To the Members of
Apollo TriCoat Tubes Limited
The Board of Directors hereby submits the report of the business and operations of yourCompany ('the Company' or 'Apollo TriCoat') along with audited financial statements forthe financial year ended March 31 2019.
1. Financial Performance
The summarized financial results of your Company are given in the table below:
| || ||(र in Lakhs) |
|Particulars ||F.Y. 2018-19 ||F.Y. 2017-18 |
|Income from Operations ||716.79 ||19110.27 |
|Other income ||423.50 ||28.38 |
|Total revenue ||1140.29 ||19138.65 |
|Total expenses ||770.37 ||18154.16 |
|Earning before Depreciation Int. Tax (EBIDTA) ||421.11 ||1189.83 |
|Depreciation ||49.87 ||17.10 |
|Profit Before Interest & ||371.24 ||1172.73 |
|Tax || || |
|Interest ||1.32 ||188.24 |
|Profit before Tax ||369.92 ||984.49 |
|Taxation ||105.06 ||286.52 |
|Profit for the year ||264.86 ||697.97 |
In order to conserve resources the Board of Directors of the Company has notrecommended any Dividend during the financial year 2018-19.
3. Performance Review
The Company in financial year 2018-19 has adopted a new line of business ofmanufacturing of tricoat tubes with the advanced Galvant Technology. The Company iscurrently establishing various business initiatives such as ramping-up manufacturingoperations establishing new manufacturing lines and undertaking marketing initiatives toimprove visibility and reach of its high-end value-added products. These initiatives willsignificantly enhance productivity and improve business efficiency for Apollo Tricoat inthe medium to longer term.
In financial year 2018-19 the Company has earned total revenue amounted INR11.40 croresand profit amounted INR 2.64 crores. Going forward as the business gains momentum andmanufacturing facilities are better utilized the Company expects better absorption ofoverhead costs leading to improved profitability performance.
4. Projects & Expansion Plans
The Company has established its first green field manufacturing facility in MalurBangalore having production capacity of 175000 MTPA and started commercial production ofits first two product categories namely the In-line Galvanized (ILG) pipes and Designer(DG) pipes.
In sync with the growth strategy the Company will be setting up two new manufacturinglines at a greenfield facility at Dujana in the state of UP. The production lines with atotal installed capacity of 100000 MTPA will be manufacturing the specialized and nicheproducts such as Narrow Sections and Door Frames the other two planned product categoriesof Apollo Tricoat.
Augmented production of all four categories of products namely ILG pipes DG pipesNarrow Sections and Door Frames will further help to boost volume performance in thefiscal year 2020.
5. Management's Discussion and Analysis Report
The detailed report on the Management's Discussion and Analysis Report is presented ina separate section forming part of the Annual Report.
6. Fixed Deposits
The detailed report on the Management's Discussion and Analysis for the year underreviewis attached as Annexure - "A''to this Report
7. Credit Rating
The ICRA Limited (ICRA) has assigned the rating of [ICRA] A(SO) for the Company's longterm facilities and [ICRA]A1(SO) for the Company's short term facilities.
8. Extract of the Annual Return
The extract of the Annual Return pursuant of Section 134 (3) (a) of the Companies Act2013 ("the Act'') in Form no. MGT-9 is annexed hereto as Annexure-"B'' and formspart of this Report.
The Annual Return of the Company as required under the Act will be available on thewebsite of the Company at www. apollotricoat.com
9. Directors and Key Managerial Personnel
Mrs. Megha Gupta Director retires by rotation and being eligible offers herself forre-appointment. A resolution seeking shareholders' approval for her re-appointment formspart of the Notice.
Shri Bharat BhushanSahny was appointed as an Independent Director at thethirty-secondtAnnual General Meeting (AGM) held on September 15 2014 for a period of fiveyears. Based on the recommendation of the Nomination and Remuneration Committee hisre-appointment for second term of five years is proposed at the ensuing AGM for approvalof the members by way of special resolution.
During the period under review Sh. Rahul Gupta appointed as Managing Director of theCompany w.e.f May 4 2018 Sh. Anil Kumar Bansal appointed as Non-Executive IndependentDirector and Mrs. Megha Gupta appointed as Director w.e.f June 11 2019. Sh. Rajeev KohliSh. Saket Agarwal and Mrs. Gunjan Agarwal ceased from the Directorship of the Companyw.e.f June 12 2018. Further Sh. Amresh Mishra resigned from the position from ChiefFinancial Officer and Sh. Nandlal Bansal appointed as Chief Financial Officer w.e.f.November 1 2018.
Pursuant to the provisions of Section 149 of the Act the Independent Directors havesubmitted the declarations that each of them meet the criteria of Independence as providedin Section 149(6) of the Act along with Rules framed thereunder and Regulation 16(1)(b) ofthe Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 ("SEBI Listing Regulations"). There has been nochange in the circumstances affecting their status as Independent Directors of theCompany.
During the year under review the non-executive directors of the Company had nopecuniary relationship or transaction with the Company other than sitting feescommission and reimbursement of expenses incurred by them for the purpose of attendingmeetings of the Board/Committee of the Company.
Pursuant to Section 203 of the Companies Act 2013 the Key Managerial Personnel of theCompany as on March 31 2019 are: Sh. Rahul Gupta Managing Director Ms. Surbhi AroraCompany Secretary and Sh. Nandlal Bansal Chief Financial Officer. Sh. Nandlal Bansal wasappointed as Chief Financial Officer of the Company w.e.f November 1 2018.
10. Number of meetings of the Board
Eight meetings of the Board were held during the year under review. For details ofmeetings of the Board please refer to the Corporate Governance Report which is annexedhereto as Annexure-"D"
11. Board evaluation
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 and SEBIListing Regulations.
The performance of the board was evaluated by the board after seeking inputs from allthe directors on the basis of criteria such as the board composition and structureeffectiveness of board processes information and functioning etc.
The performance of the committees was evaluated by the board after seeking inputs fromthe committee members on the basis of criteria such as the composition of committeeseffectiveness of committee meetings etc.
The above criteria are based on the Guidance Note on Board Evaluation issued by theSecurities and Exchange Board of India on January 5 2017.
In a separate meeting of independent directors performance of non-independentdirectors the board as a whole and the Chairman of the Company was evaluated taking intoaccount the views of executive directors and nonexecutive directors.
The Board and the Nomination and Remuneration Committee reviewed the performance ofindividual directors on the basis of criteria such as the contribution of the individualdirector to the board and committee meetings like preparedness on the issues to bediscussed meaningful and constructive contribution and inputs in meetings etc.
12. Policy on directors' appointment and remuneration and other details
The Company's policy on directors' appointment and remuneration and other mattersprovided in Section 178(3) of the Act has been disclosed in the Corporate GovernanceReport which is a part of this report and is also available on www.apollotricoat.com.
13. Internal Financial Controls and their adequacy
The Board has adopted policies and procedures for ensuring orderly and efficientconduct of business including adherence to the Company's policies the safeguarding ofits assets the prevention and detection of fraud and completeness of the accountingstandards and the timely preparation of reliable financial disclosures and financialstatements of the Company. Significant audit observations and recommendations along withcorrective actions thereon are presented to the Audit Committee of the Board.
14. Audit committee
The details pertaining to the composition of the audit committee are included in theCorporate Governance Report which is a part of this report.
M/s VAPS & Company Chartered Accountants New Delhi (FRN 003612N) who are thestatutory auditors of the Company hold office until the conclusion of ensuing AGM and areeligible for re-appointment. Based on the recommendation of the Audit Committee theirre-appointment for second term of one year is proposed at the ensuing AGM for approval ofthe members by way of ordinary resolution.
M/s VAPS & Company has acted as a Stattutory Auditors of the Company for 9consecutive years and can thereby be re-appointed for FY 2019-20 pursuant to Section 139of the Companies Act 2013 read with Rule 6 (3) of the Companies (Audit and Auditors)Rules 2014.
16. Auditor's report and secretarial audit report
The statutory auditor's report and the secretarial audit report do not contain anyqualifications reservations or adverse remarks or disclaimer. Secretarial audit reportis annexed hereto as Annexure-"B"
17. Loans Guarantees and Investments
The particulars of loans guarantees and Investments have been disclosed in the Note 22to the Financial Statements.
18. Transaction with related Parties
All Related Party Transaction (RPTs) entered during the financial year were on an arm'slength basis and in the ordinary course of business. In compliance with applicableprovisions of the Act and Listing Regulations for the RPTs which are foreseen andrepetitive in nature Omnibus Approval of the Audit Committee is obtained at the beginningof the financial year as per the RPT policy of the Company. All the RPTs affected duringthe year are disclosed in the notes to Financial Statements.
There are no materially significant RPTs made by the Company which have a potentialconflict with the interest of the Company at large and thus disclosure in Form AOC-2 isnot required.
19. Corporate Social Responsibility
In compliance with the requirement of Section 135 of the Companies Act 2013 yourCompany has constituted a Corporate Social Responsibility Committee. The Corporate SocialResponsibility Committee comprises of Ms. Megha Gupta Sh. Rahul Gupta and Sh. BharatBhushanSahny.
All the statutory disclosures with respect to the CSR Committee and Annual Report onCSR Activities forms part of this Report as Annexure "E".
|Particulars ||For the year ended March 31 2019 |
| ||(र In Lakhs) |
|a) Gross amount required to be spent by the Company during the year ||8.10 |
|b) Amount spent during the year on || |
|Particulars ||In Cash ||Yet to be paid in Cash ||Total |
|(i) Construction/ acquisition of any asset ||- ||- ||- |
|(ii) Purpose other (i) above ||- ||- ||- |
During the period under leview considering the growth requirement and challenges thecompany could not focus on spending on CSR Projects.
20. Managerial Remuneration and particulars of employees
Disclosure of ratio of the remuneration of each Executive Director to the medianremuneration of the employees of the Company and other requisite details pursuant toSection 197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 as amended is annexedto this report as Annexure 'F'. Furtherparticulars of employees pursuant to Rule 5(2)& 5(3) of the above rules form part of this report. However in terms of provisions ofsection 136 of the said Act the report and accounts are being sent to all the members ofthe Company and others entitled thereto excluding the said particulars of employees. Anymember interested in obtaining such particulars may write to the Company Secretary at theregistered office of the Company. The said information is available for inspection at theRegistered Office of the Company during working hours.
21. Vigil Mechanism
Your Company believes in the conduct of the affairs of its constituents in a fair andtransparent manner by adopting the highest standards of professionalism honestyintegrity and ethical behaviour. In line with the Apollo Tricoat Code of Conduct (ATCOC)any actual or potential violation howsoever insignificant or perceived as such would bea matter of serious concern for the Company. The role of the employees in pointing outsuch violations of the ATCOC cannot be undermined.
Pursuant to Section 177(9) of the Act a vigil mechanism was established for directorsand employees to report to the management instances of unethical behaviour actual orsuspected fraud or violation of the Company's code of conduct or ethics policy. The VigilMechanism provides a mechanism
for employees of the Company to approach the Vigilance Officers/Chairman of the AuditCommittee of the Company for redressal.
The Vigil Mechanism / Whistle Blower Policy have also been uploaded on the website ofthe Company and may be accessed at the link: http://www.apollotricoat.com/pdfs/Vigil-Mechanism-Policy.pdf
During the year under review no employee was denied access to the Chairman of theAudit Committee. No complaints were received under Vigil Mechanism & Whistle BlowerPolicy during the financial year 2018-19.
22. Issue of shares and Warrants and confirmation of fund utilisation
The Company at its meeting held on March 15 2018 has allotted 7200000 shares andissues 4300000 warrants to Sh. Rahul Gupta and 500000 warrants to Non-PromoterCategory on preferential basis.
On April 12 2018 2000000 warrants has been converted in to equal number of equityshares pursuant to which the total holding of Sh. Rahul Gupta was 36.21% of total sharecapital of the Company.
Further your Company has confirmed that there is no deviation/ variation in useproceeds other than the object/purpose stated in the offer document.
23. Directors Responsibility Statement
Pursuant to Section 134(5) of the Act the Board of Directors to the best of itsknowledge and ability confirm that:
I. in the preparation of the annual accounts the applicable accounting standards havebeen followed and there are no material departures;
II. they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the end of the financial year and of the profitof the Company for that period;
III. they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
IV. they have prepared the annual accounts on a going concern basis;
V. they have laid down internal financial controls to be followed by the Company andsuch internal financial controls are adequate and operating effectively;
VI. they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and operating effectively.
24. Conservation of energy technology absorption foreign exchange earnings and outgo
Conversation of Energy
The Company continues its efforts to reduce and optimize the energy consumption at itsmanufacturing units including its Registered and Corporate Office.
To know the energy utilization the Company has installed the meters on each machine atevery mills to record the energy requirement basis of which Company has analyzedthrough the use of various equipments the percentage of wastage of electricity by themachines and whether to replace or use them in any other manner.
As analyzed electricity is also the biggest cost to business finding alternative andcheaper sources of power is a top priority. The Company is in process of negotiations withvendors for installation of solar power system which will be beneficial for theenvironment and the Company (interms of financial perspective)
Technology Absorption adaption and innovation
The Company has made efforts towards technology absorption by commissioning DirectForming Technology (DFT) Mills at Company's unit situated at Malur Karnataka. This isState of Art Latest Technology Mills.
The Company has installed In-Line Galvanizing of Tubes this technology will reducezinc wastage increase production improve quality of zinc coating reduce cost andmoreover open a new segment of sale.
Research and Development
The Company is planning to introduce Steel Door Frames in the market. This isenvironment friendly product as it replaces conventional wooden door frames. Apart frombeing environment friendly steel door frames are cheaper has longer life and easy toinstall.
25. Disclosure as per Sexual Harassment of women at workplace (Prevention Prohibitionand Redressal) Act 2013
The Company has zero tolerance for sexual harassment at the work place and has adopteda policy on prevention prohibition and redressal of sexual harassment in line with theprovisions of the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013 and the Rules thereunder for prevention and redressal of complaintsof sexual harassment at workplace.
Internal Complaints Committee (ICC) is in place for all administrative units or officesof Apollo Tricoat to redress complaints received regarding sexual harassment. All womenassociates (permanent temporary contractual and trainees) as well as any woman visitingthe Company's office premises or women service providers are covered under this policy.
Summary of sexual harassment issues raised attended and dispensed during FY19:
No. of complaints received: Nil
No. of complaints disposed off: Nil
No. of cases pending for more than 90 days: Nil.
26. COMMITTEES OF THE BOARD
The Committees of the Board focus on certain specific areas and make informed decisionsin line with the delegated authority. The following statutory Committees constituted bythe Board function according to their respective roles and defined scope:
Nomination and Remuneration Committee
Corporate Social Responsibility Committee
Stakeholders Relationship Committee
Details of composition terms of reference and number of meetings held for respectivecommittees are given in the Report on Corporate Governance which forms a part of thisReport. Further during the year under review all recommendations made by the AuditCommittee have been accepted by the Board.
27. COMPLIANCE WITH SECRETARIAL STANDARDS
The Company confirms compliance with the applicable requirements of SecretarialStandards 1 and 2.
28. OTHER DISCLOSURES AND REPORTING
Your Directors state that no disclosure or reporting is required with respect to thefollowing items as there were no transactions on these items during the year under review:
a. Issue of equity shares with differential rights as to dividend voting or otherwise.
b. Any remuneration or commission received by Managing Director of the Company fromany of its subsidiary.
c. Significant or material orders passed by the Regulators or courts or Tribunal whichimpacts the going concern status and Company's operations in future.
d. Transfer to Investors Education and Investors Fund.e. Reporting of fraud by Auditors
e. Reporting of fraud by Auditors
f. Issue of shares (including sweat equity shares) to employees of the Company underany scheme.
g. Risk Management Policy
h. Applicablity of Cost Audit and maintenance of records
i. Details of Subsidiaries associates and holding Company.
The Directors thank the Company's employees customers vendors investors and academicpartners for theircontinuous support.
The Directors also thank the Government of India Governments of various states inIndia Governments of various countries and concerned Government departments and agenciesfor their cooperation.The Directors appreciate and value the contribution made by everymember of the Apollo Tricoat family.
| ||By the order of the Board |
| ||Sd/ |
|Date: May 17 2019 ||Rahul Gupta |
|Place: Delhi ||Chairperson |