine Thousand Four Hundred andTwo only) equity shares of RS. 10/- (Rupees Ten only) each.

During the year 1360000 outstanding fully convertible Warrants heldby Mr. Sameer Gupta and Mrs. Meenakshi Gupta (460000 and 900000 each respectively)stand lapsed on account of failure to exercise the right to acquire Equity Sharesunderlying the said warrants within 18 months of such allotment by the Warrant- holders interms of Chapter V of SEBI (Issue of Capital and Disclosure Requirements) Regulations2018. Thereby diluted share capital of Company RS. 144694020 is reduced to RS.131094020. The Company has neither issued shares with differential voting rights norhas issued any sweat equity shares. Further it did not issue any bonus shares also duringthe year under review.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

In accordance with the provisions of Section 152 of the Companies Act2013 and in terms of Articles of Association of the Company Mr. Saket Agarwal will retireat the ensuing Annual General Meeting (AGM) and being eligible offer himself forreappointment.

The Company has received declaration from all the Independent Directorsof the Company confirming that they meet the criteria of independence as prescribed bothunder the Companies Act 2013 and SEBI (LODR) 2015. Further pursuant to the Regulation25(8) of the SEBI (LODR) 2015 Independent Directors of the Company declared that theyare not aware of any circumstances or situation that exists or can be anticipated whichcould render them incapable of performing their duties with reasonable independentjudgement and without any external influence. The Board took the same on record afterundertaking assessment of its veracity. In the opinion of the Board all IndependentDirectors possess strong sense of integrity and having requisite experience qualificationand expertise.

Pursuant to Companies (Appointment and Qualification of Directors)Rules 2014 all the Independent Directors has registered themselves under the IndependentDirector's databank.

Composition of the Board of Directors of the Company as on 31.03.2021:

1. Mr. Sameer Gupta (DIN: 00005209) - Managing Director (Executive)

2. Mr. Sanjay Gupta (DIN: 00233188) - Chairman (Non-executive Director)

3. Mr. Saket Agarwal (DIN: 00203084) - Director (Non-Executive andNon-Independent)

4. Mr. Pradeep Kumar Jain (DIN: 08063400) - Director (NonExecutive andIndependent)

5. Ms. Neeru Abrol (DIN: 01279485) - Director (Non-Executive andIndependent)

6. *Mr. Abhilash Lal (DIN: 03203177) - Director (Non-Executive andIndependent)

*Mr. Abhilash Lal was appointed as Additional Director w.e.f. March 222020 and his appointment was regularized by members as Independent Director in 34th AGM ofCompany held on September 29 2020.

PARTICULARS OF REMUNERATION

Disclosure of ratio of the remuneration of each Executive Director tothe median remuneration of the employees of the Company and other requisite detailspursuant to Section 197(12) of the Companies Act 2013 read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 as amendedis annexed to this report as Annexure 'A'. Further particulars of employeespursuant to Rule 5(2) & 5(3) of the above Rules form part of this report. However interms of provisions of section 136 of the said Act the report and accounts are being sentto all the members of the Company and others entitled thereto excluding the saidparticulars of employees. Any member interested in obtaining such particulars may write tothe Company Secretary at compliance@apollopipes.com. The said information is available forinspection at the registered office of the Company during working days of the Company uptothe date of ensuing Annual General Meeting.

AUDITORS AND AUDITORS' REPORT

A. Statutory Auditors

The tenure of the Statutory Auditors M/s. VAPS & Company CharteredAccountants (Firm Registration No. 003612N) got expired in 34th AGM dated September 292020 and consequently the members of the Company in the said AGM on recommendation ofBoard in their meeting held on August 04 2020 had re-appointed M/s. VAPS & CompanyChartered Accountants for second term of five years till the conclusion of 39th AGM to beheld in year 2025.

The Statutory Audit Report on the financial statements for thefinancial year ended on March 31 2021 does not contain any qualification reservation oradverse remark or disclaimer. The Auditor has not reported any incidence of fraud duringthe period under review.

B. Cost Auditors

In terms of Section 148 of the Act the Company is required to get theaudit of its cost records conducted by a Cost Accountant. In this connection the Board ofDirectors of the Company had on the recommendation of the Audit Committee approved theappointment of M/s HMVN & Associates Cost Accountants (FRN: 000290) as the CostAuditors of the Company for the year ended March 312021.

In accordance with the provisions of Section 148(3) of the Act readwith Rule 14 of the Companies (Audit and Auditors) Rules 2014 the remuneration payableto the Cost Auditors as recommended by the Audit Committee and approved by the Board hasto be ratified by the members of the Company. Accordingly appropriate resolution waspassed by members in their 34th AGM for ratification of remuneration of Cost Auditor forfinancial year ended March 312021.

M/s HMVN & Associates Cost Accountants (FRN: 000290) have vastexperience in the field of cost audit and have been conducting the audit of the costrecords of various big Companies for many years. The Cost Audit Report of the Company forthe financial year ended March 31 2021 will be filed with the MCA. The Company hasmaintained accounts and records as specified under subsection (1) of 148 of the Act.

C. Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act 2013the Board of Directors had appointed M/s Anjali Yadav & Associates CompanySecretaries in practice as Secretarial Auditor to carry out the Secretarial Audit of theCompany for the financial year 2020-21. The report given by them for the said financialyear in the prescribed format is annexed to this report as Annexure 'B'. TheSecretarial Audit Report is self explanatory and does not contain any qualificationreservation or adverse remark.

RELATED PARTY TRANSACTIONS

During the financial year ended March 312021 all the contracts orarrangements or transactions entered into by the Company with the related parties were inthe ordinary course of business and on 'arm's length' basis and were in compliance withthe applicable provisions of the Companies Act 2013 read with Regulation 23 of SEBI(LODR) 2015.

Further the Company has not entered into any contract or arrangementor transaction with the related parties which could be considered material in accordancewith the policy of the Company on materiality of related party transactions. In view ofthe above disclosure in form AOC-2 is not applicable.

EMPLOYEE STOCK OPTION SCHEME (ESOS)

The Company under the Apollo Pipes Limited Employee Stock OptionScheme - 2020 "the Scheme" approved by the shareholders vide a postal ballot onApril 23 2020 grants share- based benefits to eligible employees of the Company with aview to attracting and retaining the best talent encouraging employees to alignindividual performances with Company objectives and promoting increased participation bythem in the growth of the Company. The total number of equity shares to be allottedpursuant to the exercise of the stock incentives under the Scheme to the employees of theCompany shall not exceed 400000 equity shares. The following disclosures are being madeunder Rule 12 of the Companies (Share Capital and Debentures) Rules 2014 and the saiddisclosure is also available on the website of the Company at www.apollopipes.com.:

Particulars (During the financial year ended March 31 2021) Apollo Pipes Limited Employee Stock Option Scheme - 2020
1 Options granted 91400
2 Options vested; The said options shall vest as under:-
• At the end of 1st year from the grant date - 25% of options granted.
• At the end of 2nd year from the grant date - 25% of options granted.
• At the end of 3rd year from the grant date - 25% of options granted.
• At the end of 4th year from the grant date - 25% of options granted.
3 Options exercised - -
4 Total number of shares arising as a result of exercise of option 91400 Equity Shares of face value RS. 10/- each will arise deeming all granted options are vested and exercised.
5 Options lapsed - -
6 Exercise price Since the Shares were acquired from the Secondary Market the exercise price is fixed at RS. 498/- per Option.
7 Variation of terms of options Not Applicable
8 Money realized by exercise of options -
9 Total number of options in force 81200
10 Employee wise details of options granted to;- (i) Key managerial personnel;
- Mr. Ajay Kumar Jain 4000
- Mr. Ankit Sharma 2000
Particulars (During the financial year ended March 312021) Apollo Pipes Limited Employee Stock Option Scheme - 2020
(ii) Any other employee who receives a grant of options in any one year of option amounting to five percent or more of options granted during that year.
- Mr. Parag Dadeech* 5000
(iii) Identified employees who were granted option during any one year equal to or exceeding one percent of the issued capital (excluding outstanding warrants and conversions) of the company at the time of grant;

*Mr. Parag Dadeech was appointed as Chief Operating Officer w.e.f.December 012020 and he was granted 5000 options pursuant to the above ESOP scheme andsubject to the above mentioned vesting schedule. However due to personal reasons he hadresigned the office on April 09 2021 thereby his options stand cancelled and moved backto ESOP pool.

Following is the list of person who has resigned the office andconsequently their options revered back to the pool.

S. No Name Number of Options granted
1. Mr. Parag Dadeech 5000
2. Mr. Priyotosh Mandal 2800
3. Ms. Tanu Jain 400
4. Mr. Sumit Sharma 400
5. Mr. Giribabu Buddi 400
6. Mr. Nagendrababu.K 400
7. Mr. Anand Sharma 400
8. Mr. Yogesh Goswami 400
Total 10200

The Certificate from the Merchant Banker of the Company certifying thatthe Scheme is being implemented in accordance with the Share Based Employee Benefits(SBEB) Regulations 2014 and the resolution passed by the Members would be placed at theAnnual General Meeting for inspection by Members.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to provisions of Section 134 sub-section 3(c) and sub-section5 of the Companies Act 2013 your Directors to the best of their knowledge hereby stateand confirm that:

a. In the preparation of the annual accounts for the year ended March31 2021 the applicable accounting standards have been followed along with properexplanations relating to material departures.

b. Such accounting policies have been selected and applied consistentlyand judgments and estimates have been made that are reasonable and prudent to give a trueand fair view of the Company's state of affairs as at March 312021 and of the Company'sprofit for the year ended on that date.

c. Proper and sufficient care has been taken for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities.

d. The annual financial statements have been prepared on a goingconcern basis.

e. The internal financial controls were laid down to be followed thatand such internal financial controls were adequate and were operating effectively.

f. Proper systems were devised to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

In line with the provisions of Section 135 Schedule VII of theCompanies Act 2013 the Company has framed its Corporate Social Responsibility (CSR)policy for development of programmes and projects for the benefit of weaker sections ofthe society and the same has been approved by Corporate Social Responsibility Committee(CSR Committee) and the Board of Directors of the Company. The Corporate SocialResponsibility (CSR) policy of the Company provides a road map for its CSR activities.

During the year under review the Company has made contribution of RS.128.48 lakh for various CSR purposes in compliance to the provisions of Companies Act2013 relating to Corporate Social Responsibility.

The Annual Report on CSR activities is annexed herewith as Annexure 'C'.

Ministry of Corporate Affairs has revised the provisions of Section 135of Companies Act 2013 notified on January 22 2021 which consequently obliged theCompany to revise Corporate Social Responsibility Policy by incorporating necessarychanges such as change in function of CSR Committee Distinction of CSR projects orprogrammes and others in terms of'short term" and "long term" manner ofdetermining ongoing projects and such other matters as prescribed under the new law.

The revised CSR Policy has been uploaded on the Company's website andmay be accessed at the link:https://www.apollopipes.com/media/product/244084920_CSR_Policy_of_Apollo_Pipes_Limited.pdf.

Pursuant to the above amendment Company had received a certificatefrom Chief Financial Officer dated April 28 2021 regarding the utilization of funds.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186

In terms of Section 186 of the Companies Act 2013 and rules framedthereunder details of Loans Guarantees given and Investments made have been disclosed inthe notes to the financial statements for the year ended March 312021.

ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO:

Information pertaining to conservation of energy technologyabsorption foreign exchange earnings and outgo as required under Section 134 (3)(m) ofCompanies Act 2013 read with the Rule 8 (3) of the Companies (Accounts) Rules 2014 isfurnished as Annexure 'D' forming part of this Report.

CORPORATE GOVERNANCE

Your Company reaffirms its commitment to the highest standards ofcorporate governance practices. Pursuant to Regulation 34 read with schedule V of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the CorporateGovernance Report is annexed to this report Annexure 'E'.

The Corporate Governance Report which forms part of this reportinter-alia also covers the following:

a) Particulars of the five Board Meetings held during the financialyear under review.

b) Policy on Nomination and Remuneration of Directors Key ManagerialPersonnel and Senior Management including inter alia the criteria for performanceevaluation of Directors.

c) The manner in which formal annual evaluation has been made by theBoard of its own performance and that of its Committees and individual Directors.

d) The details with respect to composition of Audit Committee andestablishment of Vigil Mechanism.

e) Details regarding Risk Management.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

As per the requirement of Regulation 34(2) (e) and Schedule V of theSEBI (Listing Obligation and Disclosure Requirements) Regulation 2015 a detailedManagement Discussion and Analysis Report forms part of the Annual Report of the Company.

COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND ANNUAL GENERALMEETINGS

During the period under review the Company has duly complied with theapplicable provisions of the Secretarial Standards issued by the Institute of CompanySecretaries of India on Meetings of the Board of Directors (SS-1) and General Meetings(SS-2).

DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013

The Company has complied with the provisions of the Sexual Harassmentof Women at Workplace (Prevention Prohibition and Redressal) Act 2013 and has in place aPolicy on Prevention of Sexual Harassment at the Workplace in line with the provisions ofthe said Act and an Internal Complaints Committee has also been set up to redresscomplaints received regarding Sexual Harassment.

No complaint of sexual harassment was received during the financialyear 2020-21.

OTHER DISCLOSURES AND REPORTING

Your Directors state that no disclosure or reporting is required withrespect to the following items as there were no transactions on these items during theyear under review:

1. Change in the nature of business of the Company.

2. Issue of shares (including sweat equity shares) to employees of theCompany under any scheme save and except ESOS referred to in this report.

3. Significant or material orders passed by the regulators or courts ortribunal which impacts the going concern status and company's operations in future.

4. During the year under review no applications was filed underInsolvency and Bankruptcy Code 2016.

APPRECIATION

Yours Directors take this opportunity to express their appreciation forthe co-operation received from the customers vendors bankers stock exchangesdepositories auditors legal advisors consultants stakeholders business associatesGovernment of India State Government and Local Bodies during the period under review. TheDirectors also wish to place on record their appreciation of the devoted and dedicatedservices rendered by the employees of the Company.

For and on behalf of Board of Directors of
Apollo Pipes Limited
Sanjay Gupta
Chairman
(DIN: 00233188)
Place: Noida
Date: July 26 2021

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