Mar 31, 2023
Your Directors have pleasure in presenting the Thirty Eight (38th) Annual Report on the business and operations of your company together with the Standalone and Consolidated Audited Financial Statements for the financial year ended March 31, 2023.
The Company''s financial performance for the year under review along with the previous year''s figures is given hereunder:
Particulars |
(H In crore) Consolidated Standalone |
|||
FY 2022-23 |
FY 2021-22 |
FY 2022-23 |
FY 2021-22 |
|
Gross sales |
16,165.95 |
13,063.32 |
14,279.29 |
11,589.65 |
Add : Other income |
47.18 |
40.50 |
41.91 |
35.63 |
Total revenue |
16,213.13 |
13,103.82 |
14,321.20 |
11,625.28 |
Profit before Depreciation, Finance Costs and Tax Expense |
1068.73 |
985.76 |
839.15 |
799.65 |
Less : Depreciation and amortisation |
138.33 |
108.97 |
102.46 |
93.79 |
Less : Finance cost |
67.09 |
44.47 |
47.51 |
43.43 |
Profit before tax (PBT) |
863.31 |
832.32 |
689.17 |
662.44 |
Less : Tax expense |
221.45 |
213.34 |
177.25 |
168.21 |
Profit after tax for the year (PAT) |
641.86 |
618.98 |
511.92 |
494.23 |
The Company''s consolidated gross turnover in financial year 2022-23 increased significantly by 23.75 % from H13,063.32 crores to H16,165.95 crores. The EBIDTA has increased by 8.42 % from H985.76 crores to H1068.73 crores for the year under review. The net profit of the Company has also increased by 3.70 % from H618.98 crores to H641.86 crores during the year under review.
The Board of Directors of the Company is pleased to recommend a dividend @250 % (1X15 per share) as final dividend on the equity shares for the year 2022-23 subject to declaration of the same by the members at the ensuing annual general meeting. The payment of dividend will be subject to deduction of applicable taxes and shall be paid for the full year on the shares held as on the record date irrespective of the date of issue of the shares during the year.
Pursuant to Regulation 43A of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 (as amended), the Company has Dividend Distribution policy. During the year, there have been no changes to the policy. Hence, the same is not annexed to this report, as the same is available on our website at https://www.aplapollo.com/downloads
The Board of Directors of your Company, has decided not to transfer any amount to the Reserves for the year under review.
After two years of uncertainty owing to the pandemic and other global headwinds, India established a firm footing on economic resurgence despite the ongoing geopolitical issues, inflationary headwinds and recessionary trends prevailing across the globe.
Compared to a growth of 9.1%, last year, owing to the low-base effect, India achieved a GDP growth of 7.2% in FY23. This resurgence was fueled by a rebound in private consumption, capital creation and a continued increase in contact-based service activity.
The manufacturing sector and exports remained weak owing to global exigencies and the looming recession in the west. But, continued government thrust on infrastructure and pick-up in construction activity were the bright spots for the economy.
As a result, domestic steel consumption saw robust growth in FY23. Not surprisingly, APL Apollo, the leader in structural steel space in India, was quick to seize the opportunities and reported another strong performance.
APL Apollo sustained its industry-beating performance once again. The Company recorded a healthy uptick in all the key performance indicators. After a subdued 1st quarter, sales volume picked up and continued to rise in every subsequent quarter- it ended the year with a growth of 30% over the previous year.
Revenue from operations increased by 23.75% over the previous financial year. EBITDA jumped to H1068.73 crore from H985.76 crore last fiscal while Net profit increased by 3.70% to H641.46 crore, it was H618.98 crore last year. Operating Cash Flow in FY23 has increased to H967 crore witnessing a growth of 49% from the previous year. EBITDA per tonne dropped to H4481 in FY23 against H5386 per tonne in FY22 - owing to the significant volatility in steel prices in the first half of the financial year.
The Company continued building on its three-pillar strategy -Innovation, Market Creation and ESG.
It emerged as the second company in the world to successfully develop 1000x1000 mm square tubes which are currently undergoing trials.
By completing the steel structures for its showcase Delhi hospitals project, it has created a new market segment for its 500x500 mm steel tubes. This success has generated significant interest, some of which have translated into confirmed orders. These are expected to be completed in 12-18 months.
On the ESG front, your Company scaled new heights. In the DJSI FY22 score, the Company stood at the 80th percentile. Its score reached a high of 29 points, above the industry average of 22.
Macro factors: FY24 appears to be a promising year for the Company owing to the infrastructure thrust given by the Government through the Union Budget 2023.
Sectoral opportunities: The Indian Railways has been one of the key beneficiaries of the Union Budget 2023. A large part of the allocated funds is expected to be invested in creating new railway stations and uplifting existing ones. APL Apollo has participated in some of the tenders floated by the Indian Railways and is hopeful of securing some projects. When that happens, it would open a new revenue vertical for the Company.
India plans to set up 50 new airports for improving regional air connectivity. This should help the Company in garnering healthy volumes for its heavy structural tubes.
Internal initiatives: The Raipur facility, one of the largest and most advanced tube manufacturing plants in Asia, commissioned in the year, manufacturing pathbreaking and pioneering products for India and the world. These super high-value products are margin accretive and should shore business profitability.
INTERNAL FINANCIAL CONTROL
The Company has in place adequate internal financial controls as referred in Section 134(5)(e) of the Companies Act, 2013. For the year ended March 31, 2023 the Board is of the opinion that the Company had sound Internal Financial Controls commensurate with the size and nature of its operations and are operating effectively and no reportable material weakness was observed in the system during the year.
Based on annual Internal Audit programme as approved by Audit Committee of the Board, regular internal audits are conducted covering all offices, factories and key areas of the business. The findings of the internal auditors are placed before Audit Committee, which reviews and discusses the actions taken with the management. The Audit Committee also reviews the effectiveness of company''s internal controls and regularly monitors implementation of audit recommendations.
There are existing internal policies and procedures for ensuring the orderly and efficient conduct of business, including adherence to the Company''s policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records and timely preparation of reliable financial disclosures.
ANNUAL RETURN
In accordance with the provisions of Section 134 (3)(a) of the Companies Act, 2013, the Annual Return, as required under Section 92 of the Act for the financial year 2022-23, is available on the Company''s website at https://www.aplapollo.com/financial.
SUBSIDIARY COMPANIES, JOINT VENTURES AND ASSOCIATES
The Company had six wholly-owned subsidiaries as on March 31, 2023, namely Apollo Metalex Private Limited (AMPL), Blue Ocean
Projects Private Limited, APL Apollo Building Products Private Limited, APL Apollo Mart Limited, A P L Apollo Tubes Company LLC and APL Apollo Tubes FZE.
As the members are aware of, the Board of Directors of Company at its meeting held on February 27, 2021, had approved a scheme of amalgamation of Shri Lakshmi Metal Udyog Limited and Apollo Tricoat Tubes Limited with the Company and their respective shareholders and creditors, under Sections 230 to 232 of the Companies Act, 2013 ("Scheme of Amalgamation"). The New Delhi bench of the National Company Law Tribunal (NCLT), through its order dated October 14, 2022 sanctioned the scheme. The certified copy of the NCLT order was filed with Registrar of Companies on October 31, 2022. Consequently, the scheme became operative from October 31,2022 (''Effective Date'') with appointed date from April 1,2021 as per the approved scheme.
A report on the performance and financial position of each of the subsidiaries in form AOC-1 is annexed hereto as Annexure ''A'' and forms part of this report.
In accordance with the provisions of Section 136 of the Companies Act, 2013, the audited financial statements and related information of the subsidiaries, where applicable, will be available for inspection during regular business hours at the company''s corporate office at 36, Kaushambi, Near Anand Vihar Terminal, Uttar Pradesh -201010 and the same are also available at our website i.e. www.aplapollo.com.
During the year under review, the Company incorporated another wholly owned subsidiary named "A P L Apollo Tubes Company LLC" under Umm Al Quwain (UAQ) authority in UAE.
The Company has no associates or joint ventures.
Your Company neither accepted nor renewed and/or was not having any outstanding public deposits within the meaning of Section 73 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014, during the year under report.
As on March 31,2023 the authorized capital of the Company stood increased from 1X175 crore to 1X197 crore divided into 48,50,00,000 equity shares of 1X12 each, pursuant to sanction of Scheme of Amalgamation.
During the financial year under review, the Company allotted 2,68,60,000 equity shares of 1X12 each, to the eligible shareholders of Apollo Tricoat Tubes Limited, in the share exchange ratio of 1:1 as provided in the Scheme of Amalgamation.
During the financial year under review, the Company allotted 1,90,314 equity shares of 1X12 each at a price of 1X1143.855 (including premium of H141.855), pursuant to APL Apollo Employees Stock
Option Scheme (ESOS-2015) to eligible employees of the Company and of its subsidiaries.
Pursuant to abovesaid allotments of Equity shares, the paid up capital of the Company stands increased from 1X150.06 Cr to 1X155.47 Cr comprising of 27,73,30,814 equity shares of X2 each.
The Company has neither issued shares with differential voting rights nor has issued any sweat equity shares.
Commercial Papers
The Company has received the credit ratings from credit rating agencies - ICRA and CRISL as under -
a. ''ICRA A1 '' assigned to H300 crore Commercial Paper programme of the Company.
b. ''CRISIL A1 '' assigned to H500 crore Commercial Paper Programme of the Company.
During the year the Company issued Commercial papers ("CP") for the purpose of raising short term funds in nature ranging between one to three months. Further, as on March 31, 2023, no CP was outstanding.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
In accordance with the provisions of Section 152 of the Companies Act, 2013 and in terms of Articles of Association of the Company, Shri Sanjay Gupta will retire at the ensuing Annual General Meeting (AGM) and being eligible, offer himself for reappointment.
The Board of Directors in its meeting held on May 12, 2023 appointed Shri Deepak Goyal as a non-independent additional director to hold office till the date of ensuing AGM and also as a Whole Time Director designated as "Director (Operations) & Group CFO" for a period of five consecutive years on the terms and conditions of appointment including remuneration as given in the notice of the AGM for seeking approval of the members.
Shri Romi Sehgal has ceased to be a Director of the Company w.e.f. 12.05.2023. The Board places on record its appreciation and gratitude for the contributions made by Mr. Romi Sehgal during his tenure as a member of the Board of Directors.
All Independent Directors of the Company have given declarations that they meet the criteria of independence as provided in Section 149(6) read with schedule IV of the Companies Act, 2013 and also Regulation 16(I)(b) of the Listing Regulations.
Further, in pursuance of Rule 6 of the Companies (Appointment and Qualifications of Directors) Rules, 2014, all Independent Directors of the Company have duly confirmed renewal of their respective registration with the Indian Institute of Corporate Affairs (IICA) database.
Further, in the opinion of the Board, the Independent Directors of the Company possess the requisite expertise skill and experience (including the proficiency) and are persons of high integrity and repute as well as independent of the management.
Disclosure of ratio of the remuneration of the Executive Director to the median remuneration of the employees of the Company and other requisite details pursuant to Section 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 annexed to this report as Annexure ''B'' Further, particulars of employees pursuant to Rule 5(2) & 5(3) of the above Rules form part of this report. However, in terms of provisions of section 136 of the said Act, the report and accounts are being sent to all the members of the Company and others entitled thereto, excluding the said particulars of employees. Any member interested in obtaining such particulars may write to the Company Secretary. The said information is available for inspection at the registered office of the Company during working days of the Company up to the date of the ensuing annual general meeting.
AUDITORS AND AUDITORS'' REPORT
A. Statutory Auditors
In terms of provisions of the Companies Act, 2013, M/s. Deloitte Haskins & Sells LLP, Chartered Accountants, Gurugram, (FRN117366W/W-100018), had been appointed as Statutory Auditors of the Company in the 35th Annual General Meeting held on September 29, 2020 to hold the office from the conclusion of the said Annual General Meeting until the conclusion of the 40th Annual General Meeting to be held in year 2025.
The reports the Auditors on the standalone and consolidated financial statements for the FY 2022-23 do not contain any qualification, reservation or adverse remark requiring any explanation on the part of the Board. The observations given therein read with the relevant notes are self-explanatory.
There are no frauds reported by the Auditors under section 143(12) of the Act.
B. Cost Auditors
In terms of Section 148 of the Act, the Company is required to get the audit of its cost records conducted by a Cost Accountant. In this connection, the Board of Directors of the Company in its meeting held on May 12, 2023, on the
recommendation of the Audit Committee, approved the appointment of M/s R.J. Goel & Co., Cost Accountants (FRN: 000026) as the cost auditors of the Company for the year ending March 31,2024.
I n accordance with the provisions of Section 148(3) of the Act read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditors as recommended by the Audit Committee and approved by the Board has to be ratified by the members of the Company. Accordingly, appropriate resolution will form part of the Notice convening the AGM. The approval of the members is sought for the proposed remuneration payable to the Cost Auditors for the Financial Year ended March 31, 2023. M/s R.J. Goel & Co., have vast experience in the field of cost audit and have been conducting the audit of the cost records of the Company for the past several years. The Cost Audit Report of the Company for the Financial Year ended March 31, 2023 will be filed with the MCA after its noting by the Board. The Company has maintained accounts and records as specified under sub-section (1) of 148 of the Act.
C. Secretarial Auditors
Pursuant to the provisions of Section 204 of the Companies Act, 2013, the Board of Directors had appointed M/s Parikh & Associates, Company Secretaries in practice as Secretarial Auditors to carry out the Secretarial Audit of the Company for the financial year 2022-23. The report given by them for the said financial year in the prescribed format is annexed to this report as Annexure ''C''. The Secretarial Audit Report is self- explanatory and does not contain any qualification, reservation or adverse remark. Further, the Board in its meeting held on May 12, 2023 has re-appointed the said firm for conducting the secretarial audit for the financial year 2023-24 also.
During the financial year ended March 31,2023, all the contracts or arrangements or transactions entered into by the Company with the related parties were in the ordinary course of business and on ''arm''s length'' basis and were in compliance with the 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 arrangement or transaction with the related parties which were not on ''arm''s length'' basis or could be considered material in accordance with the policy of the Company on materiality
of related party transactions. In view of the above, it is not required to provide the specific disclosure of related party transaction in Form AOC-2.
Your Directors draw attention of the members to Note No. 41 to the Financial Statement which sets out related party disclosures.
EMPLOYEE STOCK OPTION SCHEME (ESOS)
The Company, under the APL Apollo Employee Stock Option Scheme- 2015 ("ESOS-2015), approved by the shareholders vide postal ballot resolutions on July 27, 2015 and December 22, 2015, grants share-based benefits to eligible employees of the Company and employees of subsidiaries with a view to attracting and retaining the best talent, encouraging employees to align individual performances with Company objectives, and promoting increased participation by them in the growth of the Company. The total number of equity shares to be allotted pursuant to the exercise of the stock incentives under the ESOS-2015 to the employees of the Company and its subsidiaries shall not exceed 7,50,000 equity shares.
The following disclosures are being made under Rule 12 of the Companies (Share Capital and Debentures) Rules, 2014 and Regulation 14 of the Securities And Exchange Board Of India (Share Based Employee Benefits And Sweat Equity) Regulations, 2021 as on March 31, 2023 and the said disclosure is also available on the website of the Company at www.aplapollo.com:
A. Relevant disclosures in terms of the accounting standards prescribed by the Central Government in terms of section 133 of the Companies Act, 2013 (18 of 2013) including the ''Guidance note on accounting for employee share-based payments'' issued in that regard from time to time.
Please refer to Note No. 40 to Standalone Financial Statement for the year ended March 31,2023.
B. Diluted Earnings Per Share (EPS) pursuant to issue of shares on exercise of options:
Please refer Note No. 37 of the Standalone Financial Statement for disclosure of Diluted EPS.
C. Details related to Employees'' Stock Option Scheme:
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to provisions of Section 134 sub-section 3(c) and sub-section 5 of the Companies Act, 2013, your Directors to the best of their knowledge hereby state and confirm that:
a. In the preparation of the annual accounts for the year ended March 31, 2023, the applicable accounting standards have been followed along with proper explanations relating to material departures.
b. Such accounting policies have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent to give a true and fair view of the Company''s state of affairs as at March 31,2023 and of the Company''s profit for the year ended on that date.
c. Proper and sufficient care has been taken for the maintenance of adequate accounting records, in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.
d. The annual financial statements have been prepared on a going concern basis.
e. The internal financial controls are laid down to be followed that and such internal financial controls are adequate and are operating effectively.
f. Proper systems are devised to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
In line with the provisions of Section 135, Schedule VII of the Companies Act, 2013, the Company has framed its Corporate Social Responsibility (CSR) policy for development of programmes and projects for the benefit of weaker sections of the society and the same has been approved by Corporate Social Responsibility Committee (CSR Committee) and the Board of Directors of the Company. The Corporate Social Responsibility (CSR) policy of the Company provides a road map for its CSR activities.
During the year under review, the Company has made contribution of 1X10.27 Cr for various CSR purposes in compliance to the provisions of Companies Act, 2013 relating to Corporate Social Responsibility and has transferred 1X18.19 Crores to the unspent CSR account of the Company on 28.04.2023 pertaining to ongoing projects.
The Annual Report on CSR activities is annexed herewith as Annexure ''D''. The CSR Policy has been uploaded on the Company''s website and may be accessed at the link: https://www.aplapollo. com/downloads
SCHEME OF AMALGAMATION AND ARRANGEMENT
As the members are aware of, the Board of Directors of Company at its meeting held on February 27, 2021, had approved a scheme of amalgamation of Shri Lakshmi Metal Udyog Limited and Apollo Tricoat Tubes Limited with the Company and their respective shareholders and creditors, under Sections 230 to 232 of the Companies Act, 2013.
The New Delhi bench of the National Company Law Tribunal (NCLT), through its order dated October 14, 2022 has approved the scheme. The certified copy of the NCLT order was filed with Registrar of Companies on October 31, 2022. Consequently, the scheme became operative from October 31,2022 (''Effective Date'')
with appointed date from April 1,2021 as per the approved scheme. The Scheme related details are available on the website of the Company at https://aplapollo.com/ announcements/#Mergers.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186
In terms of Section 186 of the Companies Act, 2013 and rules framed thereunder, details of Loans, Guarantees given and Investments made have been disclosed in the Notes to the financial statements for the year ended March 31, 2023.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:
Information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo as required under Section 134 (3)(m) of Companies Act, 2013 read with the Rule 8 (3) of the Companies (Accounts) Rules, 2014, is furnished as Annexure ''E, forming part of this Report.
CORPORATE GOVERNANCE
Your company reaffirms its commitment to the highest standards of corporate governance practices. Pursuant to Regulation 34 read with schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Corporate Governance Report is annexed to this report (Annexure ''F'').
The Corporate Governance Report which forms part of this report, also covers the following:
a) Particulars of the Board Meetings held during the financial year under review.
b) Policy on Nomination and Remuneration of Directors, Key Managerial Personnel and Senior Management including, inter alia, the criteria for performance evaluation of Directors.
c) The manner in which formal annual evaluation has been made by the Board of its own performance and that of its Committees and individual Directors.
d) The details with respect to composition of Audit Committee and establishment of Vigil Mechanism.
e) Details regarding Risk Management.
COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND ANNUAL GENERAL MEETINGS
During the period under review, the Company has duly complied with the applicable provisions of the Secretarial Standards issued by the Institute of Company Secretaries 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 (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has complied with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and has in place a Policy on Prevention of Sexual Harassment at the Workplace in line with the provisions of the said Act and an Internal Complaint Committee has also been set up to redress complaints received regarding Sexual Harassment.
No complaint of sexual harassment was received during the financial year 2022-23.
OTHER DISCLOSURES AND REPORTING
Your Directors state that no disclosure or reporting is required with respect to the following items as there were no transactions on these items during the year under review :
1. Change in the nature of business of the Company.
2. Issue of equity shares with differential rights as to dividend, voting or otherwise.
3. Any remuneration or commission received by Managing Director of the Company, from any of its subsidiary.
4. Issue of shares (including sweat equity shares) to employees of the Company under any scheme save and except ESOS referred to in this report.
5. Significant or material orders passed by the regulators or courts or tribunal which impacts the going concern status and company''s operations in future.
6. Material changes affecting the financial position of the Company which have occurred between the end of the financial year of the Company and the date of the Report.
7. The details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year alongwith their status as at the end of the financial year.
8. The details of difference between amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof
Yours Directors take this opportunity to express their appreciation for the co-operation received from the customers, vendors, bankers, stock exchanges, depositories, auditors, legal advisors, consultants, stakeholders, business associates, Government of India, State Governments, Regulators and local bodies during the period under review. The Directors also wish to place on record their appreciation of the devoted and dedicated services rendered by the employees of the Company.
Mar 31, 2022
Your Directors have pleasure in presenting the Thirty Seventh (37th) Annual Report on the business and operations of your company together with the Standalone and Consolidated Audited Financial Statements for the financial year ended March 31,2022.
FINANCIAL PERFORMANCE:
The Company''s financial performance for the year under review along with the previous year''s figures is given hereunder:
('' in crores) |
||||
Parameters |
Consolidated |
Standalone |
||
FY 2021-22 |
FY 2020-21 |
FY 2021-22 |
FY 2020-21 |
|
Gross sales |
13,063.32 |
8499.75 |
9,062.40 |
6007.96 |
Add : Other income |
40.50 |
35.94 |
35.02 |
44.11 |
Total revenue |
13,103.82 |
8535.69 |
9,097.42 |
6052.07 |
Profit before Depreciation, Finance Costs and Tax Expense |
985.76 |
714.65 |
493.44 |
328.07 |
Less : Depreciation and amortisation |
108.97 |
102.77 |
71.14 |
68.18 |
Less : Finance cost |
44.47 |
66.09 |
37.21 |
54.89 |
Profit before tax (PBT) |
832.32 |
545.79 |
385.08 |
205.01 |
Less : Tax expense |
213.34 |
138.09 |
97.95 |
51.23 |
Profit after tax for the year (PAT) |
618.98 |
407.70 |
287.13 |
153.78 |
the Company has Dividend Distribution policy. During the year, there have been no changes to the policy. Hence, the same is not annexed to this report, as the same is available on our website at : https://aplapollo.com/policies/#policies
TRANSFER TO RESERVES
The Board of Directors has decided to retain the entire amount of profit in the profit and loss account. Accordingly, the Company has not transferred any amount to the ''Reserves'' for the year ended March 31, 2022.
OVERVIEW
The Financial Year 2021-22 was a year when the Indian economy reported a sharp turnaround in fortunes as the GDP grew by 8.7% (against a contraction of 6.6% in FY21). Notwithstanding the more intense second wave of Covid-19, resilient India and Indians worked untiringly to strengthen the momentum of the economy''s wheels. The sharp recovery of the industrial and services segments resulted
The Company''s consolidated gross turnover in financial year 2021-22 increased significantly by 53.69 % from H8499.75 crores to H13063.32 crores. The EBIDTA has been increased by 37.94 % from H714.65 crores to H985.76 crores for the year under review. The net profit of the Company has also increased by 51.82 % from H407.70 crores to H618.98 crores during the year under review.
DIVIDEND
The Board of Directors of the Company is pleased to recommend a dividend @175% (''3.5 per share) as final dividend on the equity shares for the year 2021-22 subject to declaration of the same by the members at the ensuing annual general meeting. The payment of dividend will be subject to deduction of applicable taxes and shall be paid for the full year on the shares held as on the record date irrespective of the date of issue of the shares during the year.
Pursuant to Regulation 43A of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 (as amended),
in an appreciable spike in Government revenue. Further, exports touched a new pinnacle even as imports continued to climb. As a result, India''s fiscal deficit remained reigned in below the budgeted number. Favourable government policies and an accommodative fiscal environment buoyed investments by the private sector. This ushered in robust demand for steel and steel products. APL Apollo being the dominant player in the structural steel products space was able to capitalise on the resurgence to report its best performance in its business journey this far.
BUSINESS PERFORMANCE
The Company continued to up its performance as it breached all previous performance records. Sales volumes increased by 7% as demand for the product gained traction. More importantly, the share of value-added products increased appreciably over the previous year. Revenue from operations grew by 53.69% from ''8,499.75 crores in FY21 to ''13,063.62 crores in FY22 and EBITDA improved from ''714.65 crores to ''985.76 crores over the same period.
From a business perspective, it was a satisfying year as the Company successfully implemented important initiatives that hold the promise to catapult its growth into a new orbit. The most important among them is the launch of the tubular technology for constructing high-rise buildings. The Company received the contract for supplying its high-strength columns for creating the super structure for six large multi-speciality medical building in India. The other pathbreaking initiative was the launch of the Aalishaan App which is a B-2-C tech connect that will enable the Company to come closer to the ultimate consumer. This App has received an overwhelming response from the masses and promises to be a game-changer for the Company over the medium term.
APL Apollo continued to invest in its Raipur facility, the jewel in its crown, which will manufacture pioneering products that will significantly widen the market size and strengthen its dominance in the structural tube business space. While trial production of Apollo Columns commenced during the year under review, the first phase of this project is expected to commence in the current year.
POSSIBILITIES AND PROSPECTS
The Government is focused on positioning India as a global manufacturing hub. Towards this end, it is ardently focused
on developing world-class infrastructure and announcing policies that would spur the private sector to make fresh investments. These realities promise to open interesting growth opportunities for the Company''s products.
The commissioning of the Raipur unit (initial phase) should help the Company in strengthening its presence in the market in the eastern part of India. The Company is also planning to make strategic investments towards exploring its manufacturing footprint beyond the Indian shores. It is also investing in new technologies which should considerably optimise operating costs.
These investments will increase sales volumes and optimise cost of operations - it would make the overall business more profitable and sustainable.
PROJECT AND EXPANSION PLANS
The company targets to increase its installed capacity to 4 million ton by FY23 from 2.6 million ton last year. The entire planned new capacity at Raipur of 1.5 million ton is in value added category. In addition, the management has identified two new product lines 1) 500x500 mm sq diameter tubes under heavy structural tubes segment and, 2) color coated tubes under home decor segment both of which will be launched in India for the first time in line with company''s strategy to create new market for structural steel tubes in the long term. The project is being implemented in new greenfield Raipur facility in the state of Chhattisgarh. The total capex for the New Raipur project is around C800 crores, which is planned to be funded through a combination of internal accruals and external borrowings.
INTERNAL FINANCIAL CONTROL
The Company has in place adequate internal financial controls as referred in Section 134(5)(e) of the Companies Act, 2013. For the year ended March 31,2022 the Board is of the opinion that the Company had sound Internal Financial Controls commensurate with the size and nature of its operations and are operating effectively and no reportable material weakness was observed in the system during the year.
Based on annual Internal Audit programme as approved by Audit Committee of the Board, regular internal audits are conducted covering all offices, factories and key areas of the business. The findings of the internal auditors
are placed before Audit Committee, which reviews and discusses the actions taken with the management. The Audit Committee also reviews the effectiveness of company''s internal controls and regularly monitors implementation of audit recommendations.
There are existing internal policies and procedures for ensuring the orderly and efficient conduct of business, including adherence to the Company''s policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records and timely preparation of reliable financial disclosures.
ANNUAL RETURN
In accordance with the provisions of Section 134 (3)(a) of the Companies Act, 2013, the Annual Return, as required under Section 92 of the Act for the financial year 2021-22, is available on the Company''s website at https://aplapollo. com/financial/#AplApollo
SUBSIDIARY COMPANIES, JOINT VENTURES AND ASSOCIATES
The Company had six wholly-owned subsidiaries as on March 31,2022, namely Shri Lakshmi Metal Udyog Limited (SLMUL), Apollo Metalex Private Limited (AMPL), Blue Ocean Projects Private Limited, APL Apollo Building Products Private Limited, APL Apollo Mart Limited and APL Apollo Tubes FZE. Further the Company has one step down subsidiary named Apollo Tricoat Tubes Limited (ATTL), subsidiary of SLMUL.
A report on the performance and financial position of each of the subsidiaries in form AOC-1 is annexed hereto as Annexure ''A'' and forms part of this report.
In accordance with the provisions of Section 136 of the Companies Act, 2013, the audited financial statements and related information of the subsidiaries, where applicable, will be available for inspection during regular business hours at the company''s corporate office at 36, Kaushambi, Near Anand Vihar Terminal, Uttar Pradesh -201010 and the same are also available at our website i.e. www.aplapollo.com.
In March 2022, the company through its newly incorporated subsidiary named APL Apollo Mart Limited had bought 10,00,000 equity shares of ''10 each (4.38% of the total paid up capital) of Shankara Building Products Limited (Shankara) at a price of ''755 per share. Further, Shankara has approved issuance of 14,00,000 convertible warrants at a price of ''750/-per warrant (5.77% of fully diluted capital upon conversion) to APL Apollo Mart Limited. Accordingly, upon the issue of
warrants as above, the total holding of APL Apollo Mart in Shankara, on a fully diluted basis, will be 9.90%.
Subsequent to the close of the financial year, the company jointly with 5 of its subsidiaries and group companies has promoted a Section 8 Company named APL Apollo Foundation for undertaking CSR activities for and on behalf of the promoter companies.
The Company has no associates or joint ventures. DEPOSITS
Your Company neither accepted nor renewed and/or was not having any outstanding public deposits within 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 31, 2022 the authorized capital of the Company stood increased from ''45 crore to H75 crore divided into 37,50,00,000 equity shares of H2 each, pursuant to the approval granted by the members on September 9, 2021.
During the financial year under review, the Company allotted 4,88,500 equity shares of H10 each at a price of H143.855 (including premium of H133.855), pursuant to APL Apollo Employees Stock Option Scheme (ESOS-2015) to eligible employees of the Company and of its subsidiaries.
During the financial year under review, the Company (on September 20, 2021) allotted 12,48,96,000 equity shares of face value of H2/- each as fully-paid up bonus equity shares, in the ratio of One equity share of H2/- each for every One existing equity share of H2/- each.
Pursuant to abovesaid allotments of Equity shares, the paid up capital of the Company stands increased from H24.98 Cr to H50.06Cr comprising of 25,02,80,500 equity shares of H2 each.
The Company has neither issued shares with differential voting rights nor has issued any sweat equity shares.
BORROWINGS Commercial Papers
The Company has received the credit ratings from credit rating agencies - ICRA and CRISL as under -
a. ''ICRA A1 '' assigned to H300 crore Commercial Paper programme of the Company.
b. ''CRISIL A1 '' assigned to H500 crore Commercial Paper Programme of the Company.
During the year the Company has issued Commercial papers ("CP") for the purpose of raising short term funds in nature ranging between one to three months. Further, as on March 31, 2022, no CP was outstanding.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
In accordance with the provisions of Section 152 of the Companies Act, 2013 and in terms of Articles of Association of the Company, Shri Vinay Gupta will retire at the ensuing Annual General Meeting (AGM) and being eligible, offer himself for reappointment.
The shareholders in its meeting held on July 23, 2021 had granted approval the continuation of appointment of Shri Virendra Singh Jain beyond July 24, 2021 (on attaining 75 years of age) till January 27, 2022 and also for fresh appointment for the second term from January 28, 2022 to September 30, 2024 pursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations) and the applicable provisions of companies Act, 2013.
During the year under review, (i) Shri Ameet Gupta was appointed as Non-Executive Independent Director of the Company w.e.f. 6th August, 2021 for a period of five consecutive years (ii) Shri Rahul Gupta was appointed as NonExecutive Director of the Company w.e.f. 6th August, 2021.
The requisite resolutions for both the appointments were approved by the Shareholders through postal ballot on September 9, 2021.
All Independent Directors of the Company have given declarations that they meet the criteria of independence as provided in Section 149(6) read with schedule IV of the Companies Act, 2013 and also Regulation 16(I)(b) of the Listing Regulations.
PARTICULARS OF REMUNERATION
Disclosure of ratio of the remuneration of the Executive Director to the median remuneration of the employees of the Company and other requisite details pursuant to Section 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 annexed to this report as Annexure ''B''. Further, particulars of employees pursuant to Rule 5(2) & 5(3) of the above Rules form part of this report. However, in terms of provisions of section 136
of the said Act, the report and accounts are being sent to all the members of the Company and others entitled thereto, excluding the said particulars of employees. Any member interested in obtaining such particulars may write to the Company Secretary. The said information is available for inspection at the registered office of the Company during working days of the Company up to the date of the ensuing annual general meeting.
AUDITORS AND AUDITORS'' REPORT
A. Statutory Auditors
In terms of provisions of the Companies Act, 2013, M/s. Deloitte Haskins & Sells LLP, Chartered Accountants, Gurugram, (FRN117366W/W-100018), had been appointed as Statutory Auditors of the Company in the 35th Annual General Meeting held on September 29, 2020 to hold the office from the conclusion of the said Annual General Meeting until the conclusion of the 40th Annual General Meeting to be held in year 2025.
The reports the Auditors on the standalone and consolidated financial statements for the FY 2021-22 do not contain any qualification, reservation or adverse remark requiring any explanation on the part of the Board. The observations given therein read with the relevant notes are self-explanatory.
There are no frauds reported by the Auditors under section 143(12) of the Act.
B. Cost Auditors
In terms of Section 148 of the Act, the Company is required to get the audit of its cost records conducted by a Cost Accountant. In this connection, the Board of Directors of the Company in its meeting held on May 13, 2022 had, on the recommendation of the Audit Committee, approved the appointment of M/s R.J. Goel & Co., Cost Accountants (FRN: 000026) as the cost auditors of the Company for the year ending March 31,2023.
In accordance with the provisions of Section 148(3) of the Act read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditors as recommended by the Audit Committee and approved by the Board has to be ratified by the members of the Company. Accordingly, appropriate resolution will form part of the Notice convening the AGM. The approval of the members is sought for the proposed remuneration payable to the Cost Auditors for the Financial Year ending March 31, 2023. M/s R.J. Goel & Co., have vast experience in the field of cost audit and have been conducting the audit of the cost records
of the Company for the past several years. The Cost Audit Report of the Company for the Financial Year ended March 31, 2022 will be filed with the MCA after its noting by the Board. The Company has maintained accounts and records as specified under sub-section (1) of 148 of the Act.
C. Secretarial Auditors
Pursuant to the provisions of Section 204 of the Companies Act, 2013, the Board of Directors had appointed M/s Parikh & Associates, Company Secretaries in practice as Secretarial Auditors to carry out the Secretarial Audit of the Company for the financial year 2021-22. The report given by them for the said financial year in the prescribed format is annexed to this report as Annexure ''C''. The Secretarial Audit Report is self- explanatory and does not contain any qualification, reservation or adverse remark. Further, the Board has appointed the said firm for conducting the secretarial audit for the financial year 2022-23 also.
RELATED PARTY TRANSACTIONS
During the financial year ended March 31, 2022, all the contracts or arrangements or transactions entered into by the Company with the related parties were in the ordinary course of business and on ''arm''s length'' basis and were in compliance with the 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 arrangement or transaction with the related parties which
were not on ''arm''s length'' basis or could be considered material in accordance with the policy of the Company on materiality of related party transactions. In view of the above, it is not required to provide the specific disclosure of related party transaction in Form AOC-2.
Your Directors draw attention of the members to Note No. 40 to the Standalone Financial Statement which sets out related party disclosures.
EMPLOYEE STOCK OPTION SCHEME (ESOS)
The Company, under the APL Apollo Employee Stock Option Scheme- 2015 ("ESOS-2015), approved by the shareholders vide postal ballot resolutions on July 27, 2015 and December 22, 2015, grants share-based benefits to eligible employees of the Company and employees of subsidiaries with a view to attracting and retaining the best talent, encouraging employees to align individual performances with Company objectives, and promoting increased participation by them in the growth of the Company. The total number of equity shares to be allotted pursuant to the exercise of the stock incentives under the ESOS-2015 to the employees of the Company and its subsidiaries shall not exceed 7,50,000 equity shares. The following disclosures are being made under Rule 12 of the Companies (Share Capital and Debentures) Rules, 2014 and the said disclosure is also available on the website of the Company at www.aplapollo.com:
The Certificate from the Secretarial Auditors of the Company certifying that the ESOS 2015 is being implemented in accordance with the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 and the resolution passed by the Members, would be placed at the Annual General Meeting for inspection by Members.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to provisions of Section 134 sub-section 3(c) and sub-section 5 of the Companies Act, 2013, your Directors to the best of their knowledge hereby state and confirm that:
a. In the preparation of the annual accounts for the year ended March 31, 2022, the applicable accounting standards have been followed along with proper explanations relating to material departures.
b. Such accounting policies have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent to give a true and fair view of the Company''s state of affairs as at March 31, 2022 and of the Company''s profit for the year ended on that date.
c. Proper and sufficient care has been taken for the maintenance of adequate accounting records, in accordance with the provisions of the Companies Act,
2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.
d. The annual financial statements have been prepared on a going concern basis.
e. The internal financial controls were laid down to be followed that and such internal financial controls were adequate and were operating effectively.
f. Proper systems were devised to ensure compliance with the provisions of 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 the Companies Act, 2013, the Company has framed its Corporate Social Responsibility (CSR) policy for development of programmes and projects for the benefit of weaker sections of the society and the same has been approved by Corporate Social Responsibility Committee (CSR Committee) and the Board of Directors of the Company. The Corporate Social Responsibility (CSR) policy of the Company provides a road map for its CSR activities.
During the year under review, the Company has made contribution of H3.07 Cr for various CSR purposes in compliance to the provisions of Companies Act, 2013 relating to Corporate Social Responsibility.
The Annual Report on CSR activities is annexed herewith as Annexure ''D''. The CSR Policy has been uploaded on the Company''s website and may be accessed at the link: https:// aplapollo.com/policies/#policies
SCHEME OF AMALGAMATION AND ARRANGEMENT
As the members are aware of, the Board of Directors of Company at its meeting held on February 27, 2021, had approved a scheme of amalgamation of Shri Lakshmi Metal Udyog Limited and Apollo Tricoat Tubes Limited with the Company and their respective shareholders and creditors, under Sections 230 to 232 of the Companies Act, 2013. Subsequently BSE Limited and National Stock Exchange of India Limited had given their NOC to the Scheme.
Further, the shareholders, the secured creditors and the unsecured creditors of Company, at their separate meetings held on February 8, 2022, had approved the said scheme of amalgamation. Similar approvals have been received by the transferor companies also. The Scheme is now subject to sanction of the Hon''ble NCLT, Delhi. NCLT has fixed May 27, 2022 as the final date of hearing for considering the sanctioning of the Scheme. The Scheme related details are available on the website of the Company at https:// aplapollo.com/announcements/#Mergers.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186
In terms of Section 186 of the Companies Act, 2013 and rules framed thereunder, details of Loans, Guarantees given and Investments made have been disclosed in the Notes to the financial statements for the year ended March 31,2022.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:
Information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo as required under Section 134 (3)(m) of Companies Act, 2013 read with the Rule 8 (3) of the Companies (Accounts) Rules, 2014, is furnished as Annexure ''E'', forming part of this Report.
CORPORATE GOVERNANCE
Your company reaffirms its commitment to the highest standards of corporate governance practices. Pursuant to Regulation 34 read with schedule V of SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015, the Corporate Governance Report is annexed to this report (Annexure ''F'').
The Corporate Governance Report which forms part of this report, also covers the following:
a) Particulars of the Board Meetings held during the financial year under review.
b) Policy on Nomination and Remuneration of Directors, Key Managerial Personnel and Senior Management including, inter alia, the criteria for performance evaluation of Directors.
c) The manner in which formal annual evaluation has been made by the Board of its own performance and that of its Committees and individual Directors.
d) The details with respect to composition of Audit Committee and establishment of Vigil Mechanism.
e) Details regarding Risk Management.
COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND ANNUAL GENERAL MEETINGS
During the period under review, the Company has duly complied with the applicable provisions of the Secretarial Standards issued by the Institute of Company Secretaries 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 (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has complied with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and has in place a Policy on Prevention of Sexual Harassment at the Workplace in line with the provisions of the said Act and an Internal Complaint Committee has also been set up to redress complaints received regarding Sexual Harassment.
No complaint of sexual harassment was received during the financial year 2021-22.
OTHER DISCLOSURES AND REPORTING
Your Directors state that no disclosure or reporting is required with respect to the following items as there were no transactions on these items during the year under review :
1. Change in the nature of business of the Company.
2. Issue of equity shares with differential rights as to dividend, voting or otherwise.
3. Any remuneration or commission received by Managing Director of the Company, from any of its subsidiary.
4. Issue of shares (including sweat equity shares) to employees of the Company under any scheme save and except ESOS referred to in this report.
5. Significant or material orders passed by the regulators or courts or tribunal which impacts the going concern status and company''s operations in future.
6. Details in respect of frauds reported by auditors under sub-section (12) of section 143 other than those which are reportable to the Central Government
7. The details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year alongwith their status as at the end of the financial year.
8. The details of difference between amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof
APPRECIATION
Yours Directors take this opportunity to express their appreciation for the co-operation received from the customers, vendors, bankers, stock exchanges, depositories, auditors, legal advisors, consultants, stakeholders, debenture-holders, business associates, Government of India, State Governments, Regulators and local bodies during the period under review. The Directors also wish to place on record their appreciation of the devoted and dedicated services rendered by the employees of the Company.
Mar 31, 2021
Your Directors have pleasure in presenting the Thirty Sixth (36th) Annual Report on the business and operations of your company together with the Standalone and Consolidated Audited Financial Statements for the financial year ended March 31,2021.
The Company''s financial performance for the year under review along with the previous year''s figures is given hereunder:
(C In crore) |
||||
Particulars |
Consolidated |
Standalone |
||
FY 2020-21 |
FY 2019-20 |
FY 2020-21 |
FY 2019-20 |
|
Gross sales |
8499.75 |
7,723.23 |
6007.96 |
5,930.81 |
Add : Other income |
35.94 |
22.18 |
44.11 |
27.23 |
Total revenue |
8535.69 |
7,745.41 |
6052.07 |
5,958.04 |
Profit before Depreciation, Finance Costs and Tax Expense |
714.65 |
499.52 |
328.07 |
264.84 |
Less : Depreciation and amortisation |
102.77 |
95.91 |
68.18 |
68.91 |
Less : Finance cost |
66.09 |
107.27 |
54.89 |
82.14 |
Profit before tax (PBT) |
545.79 |
296.34 |
205.01 |
113.79 |
Less : Tax expense |
138.09 |
40.34 |
51.23 |
(1.22) |
Profit after tax for the year (PAT) |
407.70 |
256.00 |
153.78 |
115.01 |
The Company''s consolidated gross turnover in financial year 2020-21 increased significantly by 10.05 % from C 7723.23 crores to C 8,499.75 crores. The EBIDTA has been increased by 43.06% from C 499.52 crores to C 714.65 crores for the year under review. The net profit of the Company has also increased by 59.25% from C 256 crores to C 407.70 crores during the year under review..
The Board of Directors of the Company has deemed it prudent not to recommend any dividend for the financial year under report and to retain the profits, in order to mitigate the adverse impact caused by the outbreak of Covid-19 pandemic and to augment 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 a Dividend Distribution policy. During the year, there have been no changes to the policy. Hence, the same is not annexed to this report, as the same is available on our website at https://aplapollo.com/policies/#policies
The Board of Directors of your Company, has decided not to transfer any amount to the Reserves for the year under review.
In Fiscal 2020-21 the Indian economy continued its downslide owing to an overall slowdown in core sectors coupled with withering consumer confidence which impacted consumer driven sectors - real estate and the automobile sectors being the worst impacted. The other factors that impeded economic progress were a muted global economy and declining investment in construction and infrastructure. And even as the green shoots of recovery appeared towards the close of fiscal 2019-20, India got embroiled with the global pandemic which engulfed the nation into a state of despair - India announced the largest lockdown in the world that extended more than 5 weeks which brought the wheels of the economy to a grinding halt. This measure has cast a dark shadow on the prospects of economic progress with economic experts suggesting a sharp economic contraction in the current fiscal. Synced with the a downturn in the real estate and construction sectors, demand for structural steel tubing remained modest during the year under review. The silver lining around the dark clouds is that verticalization as a trend in real estate development is gaining credence not only in metros but also in Tier I and II cities which augurs well for the demand of high-quality structural steel tubes over the coming years. Further, significant Government impetus on creating new-age infrastructure would catalyse demand going forward. APL Apollo being the largest player in structural steel tubes in India with an entrenched presence in the domestic markets and a resilient business model is well-positioned to capitalize on these emerging sectoral trends.
In FY2021, the Company reported a healthy set of results despite a weak operating environment. Revenues grew to C 8,499.75 crore in FY 2021 from C 7723.23 crore in FY 2020, registering a growth of 10.05%, despite overall muted demand owing to economic deceleration and marked slowdown in key user sectors due to pandemic across the nation. This was largely owing to a combination of factors which include improving product mix, branding, nationwide presence, higher realization and market sentiment. More importantly, we utilised the cash flow prudently between retiring high-cost debt even as we invested in capacityenhancing measures - for the short-term and the medium-term. Besides, we implemented important steps to create awareness about our products among discerning customers in key markets. We continued our mass branding campaign which included outdoor media, print media, IPL sponsorships and TV ads. Further, we announced the merger of Apollo TriCoat Tubes Limited and an
unlisted subsidiary with APL Apollo Tubes Limited as a strategic initiative.
As India endeavours hard to overcome the pains inflicted by the global pandemic, every business house in India will face a very challenging FY2022 like we had faced in FY2021. But, your Company''s position is better than most others in our business space owing to its inherent strengths and an improved liquidity position which should help in tiding over these trying times with ease. We have taken important measures - internally and externally - to optimise our cost structures to be able to minimise the impact of this external challenge on business profitability. As well as, your company has planned green field expansion plan at Raipur which will be operational from FY2023 which will give the impetus to the performances. Over the medium term though, the prospects are expected to be significant as we expect the Government''s economic stimulus to translate into on-ground opportunities. Our optimism is based on estimates by credible economists who are of the view that India''s economic rebound would be sharp and faster than other nations.
The company targets to increase its installed capacity to 4mn ton in FY22 from 2.6mn ton last year. To add this capacity, the management has identified two new product lines in the value added category: 1) 500x500mm sq diameter tubes under heavy structural tubes segment and, 2) color coated tubes under home decor segment. Both of these products will have capacity of 200,000 ton each and will be launched in India for the first time which is in line with company''s strategy to create new market for structural steel tubes in the long term. The project is being implemented in new greenfield Raipur facility in the state of Chhattisgarh. The total capex of around C 279.70 Crores is being funded form the internal accruals.
The World Health Organization declared Covid-19 outbreak as a pandemic just before the beginning of FY21. Responding to the potentially serious threat that this pandemic has to public health, the Indian Government had taken a series of measures to contain the outbreak, which included imposing multiple ''lockdowns'' across the country, from March 25, 2020, and extended up till Q1FY21. The lockdowns and restrictions imposed on various activities due to COVID - 19 pandemic had posed challenges to all the businesses including your company''s business. Owing to the suspension of the operations due to lockdown across the country, the revenue for Q1FY21 was impacted. The company suspended the production operations from March 25, 2020 and partially resumed production operations from April 22, 2020.
The nationwide lockdown had impacted sales of the company''s products in Q1FY21 as the construction sites and company''s distributors were shut across India during this period. Further, there were constraints for inter-state and intrastate movement of finished goods.
Impact of COVID-19 after the end of financial year till the date of this report
India was hit hard by the 2nd wave of COVID - 19 pandemic in April 2021. The state governments started announcing simultaneous lockdowns across the country. Major impact of Covid-19 has been felt in the first quarter with both revenue and profit being affected. With opening of domestic market post lockdown, we expect business to improve gradually and that business will start moving upwards from 2nd quarter of FY22.
Estimation of Future Impact of CoVID-19 on operation
The Company has assessed the impact of Covid-19 pandemic on its business operations and has considered relevant internal and external information available up to the date of approval of these financial statements, in determination of the recoverability and carrying value of property, plant and equipment, inventories, and trade receivables. Based on current estimates, the Company expects that the carrying amount of these assets will be recovered. Further, the management believes that there may not be significant impact of Covid-19 pandemic on the financial position and performance of the Company, in the long-term. The Company will continue to closely monitor any material changes to future economic conditions.
The Company has in place, adequate internal financial controls as referred in Section 134(5)(e) of the Companies Act, 2013. For the year ended March 31, 2021 the Board is of the opinion that the Company had sound Internal Financial Controls commensurate with the size and nature of its operations and are operating effectively and no reportable material weakness was observed in the system during the year.
Based on annual Internal Audit programme as approved by Audit Committee of the Board, regular internal audits are conducted covering all offices, factories and key areas of the business. The findings of the internal auditors are placed before Audit Committee, which reviews and discusses the actions taken with the management. The Audit Committee also reviews the effectiveness of company''s internal controls and regularly monitors implementation of audit recommendations.
There are existing internal policies and procedures for ensuring the orderly and efficient conduct of business, including
adherence to the Company''s policies, safeguarding of its assets, prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and timely preparation of reliable financial disclosures.
In accordance with the provisions of Section 134 (3)(a) of the Companies Act, 2013, the Annual Return, as required under Section 92 of the Act for the financial year 2020-21, is available on the Company''s website at www.aplapollo.com.
SUBSIDIARIES COMPANIES, JOINT VENTURES AND ASSOCIATES
The Company had five wholly-owned subsidiaries as on March 31, 2021, namely Shri Lakshmi Metal Udyog Limited (SLMUL), Apollo Metalex Private Limited (AMPL), Blue Ocean Projects Private Limited, APL Apollo Building Products Private Limited and APL Apollo Tubes FZE. Further the Company has one step down subsidiary named Apollo Tricoat Tubes Limited (ATTL), subsidiary of SLMUL.
A report on the performance and financial position of each of the subsidiaries in form AOC-1 is annexed hereto as Annexure A'' and forms part of this report.
In accordance with the provisions of Section 136 of the Companies Act, 2013, the audited financial statements and related information of the subsidiaries, where applicable, will be available for inspection during regular business hours at the company''s corporate office at 36, Kaushambi, Near Anand Vihar Terminal, Uttar Pradesh -201010 and the same are also available at our website i.e. www.aplapollo.com.
During the year under review, the Board of Directors of Company, at its meeting held on February 27, 2021, approved a scheme of amalgamation of Shri Lakshmi Metal Udyog Limited and Apollo Tricoat Tubes Limited with the Company and their respective shareholders and creditors, under Sections 230 to 232 of the Companies Act, 2013. The Scheme is subject to receipt of approvals from the shareholders and creditors of the Company as may be directed by the National Company Law Tribunal, Delhi bench ("NCLT"), BSE Limited, National Stock Exchange of India Limited and approval of other regulatory or statutory authorities as may be required.
Your Company did neither accept nor renew or had any outstanding public deposits within the meaning of Section 73 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014, during the year under report.
As on March 31, 2021 the authorized capital of the Company stood at C 45 crore divided into 2,25,000,000 equity shares of C 2 each.
During the year under review, the face value of Company''s equity shares was sub-divided from C 10 into 5 equity shares of C 2 each pursuant to the approval granted by the members on December 3, 2020. Necessary approvals from the Stock Exchanges for split of shares and NSDL/CDSL for assignment of New ISIN which is INE702C01027 were obtained.
During the financial year under review, the Company allotted; (i) 73,935 equity shares of C 10 each at a price of C 1438.55 (including premium of C 1428.55); (ii) 6,375 equity shares of C 10 each at a price of C 1028.80 (including premium of C 1018.80); (iii) 125,000 equity shares of C 2 each at a price of C 287.71 (including premium of C. 285.71); and (iv) 24,375 equity shares of C 2 each at a price of C 205.76 (including premium of C 203.76), pursuant to APL Apollo Employees Stock Option Scheme (ESOS-2015) to eligible employees of the Company and of its subsidiaries.
Pursuant to abovesaid allotments of Equity shares, the paid up capital of the Company stands increased from C 24.86 Cr to C 24.98 Cr comprising of 12,48,96,000 equity shares of C 2 each.
The Company has neither issued shares with differential voting rights nor has issued any sweat equity shares. Further it did not issue any bonus shares also during the year under review.
The Company has received the credit ratings from credit rating agencies - ICRA and CRISL as under -
a. ''ICRA A1 '' assigned to C 300 crore Commercial Paper programme of the Company.
b. ''CRISIL A1 '' assigned to C 500 crore Commercial Paper Programme of the Company.
During the year the Company has issued Commercial papers amounting to C 665 Crores for meeting short term fund requirement and the same were redeemed on the maturity date. Further, as on March 31,2021, no CP was outstanding.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
In accordance with the provisions of Section 152 of the Companies Act, 2013 and in terms of Articles of Association of the Company, Shri Sanjay Gupta will retire at the ensuing Annual General Meeting (AGM) and being eligible, offer himself for reappointment.
The tenure of Shri Virendra Singh Jain (DIN: 00253196) as an
Independent Director of the company comes to an end on January 27, 2022. The Board of Directors has recommended with detailed justification thereof for continuation of his appointment beyond July 24, 2021 (on attaining 75 years of age) till January 27, 2022 and also for fresh appointment for the second term from January 28, 2022 to September 30, 2024 pursuant to the provisions of Regulation 171A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the applicable provisions of companies Act, 2013.
All Independent Directors of the Company have given declarations that they meet the criteria of independence as provided in Section 149(6) read with schedule IV of the Companies Act, 2013 and also Regulation 16(I)(b) of the Listing Regulations.
Disclosure of ratio of the remuneration of each Executive Director to the median remuneration of the employees of the Company and other requisite details pursuant to Section 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 annexed to this report as Annexure ''B. Further, particulars of employees pursuant to Rule 5(2) & 5(3) of the above Rules form part of this report. However, in terms of provisions of section 136 of the said Act, the report and accounts are being sent to all the members of the Company and others entitled thereto, excluding the said particulars of employees. Any member interested in obtaining such particulars may write to the Company Secretary. The said information is available for inspection at the registered office of the Company during working days of the Company up to the date of the ensuing annual general meeting.
AUDITORS AND AUDITORS'' REPORT
A. Statutory Auditors
In terms of provisions of the Companies Act, 2013, M/s. Deloitte Haskins & Sells LLP, Chartered Accountants, Gurugram, (FRN117366W/W-100018), had been appointed as Statutory Auditors of the Company in the 35th Annual General Meeting held on September 29, 2020 to hold the office from the conclusion of the said Annual General Meeting until the conclusion of the 40th Annual General Meeting to be held in year 2025.
The reports of the Auditors on the standalone and consolidated financial statements for the FY 2020-21 do not contain any qualification, observation or adverse remark requiring any explanation on the part of the Board. The observations given therein read with the relevant notes are self-explanatory.
There are no frauds reported by the Auditors under section 143(12) of the Act.
B. Cost Auditors
In terms of Section 148 of the Act, the Company is required to get the audit of its cost records conducted by a Cost Accountant. In this connection, the Board of Directors of the Company had, on the recommendation of the Audit Committee, approved the appointment of M/s R.J. Goel & Co., Cost Accountants (FRN: 000026) as the cost auditors of the Company for the year ending March 31,2022.
I n accordance with the provisions of Section 148(3) of the Act read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditors as recommended by the Audit Committee and approved by the Board has to be ratified by the members of the Company. Accordingly, appropriate resolution will form part of the Notice convening the AGM. The approval of the members is sought for the proposed remuneration payable to the Cost Auditors for the Financial Year ending March 31,2022. M/s R.J. Goel & Co., have vast experience in the field of cost audit and have been conducting the audit of the cost records of the Company for the past several years. The Cost Audit Report of the Company for the Financial Year ended March 31, 2021 will be filed with the MCA. The Company has maintained accounts and records as specified under sub-section (1) of 148 of the Act.
C. Secretarial Auditors
Pursuant to the provisions of Section 204 of the Companies Act, 2013, the Board of Directors had appointed M/s Parikh & Associates, Company Secretaries in practice as Secretarial Auditors to carry out the Secretarial Audit of the Company for the financial year 2020-21. The report given by them for the said financial year in the prescribed format is annexed to this report as Annexure ''C The Secretarial Audit Report is self- explanatory and does not contain any qualification, reservation or adverse remark.
During the financial year ended March 31,2021, all the contracts or arrangements or transactions entered into by the Company with the related parties were in the ordinary course of business and on ''arm''s length'' basis and were in compliance with the 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 arrangement or transaction with the related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions. In view of the above, disclosure in FORM AOC-2 is not applicable.
Your Directors draw attention of the members to Note No. 41 to the Financial Statement which sets out related party disclosures.
EMPLOYEE STOCK OPTION SCHEME (ESOS)
The Company, under the APL Apollo Employee Stock Option Scheme- 2015 ("ESOS-2015), approved by the shareholders vide a postal ballot on July 27, 2015 and December 22, 2015, grants share-based benefits to eligible employees of the Company and employees of subsidiaries with a view to attracting and retaining the best talent, encouraging employees to align individual performances with Company objectives, and promoting increased participation by them in the growth of the Company. The total number of equity shares to be allotted pursuant to the exercise of the stock incentives under the ESOS-2015 to the employees of the Company and its subsidiaries shall not exceed 7,50,000 equity shares. The following disclosures are being made under Rule 12 of the Companies (Share Capital and Debentures) Rules, 2014 and the said disclosure is also available on the website of the Company at www.aplapollo.com:
S. No. |
Particulars (During the financial year ended March 31,2021) |
APL Apollo ESOS-2015 |
1 |
Options granted |
Nil |
2 |
Options vested; |
254375 |
3 |
Options exercised |
550925 |
4 |
Total number of shares arising as a result of exercise of option |
550925 |
5 |
Options lapsed |
94815 options lapsed (due to resignation of employees) |
6 |
Exercise price |
The Exercise price of the shares will be the Market Price of the shares one day before the date of grant of options. Suitable discount will be provided on that price, as deemed fit by the Nomination & Remuneration Committee ("committee"). Further, the Committee has power to reprice the grants in future if the price of the company falls continuously for a period of 3 months. |
7 |
Variation of terms of options |
NIL |
8 |
Money realized by exercise of options (C) |
153896944 |
9 |
Total number of options in force |
438000 |
Particulars (During the financial year ended March . °. 31,2021) |
APL Apollo ESOS-2015 |
10 Employee wise details of options granted to;- (i) Key managerial personnel; (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. |
Nil |
(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; |
|
Note : The number of options mentioned above have been appropriately adjusted subsequent to subdivision of face value to C2. |
The Certificate from the Statutory Auditors of the Company certifying that the ESOS 2015 is being implemented in accordance with the Share Based Employee Benefits (SBEB) Regulations and the resolution passed by the Members, would be placed at the Annual General Meeting for inspection by Members.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to provisions of Section 134 sub-section 3(c) and subsection 5 of the Companies Act, 2013, your Directors to the best of their knowledge hereby state and confirm that:
a. In the preparation of the annual accounts for the year ended March 31, 2021, the applicable accounting standards have been followed along with proper explanations relating to material departures.
b. Such accounting policies have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent to give a true and fair view of the Company''s state of affairs as at March 31,2021 and of the Company''s profit for the year ended on that date.
c. Proper and sufficient care has been taken for the maintenance of adequate accounting records, in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.
d. The annual financial statements have been prepared on a going concern basis.
e. The internal financial controls were laid down to be followed that and such internal financial controls were adequate and were operating effectively.
f. Proper systems were devised to ensure compliance with the provisions of 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 the Companies Act, 2013, the Company has framed its Corporate Social Responsibility (CSR) policy for development of programmes and projects for the benefit of weaker sections of the society and
the same has been approved by Corporate Social Responsibility Committee (CSR Committee) and the Board of Directors of the Company. The Corporate Social Responsibility (CSR) policy of the Company provides a road map for its CSR activities.
During the year under review, the Company has made contribution of C 2.56 Cr for various CSR purposes in compliance to the provisions of Companies Act, 2013 relating to Corporate Social Responsibility and has met it CSR spending obligation completly.
The Annual Report on CSR activities is annexed herewith as Annexure ''D''.
Subsequent to the year end, the CSR policy was amended in line with the latest amendments notified by the Ministry of Corporate Affairs on January 22, 2021 through Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021. The CSR Policy has been uploaded on the Company''s website and may be accessed at the link: https://aplapollo.com/policies/#policies
SCHEME OF AMALGAMATION AND ARRANGEMENT
During the year under review, the Board of Directors of Company, had at its meeting held on February 27, 2021, approved a scheme of amalgamation of Shri Lakshmi Metal Udyog Limited and Apollo Tricoat Tubes Limited with the Company and their respective shareholders and creditors, under Sections 230 to 232 of the Companies Act, 2013. The Scheme is subject to receipt of approvals from the shareholders and creditors of the Company as may be directed by the National Company Law Tribunal, Delhi bench ("NCLT"), BSE Limited, National Stock Exchange of India Limited and approval of other regulatory or statutory authorities as may be required. The scheme related details are available on the website of the Company https://aplapollo.com/ announcements/#Mergers
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186
In terms of Section 186 of the Companies Act, 2013 and rules framed thereunder, details of Loans, Guarantees given and
Investments made have been disclosed in the Notes to the financial statements for the year ended March 31,2021.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:
Information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo as required under Section 134 (3)(m) of Companies Act, 2013 read with the Rule 8 (3) of the Companies (Accounts) Rules, 2014, is furnished as Annexure ''E, forming part of this Report.
CORPORATE GOVERNANCE
Your company reaffirms its commitment to the highest standards of corporate governance practices. Pursuant to Regulation 34 read with schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Corporate Governance Report is annexed to this report (Annexure ''F'').
The Corporate Governance Report which forms part of this report, also covers the following:
a) Particulars of the Board Meetings held during the financial year under review.
b) Policy on Nomination and Remuneration of Directors, Key Managerial Personnel and Senior Management including, inter alia, the criteria for performance evaluation of Directors.
c) The manner in which formal annual evaluation has been made by the Board of its own performance and that of its Committees and individual Directors.
d) The details with respect to composition of Audit Committee and establishment of Vigil Mechanism.
e) Details regarding Risk Management.
COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND ANNUAL GENERAL MEETINGS
During the period under review, the Company has duly complied with the applicable provisions of the Secretarial Standards issued by the Institute of Company Secretaries 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 (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has complied with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and has in place a Policy on Prevention of Sexual Harassment at the Workplace in line with the provisions of the said Act and an Internal Complaints Committee has also been set up to redress complaints received regarding Sexual Harassment.
No complaint of sexual harassment was received during the financial year 2020-21.
OTHER DISCLOSURES AND REPORTING
Your Directors state that no disclosure or reporting is required with respect to the following items as there were no transactions on these items during the year under review :
1. Change in the nature of business of the Company.
2. Issue of equity shares with differential rights as to dividend, voting or otherwise.
3. Any remuneration or commission received by Managing Director of the Company, from any of its subsidiaries.
4. Issue of shares (including sweat equity shares) to employees of the Company under any scheme save and except ESOS referred to in this report.
5. Significant or material orders passed by the regulators or courts or tribunal which impacts the going concern status and company''s operations in future.
6. Details in respect of frauds reported by auditors under sub-section (12) of section 143 other than those which are reportable to the Central Government
7. The details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year alongwith their status as at the end of the financial year.
8. The details of difference between amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof
APPRECIATION
Yours Directors take this opportunity to express their appreciation for the co-operation received from the customers, vendors, bankers, stock exchanges, depositories, auditors, legal advisors, consultants, shareholders, business associates, Government of India, state government and local bodies during the period under review. The Directors also wish to place on record their appreciation of the devoted and dedicated services rendered by the employees of the Company.
For and on behalf of Board of Directors Sanjay Gupta
Place: Ghaziabad Chairman & Managing Director
Date: June 3, 2021 (DIN: 00233188)
Mar 31, 2018
To
The members of
APL Apollo Tubes Limited,
The Directors have pleasure in presenting the Thirty Third Annual Report on the business and operations of your company together with the Standalone and Consolidated Audited Financial Statements for the financial year ended March 31, 2018.
FINANCIAL PERFORMANCE:
The Companyâs financial performance for the year under review along with the previous yearâs figures is given hereunder:
(Rs.in crore)
Particulars |
Consolidated |
Standalone |
||
FY 2017-18 |
FY 2016-17 |
FY 2017-18 |
FY2016-17 |
|
Gross sales |
5,472.38 |
4,377.65 |
4,431.17 |
3,433.17 |
Add : Other income |
8.01 |
5.97 |
35.45 |
4.79 |
Total revenue |
5,480.39 |
4,383.62 |
4,466.62 |
3,437.96 |
Operating expenses |
5,101.34 |
4,044.68 |
4,196.25 |
3,211.98 |
EBIDTA |
379.05 |
338.94 |
270.37 |
225.98 |
Less : Finance cost |
81.30 |
72.03 |
70.44 |
62.78 |
Less : Depreciation and amortisation |
53.41 |
50.90 |
43.98 |
39.77 |
Profit before tax (PBT) |
244.34 |
216.01 |
155.95 |
123.43 |
Less : Tax expense |
86.21 |
63.90 |
43.26 |
35.11 |
Profit after tax for the year (PAT) |
158.13 |
152.11 |
112.69 |
88.32 |
Other Comprehensive Income/(Expense) |
0.61 |
(0.30) |
0.61 |
(0.46) |
Total Comprehensive Income for the year |
158.74 |
151.81 |
113.30 |
87.86 |
Add : Balance in profit and loss account |
418.34 |
307.15 |
529.06 |
481.83 |
Profit available for appropriation |
577.08 |
458.96 |
642.36 |
569.69 |
Transfer to debenture redemption reserve |
18.75 |
12.50 |
18.75 |
12.50 |
Proposed dividend on equity shares |
28.31 |
23.44 |
28.31 |
23.44 |
Tax on dividends |
5.93 |
4.68 |
0.12 |
4.69 |
Balance carried over to balance sheet |
524.09 |
418.34 |
595.18 |
529.06 |
The Transition from Previous GAAP to Ind AS has been accounted for in accordance whith Ind AS 101 âFirst Time Adoption of Indian Accounting Standardâ with April 1, 2016 being the transition date and accordingly these financial results along with the comparatives have been prepared in accordance with the recognition and measurement principles stated therein, prescribed under Section 133 of the Companies Act, 2013 read with the relevant rules issued thereunder and the other accounting principles generally accepted in India.
Consequent to the introduction of Goods and Service Tax (GST) with effect from July 1, 2017, Central Excise, Value Added Tax (VAT) etc. have been replaced by GST. In accordance with âInd-AS 18 : Revenueâand Schedule III of the Companies Act, 2013, GST is not included in Revenue from operations for nine months for the period of July 1, 2017 to March 31, 2018.
The Companyâs consolidated gross turnover in financial year 2017-2018 increased by 25% from Rs.4378 crores to Rs.5472 crores mainly because of high sale of customized products. The EBIDTA has been significantly increased by 12% from Rs.339 crores to Rs.379 crores for the year under review. The net profit of the Company has also increased by 4% from Rs.152 crores to Rs.158 crores during the year under review.
DIVIDEND
The Board has recommended a higher dividend of Rs.14 (140%) per equity share (as against 120% last year) on the equity share capital of the company for the year 2017-18 subject to approval from the shareholders at the ensuing AGM, in order to retain its shareholders. The total dividend pay-out works out to 30% of the net profit for the standalone results.
TRANSFER TO RESERVES
The Board of Directors has decided to retain the entire amount of profits in the profit and loss account.
OVERVIEW
The Indian economy has witnessed implementation of major policy reforms and initiatives during the year -such as the implementation of the Goods & Services Tax (GST) and Insolvency and Bankruptcy Code (IBC). Although these reforms have temporarily impacted the growth momentum and business sentiments during the first half of the fiscal, however it recovered in second half. Indiaâs GDP is expected to rise in the coming year, thereby making it the worldâs fastest growing economy. Moreover, our governmentâs strong focus towards making India a nation with unparalleled global opportunities, also augument well for a stronger economic growth.
Against this backdrop, the Company grew its revenues from Rs.4384 crore in FY17 to Rs.5480 crore in FY18, thereby registering a growth of 25%. The volumes grew at 18.5% from 0.94 Million MTPA to 1.11 Million MTPA. A healthy recovery in the demand environment in the latter half of the year supported by strong sales volume assisted the Companyâs overall performance during the year. FY19 also began on a robust note as the Company recorded strong sales volume in the months of April and May.
The Company is a âOne-Stop Shopâfor a wide spectrum of steel structural products that caters to an array of sectors such as Construction & Building Material, Solar, Infrastructure, Energy & Engineering, Automobile, Agriculture among others. These key industries move in sync with the economy and as such are likely to benefit from the upswing in the countryâs prospects. Moreover, steel pipe demand, estimated to form 10-12% of the total steel demand, is likely to grow at 8% through FY21. With an aim to tap this opportunity, the Company augmented its capacity to from the existing 1.3 to 1.75 Million MTPA in the financial year 2017-18.
OPERATIONS
In an environment marked by volatility, the Company delivered a steady operating and financial performance. The business during the year saw a healthy growth trend, driven by a combination of enhanced branding capabilities, expanding reach to newer markets and a solid product portfolio. The Company continues to strengthen its presence in established and new markets via a two pronged approach of focusing on dealer/distributor engagements while also simultaneously creating strong brand awareness to increase Top-of-Mind-views of APL Apollo products. In sync with this strategy, the Company launched four new brands for DFT products, which are gradually seeing a strong brand recall in targeted markets.
During the year under review, the Company saw a notable upscale in the dealer-distributor-retailer & warehouse network - the total distributor network stood at 650 the dealers network increased to 40,000 and the warehouse count stood at 29 as on March 31, 2018.
PROJECTS IMPLEMENTED
The Company has been a pioneer in introducing modern technologies in the industry and is the first Company in India to introduce the latest global technology named as-Direct Forming Technology (DFT). It has operationalized a Greenfield plant in Raipur and Hosur during the year. Through this technology, your Company will target the untapped regions across the globe, especially focusing towards the OEMs and Exports markets. Direct Forming Technology has following advantages:
a. Low manpower due to advanced automation.
b. High Productivity (as size change requires only 15-20 mins),
c. 3% to 8% lighter tubes.
d. Any size can be made.
CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements presented by the Company include financial information of its subsidiaries prepared in compliance with applicable accounting standards. The Audited Consolidated Financial Statements and Auditorâs Report thereon form part of this Annual Report.
INTERNAL FINANCIAL CONTROL
The Company has in place adequate internal financial controls and no reportable material weakness was observed in the system during the year. Further, the Company has in place adequate internal controls commensurate with the size and nature of its operations.
Based on annual Internal Audit programme as approved by Audit Committee of Board, regular internal audits are conducted covering all offices, factories and key areas of the business. Findings are placed before Audit Committee, which reviews and discusses the actions taken with management. The Audit Committee also reviews the effectiveness of Companyâs internal controls and regularly monitors implementation of audit recommendations.
EXTRACT OF ANNUAL RETURN
In accordance with the provisions of Section 134(3)(a) of the Companies Act, 2013, the extract of the Annual Return in Form no. MGT-9 is annexed hereto as Annexure-âAâand forms part of this report.
SUBSIDIARIES COMPANIES, JOINT VENTURES AND ASSOCIATES
The Company has three wholly-owned subsidiaries as on March 31, 2018, namely Shri Lakshmi Metal Udyog Limited (SLMUL), Apollo Metalex Private Limited (AMPL) and Blue Ocean Projects Private Limited.
During the year under review, the Honâble National Company Law Tribunal, Principal Bench at New Delhi has approved the scheme for amalgamation of Lloyds Line Pipes Limited (a wholly owned subsidiary of the Company) with APL Apollo Tubes Limited. The scheme became effective upon filing of aforesaid order with Registrar of Companies on October 18, 2017.
A report on the performance and financial position of each of the subsidiaries in form AOC-1 is annexed hereto as Annexure âBâand forms part of this report.
In accordance with the provisions of Section 136 of the Companies Act, 2013, the audited financial statements and related information of the subsidiaries, where applicable, will be available for inspection during regular business hours at the Companyâs corporate office at 36, Kaushambi, Near Anand Vihar Terminal, Uttar Pradesh -201010 and the same are also available at our website i.e. www.aplapollo.com
FIXED DEPOSITS
Your Company has neither accepted nor renewed any public deposits within the meaning of Section 73 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014. Therefore, Company is not required to furnish information in respect of outstanding deposits under Non-banking, Non-financial Companies (Reserve Bank) Directions, 1966 and Companies (Accounts) Rules, 2014.
SHARE CAPITAL
During the year under review, the Authorized Share Capital of the Company was increased to Rs.45 Crore from Rs.25 Crore, pursuant to amalgamation of Lloyds Line Pipes Limited with the Company.
Further, the Company has issued 139,850 equity shares of Rs.10 each at a price of Rs.452.60 (including premium of Rs.442.60) aggregating to Rs.6 crore, pursuant to APL Apollo Employees Stock Option Scheme-2015 (ESOS-2015) to eligible employees of the Company and of its subsidiaries. Consequently the paid up equity share capital of the Company increased to Rs.23.73 crore from Rs.23.59 crore comprising of 23,729,805 equity shares of Rs.10 each. The Company has not issued shares with differential voting rights nor sweat equity or bonus shares.
BORROWINGS
(a) Issue of Debt Securities
On September 13, 2017, the Company allotted 7.87%, 750 Secured, Redeemable, Non-Convertible Debentures (NCD) having a face value of Rs.10 lakh each for an amount aggregating to Rs.75 crore on private placement basis to identified investors. The debt-equity ratio remains within limit even after the said issue of NCD.
(b) Commercial Papers
Commercial papers (âCPâ) raised by the Company are short-term in nature ranging between one to three months. As on March 31, 2018, no CP was outstanding.
(c) Credit Ratings
During the year under review, CRISIL & ICRA has upgraded the ratings for long-term bank loans from âA â/ to âAA-â/. The outlook on the long term rating is stable.
DIRECTORS AND KEY MANAGERIAL PERSONNEL Re-appointment
In accordance with the provisions of Section 152 of the Companies Act, 2013 and in terms of Articles of Association of the Company, Shri Sanjay Gupta will retire at the ensuing Annual General Meeting (AGM) and being eligible, offer himself for re-appointment.
Appointment
During the year, Shri Virendra Singh Jain was regularized as Director in Annual General Meeting (AGM) of shareholders held on September 29, 2017.
Resignation
Shri Sharad Mahendra ceased to be Director of the Company w.e.f January 23, 2018.
All Independent Directors of the Company have given declarations that they meet the criteria of independence as provided in Section 149(6) of the Companies Act, 2013 and also Regulation 16(I)(b) of the Listing Regulations.
Key Managerial Personnel
Pursuant to Section 203 of the Companies Act, 2013, the Key Managerial Personnel of the Company are - Shri Sanjay Gupta (Chairman), Shri Ashok Kumar Gupta (Managing Director), Shri Deepak Goyal (Chief Financial Officer) and Shri Adhish Swaroop (Company Secretary). During the year, there has been no change in the key managerial personnel.
PARTICULARS OF REMUNERATION
Disclosure of ratio of the remuneration of each Executive Director to the median remuneration of the employees of the Company and other requisite details pursuant to Section 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 annexed to this report as Annexure âCâ. Further, particulars of employees pursuant to Rule 5(2) & 5(3) of the above Rules form part of this report. However, in terms of provisions of section 136 of the said Act, the report and accounts are being sent to all the members of the Company and others entitled thereto, excluding the said particulars of employees. Any member interested in obtaining such particulars may write to the Company Secretary at the registered office of the Company. The said information is available for inspection at the registered office of the Company during working hours.
AUDITORS AND AUDITORSâREPORT
A. Statutory Auditors
M/s. Deloitte Haskins & Sells LLP, Chartered Accountants, Gurugram, (FRN117366W/W-100018), have been appointed as Auditors of the Company to hold the office from the conclusion of the 30th Annual General Meeting held on August 28, 2015 until the conclusion of the 35th Annual General Meeting to be held in year 2020, subject to ratification of the appointment by the members at each AGMs. Accordingly, matter relating to the appointment of the Auditors will be placed for ratification by members at the ensuing Annual General Meeting. The observations of the Auditors in their report on accounts and the Financial Statements, read with the relevant notes are self explanatory.
B. Cost Auditors
In terms of Section 148 of the Act, the Company is required to get the audit of its cost records conducted by a Cost Accountant. In this connection, the Board of Directors of the Company has on the recommendation of the Audit Committee, approved the appointment of M/s R.J. Goel & Co., Cost Accountants as the cost auditors of the Company for the year ending March 31, 2019.
In accordance with the provisions of Section 148(3) of the Act read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditors as recommended by the Audit Committee and approved by the Board has to be ratified by the members of the Company. Accordingly, appropriate resolution forms part of the Notice convening the AGM. We seek your support in approving the proposed remuneration payable to the Cost Auditors for the Financial Year ending March 31, 2019. M/s R.J. Goel & Co., have vast experience in the field of cost audit and have been conducting the audit of the cost records of the Company for the past several years. The Cost Audit Report of the Company for the Financial Year ended March 31, 2018 will be filed with MCA.
C. Secretarial Auditors
Pursuant to the provisions of Section 204 of the Companies Act, 2013, the Board of Directors appointed M/s Anjali Yadav & Associates, Company Secretaries in practice as Secretarial Auditor to carry out Secretarial Audit of the Company for the financial year 2017-18. The report given by her for the said financial year in the prescribed format is annexed to this report as Annexure âDâ. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.
RELATED PARTY TRANSACTIONS
During the financial year ended March 31, 2018, all the contracts or arrangements or transactions entered into by the Company with the related parties were in the ordinary course of business and on armâs length basis and were in compliance with the applicable provisions of the Companies Act, 2013 and the SEBI (LODR), 2015.
Further, the Company has not entered into any contract or arrangement or transaction with the related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions. In view of the above, disclosure in FORM AOC-2 is not applicable.
The related party transaction policy as approved by the Board is available on the website of the Company:http:// www.aplapollo.com/pdf/rpt-policy.pdf
Your Directors draw attention of the members to Note No. 40 to the Financial Statement which sets out related party disclosures.
EMPLOYEE STOCK OPTION SCHEME (ESOS)
The Company, under the APL Apollo Employee Stock Option Scheme- 2015 (âESOS-2015), approved by the shareholders vide a postal ballot on July 27, 2015 and December 22, 2015, grants share-based benefits to eligible employees of the Company and employees of subsidiaries with a view to attracting and retaining the best talent, encouraging employees to align individual performances with Company objectives, and promoting increased participation by them in the growth of the Company. The total number of equity shares to be allotted pursuant to the exercise of the stock incentives under the ESOS-2015 to the employees of the Company and its subsidiaries shall not exceed 7,50,000 equity shares. The following disclosures are being made under Rule 12 of the Companies (Share Capital and Debentures) Rules, 2014:
S. No. |
Particulars (During the financial year ended March 31, 2018) |
APL Apollo ESOS-2015 |
||
1 |
Options granted |
1. 96,000 options were granted on September 9, 2017 at market price of Rs.1633.05; and 2. 70,000 options were granted on February 5, 2018 at market price of Rs.2124.10 |
||
2 |
Options vested; |
141,625* |
||
3 |
Options exercised |
139,850 |
||
4 |
Total number of shares arising as a result of exercise of option |
139,850 |
||
5 |
Options lapsed |
100,789 |
||
6 |
Exercise price |
The Exercise price of the shares will be the Market Price of the shares one day before the date of grant of options. Suitable discount will be provided on that price, as deemed fit by the Nomination & Remuneration Committee (âcommitteeâ). Further Committee has the power to reprice the grants in future if the price of the company falls continuously for a period of 3 months. |
||
7 |
Variation of terms of options |
No |
||
8 |
Money realized by exercise of options |
â63296110 |
||
9 |
Total number of options in force |
11,581 |
||
10 |
Employee wise details of options granted to;-(i) Key managerial personnel; |
|||
-Deepak Kumar Goyal, Chief Financial Officer (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. |
17,500 |
|||
- Rajeev Kohli |
20000 |
|||
- Ajay Garg |
17500 |
|||
-Arun Agarwal |
17500 |
|||
- Romi Sehgal |
17500 |
|||
(iii) I dentified 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; |
Nil |
|||
* Out of these 7875 options is due for vesting in January 2018 but not yet vested.
There is no material change in EmployeesâStock Option Scheme during the year under review and the Scheme is in line with the SEBI (Share Based Employee Benefits) Regulations, 2014 (âSBEB Regulationsâ). The applicable disclosure under SBEB Regulations, as on March 31, 2018 is uploaded on the website of the Company, at www.aplapollo. com.The details of the employee stock options form part of the Notes to accounts of the financial statements in this Annual Report.
The Certificate from the Statutory Auditors of the Company certifying that the ESOS 2015 has being implemented in accordance with the SBEB Regulations and the resolution passed by the Members, would be placed at the Annual General Meeting for inspection by Members
DIRECTORSâRESPONSIBILITY STATEMENT
Pursuant to requirement under Section 134 sub-section 3(c) and sub-section 5 of the Companies Act, 2013, your Directors to the best of their knowledge hereby state and confirm that:
a. I n the preparation of the annual accounts for the year ended March 31, 2018, the applicable accounting standards had been followed along with proper explanations relating to material departures.
b. Such accounting policies have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent to give a true and fair view of the Companyâs state of affairs as at March 31, 2018 and of the Companyâs profit for the year ended on that date.
c. Proper and sufficient care has been taken for the maintenance of adequate accounting records, in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.
d. The annual financial statements have been prepared on a going concern basis.
e. The internal financial controls were laid down to be followed by the Company and that such internal financial controls are adequate and were operating effectively.
f. Proper systems were devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
In line with the provisions of the Companies Act, 2013, the Company has framed its Corporate Social Responsibility (CSR) policy for development of programmes and projects for the benefit of weaker sections of the society and the same has been approved by Corporate Social Responsibility Committee (CSR Committee) and the Board of Directors of the Company. The Corporate Social Responsibility (CSR) policy of the Company provides a road map for its CSR activities.
During the year under review, the Company has made contribution of â0.09 Cr for various CSR purposes in compliance to the provisions of Companies Act, 2013 relating to Corporate Social Responsibility.
The Annual Report on CSR activities is annexed herewith as Annexure âEâ.
The CSR Policy has been uploaded on the Companyâs website and may be accessed at the link: http://www. aplapollo.com/pdf/csr-policy.pdf
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186
Details of Loans, Guarantees given and Investments made covered under provisions of Section 186 of the Companies Act, 2013 during the financial year 2017-18 are furnished in the notes to the financial statements.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:
Information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo as required under Section 134 (3)(m) of Companies Act, 2013 read with the Rule 8 (3) of the Companies (Accounts) Rules, 2014, is furnished as Annexure âFâ, forming part of this Report.
DIVIDEND DISTRIBUTION POLICY
The Board has in compliance with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, formulated Dividend Distribution Policy. This policy will provide clarity to the stakeholders on the dividend distribution framework of the Company. The policy sets out various internal and external factors which shall be considered by the Board in determining the dividend payout. The dividend distribution policy is attached as Annexure âGâto this report and is also available on the website of the Company http://www. aplapollo.com/pdf/dividenddistribution-policy.pdf
CORPORATE GOVERNANCE
Your company reaffirms its commitment to the highest standards of corporate governance practices. Pursuant to Regulation 34 read with schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Corporate Governance Report and the Secretarial AuditorsâCertificate regarding compliance of conditions of Corporate Governance are annexed to this report (Annexure âHâ).
The Corporate Governance Report which forms part of this report, also covers the following:
a) Particulars of the four Board Meetings held during the financial year under review.
b) Policy on Nomination and Remuneration of Directors, Key Managerial Personnel and Senior Management including, inter alia, the criteria for performance evaluation of Directors.
c) The manner in which formal annual evaluation has been made by the Board of its own performance and that of its Committees and individual Directors.
d) The details with respect to composition of Audit Committee and establishment of Vigil Mechanism.
e) Details regarding Risk Management.
COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND ANNUAL GENERAL MEETINGS
The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Board meetings and Annual General Meetings.
DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The number of complaints received during the financial year 2017-18, under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, is available in the Business Responsibility Report which is part of this Annual Report.
SIGNIFICANT OR MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNAL WHICH IMPACTS THE GOING CONCERN STATUS AND COMPANYâS OPERATIONS IN FUTURE.
During the year, Scheme of Amalgamation between Lloyds Line Pipes Limited (LLPL/Transferor Company) and APL Apollo Tubes Limited (APL/Transferee Company) (the Scheme) was sanctioned by the National Company Law Tribunal (âNCLTâ), Principal Bench at New Delhi vide its order dated August 7, 2017 and rectification order dated September 15, 2017, certified copy whereof was received by the Company on September 25, 2017. The scheme became effective upon filing of aforesaid order with Registrar of Companies on October 18, 2017.
OTHER DISCLOSURES AND REPORTING
Your Directors state that no disclosure or reporting is required with respect to the following items as there were no transactions on these items during the year under review:
1. Change in the nature of business of the Company.
2. Issue of equity shares with differential rights as to dividend, voting or otherwise.
3. Any remuneration or commission received by Managing Director of the Company, from any of its subsidiary.
4. Issue of shares (including sweat equity shares) to employees of the Company under any scheme save and except ESOS referred to in this report.
5. Material changes and commitments, if any, affecting the financial position of the company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of the report.
APPRECIATION
Yours Directors take this opportunity to express their appreciation for the co-operation received from the customers, vendors, bankers, stock exchanges, depositories, auditors, legal advisors, consultants, stakeholders, debenture-holders, business associates, Government of India, state government and local bodies during the period under review. The Directors also wish to place on record their appreciation of the devoted and dedicated services rendered by the employees of the Company.
For and on behalf of Board of Directors
Place: Ghaziabad Sanjay Gupta
Date: May 25, 2018 Chairman
Mar 31, 2017
To the members of
APL Apollo Tubes Limited,
The directors have pleasure in presenting the Thirty Second Annual Report on the business and operations of your company together with the Standalone and Consolidated Audited Financial Statements for the year ended 31 March, 2017.
FINANCIAL PERFORMANCE:
The Companyâs financial performance for the year under review along with the previous yearâs figures is given hereunder:
(Rs. in crore)
Particulars |
Consolidated |
Standalone |
||
FY 2016-17 |
FY 2015-16 |
FY 2016-17 |
FY 2015-16 |
|
Gross sales |
4,996.83 |
4,656.36 |
3,104.33 |
3,213.83 |
Less : Excise duty and cess |
451.83 |
442.77 |
224.95 |
218.23 |
Net sales / Income from operations |
4,545.00 |
4,213.59 |
2,879.38 |
2,995.60 |
Add : Other income |
3.78 |
10.27 |
2.13 |
21.62 |
Total revenue |
4,548.78 |
4,223.86 |
2,881.51 |
3,017.22 |
Operating expenses |
4,220.62 |
3,931.94 |
2,752.53 |
2,882.73. |
EBIDTA |
328.16 |
291.92 |
128.98 |
134.49 |
Less : Finance cost |
68.33 |
69.51 |
48.01 |
48.73 |
Less : Depreciation and amortisation |
51.20 |
34.10 |
29.70 |
18.67 |
Profit before exceptional items and tax |
208.63 |
188.31 |
51.27 |
67.09 |
Less : Exceptional items |
- |
25.33 |
- |
25.33 |
Profit before tax (PBT) |
208.63 |
162.98 |
51.27 |
41.76 |
Less : Tax expense |
62.74 |
62.42 |
11.94 |
10.93 |
Profit after tax for the year (PAT) |
145.89 |
100.56 |
39.33 |
30.83 |
Add : Balance in profit and loss account |
310.47 |
257.27 |
92.15 |
105.99 |
Profit available for appropriation |
456.36 |
357.84 |
131.49 |
136.82 |
Transfer to general reserve |
- |
0.50 |
- |
0.50 |
Transfer to debenture redemption reserve |
12.50 |
18.75 |
12.50 |
18.75 |
Proposed dividend on equity shares |
- |
23.44 |
- |
23.44 |
Tax on dividends |
- |
4.68 |
- |
1.98 |
Balance carried over to balance sheet |
443.86 |
310.47 |
118.98 |
92.15 |
The Companyâs consolidated gross turnover in financial year 2016-2017 increased by 7% from Rs.4,656 crore to Rs.4,997 crore mainly because of our customized products across all the users. The EBIDTA has been significantly increased by 12% from Rs.292 crore to Rs.328 crore for the year under review. The net profit of the Company has also increased by 45% from Rs.901 crore to Rs.946 crore for the year under review.
DIVIDEND
The Board has, subject to the approval of the members at the ensuing Annual General Meeting, recommended dividend of Rs.92 (120%) per fully paid-up equity share of Rs.90 each of the Company for the year ended 31 March, 2017 as against Rs.90 (100%) for the previous year.
TRANSFER TO RESERVES
The Company has not transfered any amount to the general reserve out of amount available for appropriations and an amount of Rs.918.98 crore is proposed to be retained in the Statement of Profit and Loss during the financial year 2016-17.
OVERVIEW
The financial year 2016-17 witnessed some major reformatory steps such as the passage of GST bill and the demonetization drive undertaken by the government. These reforms are expected to boost the Indian economy and enable faster growth rates in the coming years. While the global economy remained sluggish during the current financial year, the Indian economy maintained a healthy GDP growth of 7% due to favorable economic government policies, increase in Foreign Direct Investments and commencement of several development initiatives by the government.
The performance of the Company was affected due to external market challenges including demonetization and volatility in steel prices, which adversely impacted the sales volumes. Financial year 2017-18 has begun on a healthy note as the Company registered strong volumes and remains focused on delivering better results in the coming year.
The Company is a âOne-Stop Shopâ for a wide spectrum of steel structural products that caters to an array of sectors such as urban infrastructure, construction, housing, energy, automobile, irrigation, among others. These key sectors of the economy are anticipated to showcase robust growth over the next few years, which in-turn should lead to healthy demand for steel structural products going forward. To leverage upon this opportunity, the Company is in the process of augmenting its capacity from the existing 1.3 to 2 million MTPA in the financial year 2017-18. The Company has been a pioneer in introducing modern technologies in the industry and is the first Company in India to introduce the latest global technology - Direct Forming Technology (DFT) Through this facility, APL Apollo will be targeting the untapped markets across the globe. The Company has undertaken various other steps to further help enhance the âAPL Apolloâ brand reach and drive higher growth.
OPERATIONS
During the financial year 2016-17, the Company achieved the highest ever volume number. The Company is focusing on customized qualitative products of wide ranges for end users with the help of latest global technologies and acceptance of these products will keep the growth momentum in its sales in the coming years. The branding approach across markets enables higher visibility and stronger market share gains, further extending the geographical reach to the end-users. The Company is strengthening its presence in Tier II and Tier III cities either via own warehouse cum branches or through dealer-distribution network. The dealer-distribution network increased significantly to more than 600. This along with warehouses will help the Company to meet the increasing demand for our products, across various industrial as well as household applications.
The effective measures to enhance cost efficiency across the verticals, innovative approach in production and distribution of the products will help the Company to control the manufacturing, selling and distribution cost leading thereby to serve its quality products to happy and satisfied customers at competitive price.
PROJECTS AND EXPANSION PLANS
Projects commissioned during financial year 2016-17 and new projects in the upcoming years:
- Ordered nine lines of new DFT technology mills out of which two commissioned and seven will be commissioned between July 2017 and March 2018 that will add over 0.5 MTPA at the existing sites.
- During the year, we started commissioning of Greenfield plant at Raipur, to be fully operational by September 2017.
CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements presented by the Company include financial information of its subsidiaries prepared in compliance with applicable accounting standards. The audited Consolidated Financial Statements and Auditorâs Report thereon form part of this Annual Report.
INTERNAL FINANCIAL CONTROL
The Company has in place adequate internal financial controls with reference to financial statements and no material reportable weakness was observed in the system during the year. Further, the Company has in place adequate internal controls commensurate with the size and nature of its operations.
Regular internal audits are conducted covering all offices, factories and key areas of the business. Findings are placed before Audit Committee, which reviews and discusses the actions taken with management. The Audit Committee also reviews the effectiveness of companyâs internal controls and regularly monitors implementation of audit recommendations.
CREDIT RATING
The Companyâs borrowings enjoy the following credit ratings:
Nature of Borrowing |
CARE |
ICRA |
Long term bank loans |
A |
A |
Short term |
A1 |
A1 |
Commercial papers |
A1 |
A1 (SO) |
NCDs |
A |
A |
EXTRACT OF THE ANNUAL RETURN
In accordance with the provisions of Section 134 (3(a) of the Companies Act, 2013, the extract of the Annual Return in Form no. MGT-9 is annexed hereto as Annexure âAâ and forms part of this report.
SUBSIDIARIES COMPANIES, JOINT VENTURES AND ASSOCIATES
The Company had four wholly-owned subsidiaries as on 31 March, 2017, namely M/s Shri Lakshmi Metal Udyog Limited (SLMUL), M/s Lloyds Line Pipes Limited (LLPL), M/s Apollo Metalex Private Limited (AMPL) and M/s Blue Ocean Projects Private Limited
During the financial year under review, M/s Blue Ocean Projects Private Limited, became your companyâs subsidiary.
A report on the performance and financial position of each of the subsidiaries in form AOC-1 is annexed hereto as Annexure âBâ and forms part of this report.
The audited financial statements and related information of the subsidiaries, where applicable, will be available for inspection during regular business hours at the companyâs corporate office at 36, Kaushambi, Near Anand Vihar Terminal, Uttar Pradesh -201010 and the same are also available at our website i.e. www.aplapollo.com as prescribed in Section 136 of the Companies Act, 2013.
FIXED DEPOSITS
Your company has not accepted any public deposits within the meaning of Section 73 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014. Therefore company is not required to furnish information in respect of outstanding deposits under Non-banking, Non-financial Companies (Reserve Bank) Directions, 1966 and Companies (Accounts) Rules, 2014.
SHARE CAPITAL
During the year under review the Company has issued 151,319 equity shares of Rs.90 each at a price of Rs.452.60 (including premium of Rs.442.60) aggregating to Rs.7 crore, pursuant to APL Apollo Employees Stock Option Scheme (ESOS) to eligible employees of the Company and of its subsidiaries. Consequently the paid up equity share capital of the Company increased to Rs.23.59 crore from Rs.23.44 crore comprising of 23,589,955 equity shares of Rs.90 each. The Company has not issued shares with differential voting rights nor sweat equity or bonus shares. The proceeds of the said issue have been used towards augmenting the net worth of the Company.
The details of stock options granted by the Company are disclosed in compliance with Regulation 14 of Securities and Exchange Board of India (Share Based Employee Regulations), 2014 on the website of the Company at www. aplapollo.com.
NON-CONVERTIBLE DEBENTURES
During the period under review, your company issued fully secured, listed, redeemable, non-convertible debentures (the âDebenturesâ) amounting to Rs.50 crore on a private placement basis. The outstanding balance of debentures as on 31 March, 2017 amounts to Rs.925 crore. The proceeds of the aforesaid issue were utilized for general corporate purposes.
The Companyâs NCDs have been assigned the rating of âA â by ICRA Limited.
COMMERCIAL PAPERS
The commercial paper programme of your company has been rated by M/s ICRA Limited and M/s CARE Limited and is assigned the rating of [ICRA] A1 (SO) for Rs.200 crore and [CARE] A1 for Rs.200 crore respectively. During the year under review, commercial papers outstanding amount stood at Rs.65 crore.
DIRECTORS AND KEY MANAGERIAL PERSONNEL Re-appointment
In accordance with the provisions of Section 152 of the Companies Act, 2013 and in terms of Articles of Association of the Company, Shri Romi Sehgal will retire at the ensuing Annual General Meeting (AGM) and being eligible, offer himself for reappointment.
Appointment
Shri Sharad Mahendra who was appointed as an Additional Director of the Company by the Board of Directors with effect from 29 October, 2016 in terms of Section 161 of the Companies Act, 2013 and in terms of Articles of Association of the Company, holds office until the date of ensuing Annual General Meeting. Your company has received a notice under Section 160 of the Companies Act, 2013 from a shareholder of your company, signifying his intention to propose the name of Shri Sharad Mahendra, for appointment as a Director of your company.
Shri Virendra Singh Jain who was appointed as an Additional Director (Independent) of the Company on 28 January, 2017, to hold office for a period of five consecutive years, not liable to retire by rotation, subject to consent by the Members of the Company at the ensuing Annual General Meeting (âAGMâ). Your company has received declarations from him that he meet the criteria of independence as provided in Section 149(6) of the Companies Act, 2013 and also Regulation 16(1)(b) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.
The Board of Directors of the Company re-appointed Shri Sanjay Gupta as Chairman (under whole time director category) of the Company for a period of five years w.e.f. 01 April, 2017, subject to approval of members at the ensuing AGM of the Company.
The Board of Directors of the Company also re-appointed Shri Ashok Kumar Gupta as Managing Director of the Company for a period of three years w.e.f. 01 May, 2017, subject to approval of members at the ensuing AGM of the Company.
All Independent Directors of the Company have given declarations that they meet the criteria of independence as provided in Section 149(6) of the Companies Act, 2013 and also Regulation 16(I)(b) of the Listing Regulations.
Key Managerial Personnel
Pursuant to Section 203 of the Companies Act, 2013, the Key Managerial Personnel of the Company are - Shri Sanjay Gupta (Chairman), Shri Ashok Kumar Gupta (Managing Director), Shri Deepak Kumar Goyal (Chief Financial Officer) and Shri Adhish Swaroop (Company Secretary). During the year, there has been no change in the key managerial personnel.
PARTICULARS OF REMUNERATION
Disclosure of ratio of the remuneration of each Executive Director to the median remuneration of the employees of the Company and other requisite details pursuant to Section 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 annexed to this report as Annexure âCâ. Further, particulars of employees pursuant to Rule 5(2) and 5(3) of the above Rules, form part of this report. However, in terms of provisions of section 136 of the said Act, the report and accounts are being sent to all the members of the Company and others entitled thereto, excluding the said particulars of employees. Any member interested in obtaining such particulars may write to the Company Secretary at the registered office of the Company. The said information is available for inspection at the registered office of the Company during working hours.
AUDITORS AND AUDITORSâ REPORT
A. Statutory Auditors
M/s. Deloitte Haskins & Sells LLP, Chartered Accountants, Gurugram, (FRN117366W/W-100018), have been appointed as Auditors of the Company to hold the office from the conclusion of the 30th Annual General Meeting held on 28 August, 2015 until the conclusion of the 35th Annual General Meeting to be held in year 2020, subject to ratification of the appointment by the members at each AGMs. Accordingly, matter relating to the appointment of the Auditors will be placed for ratification by members at the ensuing Annual General Meeting. The observations of the Auditors in their report on accounts and the Financial Statements, read with the relevant notes are self explanatory.
B. Cost Auditors
The audit of Cost Records of the Company is mandatory for the financial year ended 31 March, 2017, is being conducted by M/s R.J. Goel & Co., Cost Accountants and their report will be filed with the MCA.
C. Secretarial Auditors
Pursuant to the provisions of Section 204 of the Companies Act, 2013, the Board of Directors appointed M/s Anjali Yadav & Associates, Company Secretaries in practice as Secretarial Auditor to carry out Secretarial Audit of the Company for the financial year 2016-17. The report given by her for the said financial year in the prescribed format is annexed to this report as Annexure âDâ. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.
RELATED PARTY TRANSACTIONS
During the financial year ended 31 March, 2017, all the contracts or arrangements or transactions entered into by the Company with the related parties were in the ordinary course of business and on armâs length basis and were in compliance with the applicable provisions of the Companies Act, 2013 and the SEBI (LODR), 2015.
Further, the Company has not entered into any contract or arrangement or transaction with the related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions. In view of the above, disclosure in FORM AOC-2 is not applicable.
The related party transaction policy as approved by the Board is available on the website of the Company:http:// www.aplapollo.com/pdf/rpt-policy.pdf
Your directors draw attention of the members to Note No. 29.3 to the Financial Statement which sets out related party disclosures.
EMPLOYEE STOCK OPTION SCHEME (ESOS)
The applicable disclosures relating to the APL Apollo Tubes Limited - ESOS 2015 as stipulated under the Companies (Share Capital and Debentures) Rules, 2014 as on 31 March, 2017 are given below:
S. No. |
Particulars |
|||
1 |
Options granted |
750,000 |
||
2 |
Options vested; |
163,583 |
||
3 |
Options exercised |
151,319 |
||
4 |
Total number of shares arising as a result of exercise of option |
151,319 |
||
5 |
Options lapsed |
96,792 |
||
6 |
Exercise price |
724,000 options were granted on 28 July, 2015 at the market price Rs.452.60 and 46,000 options were granted on 28 January, 2017 at market price of Rs.9028.80 |
||
7 |
Variation of terms of options |
1. Performance grades were modified 2. New joinees after the date of institution of the Scheme, who meet the eligibility criteria, shall now also be eligible for grant of options under the Scheme. 3. Shares issued pursuant to exercise of options under the scheme would now be in lock in for the period of 6 months |
||
8 |
Money realized by exercise of options |
Rs.68,486,979 |
||
9 |
Total number of options in force |
76,792 |
||
10 |
Employee wise details of options granted to;- |
|||
(i) Key managerial personnel; |
||||
- Deepak Kumar Goyal, Chief Financial Officer |
30,600 |
|||
- Adhish Swaroop, Company Secretary |
6,000 |
|||
(ii) Any other employee who receives a grant of options |
Nil |
|||
in any one year of option amounting to five percent |
||||
or more of options granted during that year. |
||||
(iii) Identified employees who were granted option, |
Nil |
|||
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; |
||||
The Company has received a certificate from the auditors of the Company that the ESOS 2015 has been implemented in accordance with the SEBI (Share Based Employee Benefits) Regulations and as per the resolution passed by the Members of the Company authorizing issuance of the said options.
DIRECTORSâ RESPONSIBILITY STATEMENT
Pursuant to requirement under Section 134 sub-section 3(c) and sub-section 5 of the Companies Act, 2013, your directors to the best of their knowledge hereby state and confirm that:
a. In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanations relating to material departures.
b. Such accounting policies have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent to give a true and fair view of the Companyâs state of affairs as at 31 March, 2017 and of the Companyâs profit for the year ended on that date.
c. Proper and sufficient care has been taken for the maintenance of adequate accounting records, in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.
d. The annual financial statements have been prepared on a going concern basis.
e. The internal financial controls were laid down to be followed that and such internal financial controls were adequate and were operating effectively.
f. Proper systems were devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
In line with the provisions of the Companies Act, 2013, the Company has framed its Corporate Social Responsibility (CSR) policy for development of programmes and projects for the benefit of weaker sections of the society and the same has been approved by Corporate Social Responsibility Committee (CSR Committee) and the Board of Directors of the Company. The Corporate Social Responsibility (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.9.01 crore to Prime Ministerâs National Relief Fund for Education of Poor Children, Rs.0.11 crore to World Hope Foundation, Rs.0.02 crore to U.P. Science Centre, Jhansi,Rs. 0.06 crore to Bharat Lok Shiksha Parished, and Rs.0.01 crore to Sikandrabad Industrial Association in compliance to the provisions of Companies Act, 2013 relating to Corporate Social Responsibility.
The Annual Report on CSR activities is annexed herewith as Annexure âEâ.
The CSR Policy has been uploaded on the Companyâs website and may be accessed at the link: http://www.aplapollo.com/ pdf/csr-policy.pdf
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186
Details of Loans, Guarantees and Investments covered under provisions of Section 186 of the Companies Act, 2013 during the financial year 2016-17are furnished in the notes to the financial statements.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:
Information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo as required under Section 134 (3)(m) of Companies Act, 2013 read with the Rule 8 (3) of the Companies (Accounts) Rules, 2014, is furnished Annexure âFâ, forming part of this Report.
DIVIDEND DISTRIBUTION POLICY
The Board has in compliance with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, formulated Dividend Distribution Policy. This policy will provide clarity to the stakeholders on the dividend distribution framework of the Company. The policy sets out various internal and external factors which shall be considered by the Board in determining the dividend payout. The dividend distribution policy is attached as Annexure âGâ to this report and is also available on the website of the Company http://www. aplapollo.com/pdf/dividenddistribution-policy.pdf
CORPORATE GOVERNANCE
Corporate Governance - including details pertaining to Board Meetings, Nomination and Remuneration Policy, Performance Evaluation, Risk Management, Audit Committee and Vigil Mechanism.
Your company reaffirms its commitment to the highest standards of corporate governance practices. Pursuant to Regulation 34 read with schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Corporate Governance Report and the Auditorsâ Certificate regarding compliance of conditions of Corporate Governance are annexed to this report (Annexure âHâ).
The Corporate Governance Report which forms part of this report, also covers the following:
a) Particulars of the four Board Meetings held during the financial year under review.
b) Policy on Nomination and Remuneration of Directors, Key Managerial Personnel and Senior Management including, inter alia, the criteria for performance evaluation of Directors.
c) The manner in which formal annual evaluation has been made by the Board of its own performance and that of its Committees and individual Directors.
d) The details with respect to composition of Audit Committee and establishment of Vigil Mechanism.
e) Details regarding Risk Management.
DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The number of complaints received during the financial year 2016-17, under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, is available in the Business Responsibility Report which is part of this Annual Report.
OTHER DISCLOSURES AND REPORTING
Your directors state that no disclosure or reporting is required with respect to the following items as there were no transactions on these items during the year under review :
1. Change in the nature of business of the Company.
2. Issue of equity shares with differential rights as to dividend, voting or otherwise.
3. Any remuneration or commission received by Managing Director of the Company, from any of its subsidiary.
4. Significant or material orders passed by the Regulators or Courts or Tribunal which impacts the going concern status and Companyâs operations in future.
5. Issue of shares (including sweat equity shares) to employees of the Company under any scheme save and except ESOS referred to in this report.
6. Material changes and commitments, if any, affecting the financial position of the company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of the report.
APPRECIATION
Yours directors take this opportunity to express their appreciation for the co-operation received from the customers, vendors, bankers, stock exchanges, depositories, auditors, legal advisors, consultants, stakeholders, debenture-holders, business associates, Government of India, state government and local bodies during the period under review. The directors also wish to place on record their appreciation of the devoted and dedicated services rendered by the employees of the Company.
For and on behalf of Board of Directors
Place: Ghaziabad Sanjay Gupta
Date: 20 May, 2017 Chairman
Mar 31, 2016
TO THE MEMBERS OF APL APOLLO TUBES LIMITED
The Directors have pleasure in presenting the Thirty First Annual Report on the business and operations of your Company together with the Standalone and Consolidated Audited Financial Statements for the year ended 31 March, 2016.
Financial Performance:
The Company''s Financial performance for the year under audit along with the previous year''s figures are given hereunder:-
(Rs, in crore)
Particulars |
Consolidated |
Standalone |
||
|
FY 2015-16 |
FY 2014-15 |
FY 2015-16 |
FY 2014-15 |
Gross sales |
4,656.36 |
3,481.73 |
3,213.83 |
2,301.37 |
Less : Excise duty and cess |
442.77 |
343.46 |
218.23 |
200.80 |
Net sales / Income from operations |
4,213.59 |
3,138.27 |
2,995.60 |
2,100.57 |
Operating EBIDTA |
281.66 |
181.62 |
112.87 |
93.75 |
Add : Other income |
10.27 |
4.51 |
21.62 |
12.65 |
Less : Finance cost |
69.51 |
66.44 |
48.73 |
50.16 |
Less : Depreciation and amortization |
34.10 |
22.01 |
18.67 |
12.01 |
Profit before exceptional items and tax |
188.32 |
97.67 |
67.09 |
44.23 |
Less : Exceptional items |
25.33 |
- |
25.33 |
- |
Profit before tax (PBT) |
163.00 |
97.67 |
41.76 |
44.23 |
Less : Tax expense |
62.42 |
33.92 |
10.93 |
12.78 |
Profit after Tax for the year (PAT) |
100.57 |
63.75 |
30.83 |
31.45 |
Add : Balance in statement of profit and loss |
257.27 |
216.89 |
105.99 |
94.69 |
Profit available for Appropriation |
357.84 |
280.64 |
136.82 |
126.14 |
Transfer to General Reserve |
0.50 |
6.50 |
0.50 |
5.00 |
Transfer to Debenture redemption reserve |
18.75 |
- |
18.75 |
- |
Proposed dividend on Equity Shares |
23.44 |
14.06 |
23.44 |
14.06 |
Tax on dividends |
4.68 |
2.81 |
1.98 |
1.09 |
Balance Carried over to Balance Sheet |
310.47 |
257.27 |
92.16 |
105.99 |
The company''s consolidated gross turnover in financial year 2015-2016 increased by 34% from RS, 3,481.73 crore to RS, 4,656.36 crore mainly because of our customized products across all the users. The EBIDTA has been significantly increased by 57% from RS, 186 crore to RS, 292 crore for the year under audit. The net profit of the Company has also increased by 58% from RS, 64 crore to RS, 101 crore for the year under audit.
DIVIDEND
The Board has, subject to the approval of the members at the ensuing Annual General Meeting, recommended dividend of RS, 10/- (100%) per fully paid-up equity share of RS, 10/- each of the Company for the year ended 31 March, 2016 as against RS, 6/- (60%) for the previous year.
TRANSFER TO RESERVES
The company proposes to transfer RS, 0.5 crore to the General Reserve out of amount available for appropriations and an amount of RS, 92.16 crore, standalone basis proposed to be retained in the Statement of Profit and Loss during the financial year 2015-16.
OVERVIEW
The global economy as well as Indian economy during the current financial year remained subdued and witnessed overall fall in demand, slow down and uneven recovery across advanced and emerging markets. The Government has taken several initiatives and measures for development to improve the economic conditions of the country but due to poor monsoons, disappointing manufacturing output and growing NPAs and stressed assets among others has kept the economy under stress. However, the performance of the company is not much affected and it managed to achieve the targets through innovative designed products and increasing its production capacity. The Company has set the vision 2020 for achieving the capacity up to 2.5 millions MTPA including installation and commissioning of new machineries based on HSU technology. The road map of development will take shape in the coming years, consequent to the implementation of government projects and other initiatives undertaken for growth. The strategy and steps taken by the Company in designing new products in steel tubes and pipes segment by innovative means has succeeded in a big way with the production and launch by the Company for the first time in India and other new products like window / door frames designed and patented by the company will boost the sales of the company as demand for these products is expected to grow significantly in rural and semi-urban areas of the country. The Company focused on reducing cost of raw materials by procuring through imports, improving efficiencies, reducing cost of borrowings, increasing penetration particularly in Tier II cities, developing new product sizes, finding new markets etc. Due to various other measures taken by the Company, it has maintained steady in its operations.
The company has increased its capacities by adding new mills and adopting latest technologies across all the plants. To create demands for all diversified products the Company is focusing on creation and spreading of Company''s popular Brand APL Apollo across the targeted markets. With this the Company expects to maintain the growth momentum and improve margins.
OPERATIONS
During the financial year 2015-16, the Company has achieved the highest ever volume once again and break its previous volume, despite the adverse conditions across the globe. The Company is focusing on the products of new designed and gradually the positive response is witnessing in its sales. The continued focus on brand image exercise and extending the geographical reach to the end-users, strengthened our presence in Tier II and Tier III cities either via own warehouse cum branches or through dealer-distribution network. The dealer-distribution network increased significantly to 600. This along with warehouses will help the Company to meet the increasing demand for our products, across various industrial applications.
The effective steps towards measures to enhance cost efficiency across the verticals, innovative approach in production and distribution of the products helped the Company to control the manufacturing, selling and distribution cost.
CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements presented by the Company include financial information of its subsidiaries prepared in compliance with applicable Accounting Standards. The audited Consolidated Financial Statements and the Auditor''s Report thereon form part of this annual report.
PROJECTS AND EXPANSION PLANS
Project commissioned during financial year 2015-16 and New Projects in the upcoming years
New 5 lines commissioned during the year across all existing plant thereby enhancing the capacity from 10.50 lacs TPA to 13 lacs TPA.
Setting up a new plant in Raipur with 3.25 lacs TPA including HSU technology for making our presence Pan India.
Ordered 8 lines of new HSU technology mills that will add over 5 lacs TPA at the existing sites and Raipur in this year.
SUBSIDIARIES COMPANIES, JOINT VENTURES & ENTERPRISES OVER WHICH SUBSIDIARIES, KEY MANAGERIAL PERSONNEL & RELATIVE OF KMP EXERCISES SIGNIFICANT INFLUENCE
The Company has three wholly-owned subsidiaries and five Enterprises over which Subsidiaries, Key Managerial Personnel & Relative of KMP exercises significant influence as on 31 March, 2016.
No subsidiaries were acquired/formed during the year.
A. Wholly Owned Subsidiaries
1. M/s Shri Lakshmi Metal Undying Limited (SLMUL)
Shri Lakshmi Metal Udyog Limited is a wholly owned subsidiary of the Company acquired on 28 April, 2008. The turnover of the Company during financial year 2015-16 stood at Rs. 457.39 crore. The profit before tax was Rs. 57.24 crore in the financial year 2015-16 as compared to Rs. 24.59 crore in the financial year 2014-15. The profit after tax stood at Rs. 35.43 crore in the financial year 2015-16 as compared to Rs. 16.50 crore in the financial year 2014-15.
2. M/s Lloyds Line Pipes Limited (LLPL)
Lloyds Line Pipes Limited is a wholly owned subsidiary of the Company acquired on 11 November, 2010. The turnover of the Company during financial year 2015-16 stood at Rs. 879.02 crore. The profit before tax was Rs. 49.55 crore in financial year 2015-16 as compared to Rs. 25.75 crore in financial year 2014-15. The profit after tax stood at Rs. 31.29 crore in financial year 2015-16 as compared to Rs. 17.19 crore in financial year 2014-15.
3. M/s Apollo Metalex Private Limited (AMPL)
APL Apollo Tubes Limited acquired 100% stake in Apollo Metalex Private Limited on 15 June, 2007. The turnover of The Company during the financial year 2015-16 stood at Rs. 580.95 crore. The profit before tax Rs. 27.91 crore in financial year 2015-16 as compared to Rs. 12.94 crore in financial year 2014-15. The profit after tax stood at Rs. 16.47 crore in financial year 2015-16 as compared to Rs. 8.46 crore in financial year 2014-15.
B. Enterprises over which Subsidiaries, Key Managerial Personnel & Relative of KMP exercises significant influence
- M/s Apollo Pipes Limited
- M/s V S Exim Private Limited
- APL Infrastructure Private Ltd
- Assawa Associates Private Limited
- SMT Finance and Investment Limited
A report on the performance and financial position of each of the subsidiaries and associates companies as per the Companies Act, 2013 is provided as Annexure "C" to the Consolidated Financial Statements and hence not repeated for the sake of brevity.
During the financial year 2015-16, the Board of Directors in its Meeting held on 13 June, 2015 has also approved the Scheme of Amalgamation of Lloyds Line Pipes Limited (wholly owned subsidiary) with the
Company to enable consolidation and further expansion of the Company.
Your Company has since filed a petition with the Hon''ble High Court of Delhi, for its approval to the said amalgamation of the Company with Lloyds Line Pipes Limited (wholly owned subsidiary) and same is pending with the Court. The company is hopeful to get the approval of High Court and other requisite approvals will be obtained by the end of September, 2016.
Your Directors believe that the amalgamation would achieve economies of scale, and other operational synergies which would result in the optimization of operation and capital expenditure and lead to increased competitive strength, cost reduction and efficiencies, productivity gains by pooling the financial, managerial and technical resources, personnel capabilities, skill expertise and technologies of both the Companies.
The audited financial statement and related information of the subsidiaries, where applicable, will be available for inspection during regular business hours at the Company''s Corporate Office at 36, Kaushambi, Near Anand Vihar Terminal, Ghaziabad, Uttar Pradesh-201010 and the same are also available at our website i.e. www.aplapollo.com as prescribed in Section 136 of the Companies Act, 2013.
RISK MANAGEMENT
The Company has in place of mechanism to identify access, monitor and mitigate various risks to business key objectives. Major risks identified by the business and functions are systematically addressed through mitigating actions on a continuing basis. These are discussed at the meeting of the Board of Directors of the Company.
The board has adopted formal Risk Management Policy for the Company whereby risks are broadly categorized into Strategic, Operational, Compliance, and Financial & Reporting Risks. The Policy outlines the parameters of identification, assessment, monitoring and mitigation of various risks which are keys to the business objectives.
The Risk Management Policy has been uploaded on the Company''s website and may be accessed at the link:
http://www.aplapollo.com/pdf/rmp.pdf
INTERNAL CONTROL, AUDIT AND INTERNAL FINANCIAL CONTROL
OVERVIEW
A robust system of internal control, commensurate with the size and nature of its business forms an integral part of the Company''s governance policies.
INTERNAL CONTROL
The Company has a proper and adequate system of internal control commensurate with the size and nature of its business, internal control system are integral to Company''s Corporate Governance framework. Some significant features of internal control system are:
Adequate documentation of policies, guidelines authorities and approval procedures covering all the important functions of the Company.
- Ensuring complete compliance with laws, regulations, standards and internal procedures and systems.
- De-risking the Company''s assets/resources and protecting them from any risks.
- Ensuring the integrity of the accounting system; proper and authorized recording and reporting of all transactions.
- Preparation and monitoring of annual budgets for all operating and service functions.
- Ensuring reliability of all financial and operational information.
- Audit Committee of the Company, comprising of Independent Directors. The Committee regularly reviewing audit plans, significant audit findings, adequacy of Internal Controls, Compliance with Accounting Standards, etc.
- Comprehensive Information Security Policy and Continuous updation of IT systems.
The Internal Control systems and procedures are designed to assist in the identification and management of risks, the procedure-led verification of all compliance as well as enhanced control consciousness.
INTERNAL AUDIT
The Company has an internal audit function that inculcates global best standards and practices. The Company has strong internal audit department reporting to Audit Committee.
AUDIT PLAN AND EXECUTION
Internal Audit department prepares a risk based Audit plan. The frequency of audit is decided by risk rating of areas/functions. The audit plan is reviewed periodically to include areas which have assumed significant importance in line with the regulatory changes, emerging industry trends and value of the transactions. The audit is based on an internal audit plan, which is reviewed this year in consultation with the audit committee. The Internal Audit team develops an annual audit plan based on the risk profile of the business activities. The Internal Audit plan is approved by the Audit Committee, which also reviews compliance to the plan.
The Internal Audit team monitors and evaluates the efficacy and adequacy of internal control systems in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company and its subsidiaries. Based on the report of internal audit function, process owners undertake corrective action(s) in their respective area(s) and thereby strengthen the controls. Significant audit observations and corrective action(s) thereon are presented to the Audit Committee.
INTERNAL FINANCIAL CONTROL
As per Section 134(5) (e) of the Companies Act, 2013 the Directors have an overall responsibility for assuring that the Company has implemented robust systems and framework of Internal Financial Controls.
The Company has successfully laid down the framework and ensured its effectiveness. APL''s internal controls are commensurate with its size and the nature of its operations. These have been designed to provide reasonable assurance with regard to recording and providing reliable financial and operational information, complying with applicable statutes, safeguarding assets from unauthorized use, executing transactions with proper authorization and ensuring compliance of corporate policies.
APL has a well-defined delegation of power with authority limits for approving revenue as well as expenditure. Processes for formulating and reviewing annual and long term business plans have been laid down. It has continued its efforts to align all its processes and controls with global best practices.
Our management assessed the effectiveness of the Company''s internal control over financial reporting (as defined in Clause 17 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 as of 31 March, 2016. The assessment involved self review, peer review and external audit.
The audit committee reviews reports submitted by the management and audit reports submitted by internal auditors and statutory auditors. Suggestions for improvement are considered and the audit committee follows up on corrective action. The audit committee also meets statutory auditors of the Company periodically to, inter alia, ascertain their views on the adequacy of internal control systems and keeps the board of directors informed of its major observations periodically.
Based on its evaluation (as defined in section 177 of Companies Act 2013 and Clause 18 of SEBI Regulations 2015), the audit committee has concluded that, as of 31 March, 2016, internal financial controls of the Company were adequate and operating effectively.
CREDIT RATING
The Company''s borrowings enjoy the following credit ratings:
Nature of Borrowing |
CARE |
ICRA |
Long term bank Loans |
- |
[ICRA] A |
Short Term |
- |
[ICRA] A1 |
Commercial Papers |
- |
[ICRA] A1 & ICRA A1 [SO] |
NCDs |
CARE A |
- |
Your Company has obtained upgraded rating from M/s ICRA Limited and further obtained rating for the Non-Convertible Debentures for the first time during the year with stable outlook.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report for the year under audit, as stipulated under Regulation 34 and 53 of the SEBI (Listing Obligations and Disclosures Requirements), Regulations 2015 is presented in a separate section forming part of the Annual Report.
FIXED DEPOSITS
Your Company has not accepted any public deposits within the meaning of Section 73 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014. Therefore, company is not required to furnish information in respect of outstanding deposits under Non-banking, Non-financial Companies (Reserve Bank) Directions, 1966 and Companies (Accounts) Rules, 2014.
SHARE CAPITAL
There was no change in the Company''s share capital during the year under audit. The Company''s paid up equity share capital remained at Rs. 234,386,360 comprising of 23,438,636 equity shares of Rs. 10/- each. The company has not issued shares with differential voting rights nor sweat equity or bonus shares.
Your Company has established share incentive schemes APL Apollo Employees Stock Option Plan pursuant to which options to acquire shares have been granted to eligible employees of the Company and its subsidiaries. During the year, stock options have been granted to the employees of the Company and its subsidiaries. On exercise of the options so granted, the paid-up equity share capital of the Company will increase in terms of the Stock Option Plans mentioned above. The details of stock options granted by the Company are disclosed in compliance with Regulation 14 of Securities and Exchange Board of India (Share Based Employee Regulations), 2014 is placed on the Website of the Company at www.aplapollo.com.
NON-CONVERTIBLE DEBENTURES
During the period under audit, your Company issued fully secured, listed, redeemable, Non-convertible debentures (the "Debentures") amounting to Rs. 75 crore on a Private Placement basis. The outstanding balance of Debentures as on 31 March, 2016 amounts to Rs. 75 crore. The proceeds of the aforesaid issue were utilized for general corporate purposes.
Debenture Trust Agreement in favor of HDFC Trustee Co. Limited for the aforesaid issue was executed.
The Company''s NCDs have been assigned the rating of CARE A by Credit Analysis and Research Limited (CARE).
COMMERCIAL PAPERS
The Commercial Paper Program of your Company has been rated by M/s ICRA Limited and is assigned the rating of [ICRA] A1 & [ICRA] A1 [SO] for Rs. 70 crore and Rs. 130 crore respectively. During the year under audit, Commercial Papers outstanding amount stood at Rs. 25 crore.
CORPORATE GOVERNANCE
At APL Apollo, we ensure that we evolve and follow the corporate governance guidelines and best practices sincerely to not just boost long-term shareholder value, but to also respect minority rights. We consider it our inherent responsibility to disclose timely and accurate information regarding our financials and performance, as well as the leadership and governance of the Company.
Pursuant to the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations, 2015 (Listing Regulations) and Clause 49 of the erstwhile Listing Agreement regarding the Corporate Governance Report and the Auditors'' Certificate regarding compliance of conditions of Corporate Governance are annexed to this report (Annexure H).
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Re-appointment
In accordance with the provisions of Section 152 of the Companies Act, 2013 and in terms of Articles of Association of the Company, Shri Vinay Gupta (DIN: 00005149) will retire at the ensuing Annual General Meeting (AGM) and being eligible, offer himself for reappointment. The profile and particulars of experience, attributes and skills that qualify Shri Vinay Gupta for the Board membership is disclosed in the notice convening the AGM. The Board recommends and seeks your support in confirming Shri Vinay Gupta''s reappointment.
Cessation
Shri Sameer Gupta (DIN: 00005209), ceased to be Director of the Company effective from 30 May, 2016. The Directors place on record their appreciation towards Shri Sameer Gupta''s contribution during the tenure as a Director of the Company.
Appointment
Shri Romi Sehgal (DIN: 03320454) who was appointed as an Additional Director of the Company by the Board of
Directors with effect from 13 August, 2016 in terms of Section 161 of the Companies Act, 2013 and in terms of Articles of Association of the Company, holds office until the date of ensuing Annual General Meeting. Your Company has received a notice under Section 160 of the Companies Act, 2013 from a shareholder of your Company, signifying his intention to propose the name of Shri Romi Sehgal, for appointment as a Director of your Company.
Key Managerial Personnel
Pursuant to Section 203 of the Companies Act, 2013, the Key Managerial Personnel of the Company are - Shri Sanjay Gupta (Chairman), Shri Ashok Kumar Gupta (Managing Director), Shri Deepak Goyal (Chief Financial Officer) and Shri Adhish Swaroop (Company Secretary). During the year, there has been no change in the key managerial personnel.
POLICY ON DIRECTORS'' APPOINTMENT AND REMUNERATION
Matching the needs of the Company and enhancing the competencies of the Board are the basis for the Nomination and Remuneration Committee to select a candidate for appointment to the Board.
The current policy is to have a balance mix of executive and non-executive Independent Directors to maintain the Independence of the Board, and separate its function of governance and management. As at 31 March, 2016, the Board of Directors comprises of 8 Directors of which
4 are non-executive including 1 women Director. The number of Independent Directors is 4, which is one half of the total numbers of Directors.
The Policy of the Company on Directors appointment including criteria for determining qualifications, positive attributes, independence of Directors and other matters as required under Section 178 of Companies Act 2013 is governed by Nomination Policy read with Company''s policy on appointment/reappointment of Independent Directors. The remuneration paid to the Directors is in accordance with the remuneration policy of the Company.
COMPENSATION POLICY FOR THE BOARD AND SENIOR MNAGEMENT
Based on the recommendations of NRC, the Board has approved the Remuneration Policy for Directors, Key Managerial Personnel (KMP) and all other employees of the Company. As part of the policy, the Company strives to ensure that:
i the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors of the quality required to run the Company successfully;
ii. relationship between remuneration and performance is clear and meets appropriate performance benchmarks; and
iii. remuneration to Directors, KMP and Senior Management involves a balance between fixed and incentive pay, reflecting short, medium and long-term performance objectives appropriate to the working of the Company and its goals.
During the year, there have been no changes to the policy. Hence, the same is not annexed to this report, but is available on our website www.aplapollo.com.
DECLARATION BY INDEPENDENT DIRECTOR(S):
All the Independent Directors have submitted their disclosures to the Board that they fulfill all the requirements as stipulated in Section 149 of the Companies Act, 2013 and Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules.
BOARD EVALUATION & CRITERIA FOR EVALUATION
The board of directors has carried out an annual evaluation of its own performance, Board Committees and individual directors pursuant to the provisions of the Act and the Corporate Governance requirements as prescribed by Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements, Regulations), 2015 ("SEBI Listing Regulations").
The Board evaluated the effectiveness of its functioning, that of the Committees and of individual Directors. The Board, through NRC, sought the feedback of Directors on various parameters such as:
Degree of fulfillment of key responsibilities towards stakeholders (by way of monitoring corporate governance practices, participation in the long-term strategic planning etc.);
The structure, composition and role clarity of the Board and Committees;
- Extent of co-ordination and cohesiveness between the Board and its Committees;
- Effectiveness of the deliberations and process management;
- Board/Committee culture and dynamics; and
- Quality of relationship between Board Members and the Management.
The Chairman of the Board had one-on-one meeting with the Independent Directors and the Chairman of NRC had one-on-one meeting with the Executive and Non-Executive Directors. These meeting were intended to obtain Directors'' inputs on effectiveness of the Board/Committee processes.
The Board considered and discussed the inputs received from the Directors. Also, the Independent Directors at their meeting, reviewed the performance of the Board, Chairman of the Board and that of Non-Executive Directors. The evaluation process endorsed the Board Members'' confidence in the ethical standards of the Company, the cohesiveness that exists amongst the Board Members, the two-way candid communication between the Board and the Management and the openness of the Management in sharing strategic information to enable Board Members to discharge their responsibilities. In the coming year, the Board intends to enhance its focus on the strategic plan for portfolio restructuring, risk management, policy advocacy and regulatory affairs, environmental matters including sustainability (particularly on aspects such as emissions and climate change) and succession planning for the Board.
AUDITORS AND AUDITORS'' REPORT
A. Statutory Auditors
Deloitte Haskins & Sells LLP, Chartered Accountants, Gurgaon, (FRN117366W/W-100018), who are statutory auditors of the Company, hold office until the conclusion of ensuing AGM and are eligible for re-appointment. Members of the Company at the AGM held on 28 August, 2015 had approved the appointment of Deloitte Haskins & Sells LLP as the statutory auditors for a period of five years i.e. up to 35th AGM of the Company.
As required by the provisions of the Companies Act, 2013, their appointment should be ratified by members each year at the AGM. Accordingly, requisite resolution forms part of the notice convening the AGM.
B. Cost Auditors
Pursuant to the provisions of Section 148(2) of the Companies Act, 2013 read with Companies (Cost Records and Audit), Amendment Rules, 2014, required to have the audit of its cost records conducted by a Cost Accountant in practice. In this connection, the Board of Directors of the Company has on the recommendation of the Audit Committee, approved the re-appointment of M/s R.J. Goel & Co., Cost Accountants, (Registration No.000026) as the Cost Auditors of the Company for the year ending 31 March, 2017. The remuneration proposed to be paid to the Cost Auditor requires ratification in terms of Section 148 read with Rule 14 of the Companies (Audit & Auditors) Rules, 2014 and is accordingly forms part of the notice convening the AGM.
C. Secretarial Auditors
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, the Board had appointed M/s Anjali Yadav & Associates, a firm of Company Secretaries in Practice, to undertake the Secretarial Audit for the financial year 2015-16. The Secretarial Audit Report for the financial year ended 31 March, 2016 is annexed herewith marked as Annexure E to this Report. The Secretarial Audit Report is self-explanatory and does not contain any qualification, reservation or adverse remark.
RELATED PARTY TRANSACTIONS
Pursuant to the provisions of Section 134 of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014, the particulars of all Related Party Transactions (RPT) that were entered into during the financial year were on arm''s length basis and in ordinary course of business. There were no material related party transactions entered during the financial year 2015-16.
Accordingly, particulars of contracts or arrangements with related parties referred to in Section 188(1) along with the justification for entering into such contracts or arrangements in Form AOC-2 form part of the report (Annexure D).
The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company''s website at the link:
http://www.aplapollo.com/pdf/rpt-policy.pdf
The Policy intends to ensure that proper reporting, approval and disclosure process are in place for all transactions between the Company and related parties. All related party transaction are placed before the Audit Committee for review and approval.
Your Directors draw attention of the members to Note 29.3 to the Financial Statement which sets out related party disclosures.
EMPLOYEE STOCK OPTION PLAN (ESOP)
The board of directors of the company at its meeting held on 13 June, 2015 formulated the APL Apollo Tubes Limited - Employees Stock Option Scheme-2015 ("ESOS Plan") with an objective of enabling the Company to attract and retain talented human resources by offering them the opportunity to acquire a continuing equity interest in the Company which will reflect their efforts in building the growth and the profitability of the Company. More than being a compensation element, the plan will have a strategic significance and will act as a key enable to achieve long-term business objectives.
At the said meeting, the board authorized the Nomination and Remuneration Committee of the APL Apollo Tubes Limited for the superintendence of the ESOS Plan.
Grant of stock options under the ESOS plan shall be as per the terms and conditions as may be decided by the Board/Committee from time to time in accordance with the provisions of Companies Act, 2013 the rules made there under and the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 ("ESOS Regulations").
Under the provisions of the Companies Act, 2013 and the ESOS Regulations, approval of the members by way of a special resolution vide a postal Ballot was obtained on 27 July, 2015 and 22 December, 2015 for the ESOS plan involving issue of shares to the employees of the Company and its subsidiaries.
A total of 750,000 options would be available for grant to the eligible employees of the Company and its subsidiaries and total of 724,000 options would be available for grant to the eligible employees of the Company and its Subsidiaries, under the ESOS plan.
724,000 options have been granted under this plan by the Committee in its meeting held on 28 July, 2015 under the 1st Grant to the eligible employees of the Company and its subsidiaries.
The applicable disclosures relating to the APL Apollo Tubes Limited - ESOS Scheme -2015 as stipulated under the ESOS Regulations pertaining to the year ended 31 March, 2016 are hosted on the website of the Company at www.aplapollo.com.
The ESOS plan are in compliance with the ESOS Regulations and the Certificate from Statutory Auditor of the Company certifying that the Company''s stock option plans are being implemented in accordance with the ESOS Regulations and the resolution passed by the Members would be placed at the Annual General Meeting for inspection by Members.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to requirement under Section 134 sub-section 3(c) and sub-section 5 of the Companies Act, 2013, your Directors to the best of their knowledge hereby state and confirm that:
a. In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanations relating to material departures.
b. Such accounting policies have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent to give a true and fair view of the Company''s state of affairs as at 31 March, 2016 and of the Company''s profit for the year ended on that date.
c. Proper and sufficient care has been taken for the maintenance of adequate accounting records, in accordance with the provisions of the Companies Act 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.
d. The annual financial statements have been prepared
on a going concern basis.
e. The internal financial controls were laid down to be followed that and such internal financial controls were adequate and were operating effectively.
f. Proper systems were devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
In line with the provisions of the Companies Act, 2013, the Company has framed its Corporate Social Responsibility (CSR) policy for development of programmes and projects for the benefit of weaker sections of the society and the same has been approved by Corporate Social Responsibility Committee (CSR Committee) and the Board of Directors of the Company. The Corporate Social Responsibility (CSR) policy of the Company provides a road map for its CSR activities.
During the subsequent year, the Company has made contribution of Rs. 1.01 crore to Prime Minister''s National Relief Fund for Education of Poor Children, Rs. 0.11 crore to World Hope Foundation and 0.015 crore to U.P. Science Centre, Jhansi, in compliance to the provisions of Companies Act, 2013 relating to Corporate Social Responsibility.
The Annual Report on CSR activities is annexed herewith as Annexure B.
The CSR Policy has been uploaded on the Company''s website and may be accessed at the link: http://www.aplapollo.com/pdf/csr-policy.pdf
LISTING AGREEMENT
During the year, SEBI notified the Listing Regulations and the same were effective from 1 December, 2015. The Listing Regulations aim to consolidate and streamline the provisions of the erstwhile listing agreement for different segments of capital markets to ensure better enforceability. In terms of the Listing Regulations, all listed entities were required to enter into a new listing agreement with the stock exchanges. In compliance with the requirement, we on 15 February, 2016, executed the listing agreement with the BSE Limited and the National Stock Exchange of India Limited.
DISCLOSURES
NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS
During the financial year 2015-16, 7 (Seven) Board Meetings were convened and held details of which are given in the Corporate Governance Report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013 and Regulation 17 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Clause 49 of the erstwhile Listing Agreement.
AUDIT COMMITTEE
The Audit Committee comprises of four Directors, of which three are Non-Executive and Independent Directors. Shri Anil Kumar Bansal, Non-Executive Independent Director, is the Chairman of the Audit Committee. Members possess the adequate knowledge of Accounts, Audit and Finance, etc. The Composition of the Committee meets the requirement as per Section 177 of the Companies Act 2013 and Regulation 18 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Clause 49 of the erstwhile Listing Agreement.
There are no recommendations of the Audit Committee which have not been accepted by the Board.
EXTRACT OF THE ANNUAL RETURN
In accordance with the provisions of Section 134 (3(a) of the Companies Act, 2013, the extract of the Annual Return in Form no. MGT-9 is annexed hereto as Annexure-"A" and forms part of this report.
WHISTLE BLOWER POLICY/VIGIL MECHANISM
In compliance with the provisions of Section 177 (9) of the Companies Act, 2013 and Regulation 22 of SEBI (Listing Obligation and Disclosure Requirements)
Regulations, 2015, the Company has framed a Vigil Mechanism / Whistle Blower Policy to deal with unethical behavior, actual or suspected fraud or violation of the Company''s code of conduct or ethics policy, if any.
In staying true to our values of Strength, Performance and Passion and in line with our vision of being one of the most respected companies in India, the Company is committed to the high standards of Corporate Governance and stakeholder responsibility.
The Policy ensures that strict confidentiality is maintained whilst dealing with concerns and also that no discrimination will be meted out to any person for a genuinely raised concern.
The Vigil Mechanism / Whistle Blower Policy have also been uploaded on the Company''s website and may be accessed at the link:
http://www.aplapollo.com/pdf/whistle-blowing-policy.pdf
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186
Details of Loans, Guarantees and Investments covered under provisions of Section 186 of the Companies Act, 2013 during the financial year 2015-16 are furnished in the notes to the financial statements.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:
Information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo as required under Section 134 (3)(m) of Companies Act, 2013 read with the Rule 8 (3) of the Companies (Accounts) Rules, 2014, is furnished Annexure ''G'', forming part of this Report.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
Details pursuant to Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2016 pursuant to MCA Notification dated 30 June, 2016 forms part of this Annual Report and annexed herewith as Annexure F.
DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has zero tolerance for sexual harassment at workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed there under. No complaint has been received for sexual harassment of women at work place by the Company during the financial year 2015-16.
MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT.
There are no material changes and commitments, affecting the financial position of the Company occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report other than those disclosed in the financial statements.
Further, the Board of Directors in its meeting held on 13 August, 2016 constituted the share allotment committee for allotment of equity shares to the employees of the Company and its subsidiaries who will exercise their vesting rights pursuant to APL Apollo Employee Stock Option Scheme-2015 from time to time.
OTHER DISCLOSURES AND REPORTING
Your Directors state that no disclosure or reporting is required with respect to the following items as there were no transactions on these items during the year under audit:
1. Change in the nature of business of the Company.
2. Issue of equity shares with differential rights as to dividend, voting or otherwise.
3. Any remuneration or commission received by Managing Director of the Company, from any of its subsidiary.
4. Significant or material orders passed by the Regulators or Courts or Tribunal which impacts the going concern status and company''s operations in future.
5. Issue of shares (including sweat equity shares) to employees of the Company under any scheme save and except ESOS referred to in this report.
APPRECIATION
Yours Directors take this opportunity to express their appreciation for the co-operation received from the customers, vendors, bankers, stock exchanges, depositories, auditors, legal advisors, consultants, stakeholders, debenture holders, business associates, Govt, of India, state government and local bodies during the year under audit. The Directors also wish to place on record their appreciation of the devoted and dedicated services rendered by the employees of the Company.
For and on behalf of Board of Directors
Sanjay Gupta
Chairman
Place : Ghaziabad
Date : 13 August, 2016
Mar 31, 2015
Dear Members,
The Directors have pleasure in presenting the 30th Annual Report on
the business and operations of your Company together with the Audited
Financial Statements for the year ended March 31, 2015.
Financial Results
The summarized standalone and consolidated results of your company are
given in the table below:
(Rs. in million)
Particulars Consolidated
FY 2014-15 FY 2013-14
Gross sales 33,572.34 27,900.48
Less : Excise duty and cess 3434.57 2930.93
Net sales / Income from operations 3,0137.77 2,4969.55
Operating EBIDTA 1831.86 1645.54
Add : Other income 30.00 20.41
Less : Finance cost 664.53 609.30
Less : Depreciation and amortisation 220.07 164.32
Profit before exceptional items and tax 977.26 892.33
Less : Exceptional items 0.53 2.63
Profit before tax (PBT) 976.73 889.70
Less : Tax expense 339.16 299.92
Profit after Tax for the year (PAT) 637.57 589.78
Add : Balance in profit and loss account 2168.94 1765.36
Profit available for Appropriation:
Transfer to General Reserve 65.00 50.00
Proposed dividend on Equity Shares 140.63 117.19
Tax on dividends 28.12 19.01
Balance Carried over to Balance Sheet 2527.76 2168.94
Particulars Standalone
FY 2014-15 FY 2013-14
Gross sales 22,179.07 21,856.49
Less : Excise duty and cess 2007.97 1787.39
Net sales / Income from operations 20,171.10 20,069.10
Operating EBIDTA 944.80 933.49
Add : Other income 118.26 21.60
Less : Finance cost 501.54 462.16
Less : Depreciation and amortisation 120.13 98.69
Profit before exceptional items and tax 441.39 394.23
Less : Exceptional items (0.93) 1.35
Profit before tax (PBT) 442.32 392.88
Less : Tax expense 127.78 131.03
Profit after Tax for the year (PAT) 314.54 261.85
Add : Balance in profit and loss account 946.91 871.26
Profit available for Appropriation:
Transfer to General Reserve 50.00 50.00
Proposed dividend on Equity Shares 140.63 117.19
Tax on dividends 10.91 19.01
Balance Carried over to Balance Sheet 1059.91 946.91
Dividend
Your directors are pleased to recommend a dividend of Rs. 6/- per
Equity Shares (i.e.60%) on 2,34,38,636 Equity Shares of Rs. 10/- each
for the year ended March 31, 2015 aggregating to Rs. 168.75 millions
including Corporate Dividend Tax of Rs. 28.12 millions as compared to
Rs. 136.20 millions (including Corporate Dividend Tax of Rs. 19.01
millions) in the previous year. The proposed dividend is subject to the
approval of shareholders in the ensuing Annual General Meeting of the
Company. The dividend would be payable to all Shareholders whose names
appear in the Register of Members as on the Book Closure Date.
Transfer to Reserves
The company proposes to transfer Rs. 65.00 millions to the General
Reserve out of amount available for appropriations and an amount of Rs.
2,527.76 millions is proposed to be retained in the Profit and Loss
Account during the financial year 2014-15.
Overview
A significant improvement has been achieved by the company during the
current Financial Year. The company has achieved many new landmarks,in
terms of capacity utilization, sales volume and branding. The overall
performance of Steel Tubes and Pipe Industry was adversely affected by
falling steel prices globally. The overall economic conditions of the
country, though improving, remains under strain and roadmap of
development will take shape in the coming years, consequent to the
successful implementation of government projects and other initiatives
undertaken for growth.
The company has achieved many new landmarks in this fiscal, in terms of
capacity utilization, sales volume and branding. The strategy and steps
taken by the Company in designing new products in steel tubes and pipes
segment by innovative means has succeeded in a big way with the
production and launch products like color coated pipes for the first
time in India and window / door frames which have been designed and
patented by the company will further boost the sales of the company as
demand for these products is expected to grow significantly in rural
and semi-urban areas of the country. The launch of color coated pipes
is seen as a testimony to the company''s strength and abilities in the
Steel Tubes and Pipe segment.
The company continues to focus on reducing cost of raw materials by
procuring through imports, improving, efficiencies, reducing cost of
borrowings, increasing penetration particularly in Tier II cities,
developing new product sizes, finding new markets etc. We extended our
geographical reach to the end users, strengthened our presence in Tier
II and Tier III cities either via own warehouse cum branches or through
dealer-distribution network. An additional warehouse-cum branch was
opened at Chandigarh to cater to the burgeoning demand for our
products, across various industrial applications, thereby,
strengthening the APL Apollo brand. Due to the above measures being
taken, the company managed to maintain its performance despite a
hostile industry environment.
The company has also increased its capacities by adding new mills and
adopting latest technologies across all the plants. To create demands
for its diversified products the Company is focussing on creating and
spreading the Company''s popular Brand APL Apollo across the targeted
markets. With this the company expects to maintain the growth momentum
and improve margins During the Financial Year 2014-15, the Company has
recorded the highest ever volume, despite the adverse conditions across
the globe. To maintain the market share, we have adopted a conscious
strategy of keeping our margin at the lower end so that we do not lose
our large customers.
Credit Rating
During the year, M/s ICRA Limited has upgraded the long-term rating
from "[ICRA] A-" to "[ICRA] A" and has reaffirmed the short-term rating
of "[ICRA] A1" to the Company. The outlook on the long-term rating is
stable.
Management''s Discussion and Analysis Report
Management''s Discussion and Analysis Report for the year under review,
as stipulated under Clause 49 of the Listing Agreement with the Stock
Exchanges in India, is presented in a separate section forming part of
the Annual Report.
Consolidated Financial Statements
The consolidated Financial Statements presented by the Company include
financial information of its subsidiaries prepared in compliance with
applicable Accounting Standards. The audited Consolidated Financial
Statements and the Auditor''s Report thereon form part of this annual
report.
Subsidiary Companies, Joint Ventures and Associates
The Company has three wholly-owned subsidiaries namely, Shri Lakshmi
Metal Udyog Limited, Lloyds Line Pipes Limited and Apollo Metalex
Private Limited. A report on the performance and financial position of
each of the subsidiaries and associates companies as per the Companies
Act, 2013 is provided as Annexure "C" to the Consolidated Financial
Statements and hence not repeated for the sake of brevity.
Further, in order to take the benefit of economy of scale and reduce
the administration expenses, the Board of Directors in its Meeting held
on June 13, 2015 has also approved the Scheme of Amalgamation of Lloyds
Line Pipes Limited (wholly owned subsidiary) with the Company. The
above said amalgamation would enable consolidation and further
expansion of the Company. This will contribute in furthering and
fulfilling the objectives and business strategies of both the companies
thereby accelerating growth, expansion and development of the business.
The audited financial statement and related information of the
subsidiaries, where applicable, will be available for inspection during
regular business hours at the company''s Registered Office at 37,
Hargobind Enclave, Vikas Marg, Delhi-110 092 and the same are also
available at our website i.e. www.aplapollo.com as prescribed in
Section 136 of the Companies Act, 2013.
Names of Companies which have become or ceased to be its subsidiaries,
joint ventures or associate companies during the year
During the financial year ended March 31, 2015 no entity became or
ceased to be the subsidiary, joint venture or associate of the company.
Deposits
Your Company has not accepted any deposits within the meaning of
Section 73 of the Companies Act, 2013 and the Companies (Acceptance of
Deposits) Rules, 2014. Accordingly, there are no unclaimed or unpaid
deposits lying with the Company for the year under review.
Details of significant and Material Orders passed by the Regulators,
Courts and Tribunal
No significant and material order has been passed by the Regulators,
Courts and Tribunals impacting the going concern status and Company''s
operations in future.
Change in the nature of business, if any
There was no Change in the nature of business of the Company during the
Financial Year ended March 31, 2015.
Material changes and commitments, if any, affecting the financial
position of the company which have occurred between the end of the
financial year of the company to which the financial statements relate
and the date of the report
There are no material changes and commitments, affecting the financial
position of the Company occurred between the end of the financial year
of the Company to which the financial statements relate and the date of
the report other than those disclosed in the financial statements.
Further, the Board of Directors in its Meeting held on June 13, 2015
approved the issue of Equity Shares to the Employees of the Company
pursuant to APL Apollo Employee Stock Option Scheme-2015 up to 7,50,000
Equity Shares, subject to the approval of shareholders. The Employees
Stock Option Scheme -2015 (ESOS-2015) was also approved by the
shareholders vide a special resolution passed through Postal Ballot on
July 27, 2015.
Nomination and Remuneration Committee of the Company in its meeting
held on July 28, 2015, has granted 7,24,000 Employees Stock Options
under APL Apollo Employees Stock Option Scheme-2015. The following are
the terms of Plan:-
1. Each Option will entitle the holder to 1 (one)Equity Share of the
company, i.e. 7,24,000 Equity Shares in aggregate;
2. These option will vest in the eligible employees over a period of
12 months from the date of Grant:
3. Vesting is based on performance and employees continuity in the
company; and
4. The options shall be exercisable within 5 years from the date of
grant.
Thereafter, the Board of Directors in its meeting held on July 28, 2015
has taken on record and approved the grant of 7,24,000 options under
APL Apollo Employees Stock Options Scheme-2015.
Directors'' Responsibility Statement
Pursuant to Section 134 (3) ( c ) of the Companies Act, 2013, the
Directors to the best of their knowledge hereby state and confirm that:
(a) In the preparation of the annual accounts, the applicable
accounting standards had been followed along with proper explanations
relating to material departures.
(b) The directors had selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the company at the end of the financial year and of the profit of
the company for the period;
(c) The directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets of the company and
for preventing and detecting fraud and other irregularities;
(d) The directors had prepared the annual accounts on a going concern
basis;
(e) The internal financial controls to be followed by the Company were
laid down and such internal financial controls were adequate and were
operating effectively; and
(f) The directors had devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems were
adequate and operating effectively.
Corporate Governance
Your Company upholds the standards of governance and is compliant with
the Corporate Governance provisions as stipulated in Clause 49 of the
Listing Agreement in both letter and spirit during the period under
review. Your Company lays strong emphasis on transparency, disclosure
and independent supervision to increase various stakeholders'' value.
The Company has complied with the Corporate Governance as stipulated
under Clause 49 of the Listing Agreement with Stock Exchanges. A
separate section on Corporate Governance, along with certificate from
Statutory Auditors confirming compliance with the requirements of
Clause 49 of the Listing Agreement with National Stock Exchange of
India Limited and the BSE Limited (BSE), are annexed as Annexure "H"
and forming part of the Annual Report.
Particulars of Contracts and Arrangements with Related Parties
Pursuant to the provisions of Section 134 of the Companies Act, 2013
read with Rule 8(2) of the Companies (Accounts) Rules, 2014, the
particulars of all contracts / arrangements / transactions entered into
by the Company with related parties during the financial year are in
the ordinary course of business and on arm''s length basis. During the
year, the Company had not entered into any contract / arrangement /
transaction with related parties which could be considered material in
accordance with the policy of the Company on related party transactions
and materiality of related party transactions.
The Policy on materiality of related party transactions and dealing
with related party transactions as approved by the Board may be
accessed on the Company''s website at the link:
http://aplapollo.com/pdf/rpt-policy. pdf
Your Directors draw attention of the members to Note 32 to the
Financial Statement which sets out related party disclosures. The
particulars of contracts and arrangements entered into by the company
with related parties referred to in Section 188 in Form AOC-2 is
attached herewith as Annexure-D
Corporate Social Responsibility (CSR)
In line with the provisions of the Companies Act, 2013, the Company has
framed its Corporate Social Responsibility (CSR) policy for development
of programmes and projects for the benefit of weaker sections of the
society and the same has been approved by Corporate Social
Responsibility Committee (CSR Committee) and the Board of Directors of
the Company. The Corporate Social Responsibility (CSR) policy of the
Company provides a road map for its CSR activities.
The CSR Policy has been uploaded on the Company''s website and may be
accessed at the link:
http://aplapollo.com/pdf/csr-policy.pdf
The Annual Report on CSR activities is annexed herewith as Annexure
"B".
Risk Management Policy
During the year, the Board of Directors, in its Meeting held on
February 18, 2015, has also adopted a formal Risk Management Policy for
the Company, whereby, risks are broadly categorized into Strategic,
Operational, Compliance, and Financial & Reporting Risks. The Policy
outlines the parameters of identification, assessment, monitoring and
mitigation of various risks which are key to the business objectives.
The Risk Management Policy has been uploaded on the Company''s website
and may be accessed at the link: http://aplapollo.com/pdf/rmp.pdf
Details in respect of adequacy of Internal Financial Controls with
reference to the Financial Statements.
The Company has a robust and comprehensive Internal Financial Control
System commensurate with the size, scale and complexity of its
operations. The objective of these procedures is to ensure efficient
use and protection of the Company''s resources, accuracy in financial
reporting and due compliance of statues and corporate policies and
procedures. The system encompasses the major processes to ensure
reliability of financial reporting, compliance with the policies,
procedures, laws and regulations safeguarding assets and economical and
efficient use of resources. The policies and procedures adopted by the
company ensure the orderly and efficient conduct of its business and
adherence to the company''s policies, prevention and detection of frauds
and errors, accuracy and completeness of the records and timely
preparation of reliable financial information.
The scope and authority of the Internal Audit function is defined in
the Internal Audit Manual. To maintain its objectivity and
independence, the Internal Audit function reports to the Chairman of
the Audit Committee of the Board and to the Chairman and Managing
Director.
The Internal Audit Department monitors and evaluates the efficacy and
adequacy of internal control system in the Company, its compliance with
operating systems, accounting procedures and policies at all locations
of the Company. Based on the report of internal audit function, process
owners undertake corrective action in their respective areas and
thereby strengthen the controls. Significant audit observations and
recommendations along with corrective actions thereon are presented to
the Audit Committee of the Board.
Directors and Key Managerial Personnel
In accordance with the provisions of Section 152 of the Companies Act,
2013 and the Articles of Association of the Company, Mr. Sameer Gupta
retire by rotation at the ensuing Annual General Meeting and being
eligible offer himself for reappointment.
The Board in its Meeting held on March 24, 2015 by circular resolution,
appointed Ms. Neeru Abrol, as an Additional Director and Independent
Women Director on the Board, she holds office up to the date of this
AGM. The requirement under Section 149 of the Companies Act, 2013 read
with Rule 3 of Companies (Appointment of Directors) Rules, 2014 and
Clause 49 of the Listing Agreement also stands complied with this
appointment.
The Company has received a Notice in writing under the provisions of
Section 160 of the Companies Act, 2013, proposing her candidature for
the office of the Director. The Company has received consent in
writing to act as Director in Form DIR-2 and intimation in Form DIR-8
to the effect that she is not disqualified under Section 1 64 (2) to
act as Director. The company has also received declaration from her
that she meets the criteria of independence as prescribed under Section
of 149 (6) of the Companies Act, 2013.
In the opinion of the Board, she fulfills the condition for appointment
as Independent Director on the Board.
She is eligible to be appointed as Director of the Company and her
appointment requires the approval of the members at the ensuing Annual
General Meeting.
Mr. Aniq Husain has resigned from directorship of the company w.e.f.
May 9, 2015. Your Directors place on record their deep appreciation of
valuable services rendered by Mr. Aniq Husain during his tenure as
Director of the Company.
Further, in Compliance with requirements of Section 203 of the
Companies Act 2013 Mr. Deepak Goyal was appointed as Chief Financial
Officer of the company with effect from February 18, 2015.
The details of directors being recommended for appointment /
re-appointment as required in clause 49 of the Listing Agreement are
contained in the Notice convening the ensuing Annual General Meeting of
the Company.
Appropriate resolution(s) seeking your approval to the appointment /
re-appointment of Directors are also included in the Notice.
Declaration by Independent Director(s)
All the Independent Directors have submitted their disclosures to the
Board that they fulfill all the requirements as stipulated in Section
149 (6) of the Companies Act, 2013 so as to qualify themselves to be
appointed as Independent Directors under the provisions of the
Companies Act, 2013 and the relevant rules.
Board Evaluation
Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of
the Listing Agreement, the Board has carried out an annual evaluation
of its own performance, the Directors individually as well as the
evaluation of the working of various Committees. The Independent
Directors also carried out the evaluation of the Chairman and the
Non-Independent Directors, the details of which covered in the
Corporate Governance Report.
Criteria for Evaluation of Directors
For the purpose of proper evaluation, the Directors of the Company have
been divided in 3 (three) categories i.e. Independent, Non-Independent
and Non-Executive and Executive.
The criteria for evaluation includes factors such as engagement,
strategic planning and vision, team spirit and consensus building,
effective leadership, domain knowledge, management qualities, team work
abilities, result/achievements, understanding and awareness,
motivation/ commitment/ diligence, integrity/ ethics/ value and
openness/ receptivity.
Number of meetings of the Board of Directors
A calendar of Meetings is prepared and circulated in advance to the
Directors. During the Financial Year 2014- 15, the Board of Directors
of the Company met 5 (Five) times on 30th May 2014, 4th August 2014,
12th November 2014, 4th February 2015 and 18th February 2015. During
the Financial Year 2014-15, Meeting of the Audit Committee were held on
30th May 2014, 4th August 2014, 12th November 2014, 4th February 2015
and 18th February,2015. The details of which are given in the Corporate
Governance Report. The intervening gap between the Meetings was within
the period prescribed under the Companies Act, 2013.
Audit Committee
The Audit Committee comprises three Directors, of which two are
Non-Executive and Independent Directors. The Chairman of the committee
is a Non-Executive Independent Director. The composition of the Audit
Committee as on March 31, 2015 is as under:
Name of Director Category
Mr. Anil Kumar Bansal Independent Non-Executive
(Chairman)
Mr. Abhilash Lal Independent Non-Executive
Mr. Vinay Gupta Non-Executive Promoter
Nomination and Remuneration Policy of Directors, Key Managerial
Personnel and other Employees
In adherence of Section 178(1) of the Companies Act, 2013, the Board of
Directors of the Company in its Meeting held on February 18, 2015,
approved a policy on directors'' appointment and remuneration including
criteria for determining qualifications, positive attributes,
independence of a director and other matters provided in Section 178
(3) of the Companies Act, 2013, based on the recommendations of the
Nomination and Remuneration Committee. The broad parameters covered
under the Policy are- Company Philosophy, Guiding Principles,
Nomination of Directors, Remuneration of Key Managerial Personnel
(other than Managing / Whole Time Directors), Key- Executives and
Senior Management and the Remuneration of Other Employees. Nomination
and Remuneration Policy has been uploaded on the company''s website and
may be accessed at the link: http://aplapollo.com/pdf/nomination-
policy. pdf
The Company''s Policy relating to appointment of Directors, payment of
Managerial Remuneration, Directors'' qualifications, positive
attributes, independence of Directors and other related matters as
provided under Section 178 (3) of the Companies Act, 2013 is furnished
and forms part of this Report.
Details of establishment of Vigil Mechanism for Directors and Employees
In compliance with the provisions of Section 177 (9) of the Companies
Act,2013 and Clause 49 of the Listing Agreement, the Company has framed
a Vigil Mechanism / Whistle Blower Policy to deal with unethical
behavior, actual or suspected fraud or violation of the Company''s code
of conduct or ethics policy, if any.
In staying true to our values of Strength, Performance and Passion and
in line with our vision of being one of the most respected companies in
India, the Company is committed to the high standards of Corporate
Governance and stakeholder responsibility.
The Policy ensures that strict confidentiality is maintained whilst
dealing with concerns and also that no discrimination will be meted out
to any person for a genuinely raised concern. A high level Committee
under the chairmanship of Mr. Anil Kumar Bansal has been constituted
which looks into the complaints raised. The Committee reports to the
Audit Committee and the Board.
The Vigil Mechanism / Whistle Blower Policy have also been uploaded on
the website of the Company and may be accessed at the link:
http://aplapollo.com/pdf/whistle- blowing-policy. pdf
Auditors and Auditors'' Report
A. Statutory Auditors - Audit Committee of the Company in its meeting
held on July 29, 2015 has recommended the appointment of M/s. Deloitte
Haskins & Sells LLP, Chartered Accountants, Gurgaon as the Statutory
Auditors of the Company in place of M/s VAPS & Co., Chartered
accountants, whose term expires at the conclusion of the ensuing Annual
General Meeting and they have expressed their unwillingness for
re-appointment. Thereafter, the Board of Directors have also ratified
the decision of the Audit Committee subject to approval of shareholders
in the ensuing Annual General Meeting. M/s. Deloitte Haskins & Sells
LLP, Chartered Accountants eligible to hold the office from the
conclusion of this Annual General Meeting (AGM) until the conclusion of
the Thirty Fifth AGM of the Company to be held in the year 2020
(subject to ratification of their appointment at every AGM), to examine
and audit the accounts of the Company. The certificate to the effect
that if appointed would be within the prescribed limit under Section
141 of the Companies Act, 2013 has been obtained from them.
The observations of Statutory Auditors in their reports on standalone
and consolidated financials are self-explanatory and therefore, do not
call for any further comments under Section 134 of the Companies Act,
2013.
B. Cost Auditors - Pursuant to the provisions of Section 148 of the
Companies Act, 2013 and Rules made there under, the board of directors
on the recommendation of the Audit Committee appointed M/s. R. J. Goel
& Co., Cost Accountants, (Registration No.000026) as the Cost Auditor
of the Company for the year ended March 31, 2015. The appointment and
remuneration proposed to be paid to the Cost Auditor requires
ratification of the shareholders of the Company. In view of this, your
ratification for appointment and payment of remuneration to the Cost
Auditor is being sought at the ensuing Annual General Meeting. The Cost
Auditor has confirmed that their appointment is within the limits of
the Section 139 of the Companies Act, 2013 and has certified that their
firm is free from any disqualification specified under Section 148 (5)
and all other applicable provisions of Companies Act, 2013.In terms of
the requirements of the Companies (Cost Accounting Records) Rules, 201
1. The Cost Audit Report for the year ended on March 31, 2015, shall be
submitted within the time stipulated in the aforesaid rules.
C. Secretarial Auditors - Pursuant to the provisions of Section 204 of
the Companies Act, 2013 and The Companies (Appointment and Remuneration
of Managerial Personnel) Rules 2014, the Board had appointed M/s Anjali
Yadav & Associates, Company Secretaries, to conduct Secretarial Audit
for the Financial Year 2014-15. The Secretarial Audit Report for the
Financial Year ended March 31, 2015 is annexed herewith marked as
Annexure "E" to this Report. The Secretarial Audit Report is
self-explanatory and therefore, do not call for any further comments.
Particulars of Loans, Guarantees or Investments under section 186
The company has given Loans, corporate guarantee or investments to its
wholly owned 100% subsidiaries under Section 186 of the Companies Act,
2013 during the financial year 2014-15 which are given under the
respective head and the same is furnished in the notes to the financial
statements.
Share Capital
The paid up equity capital as on March 31, 2015 was Rs. 234,386,360.
The company has not issued shares with differential voting rights nor
granted stock options nor sweat equity or bonus shares.
Extract of the Annual Return
The details forming part of the extract of the Annual Return in Form
no. MGT-9 as required under Section 92 of the Companies Act, 2013 is
annexed hereto as Annexure-"A" and forms part of the Director''s Report.
Energy Conservation, Technology Absorption and Foreign Exchange
Earnings and Outgo
Information pertaining to conservation of energy,technology absorption,
foreign exchange earnings and outgo as required under Section 134(3)(m)
of Companies Act, 2013 read with the Rule 8 (3) of the Companies
(Accounts) Rules, 2014, is annexed hereto as Annexure "G", forming part
of this Report.
Particulars of Employees and related disclosures
Details pursuant to Section 197(12) of the Companies Act, 2013 read
with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration
of Managerial Personnel) Rules, 2014 form part of this Annual Report
and annexed herewith as Annexure "F".
Disclosure as per Sexual Harassment of women at workplace (Prevention,
Prohibition and Redressal) Act, 2013
The Company has zero tolerance for sexual harassment at workplace and
has adopted a policy on prevention, prohibition and redressal of sexual
harassment at workplace in line with the provisions of Sexual
Harassment of Women at Workplace (Prevention, Prohibition and
Redressal) Act, 2013 and the rules framed there under. No complaint
has been received for sexual harassment of women at work place by the
Company during the financial year 2014-15
Transfer to Investor Education and Protection Fund
Pursuant to the provisions of Section 125 (2) ( c ) of the Companies
Act, 2013, your company has transferred Rs. 76,639/- during the
financial year 2014-15 to the Investor Education and Protection Fund.
This amount lying in the Investor Education and Protection Fund under
Section 205C of the Companies Act, 1956 which was lying unclaimed/
unpaid with the Company for a period of seven years after declaration
of Dividend for the financial year ended 2006-07.
Acknowledgements
The Board places on record its appreciation for the continued
co-operation and support extended to the Company by customers, vendors,
bankers, rating agencies, stock exchanges, depositories, auditors,
legal advisors, consultants business associates, state government,
local bodies and all the employees with whose help, co- operation and
hard work the Company is able to achieve the results.
The Board deeply acknowledges the trust and confidence placed by the
customers of the Company and all its shareholders.
for and on behalf of the Board
Sanjay Gupta Ashok K. Gupta Vinay Gupta
Chairman Managing Director Director
Place : Delhi
Dated : 29th July, 2015
Regd. Office:
37, Hargobind Enclave,
Vikas Marg, Delhi - 1 10092
Mar 31, 2014
Dear Members,
The Board of Directors are pleased to present the 29th annual report on
the business and operations of your Company, together with the audited
statement of financial accounts, consolidated and standalone, for the
year ended March 31, 2014.
Financial Results (Rs in million)
Particulars Consolidated
FY2013-14 FY2012-13
Gross sales 28,619.48 22,471.22
Less : Excise duty and cess 2,930.93 2,388.39
Net sales / Income from operations 25,688.55 20,082.83
Operating EBIDTA 1,645.55 1,595.38
Add : Other income 20.41 17.11
Less : Finance cost 609.30 429.49
Less : Depreciation and amortisation 164.32 125.08
Profit before exceptional items and tax 892.33 1,057.76
Less : Exceptional items 2.63 7.68
Profit before tax (PBT) 889.70 1,050.08
Less : Tax expense 299.91 363.65
Profit for the year (PAT) 589.79 686.43
Add : Balance in profit and loss account 1,765.64 1,258.93
Amount available for appropriation 2,355.14 1,945.36
Less Appropriations :
Proposed dividend on Equity Shares 117.19 111.62
Tax on dividends 19.01 18.11
Transfer to general reserve 50.00 50.00
Closing balance 2,168.94 1,765.64
Financial Results (Rs in million)
Particulars Consolidated
FY2013-14 FY2012-13
Gross sales 22,360.59 17,537.87
Less : Excise duty and cess 1,787.39 1,446.69
Net sales / Income from operations 20,573.21 16,091.18
Operating EBIDTA 955.08 937.83
Add : Other income 21.60 10.31
Less : Finance cost 462.16 320.05
Less : Depreciation and amortisation 98.69 78.79
Profit before exceptional items and tax 394.23 549.29
Less : Exceptional items 1.35 3.66
Profit before tax (PBT) 392.88 545.63
Less : Tax expense 131.03 199.08
Profit for the year (PAT) 261.85 346.55
Add : Balance in profit and loss account 871.26 704.43
Amount available for appropriation 1,133.11 1,050.98
Less : Appropriations :
Proposed dividend on Equity Shares 117.19 111.62
Tax on dividends 19.01 18.11
Transfer to general reserve 50.00 50.00
Closing balance 946.91 871.26
Dividend
The Board recommended dividend of Rs. 5/- per fully paid- up Equity
Shares on 23,438,636 of Rs. 10/- each for the year ended March 31, 2014
(Financial Year 2012-2013 Rs. 5/- per fully paid-up Equity Shares on
22,323,636 of Rs. 10/- each). The dividend on Equity Shares is subject to
the approval of the shareholders at the ensuing Annual General Meeting.
The total dividend payout including dividend distribution tax for the
financial year ended March 31, 2014 is Rs. 136.20 Million vis-a-vis Rs.
129.73 Million paid for the financial year ended March 31, 2013.
Overview
The year gone by FY14 was a good year for the company despite the
adverse economic conditions prevailing the world over. It achieved a
volume growth of above 25% even though the country was passing through
a sluggish economy, lower investments and credit squeeze. This was also
a challenging year since demand growth particularly in infrastructure
and construction sector was sluggish. But this gave the company a
excellent opportunity to revisit our systems and sharpen our practices.
The company focussed on improving efficiencies, increasing penetration
particularly in tier II cities, developing new product sizes,
finding new markets etc. Due to number of measures taken, the company
was able to beat slowdown and post robust growth. However in the
process the EBITDA came under pressure and declined marginally.
There is a new optimism in the country after the recent change in the
Government. Economic activity is expected to pick up momentum.
Consequently investments in infrastructure, industries, construction,
Irrigation etc. are all expected to leapfrog. This augurs well for your
company. Our growth drivers are these industries and any improvement
in their fortune will have a direct impact on your company as well. We
expect demand to pick up in near future. So we are further
strengthening our marketing network. Capacities are being increased to
take care of additional demand. We expect to reach a capacity of about
1 million tonnes by next year. New export markets are being developed.
Investments are being made in new products. Brand building exercises
are getting the necessary thrust to make your company''s Brand APL
Apollo popular throughout the targeted markets. With this the company
expects to maintain the growth momentum and improve margins.
Projects and Expansion
The Company has undertook massive drive for expansion, capacity
enhancement and de-bottlenecking of its manufacturing capacities in
last couple of years and is confident of achieving ''Vision 2015'' i.e.
production of 1 million MT per annum well within the scheduled time.
New manufacturing lines are added across the locations, new equipments
based on latest technology is being commissioned, old
machineries/plants are replaced with more efficient and state of the
art facilities and plant layouts are reworked to achieve optimum
utilizations of the installed capacities.
Operations
During FY14, the Company has achieved the highest ever volume, turnover
despite the deceleration in the global and domestic economy. Though as
a conscious strategy we lowered our margins to grab larger market share
and become market leader. We extended our geographical reach to the
end-users, strengthen our presence in tier II and tier III cities
either via own warehouse cum branches or through dealer-distributors
network. Additional warehouse-cum-branches were opened at Ananthapur,
Dehradun and Jodhpur to cater to the burgeoning demand in various
industrial applications, thereby, strengthening the APL Apollo brand.
Measures to enhance cost efficiency across the verticals, innovative
approach in production and distribution of the products helped the
Company to control the manufacturing as well as selling and
distribution cost.
Credit Rating
ICRA has assigned long-term rating A- and short-term rating A2 to the
Company and outlook on the long-term rating is stable.
Conversion of warrants and capital
During the year under review, on August 13, 2013, the Company has
allotted 1,115,000 Equity Shares having a nominal value of Rs. 10/- each
to Mr. Ashok Kumar Gupta, a person considered as promoter upon
conversion of equal number of warrants.
The Company allotted 1,500,000 warrants to Mr. Ashok Kumar Gupta, a
person considered as promoter, on a preferential basis on February 14,
2012 at a price of Rs. 145/- each wherein each warrant entitled Mr. Ashok
Kumar Gupta to subscribe for one Equity Share of the Company. Out of
these fifteen lacs warrants, 385,000 warrants were converted in to
equity shares on March 23, 2013. Presently there is nil warrants
pending for conversion.
With the aforesaid allotment of Equity Shares, the issued, subscribed
and paid-up Equity Share capital of the Company has been enhanced from
Rs. 223,236,360/- to Rs. 234,386,360/- divided into 23,438,636 Equity
Shares of Rs. 10/- each. The authorised Equity Share capital of the
Company remained at Rs. 25 crores, consisting of 25,000,000 equity shares
of Rs. 10/- each.
Consolidated financial statements
The consolidated financial statements presented by the Company include
financial information of its subsidiaries prepared in compliance with
applicable Accounting Standards. The audited consolidated financial
statements and the Auditor''s Report thereon form part of this annual
report.
Subsidiaries
The Company has three wholly-owned subsidiaries namely, Shri Lakshmi
Metal Udyog Limited, Lloyds Line Pipes Limited and Apollo Metalex
Private Limited. The Ministry of Corporate Affairs, Government of
India, vide its General Circular No. 2/2011 dated February 8, 2011 has
granted general exemption under Section 212(8) of the Companies Act,
1956 from attaching the balance sheet, profit and loss account and
other documents of the subsidiary companies to the Balance Sheet of the
Company, provided certain conditions are fulfilled. Accordingly, the
annual accounts of the subsidiary companies are not being attached with
the Balance Sheet of the Company.
As per the terms of the said Circular, a statement containing brief
financial details of the Company''s subsidiaries, for the year ended
March 31, 2014 is included in the Annual Report. The Company will make
available the Annual Accounts of the subsidiary companies and the
related detailed information to any member of the Company who may be
interested in obtaining the same. The annual accounts of the subsidiary
companies will also be kept open for inspection at the registered
office of the Company and that of the respective subsidiary companies.
Directors
In accordance with the provisions of Section 152 of the Companies Act,
2013 and the Articles of Association of the Company, Mr. Vinay Gupta
and Mr. S T Gerela retire by rotation at the ensuing Annual General
Meeting and being eligible, offer themselves for reappointment.
Further, with a view to broad-base the Board and bring strategic focus
into the business and ensure better governance in the Company, Mr.
Abhilash Lai was appointed as an Additional Director designated as an
Independent Director by the Board of Directors of the Company in its
meeting held on February 12, 2014 and Mr. Anil Kumar Bansal is
appointed as an Additional Director designated as an Independent
Director by the Board of Directors of the Company in its meeting held
on August 4, 2014.
In terms of the provisions of Section 161(1) of the Companies Act,
2013, Mr. Abhilash Lai and Mr. Anil Kumar Bansal hold office as an
Additional Director only up to the date of the ensuing Annual General
Meeting and in terms of Section 160 of the Companies Act, 2013, the
Company has received a notice from member along with the requisite
deposit proposing his candidature as a Director of the Company.
Pursuant to Section 149 and other applicable provisions of the
Companies Act, 2013, your Directors are seeking appointment of Mr. Aniq
Husain and Mr. S T Gerela as Independent Directors for the terms given
in the Notice of the 29th Annual General Meeting.
The proposals regarding the appointment / re- appointment of the
aforesaid directors are placed for your approval. Details of the
proposal for the appointment of above Independent Directors are
mentioned in the Explanatory Statement under Section
102 of the Companies Act, 2013 of the Notice of the 29th Annual General
Meeting.
The Board of directors of the company recommend their appointment /
re-appointment. The company has received declarations from all the
Independent Directors of the Company confirming that they meet with the
criteria of independence as prescribed both under sub- section (6) of
Section 149 of the Companies Act, 2013 and Clause 49 of the Listing
Agreement with the Stock Exchanges.
Other changes in the Board of Directors of your company: during the
year under review Mr. Rakesh Jinsi and thereafter Mr. C. S. Johri
ceased to be a Director of the company due to their resignation w.e.f.
February 12, 2014 and August 4, 2014 respectively. Your directors place
on record their deep appreciation of valuable services rendered by Mr.
Rakesh Jinsi and Mr. C S Johri during their tenure as Directors of the
Company.
Management''s Discussion and Analysis Report
Management''s Discussion and Analysis Report for the year under review,
as stipulated under Clause 49 of the Listing Agreement with the Stock
Exchanges in India, is presented in a separate section forming part of
the Annual Report.
Auditors and Audit Report
The Auditors of the Company, M/s. VAPS & Co., chartered accountants,
hold office till the conclusion of the ensuing Annual General Meeting
and are eligible for re-appointment
The company has received letters from them to the effect that their
re-appointment, if made, would be within the prescribed limits under
Section 141(3)(g) of the Companies Act, 2013 and they are not
disqualified for re-appointment.
Notes to Accounts, referred in the Auditors Report, are
self-explanatory and therefore do not require any further comments.
Directors'' responsibility statement
Pursuant to the requirement under Section 217 (2AA) of the Companies
1956, with respect to Directors Responsibility Statement, it is hereby
confirmed that:
- In the preparation of the annual accounts for the financial year
ended March 31, 2014 the applicable accounting standards were followed
by the Company and there have been no
material departures from the same,
- The Directors have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the Company''s state of
affairs and profits at the end of financial year,
- The Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956, for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities,
- The Directors have prepared the annual accounts for the financial
year ended March 31, 2014 on a ''going concern'' basis.
Energy conservation, technology absorption, R&D cell and foreign
exchanges earning and outgo
Information pursuant to Section 217(1) (e) of the Companies Act, 1956,
read with the Companies (Disclosure of Particulars in the Report of the
Board of Directors) Rules, 1988, in respect of conservation of energy,
technology absorption and foreign exchange earnings and outgo are
annexed hereto as Annexure ''B'', forming part of this report.
Particulars of employees
The particulars of employee(s) in the Company drawing a remuneration of
Rs. 60 lac or more per annum, if employed throughout the year or Rs. 5 lac
or more per month, if employed for a part of the year pursuant to
Section 217 (2A) of the Companies Act, 1956 read with the Companies
(Particulars of Employees) Rules, 1975 is annexed at Annexure - A.
Corporate Governance report
The Company is committed to maintain the highest standards of Corporate
Governance and adhere to the Corporate Governance requirements set out
by SEBI. The Company has also implemented several best corporate
governance practices as prevalent globally.
Pursuant to Clause 49 of the Listing Agreements with the Stock
Exchanges, a Management Discussion and Analysis, Corporate Governance
Report, Managing Director''s and Auditors'' Certificate regarding
compliance of conditions of
Corporate Governance are made a part of this Annual Report.
Fixed deposits
During FY 2013-14, the Company did not accept/renew any deposits within
the meaning of Section 58A of the Companies Act, 1956 and the rules
made there under and, as such, no amount of principal or interest was
outstanding as on the date of Balance Sheet.
Health and safety
The Company is strongly committed to providing and maintaining a safe,
healthy workplace for the employees and anyone else likely to be
affected by hazards in the workplace. Initiatives that ensure a working
environment that minimises incidents of risks or personal injury, ill-
health or damage to property including employee and workplace
inductions, appropriate training for all employees, effective
supervision, safe plants, equipment and systems of work and regular
consultation on health and safety issues.
The development of a safe working culture is the responsibility of
everyone and can be best achieved through the cooperative efforts of
employees. A safe culture will be reinforced through continual risk
assessment, provision of information concerning such risks and the
promotion, instruction, training and supervision of employees to ensure
safe work practices.
Environment
The Company is committed towards minimising the environmental impact of
its operations and its products by adopting sustainable practices and
continuous improvements in environmental performance. Climate change is
one of the most important issues facing the world today. APL Apollo
aims to contribute positively to the communities around or near its
operational sites and actively participates in community initiatives,
encouraging bio-diversity and environmental conservation.
The Company is committed towards infusing a sense of environmental
responsibility into its normal business practices. APL Apollo products
are part of the solution to the adverse impact of climate change as
steel has inherent environmental advantages by being durable,
adaptable, reusable and recyclable. The Company maintains proactive
approach towards environment management and continuously followed the
ISO 14001 parameters for its manufacturing operations.
Personnel
The Company believes that its employees are key contributors to its
business efficiency. With a focus on attracting and retaining the best
available talent in the industry, the Company offers an excellent
working environment and compensations. The Company has a rich pool of
technical and managerial skills required for the efficient growth of
operations. Your Company enjoys cordial relations with all its
employees.
Acknowledgement
The Directors take this opportunity to place on record their thankful
appreciation for the assistance and co- operation received from the
Company''s shareholders, customers, suppliers, bankers, government and
all other concerned authorities. The Board also wishes to place on
record its sincere appreciation of the employees of all levels, for
their hard work, dedication and commitment.
For and on behalf of the Board
Sanjay Gupta Ashok K. Gupta Vinay Gupta
Chairman Managing Director Director
Regd. Office:
37, Hargobind Enclave,
Vikas Marg, Delhi - 110092
Place : Delhi - 110092 CIN : L74899DL1986PLC023443
Dated : August 4, 2014 www.aplapollo.com
Mar 31, 2013
Dear member''s
The Board of Directors have the pleasure of presenting the 28th annual
report on the business and operations of your Company, together with
the audited statement of financial accounts, consolidated and
standalone, for the year ended March 31, 2013.
Financial results (Figures in Rs. million)
PARTICULARS Consolidated Standalone
FY 2012-13 FY2011-12 FY 2012-13 FY 2011-12
Gross sales 22,471.22 15,362.63 17,537.87 11,658.35
Less : Excise
duty and cess 2,388.39 1,439.72 1,446.69 883.02
Net sales/Income
from operations 20,082.83 13,922.91 16,091.18 10,775.33
Operating EBIDTA 1,595.38 1,150.83 937.83 716.39
Add : Other income 17.11 7.63 10.31 5.67
Less : Finance cost 429.49 335.91 320.05 232.33
Less : Depreciation
and amortisation 125.08 93.22 78.79 55.47
Profit before
exceptional
items and tax 1,057.76 729.34 549.29 434.26
Less : Exceptional
items 7.68 4.48 3.66 4.10
Profit before
tax (PBT) 1,050.08 724.86 545.63 430.16
Less : Tax expense 363.65 234.31 199.08 142.64
Profit for the
year (PAT) 686.43 490.55 346.55 287.52
Add : Balance in
profit and
loss account 1,258.93 846.18 704.43 495.34
Amount available
for appropriation 1,945.36 1,336.75 1,050.98 782.86
Less :
Appropriations :
Proposed dividend
on Equity Shares 111.62 42.59 111.62 42.59
Tax on dividends 18.11 7.07 18.11 7.07
Transfer to
general reserve 50.00 28.75 50.00 28.75
Interim dividend
paid - - - -
Corporate dividend tax - - - -
Closing balance 1,765.64 1,258.93 871.26 704.44
Dividend
The Board recommended dividend of Rs.5 per fully paid-up Equity Shares
on 22,323,636 of Rs.10 each (Financial Year 2011-12: 12 per fully
paid-up Equity Shares on 21,296,683 of Rs.10/- each) for the year ended
March 31, 2013. The dividend on Equity Shares is subject to the
approval of the shareholders at the ensuing Annual General Meeting.
Overview
The overall performance of the Company was satisfactory during FY
2012-13 despite the worsening health of the Indian economy due to
internal and external factors such as high inflation, elevated interest
rates, depreciating rupee, low industrial production, among others. The
economic growth of India also slowed down and was pegged at 5% forcing
the manufacturing industries to plan their strategies in a more
cautious and informed manner to achieve the desired results. The
outlook for the Indian and the global economy for FY13 and FY14 is
positive with the reformatory measures undertaken together with the
increase in GDF of the world at large, as projected by IMF. The same is
estimated to grow to 3.3% and 4% during 2013 and 2014 respectively.
There are many other factors such as improved inflows and remittances,
enhancement of exports, among others which will contribute
significantly in reducing the current account deficit and to improve
the overall performance further.
The Company has constantly emphasised on achieving its aim for FY 2015.
It is the firm belief of the Company that by taking focused and
innovative steps in terms of enhancing production capacity,
implementing new technologies, starting new mills, networks / supply
chains, and manufacturing new and diversified products, it can mitigate
the risks and advance on the path of growth as witnessed year by year,
with confidence.
The outlook for the global economy is expected to progressively improve
(assuming the absence of any adverse events) with more accommodative
monetary policies, improving fiscal stability resulting in a steady
restoration of confidence during the current financial year and the
next financial year as well. However, it remains a tough task for all
the developed economies to face the existing challenges and improve the
overall situation.
The consumption pattern for steel-made products will rise in India,
assuming a normal monsoon, consequently resulting in the growth in the
earnings of the farm sector. The government has taken effective
measures such as forming a cabinet committee making investments
mediated towards the timely clearances of projects, increasing the
focus on infrastructural development in semi-urban and rural areas, the
demand for steel products in the current year will increase. However,
surging imports at incentivised duty rates under the Free Trade
Agreements with Japan and Korea remain major challenges for the Indian
steel industry. In this tough economical scenario we choose to remain
cautious and continual endeavour towards tapping new domestic and
international markets and end users through our nationwide distribution
network and making available qualitative diversified products at
competitive prices.
Projects and expansion
The Company has executed its plans duly and is hopeful to attain
''Vision 2015'' i.e. production of 1 million MT per annum before the
scheduled time. New projects at Hosur and Murbad plants are
progressing as per schedule and foundation/commission of new plant(s)
are also on the Company''s agenda for FY 2013-2014. The capex plans
undertaken by the Company to attain a dominant position are expected to
be finished in FY 2013-14. The projects under implementation include
installation of new manufacturing lines, de-bottlenecking of assembly
lines, installing auxiliary equipments and replacement of old
machinery.
Operations
During FY 2012-13, the Company has achieved the highest ever volume of
Â4,64,000 tonnes despite the deceleration in the global and domestic
economy. Industry sectors like telecom, solar and wind power, among
others are the main revenue centres for the Company to which new
supplies were provided. Your Directors are very optimistic to get more
orders from these sectors in FY 2013-14 and in the subsequent years. We
extended our geographical reach to the end -users. Moreover an
increase in the price realisation of steel tubes, introduction of new
products, a judicious product mix and larger offtake of pre-galvanised
steel tubes and hollow sections as well as the premium product segment
resulted in an improvement of margins. Measures to enhance cost
efficiency helped the Company control the rise in interest charges
emanating from higher working capital requirements. The completion of
the de-bottlenecking measures and the functioning of the new line at
Murbad, near Mumbai has aided in increased operational efficiency and
higher production in the financial year under review. Three additional
warehouse-cum-branches were opened at Solan and two in Ahmedabad to
cater to the burgeoning demand in various industrial applications,
thereby, strengthening the APL Apollo brand.
Pursuant towards the aim of being the number one player in the
manufacturing of steel tubes and pipes in the near future your
Directors have taken initiatives to substantially expand its production
capacity through installation of new tube mills at Hosur and Murbad
plant and intends to commission new plant(s) near our existing plants.
Credit Rating
ICRA has assigned long-term rating A- and short-term rating A2 to the
Company and outlook on the long-term rating is stable.
Conversion of warrants and capital
The Company has allotted 1,641,953 warrants to M/s. APL Infrastructure
Private Limited, a promoter group entity, on a preferential basis on
December 22, 2010, wherein each warrant entitled M/s. APL
Infrastructure Private Limited to subscribe for one Equity Share of the
Company at a price of Rs.176 each. On June 21, 2012, M/s. APL
Infrastructure Private Limited exercised its right to convert balance
641,953 warrants into Equity Shares at a price of Rs.176 each.
Accordingly, 641,953 Equity Shares having a nominal value of Rs.10 each
were allotted to M/s. APL Infrastructure Private Limited, a promoter
group entity, on June 21, 2012 at a premium of Rs.166 per share
aggregating to Rs.11.30 crore. (10 lac equity shares were allotted to
M/s. APL Infrastructure Private Limited in the financial year 201 1
-2012).
Further, the Company has allotted 1.500.000 warrants to Mr. Ashok Kumar
Gupta, a person considered as promoter, on a preferential basis on
February 14, 2012, wherein each warrant entitled Mr. Ashok Kumar Gupta
to subscribe for one Equity Share of the Company at a price of Rs.145
each. On March 23, 2013, Mr. Ashok Kumar Gupta exercised its right to
convert 385.000 warrants into Equity Shares at a price of Rs.145 each.
Accordingly, 385.000 Equity Shares having a nominal value of Rs.10 each
were allotted to Mr. Ashok Kumar Gupta, Promoter, on March 23, 2013 at
a price of Rs.145 each aggregating to Rs.5.58 crore.
With the aforesaid allotment of Equity Shares, the issued, subscribed
and paid- up Equity Share capital of the Company has been enhanced from
Rs.212,966,830 to Rs.2,232,36,360 divided into 22,323,636 Equity Shares
of Rs.10 each. The authorised Equity Share capital of the Company
remained at Rs.25 crores, consisting of 25,000,000 equity shares of
Rs.10 each.
Consolidated financial statements
The consolidated financial statements presented by the Company include
financial information of its subsidiaries prepared in compliance with
applicable Accounting Standards. The audited consolidated financial
statements and the Auditor''s Report thereon form part of this annual
report.
Subsidiaries
The Company has three wholly-owned subsidiaries namely, Shri Lakshmi
Metal Udyog Limited, Lloyds Line Pipes Limited and Apollo Metalex
Private Limited. The M inistry of Corporate Affairs, Government of
India, vide its General Circular No. 2/2011 dated February 8, 2011 has
granted general exemption under Section 212(8) of the Companies Act,
1956 from attaching the balance sheet, profit and loss account and
other documents of the subsidiary companies to the Balance Sheet of the
Company, provided certain conditions are fulfilled. Accordingly, the
annual accounts of the subsidiary companies are not being attached with
the Balance Sheet of the Company.
As per the terms of the said Circular, a statement containing brief
financial details of the Company''s subsidiaries, for the year ended
March 31, 2013 is included in the Annual Report. The Company will make
available the Annual Accounts of the subsidiary companies and the
related detailed information to any member of the Company who may be
interested in obtaining the same.
The annual accounts of the subsidiary companies will also be kept open
for inspection at the registered office of the Company and that of the
respective subsidiary companies.
Scheme of merger
The Company has acquired certain entities as its wholly owned
subsidiaries and the Company is now proposing to amalgamate its
subsidiary namely Lloyds Line Pipes Limited with it for synergising the
capabilities of this unit so as to ensure efficient and cost effective
operations, in accordance with the laws as may be prevailing and
applicable at the time of such corporate restructuring.
In view of the above and the precedents laid down by the various
company courts, and as a measure of abundant precaution, it is proposed
to alter Clause lll(B) relating to "Objects that are incidental or
ancillary to the attainment of the main objects" to include the power
to amalgamate, merge or absorb, into, other Company or companies or
vice-versa.
The proposed alteration in Clause lll(B) can be conveniently and
advantageously combined and carried out along with the existing
objects/activities of the Company.
Pursuant to provisions of Sections 16, 17 and 192AoftheAct, any
alteration in the Objects Clause of the Memorandum of Association
requires approval of the members by way of special resolution through
postal ballot.
Directors
In accordance with the Companies Act, 1956, and pursuant to Article No.
89 of the Articles of Association of the Company, Mr. Sameer Gupta and
Mr. Aniq Husain retire by rotation at the ensuing Annual General
Meeting and being eligible, offer themselves for reappointment.
Further, with a view to broad-base the Board and bring strategic focus
into the business and ensure better governance in the Company, Mr.
Rakesh Jinsi was appointed as an Additional Director by the Board of
Directors of the Company in its meeting held on March 23, 2013.
In terms of the provisions of Section 260 of the Companies Act, 1956,
Mr. Rakesh Jinsi holds office as an Additional Director only up to the
date of the ensuing Annual General Meeting and in terms of Section 257
of the Companies Act, 1956, the Company has received a notice from Mr.
Ashok Kumar Gupta, a member along with the requisite deposit proposing
his candidature as a Director of the Company.
Necessary resolutions for the appointment/reappointment of the
aforesaid Directors have been included in the notice convening the
Annual General Meeting. None of the Directors are disqualified from
being appointed as Directors as specified in the terms of Section
274(1) (G) of the Companies Act, 1956.
Management''s Discussion and Analysis Report
Management''s Discussion and Analysis Report for the year under review,
as stipulated under Clause 49 of the Listing Agreement with the Stock
Exchanges in India, is presented in a separate section forming part of
the Annual Report.
Auditors and Audit Report
The Auditors of the Company, M/s. VAPS & Co., chartered accountants,
retire at the conclusion of the ensuing Annual General Meeting and have
confirmed their eligibility and willingness to accept office, if
reappointed, and have further confirmed that the said appointment would
be in conformity with the provisions of Section 224(1 B) of the
Companies Act, 1956.
Notes to Accounts, referred in the Auditors Report, are
self-explanatory and therefore do not require any further comments.
Directors'' responsibility statement
Pursuant to Section 217 (2AA) of the Companies (Amendment) Act, 2000,
your Directors confirm that:
In the preparation of the annual accounts for the financial year ended
March 31, 2013 the applicable accounting standards were followed by the
Company and there have been no material departures from the same,
They have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the Company''s state of
affairs and profits at the end of financial year,
They have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956, for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities,
They have prepared the annual accounts for the financial year ended
March 31, 2013 on a ''going concern'' ''basis.
Energy conservation, technology absorption, R & D cell and foreign
exchanges earning and outgo
Information pursuant to Section 217(1) (e) of the Companies Act, 1956,
read with the Companies (Disclosure of Particulars in the Report of the
Board of Directors) Rules, 1988, in respect of conservation of energy,
technology absorption and foreign exchange earnings and outgo are
annexed hereto as Annexure ''B'', forming part of this report.
Particulars of employees
The particulars of employee(s) in the Company drawing a remuneration of
Rs.60 lac or more per annum, if employed throughout the year or Rs.5
lac or more per month, if employed for a part of the year pursuant to
Section 217 (2A) of the Companies Act, 1956 read with the Companies
(Particulars of Employees) Rules, 1975 is annexed at Annexure - A.
Corporate Governance report
The Company is committed to maintain the highest standards of Corporate
Governance and adhere to the Corporate Governance requirements set out
by SEBI. The Company has also implemented several best corporate
governance practices as prevalent globally.
Pursuant to Clause 49 of the Listing Agreements with the Stock
Exchanges, a Management Discussion and Analysis, Corporate Governance
Report, Managing Director''s and Auditors'' Certificate regarding
compliance of conditions of Corporate Governance are made a part of
this Annual Report.
Fixed deposits
During FY 2012-13, the Company did not accept/renew any deposits within
the meaning of Section 58A of the Companies Act, 1956 and the rules
made there under and, as such, no amount of principal or interest was
outstanding as on the date of Balance Sheet.
Health and safety
The Company is strongly committed to providing and maintaining a safe,
healthy workplace for the employees and anyone else likely to be
affected by hazards in the workplace. Initiatives that ensure a working
environment that minimises incidents of risks or personal injury,
ill-health or damage to property including employee and workplace
inductions, appropriate training for all employees, effective
supervision, safe plants, equipment and systems of work and regular
consultation on health and safety issues.
The development of a safe working culture is the responsibility of
everyone and can be best achieved through the cooperative efforts of
employees. A safe culture will be reinforced through continual risk
assessment, provision of information concerning such risks and the
promotion, instruction, training and supervision of employees to ensure
safe work practices.
Environment
The Company is committed towards minimising the environmental impact of
its operations and its products by adopting sustainable practices and
continuous improvements in environmental performance. Climate change is
one of the most important issues facing the world today. APL Apollo
aims to contribute positively to the communities around or near its
operational sites and actively participates in community initiatives,
encouraging biodiversity and environmental conservation.
The Company is committed towards infusing a sense of environmental
responsibility into its normal business practices. APL Apollo products
are part of the solution to the adverse impact of climate change as
steel has inherent environmental advantages by being durable,
adaptable, reusable and recyclable. The Company maintains proactive
approach towards environment management and continuously followed the
ISO 14001 parameters for its manufacturing operations.
Personnel
The Company believes that its employees are key contributors to its
business efficiency. With a focus on attracting and retaining the best
available talent in the industry, the Company offers an excellent
working environment and compensations. The Company has a rich pool of
technical and managerial skills required for the efficient growth of
operations. Your Company enjoys cordial relations with all its
employees.
Acknowledgement
The Directors take this opportunity to place on record their thankful
appreciation for the assistance and co- operation received from the
Company''s shareholders, customers, suppliers, bankers, government and
all other concerned authorities. The Board also wishes to place on
record its sincere appreciation of the employees of all levels, for
their hard work, dedication and commitment.
For and on behalf of the Board
SANJAY GUPTA ASHOK K. GUPTA VINAY GUPTA
Chairman Managing Director Director
Regd. Office:
Delhi 110092 37, Hargobind Enclave,
May 30, 2013 Vikas Marg, Delhi - 110092
Mar 31, 2012
The Board of Directors take pleasure in presenting the 27 th annual
report on the business and operations of your Company, together with
the Audited statement of Financial Accounts, consolidated and
standalone, for the year ended March 31, 2012.
Financial results (Rs.in Millions)
PARTICULARS Consolidated Standalone
Current
year Previous
year Current
year Previous
year
Gross Sales 15362.63 9851.48 11726.09 6433.77
Less : Excise
duty & Cess 1439.72 799.54 883.02 541.45
Net Sale / Income
From Operations 13922.91 9051.94 10843.07 5892.32
Operating EBIDTA 1150.84 896.56 722.66 564.38
Add : Other Income 7.63 19.70 6.43 17.79
Less : Finance Cost 335.91 226.54 232.33 158.45
Less : Depreciation
& amortisation 93.22 61.89 62.48 47.15
Profit before
Exceptional
Item & Tax 729.34 627.83 434.28 376.57
Less : Exceptional
Item 4.48 1.75 4.10 145
Profit before
Tax (PBT) 724.86 626.08 430.18 375.12
Less : Tax Expense 234.31 195.14 142.63 121.32
Profit for
the year (PAT) 490.55 430.94 287.55 253.80
Add : Balance in
profit and
loss account 846.18 502.59 495.34 328.85
Amount available
for appropriation 1336.73 933.53 782.89 582.65
Less :
Appropriations :
Proposed/
interim dividend 42.59 4059 42.59 40.59
Tax on dividends 7.07 6.74 7.07 674
Transfer to
General Reserve 28.75 40.00 28.75 40.00
Closing Balance 1258.32 846.20 704.48 495.32
Dividend
The Board recommended dividend of Rs. 2/- per fully paid-up equity shares
on 2,12,96,683 of Rs. 10/- each (Financial Year 2010-11: Rs. 2/- per fully
paid-up equity shares on 2,02,96,683 of Rs. 10/- each) for the year ended
March 31, 2012. The dividend on equity shares is subject to the
approval of the shareholders at the Annual General Meeting.
Overview
The FY 2011-12 witnessed tough global and domestic economic conditions.
An economic Survey of 2011-12 reveals lowered GDP growth rates for the
current year and next year. The inflation (WPI) at 9.1% in Financial
Year 2011-12 led to consistent interest rate hikes, increase of raw
materials cost, affecting demand adversely. The manufacturing sector
grew by 3.9% during the year as compared to 7.6% during 2010-11. The
Indian economy faced challenges of tackling higher inflation, high
fiscal deficit, higher volatility in foreign exchange with depreciating
rupee against major global currencies . However, the Company believes
that with its focused and innovative steps in terms of enhanced
production capacity and diversified range of products. It can mitigate
the challenges and advances on the path of growth.
On the global front, the US economy was still struggling to come back
on path of recovery, unprecedented sovereign debt crisis in some of the
European countries hugely compounded business conditions not only in
Europe but other countries as well. Significant tightening, caution and
reduced level of business confidence continue to put downward pressure
on growth prospects around the world.
There has been a diversification in the product mix of the steel
industry in India towards sophisticated value-added steel used in the
automotive sector, heavy machinery and infrastructure. The Company has
expanded its product range to over 350 sizes leading into significant
increase in turnover.
Indian GDP is estimated at 7.6% in FY 2012-13 as per Prime Minister's
Economic Advisory Council (PMEAC). Increased governmental impetus on
growth of semi-urban and rural areas through investments in
infrastructure, construction and industrial sectors will enhance the
demand of steel products in the current year and it is expected that
Indian steel industry will surpass the GDP growth rate We are
continually endeavouring to tap domestic and international new markets
and end users through our nationwide distribution network.
Project and Expansion
The Company has initiated plans to attain its Vision 2015 i.e.
production of 1 million MT per annum. New projects at Hosur and Murbad
plants are progressing as per schedule. The capex plans undertaken by
the Company to attain a dominant position in the industry are expected
to be commissioned in phases over FY 2012- 13 and 2013-14. The projects
under implementation include installation of new manufacturing lines,
de-bottlenecking, auxiliary equipments and replacement of old
machinery.
Operations
During FY 2011-12, the Company has achieved highest ever volumes of
~3,00,000 tonnes despite tough global and domestic economic conditions.
The new industry sectors like telecom, solar and wind power, among
others are the main revenue centres for the Company to which new
supplies were provided. Your Directors are very optimistic about
executing more orders from these sectors in FY 2012-13 and subsequent
years. The extension of geographical reach to the end-users, increase
in price realisation of steel tubes, judicious product mix and larger
offtake of pre-galvanised steel tubes and hollow sections, premium
product segment resulted in improvement of margins. Cost efficiency
measures helped the Company to control the rise in interest charges
emanating from higher working capital requirements. Completion of de-
bottlenecking at Murbad, near Mumbai has aided in increased
-operational efficiency and higher production. The new line at the
facility is nearing completion. Eight additional warehouses cum
branches were opened at Ludhiana, Rudrapur, UP border, Faridabad,
Jaipur, Pune, Mumbai and Ahmedabad to cater to the burgeoning demand in
various industrial applications, thereby, strengthening APL Apollo
brand.
In our pursuit to be number one player in the manufacturing of steel
tubes and pipes in years to come your Directors have taken initiatives
to substantially expand its production capacity through installation of
new tube mills at Hosur and Murbad plant.
Credit Rating
ICRA has assigned long-term rating A- and short-term rating A2 to the
Company and outlook on the long-term rating is stable.
Conversion of Warrants and Capital
The Company has allotted 16,41,953 warrants to M/s. APL Infrastructure
Private Limited, a promoter group entity, on preferential basis on
December 22, 2010, wherein each warrant entitled M/s. APL
Infrastructure Private Limited to subscribe for one equity share of the
Company at a price of Rs. 176/- per share. On March 14, 2012, M/s. APL
Infrastructure Private Limited exercised its right to convert 10,00,000
warrants into equity shares at a price of Rs. 176/- per share.
Accordingly, 10,00,000 equity shares having nominal value of Rs. 10/-
each were allotted to M/s. APL Infrastructure Private Limited, a
promoter group entity, on March 14, 2012 at a premium of Rs. 166/- per
share aggregating to Rs. 17.60 crores.
With the aforesaid allotment of equity shares, the total paid-up equity
share capital of the Company has been enhanced from Rs. 20,29,66,830/- to
Rs. 21,29,66,830/- divided into 2,12,96,683 equity shares of Rs. 10/- each.
The authorised equity share capital of the Company remained at Rs. 25
crores, consisting of 2,50,00,000 equity shares of Rs. 10/- each.
Preferential Issue of Warrants
With a view to raise funds for financing the Company's growth and
expansion projects, investment in subsidiaries and joint ventures,
technology upgradation and modernisation, acquisitions, working capital
requirements and general corporate purposes, the Company has allotted
15,00,000 compulsorily convertible warrants, to Mr. Ashok Kumar Gupta,
considered as a promoter, on preferential basis, on February 14, 2012.
Each warrant entitles the holder thereof, to subscribe to one equity
share of the Company at a price of 145/- per share. In compliance of
the provisions of SEBI (Issue of Capital and Disclosure Requirements)
Regulations 2009, an amount equivalent to 25% of the price aggregating
to Rs. 5,43,75,000 (Rupees five crores forty three lacs and seventy five
thousand only) was received from the allottee and the option to convert
the warrants into equity shares is exercisable before August 13, 2013.
The aforesaid warrants together with 6,41,953 warrants allotted to M/s.
APL Infrastructure Pvt. Ltd., were outstanding for conversion as at
March 31, 2012.
During the current financial year M/s. APL Infrastructure Pvt. Ltd. (a
promoter group entity) exercised their option to get 6,41,953 warrants
converted in to equal number of equity shares within 18 months from the
date of warrant allotment, and consequently the Company allotted
6,41,953 equity shares of Rs. 10/- each on June 21, 2012.
As such issued, subscribed and paid-up capital of the Company stood at
Rs. 21,93,86,360/- comprising 2,19,38,636 equity shares of Rs. 10/- each.
Subsidiaries
The Company has three wholly-owned subsidiaries namely, Shri Lakshmi
Metal Udyog Limited, Lloyds Line Pipes Limited and Apollo Metalex
Private Limited. The Ministry of Corporate Affairs, Government of
India, vide its general circular No. 2/2011 dated February 8, 2011 has
granted general exemption under Section 212(8) of the Companies Act,
1956 from attaching the balance sheet, profit and loss account and
other documents of the subsidiary companies to the balance sheet of the
Company, provided certain conditions are fulfilled. Accordingly, the
annual accounts of the subsidiary companies are not being attached with
the balance sheet of the Company.
As per the terms of the said circular, a statement containing brief
financial details of the Company's subsidiaries, for the year ended
March 31, 2012 is included in the annual report. The Company will make
available the annual accounts of the subsidiary companies and related
information to any member of the Company who may be interested in
obtaining the same. The annual accounts of the subsidiary companies
will also be kept open for inspection at the registered office of the
Company and that of the respective subsidiary companies.
Directors
In accordance with the Companies Act, 1956, and pursuant to Article No.
89 of the Articles of Association of the Company, Mr. Vinay Gupta and
Mr. S. T. Gerela retire by rotation at the ensuing Annual General
Meeting and being eligible, offer themselves for reappointment.
Further, with a view to broad-base the Board and bring strategic focus
in business and ensure better governance of the increased level of
business activities of the Company, Mr. Ashok Kumar Gupta was appointed
as an Additional Director by the Board of Directors of the Company in
its meeting held on October 19, 2011. He was further designated /
appointed as Managing Director of the Company and his appointment as
Managing Director was approved by the members of the Company in their
Extra-ordinary General Meeting held on November 18, 2011. In terms of
this member's approval, Mr. Ashok Kumar Gupta has joined the Company
as Managing Director w.e.f. May 1, 2012 and shall be occupying this
office till January 31, 2017, the day upto which his appointment has
been approved by the members.
However, in terms of the provisions of Section 260 of the Companies
Act, 1956, Mr. Ashok Kumar Gupta holds office as an Additional Director
only up to the date of this Annual General Meeting and in terms of
Section 257 of the Companies Act, 1956, the Company has received notice
from a member along with requisite deposit proposing his candidature as
a Director of the Company.
Mr. Sanjay Gupta, who has been Managing Director of the Company for
almost a decade and under his stewardship the Company has achieved
national and international recognitions, with his vision and leadership
the Company has attained a remarkable market value and steady growth.
APL Apollo today stands as the premier manufacturer of ERW steel tubes
and pipes, a government recognised export house, and a household name
for quality products. He was appointed as Chairman of the Company
(under Whole-time Director category) of the Company for a period of
five years with effect from April 1, 2012.
Necessary resolutions for the appointment/reappointment of the
aforesaid Directors have been included in the notice convening the
Annual General Meeting. None of the Directors are disqualified from
being appointed as Directors as specified in the terms of Section
274(1) (g) of the Companies Act, 1956.
Management's Discussion and Analysis Report
Management's Discussion and Analysis Report for the year under review,
as stipulated under Clause 49 of the Listing Agreement with the Stock
Exchanges in India, is presented in a separate section forming part of
the Annual Report.
Consolidated financial statements
The consolidated financial statements presented by the Company include
financial information of its subsidiaries prepared in compliance with
applicable Accounting Standards. The audited consolidated financial
statements and the Auditor's Report thereon form part of this annual
report.
Auditors and Audit Report
The Auditors of the Company, M/s. VAPS & Co., Chartered Accountants,
retire at the conclusion of the ensuing Annual General Meeting and have
confirmed their eligibility and willingness to accept office, if
reappointed, and have further confirmed that the said appointment would
be in conformity with the provisions of Section 224(1B) of the
Companies Act, 1956.
Notes to accounts, referred in the Auditors Report, are self-
explanatory and therefore do not require any further comments.
Directors' responsibility statement
Pursuant to Section 217 (2AA) of the Companies (Amendment) Act, 2000,
your Directors confirm that:
In the preparation of the annual accounts for the financial year ended
March 31, 2012 the applicable accounting standards were followed by the
Company and there have been no material departures from the same,
They have selected such accounting policies and applied them
consistently and made judgment and estimates that are reasonable and
prudent so as to give a true and fair view of the Company's state of
affairs and profits at the end of financial year,
They have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956, for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities,
They have prepared the annual accounts for the financial year ended
March 31, 2012 on a 'going concern' basis.
Energy conservation, technology absorption, R & D cell and foreign
exchanges earning and outgo
Information pursuant to Section 217 (1) (e) of the Companies Act, 1956,
read with the Companies (Disclosure of Particulars in the Report of the
Board of Directors) Rules, 1988, in respect of conservation of energy,
technology absorption and foreign exchange earnings and outgo are
annexed hereto as Annexure 'A', forming part of this report.
Particulars of Employees
As required under Section 217(2A) of the Companies Act, 1956 and rules
made there under, no such employee of the Company's were in receipt of
remuneration of more than Rs. 60,00,000 (Rupees Sixty Lacs only) during
the year ended March 31, 2012 or of more than Rs. 5,00,000 per month
during any part thereof.
Corporate Governance Report
The Company is committed to maintain the highest standards of Corporate
Governance and adhere to the Corporate Governance requirements set out
by SEBI. The Company has also implemented several globally benchmarked
Corporate Governance practices.
Pursuant to Clause 49 of the Listing Agreements with the Stock
Exchanges, a Management Discussion and Analysis, Corporate Governance
Report, Managing Director's and Auditors' Certificate regarding
compliance of conditions of Corporate Governance are made a part of
this annual report.
Fixed deposits
During FY 2011-12, the Company did not accept/renew any deposits within
the meaning of Section 58A of the Companies Act, 1956 and the rules
made there under and, as such, no amount of principal or interest was
outstanding as on the date of balance sheet.
Health and safety
The Company is strongly committed to providing and maintaining a safe,
healthy workplace for the employees. Initiatives that ensure a working
environment that minimises incidents of risks or personal injury, ill
health or damage to property including employee and workplace
inductions, appropriate training for all employees, effective
supervision, maintenance of safety at plants, equipment and systems of
work and regular consultation on health and safety issues.
The development of a safe working culture is the responsibility of
everyone and can be best achieved through the cooperative efforts of
employees. A safe culture will be reinforced through continual risk
assessment, provision of information concerning such risks and the
promotion, instruction, training and supervision of employees to ensure
safe work practices.
Environment
The Company is committed to minimising the impact of its operations and
its products on the environment by adopting sustainable practices.
Climate change is one of the most important issues facing the world
today. APL Apollo aims to contribute positively to the communities
around or near its operations and actively participates in community
initiatives, encourages biodiversity and nature conservation.
The Company is committed to ensure the incorporation of environmental
responsibility as a part of its normal business practice. APL Apollo
products are part of the solution to climate change as steel has
inherent environmental advantages by being durable, adaptable, reusable
and recyclable. The Company maintains a proactive approach towards
environmental management and continuously follows ISO 14001 for
manufacturing operations.
Personnel
The Company believes that its employees are key contributors to its
business success and efficient operations. With prime focus on
attracting and retaining the talent in the industry, the Company offers
an excellent working environment and compensations. The Company has a
rich pool of technical and managerial skills required for the efficient
growth of operations. Your Company enjoys cordial relations with all
its employees.
Acknowledgement
The Directors take this opportunity to place on record their thankful
appreciation for the assistance and cooperation received from the
Company's shareholders, customers, suppliers, bankers, the government
and all other concerned authorities. The Board also wishes to place on
record its sincere appreciation of the employees of all levels, for
their hard work, dedication and commitment.
For and on behalf of the Board
SANJAY GUPTA ASHOK K. GUPTA VINAY GUPTA
Chairman Managing Director Director
Regd. Office:
Delhi 110092 37, Hargobind Enclave,
September 3, 2012 Vikas Marg, Delhi à 110092
Mar 31, 2011
Dear Members,
The Board of Directors hereby presents the 26th Annual Report on the
business and operations of your Company along with the financial
statements, consolidated and standalone, for the year ended March 31,
2011.
Performance
Your Company recorded a significant growth during the financial year
under review. The consolidated gross sales grew to Rs. 98,514.83 lacs,
registering a growth of 47.93% over the previous year's sales of Rs.
66,594.83 lacs. Earnings before depreciation, interest and taxation
[EBIDTA] stood at Rs. 8,926.69 lacs for the current year, whereas net
profit is Rs. 4,309.43 lacs, as compared with Rs. 2,977.50 lacs in the
previous year. During the year under report, consolidated sale of steel
tubes was 225,142 MT, compared with 156,584 MT in the preceding year.
Dividend
As a part of the Silver Jubilee celebrations, the Company declared two
interim dividends at 10% each during the financial year 2010-11 on the
2,02,96,683 outstanding equity shares. The total dividend payout works
out to Rs. 4,05,93,366, i.e. Rs. 2 per equity share.
Further, with a view to conserve resources to support the increased
level of activities and ongoing capital expenditure, your Directors
considered it prudent not to recommend final dividend on the equity
shares, hence, the aforesaid interim dividends be considered and
approved as final dividend for the financial year under discussion.
Overview
During the financial year 2010-11, the world continued on a path to
regain economic stability. Emerging markets like India, China and other
Asian countries, as also certain countries in Latin America, continued
to register high levels of growth and continued to be centres of
significant economic activity as compared with the developed countries,
which experienced modest economic activities, and accordingly, in
contrast with its global counterparts, the Indian steel industry
continued to enjoy strong demand from several sectors resulting in
increased volumes and a richer product mix.
The Indian steel industry, the fourth- largest producer of steel in the
world after China, Japan and the US, diversified its product mix to
include sophisticated value-added steel used in the automotive sector,
heavy machinery and physical infrastructure. The steel pipe industry,
which forms a major segment of the steel industry by virtue of its
various critical and non-critical uses, showed robust growth on account
of strong demand from the domestic and export market. Additionally, the
industry's impressive performance also owes a great deal to the
economic stimulus packages mooted by the government towards sustaining
infrastructure spending and measures to promote spending on consumer
durables and transportation.
Continued steel usage growth in India not only ensured the Company's
phenomenal performance during the year under review but also encouraged
it to deliver more and more via continuous improvement, consolidation,
magnification of its operations and enrichment of its product mix.
In the recent past, we focused on brand strengthening, entered into new
territories, increased our market penetration by reaching smaller
consumption centers which enabled us to cut intermediaries' margin and
make our products more competitive. We are continually endeavouring to
invest in new technologies resulting into new and better products to
create unprecedented value for our stakeholders.
However, inflation has now emerged as the new global economic
challenge, driven by a substantial rise in the prices of almost all
commodities, mineral resources and energy, impacting almost all
industrial sectors. Consequently, the years ahead could be challenging,
as the Indian government endeavours to curb inflationary growth.
Central Banks' anti- inflation measures will affect access to credit
and could slow down investment levels as also consumer demand. The most
significant impact will however be from the slowdown in major
infrastructure projects in the areas of road construction, mass transit
systems and power generation. These would have further impact on per
capita disposable income and the demand for goods and services.
Detailed analysis covered in the 'Management Discussion and Analysis'
pages forms part of this Directors' Report.
Acquisition
To strengthen your Company's position in the emerging markets,
especially in the high-end segment, and in the western part of India
and for the accelerated pace of growth in the market expansion
geographically, your Company strategically acquired 100% shares of M/s
Lloyds Line Pipes Limited (hereinafter known as LLPL) from its
erstwhile shareholders in all cash deal, inter-alia making it the
Company's wholly-owned subsidiary on November 11, 2010.
The ready to use manufacturing facilities of LLPL are API certified and
being proximate to ports, these facilities will not only ensure savings
in logistics cost, but would also enable higher exports. This will
further help the Company in extending its presence into potential
markets and to take advantage of the increased demand for all its
products. Besides these visible benefits, some yet unidentified
synergies are also anticipated from, among other things, the new
customer franchise, product development, the impact of consolidation,
bidding synergies and other financial synergies.
Operations
There was a turnaround since outburst of recession, for the economy at
large and the Company witnessed the effects of the same. In line with
the growth plans of the Company, your Directors continued making
constant efforts towards enhancement of value for all stakeholders. The
Company is the only player having nationwide distribution network
supported by multi-location manufacturing facilities, thus leveraging
the benefits of chain economics. With the full operation of Phase II
and III of the Hosur manufacturing facility during the year, the
Company significantly enhanced its product offerings and witnessed
improvement in its overall margins. Five additional warehouses-
cum-branches were opened at Nagpur, Goa, Bengaluru, Hyderabad and
Cochin to cater to the burgeoning demand in various industrial
applications, thereby, strengthening the APL Apollo brand.
Further, with an objective towards continuous growth coupled with
achieving leadership footprint, the Company is focused on expanding its
capacity through both organic and inorganic routes and entering into
adjacent business spaces via various initiatives. Post acquisition of
LLPL, having API certified manufacturing lines, the consolidated
production capacity was augmented to 490,000 MTPA against 274,000 MTPA
in FY10 and the Company is targeting emerging demand in the city gas
distribution, tubing and casing, a niche area which is under penetrated
at present. Efforts are being made to break through into manufacture of
low dia high thickness seamless equivalent tubes and dynamically
balanced special tubes through the implementation of RSM technology.
Your Directors are confident that these efforts will reap huge benefits
in future.
Capital
There was no change in the Company's issued, subscribed and paid-up
capital and it stands at Rs. 2,029.67 lacs as on date. The authorised
share capital of the Company remained at Rs. 25 crores, comprising 250
lac shares of Rs. 10 each.
Preferential Issue
With a view to raise funds for financing the Company's growth and
expansion projects, acquisitions, investment in subsidiaries, working
capital requirements and general corporate purposes, the Company
allotted 16,41,953 Compulsorily Convertible Warrants, to APL
Infrastructure Private Limited, a promoter group entity, on
preferential basis, on December 22, 2010.
Each warrant entitles the holder thereof, to subscribe to one ordinary
share of the Company at a price of Rs. 176 per share. In compliance with
the provisions of SEBI (Issue of Capital and Disclosure Requirements)
Regulations 2009, an amount equivalent to 25% of the price aggregating
to Rs. 7,22,45,932 (Rupees seven crores twenty two lacs forty five
thousand nine hundred thirty two only) was received from the allottee
and the option to convert the warrants into ordinary shares is
exercisable before June 22, 2012. The aforesaid warrants are
outstanding for conversion till date.
Consolidated financial statements
The consolidated financial statements presented by the Company include
financial information of its subsidiaries prepared in compliance with
applicable Accounting Standards. The audited consolidated financial
statements and the Auditor's Report thereon form part of this annual
report.
Subsidiaries
The Company has three wholly-owned subsidiaries namely, Apollo Metalex
Private Limited, Shri Lakshmi Metal Udyog Limited and Lloyds Line Pipes
Limited. The Ministry of Corporate Affairs, Government of India, vide
its general circular No. 2/2011 dated February 8, 2011 granted general
exemption under Section 212(8) of the Companies Act, 1956 from
attaching the balance sheet, profit and loss account and other
documents of the subsidiary companies to the balance sheet of the
Company, provided certain conditions are fulfilled. Accordingly, the
annual accounts of the subsidiary companies are not being attached with
the balance sheet of the Company.
As per the terms of the said circular, a statement containing brief
financial details of the Company's subsidiaries, for the year ended
March 31, 2011 is included in the annual report. The Company will make
available the annual accounts of the subsidiary companies and the
related detailed information to any member of the Company who may be
interested in obtaining the same.
The annual accounts of the subsidiary companies will also be kept open
for inspection at the Registered Office of the Company and that of the
respective subsidiary companies.
Directors
In accordance with the Companies Act, 1956, and pursuant to Article No.
89 of the Articles of Association of the Company, Mr. Sameer Gupta and
Mr. Chandra Shankar Johri retire by rotation at the ensuing Annual
General Meeting and being eligible, offer themselves for reappointment.
Necessary resolutions for the appointment/reappointment of the
aforesaid Directors have been included in the notice convening the AGM.
None of the Directors are disqualified from being appointed as
Directors as specified in the terms of Section 274(1) (g) of the
Companies Act, 1956.
Further, Mr. Mukesh K. Jain, an Independent Non-Executive Director on
the Board of the Company, left for his heavenly abode on July 2, 2010.
The Board places on record, its since appreciation for his leadership
and contribution to the growth of the Company.
Auditors and Audit Report
The Auditors M/s VAPS & Co., Chartered Accountants, retire at the
Annual General Meeting and have confirmed their eligibility and
willingness to accept office, if reappointed.
Notes to Accounts, referred in the Auditors Report, are
self-explanatory and therefore do not require any further comment.
Directors' responsibility statement Pursuant to Section 217 (2AA) of
the Companies (Amendment) Act, 2000, your Directors confirm that:
- In the preparation of the annual accounts for the financial year
ended March 31, 2011 the applicable accounting standards were followed
by the Company and there has been no material departures from the same,
- They have selected such accounting policies and applied them
consistently and made judgment and estimates that are reasonable and
prudent so as to give a true and fair view of the Company's state of
affairs and profits at the end of financial year,
- They have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956, for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities,
- They have prepared the annual accounts for the financial year ended
March 31, 2011 on a going-concern basis.
Energy conservation, technology absorption, R&D and foreign exchange
earnings and outgo
Information pursuant to Section 217 (1) (e) of the Companies Act, 1956,
read with the Companies (Disclosure of Particulars in the Report of the
Board of Directors) Rules, 1988, in respect of conservation of energy,
technology absorption and foreign exchange earnings and outgo is as
follows:
I. Conservation of Energy
(a) Energy conservation measures taken:
The Company gives the highest priority for conservation of energy by
using a mix of technology changes, process optimisation methods and
other conventional methods, on an ongoing basis. Various energy
conservation measures taken by the Company are:
i. Use of energy saving devices like TFT monitors, CFL tubes, LED
lights, among others.
ii. Optimisation of load factor.
iii. Defined AC working hours and temperature to suit seasonal changes
iv. Optimisation of processes to enhance production.
(b) Additional Investment and proposals, if any, being implemented for
reduction of consumption of energy: The Company is making constant
efforts to locate all the possible areas where additional investment
can be considered for conservation of energy. Also, the Company is
contemplating use of Liquefied Natural gas (LNG) for captive power
generation.
(c) Impact of the measures taken above and consequent impact on the
cost of production of goods: Use of LNG would contribute in substantial
saving in fuel expenses thus, reducing per metric tonne power cost and
will also ensure environmental protection.
The above measures resulted in substantial saving in the consumption of
energy and consequent saving in the cost of production.
(d) Total energy consumption and energy consumption per unit of
production:
II. Technology Absorption Research and Development (R&D)
1. Specific areas in which R&D carried out by the Company: The
research and development activities were focused towards improvement in
products and processes and consequent reduction in cost. With the
introduction of RSM technology, we are developing dynamically balanced
tubes which find applications in high speed conveyors and various other
applications. In addition to this, the Company installed a new process
named 'cold sawing' which enables to produce round and hollow sections
with burr free ends. R&D was also carried out for development of
different varieties of steel tubes to meet the specific requirements of
customers in various sectors.
2. Benefits derived as a result of the above R&D: The research and
development activity resulted in process
optimisation, cost saving, reduction in manpower and in time as well as
product development. The Company stepped towards the development of
special tubes, thus gaining a competitive edge.
3. Future plan of action: The Company will further improve the quality
of its products and continue with its activities in the field of
research and development with a view to introduce new and innovative
products.
Technology absorption, adaptation and innovation
1. Efforts, in brief, made towards technology absorption, adaptation
and innovation: The Company continues to lay emphasis on development
and innovation of in-house technological and technical skills. Constant
efforts are being made to upgrade the existing standards and to keep
pace with the advances in technological innovations.
The Company is implementing Rotary Sizing Mill (RSM) technology, from
Kusakabe, Japan, world leader in tube making industry with a view, to
develop high precision dynamically balanced steel tubes.
2. Benefits derived as a result of the above efforts: The
implementation of RSM technology will contribute towards improving the
existing products, thus enabling the Company to cater to the needs of
diverse industrial applications.
III. Foreign exchange earnings and outgo:
(a) Activities relating to exports, initiatives taken to increase
exports, development of new export markets for products and services
and export plans:
The Company is presently exporting its products to more than 35
countries across the world. It has a constant watch on the developments
in the global steel tubes and pipes Industry with focus on untapped
markets by providing value- added products customised around customer
requirements. The Company's representatives also participate in various
trade fairs and exhibitions concerning the industry, from time to time.
With an objective to increase our presence in new geographies and
territories, the Company acquired LLoyds Line Pipes Limited during
FY11, having manufacturing facilities contiguous to the ports in
western part of the country, thus providing an opportunity to augment
export sales.
Particulars of Employees
There is no employee whose particulars are required to be furnished in
terms of Section 217(2A) of the Companies Act, 1956 and rules made
there under.
Corporate Governance Report
The Company is committed to maintain the highest standards of Corporate
Governance and adhere to the Corporate Governance requirements set out
by SEBI. The Company also implemented several best Corporate Governance
practices as prevalent globally.
Pursuant to Clause 49 of the Listing Agreements with the stock
exchanges, a Management Discussion and Analysis, Corporate Governance
report, Managing Director's and Auditors' Certificate regarding
compliance of conditions of Corporate Governance are made a part of the
annual report.
Fixed deposits
We have not accepted any fixed deposits till date and, hence, no amount
of principal or interest was outstanding as on the date of balance
sheet.
Health & Safety
The Company is strongly committed to providing and maintaining a safe,
healthy workplace for the employees and anyone else likely to be
affected by hazards in the workplace. Initiatives that ensure a
working environment that minimises incidents of risks or personal
injury, ill health or damage to property include employee and workplace
inductions, appropriate training for all employees, effective
supervision, safe plants, equipment and systems of work and regular
consultation on health and safety issues.
The development of a safe working culture is the responsibility of
everyone and can be best achieved through the cooperative efforts of
employees. A safe culture will be reinforced through continual risk
assessment, provision of information concerning such risks and the
promotion, instruction, training and supervision of employees to ensure
safe work practices.
Environment
The Company is committed to minimising the environmental impact of its
operations and its products by adopting sustainable practices and
continuous improvements in environmental performance. Climate change is
one of the most important issues facing the world today. APL Apollo
aims to contribute positively to the communities around or near its
operations and actively participates in community initiatives,
encourages biodiversity and nature conservation.
The Company is committed to ensuring the incorporation of environmental
responsibility as a part of its normal business practice.
Personnel
The Company believes that its employees are key contributors to its
business success and efficiency operations. With prime focus on
attracting and retaining the talent in the industry, the Company offers
an excellent working environment and compensations. The Company has a
rich pool of technical and managerial skills required for the efficient
growth of operations. Your Company enjoys very cordial relations with
all its employees.
Acknowledgement
The Directors take this opportunity to place on record their thankful
appreciation for the assistance and co- operation received from the
Company's shareholders, customers, suppliers, bankers, government and
all other concerned authorities. The Board also wishes to place on
record its sincere appreciation of the employees of all levels, for
their hard work, dedication and commitment.
For and on behalf of the Board
Sanjay Gupta
Chairman-cum-
Managing Director
Delhi 110092 Vinay Gupta
August 30, 2011 Director
Regd. Office:
37, Hargobind Enclave,
Vikas Marg, Delhi - 110092
Mar 31, 2010
The Board of Directors hereby presents the 25th annual report on the
business and operations of your Company along with the financial
statements, consolidated and standalone, for the year ended March 31,
2010.
Performance
Your Company recorded a significant growth during the financial year
under review. The consolidated net sales grew to?61,800.84 lacs,
registering a growth of 17.34% over the previous years sales of
?52,666.39 lacs. Earnings before depreciation, interest and taxation
[EBDITA] stood at ?6,628.48 lacs in the current year, as compared with
?2,852.76 lacs in the previous year. During the year under report,
consolidated sale of steel tubes was 1,56,584 MT, compared with
1,15,214 MT in the preceding year.
Dividend
As a part of Silver Jubilee Celebrations, the Company declared two
interim dividends of 10% each for the financial year 2009-10 on the
2,02,96,683 outstanding equity shares. The total dividend payout works
out to ?4,05,93,366, i.e. ?2 per equity share. These interim dividends
be considered and approved as final dividend for the financial year
under discussion.
Overview
Following two years of the worst global economic downturn in most
peoples living memory, which resulted in sharp decline in volumes in
the steel industry and a consequent significant plunge in steel prices
across the world, the world seems to be regaining some economic
stability but with dramatic shifts in the concentration of economic
strength. The growth rates in developed world economies are still
extremely moderate, while countries in the developing world have
registered high levels of economic growth and some have become new
centers of global capacity, demand and control over natural resources.
The steel industry has also been impacted by these global shifts, and
as a result the requirement of steel is growing in new emerging
markets, where downstream user industries are experiencing high demand.
India emerged as a strong economy during this crisis period, where the
demand conditions continued to be relatively stable, even though prices
dropped significantly in line with the global pricing scenario, and as
such is being considered as a new and robust centre of economic
activities.
Recognising the need for growth and riding on the rising Indian
economy, APL Apollo put into action initiatives that will ensure its
growth is sustainable, including expansion, new acquisitions, retail,
value-added manufacturing and strategic procurement, among others.
Detailed analysis covered in the Ãmanagement discussion and analysis
pages forms part of this Directors Report.
Operations
We started our journey twenty five years ago with an impeccable mission
and have carved an unparalleled position in the industry. Our passion
for excellence, investment in technology and engineering, a genuine
team spirit, clear objectives, ethical business practices and
well-defined goals have infused an accelerated pace of growth in the
expansion of our Company. Through integrated product pipeline,
world-class brand, upstream and downstream tie- ups along with a
rapidly growing domestic market and consumption centers across the
world we have come to acquire a leaders status.
Our multi-location manufacturing facilities offer a comprehensive range
of steel products, ERW black tubes and pipes, hot-dipped galvanised and
pre- galvanised tubes, hollow sections and structurals, among others.
Towards our goals of growth, we have transformed five of the our
branches in Ghaziabad, Gurgaon, Jaipur, Pune and Ludhiana to a
full-fledged steel product retail chain under the name of APL Apollo
Steel World. Additionally, we expect to soon open five more outlets in
Cochin, Chennai, Hyderabad, Bangaluru and Ahmedabad.
Expansions
We commissioned world-scale manufacturing facilities at Hosur, Tamil
Nadu, with installed capacity of 2,00,000 MTPA, with a view to support
the Companys current operations and its growth aspirations, strengthen
our position in the southern part of India and extend the brand ÃAPL
Apolloî in promising markets. Today, we are the largest player of the
segment having multi-locational installed capacities of 4,00,000 MTPA.
After having manufacturing lines in northern and southern India, we are
actively pursuing the opportunity to have a presence in West India.
Under active consideration is either a greenfield project or
acquisition of an existing facility of similar capacity as that of
Hosur Plant.
Change of name
ÃAPL Apollo signifies our passion and commitment for innovations,
superior quality, services and trust. Considering the outstanding
reputation of our vibrant brand ÃAPL Apollo in both Indian and
international markets, the name of the Company was changed from ÃBihar
Tubes Limited to ÃAPL Apollo Tubes Limited to attain a strategic
image makeover and brand building.
Capital
There was no change in the Companys issued, subscribed and paid-up
capital and it stands at ?2,029.67 lacs as on date. The authorised
share capital of the Company remained at ?25 crores, consisting of 250
lac shares of ?10 each.
Subsidiaries
The Company has two subsidiaries namely Apollo Metalex Private Limited
and Shri Lakshmi Metal Udyog Limited. A statement of the Companys
interest in the subsidiary along with all other statutory information
pursuant to Section 212 of the Companies Act, 1956, is enclosed and
forms part of this annual report.
Directors
In accordance with the Companies Act, 1956, and pursuant to Article No.
89 of the Articles of Association of the Company, Mr. Vinay Gupta and
Mr. Aniq Husain retire by rotation at the ensuing Annual General
Meeting and being eligible, offer themselves for reappointment.
The Company lost one of its valuable Directors, Mr. Mukesh K Jain, due
to his untimely demise on July 2, 2010. The Directors would like to
place on record their appreciation for his leadership and contributions
to the growth of the Company.
Necessary resolutions for the appointment/re-appointment of the
aforesaid Directors have been included in the notice convening the AGM.
None of the Directors are disqualified from being appointed as
Directors as specified in the terms of Section 274(1) (g) of the
Companies Act, 1956.
Auditors and Audit Report
The Auditors M/s VAPS & Co., Chartered Accountants, retire at the
Annual General Meeting and have confirmed their eligibility and
willingness to accept office, if re-appointed.
Notes to Accounts, referred in the Auditors Report, are
self-explanatory and therefore do not require any further comment.
Consolidated financial statements
Consolidated financial statements were prepared by your Company in
accordance with the requirements of the Accounting Standards issued by
the Institute of Chartered Accountants of India. The audited
consolidated financial statements and the Auditors Report thereon form
part of this annual report.
Directors responsibility statement
Pursuant to Section 217 (2AA) of the Companies (Amendment) Act, 2000,
your Directors confirm that:
* In the preparation of the annual accounts for the financial year
ended March 31, 2010 the applicable accounting standards were followed
* They have selected such accounting policies and applied them
consistently and made judgment and estimates that are reasonable and
prudent so as to give a true and fair view of the Companys state of
affairs and profits at the end of financial year
* They have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956, for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities
* They have prepared the annual accounts for the financial year ended
March 31, 2010 on a going-concern basis
Energy conservation, technology absorption, R&D cell and foreign
exchange earnings and outgo
Information pursuant to Section 217 (1) (e) of the Companies Act, 1956,
read with the Companies (Disclosure of Particulars in the Report of the
Board of Directors) Rules, 1988, in respect of conservation of energy,
technology absorption and foreign exchange earnings and outgo are as
below:
(Amount in Rs.)
Particular 2010 2009
I. Purchase
Unit 47,94,069.00 45,92,289.00
Total amount (Rs) 2,37,71,368.00 2,19,04,304.00
Rate per unit (Rs) 4.96 4.77
II. Own generation through DG
Unit 24,08,292.00 13,50,600.00
Fuel consumed (Ltr) 7,17,173.00 4,49,975.00
Fuel consumed (Rs) 2,24,17,044.00 1,43,14,137.00
Cost per unit (Rs) 9.31 10.60
III. Foreign exchange earnings 23,96,20,154.80 82,57,08,230.12
Foreign exchange outgo 6,82,60,250.40 4,04,48,237.00
Corporate Governance
As per the requirements of Clause 49 of the Listing Agreement with the
stock exchanges, a detailed report on compliance of Corporate
Governance is annexed herewith and forms part of this annual report.
The Auditors certificate on compliance with the mandatory requirements
of Clause 49 is annexed to this report.
Fixed deposits
We have not accepted any fixed deposits till date and, as such, no
amount of principal or interest was outstanding as of the balance sheet
till date.
Health and safety
The Company is strongly committed to providing and maintaining a safe,
healthy workplace for employees and anyone else likely to be affected
by hazards in the workplace. Initiatives that ensure a working
environment that minimises incidents of risk or personal injury, ill
health or damage to property include employee and workplace inductions,
appropriate training for all employees, effective supervision, safe
plants, equipment and systems of work and regular consultation on
health and safety issues.
The development of a safe working culture is the responsibility of
everyone and can be best achieved through the cooperative efforts of
employees. A safe culture will be reinforced through continual risk
assessment, provision of information concerning such risks and the
promotion, instruction, training and supervision of employees to ensure
safe work practices.
Environment
The Company is committed to minimising the environmental impact of its
operations and products by adopting sustainable practices and
continuous improvements in environmental performance. Climate change is
one of the most important issues facing the world today. APL Apollo
aims to contribute positively to the communities around or near its
operations and actively participates in community initiatives, and
encourages biodiversity and nature conservation.
The Company is committed to ensuring the incorporation of environmental
responsibility as a part of its normal business practice.
Personnel
The Company believes that its employees are key contributors to its
business success and efficiency operations. With prime focus on
attracting and retaining the talent in the industry, the Company offers
an excellent working environment and compensations. The Company has a
rich pool of technical and managerial skills required for the efficient
growth of operations.
Your Company enjoys very cordial relations with all its employees.
During the year under report, except Mr. Sanjay Gupta, Managing
Director of the Company, who is in receipt of 24,00,000 per annum
having 17 years of experience, associated with the Company since
December 30, 1994, there is no employee in respect of whom the
particulars are required to be disclosed under Section 217 (2A) of the
Companies Act, 1956, read with the Companies (Particulars of Employees)
Rules, 1975.
Acknowledgement
The Directors take this opportunity to places on record their thankful
appreciation for the assistance and co- operation received from the
Companys shareholders, customers, suppliers, bankers, government and
all other concerned authorities. The Board also wishes to place on
record its sincere appreciation of the employees of all levels, for
their hard work, dedication and commitment.
For and on behalf of the Board
Delhi 110092 Sanjay Gupta Vinay Gupta
September 1, 2010 Managing Director Director
Regd. Office:
37, Hargobind Enclave,
Vikas Marg, Delhi - 110092
Mar 31, 2009
We are delighted to present our report on the business and operations
of the Company for the year ended March 31, 2009.
FINANCIAL HIGHLIGHTS
Your Company recorded a significant growth during the financial year
under review. The Net Sales grew to Rs. 39,531.20 Lacs registering a
growth of 40% over the previous years sales of Rs. 28,236.35 Lacs.
However, due to adverse economic circumstances and softening of steel
prices the Earnings before Depreciation, Interest and Taxation [EBDITA]
stood at Rs.1,784.28 Lacs in the current year as compared to Rs.
3,001.90 Lacs in the previous year.
BUSINESS OVERVIEW
While most steel companies across geographies enjoyed strong demand and
record earnings in the first half of 2008,the demand for steel weakened
significantly after August 2008 with the global financial crisis
adversely impacting the construction sector and capital spending.
Steel prices also declined significantly across the world with more
than a 50% reduction in the second half, compared to the first half of
2008-09. It is very likely that the annual benchmark rates in 2009 for
steel will be settled at a significantly lower level. For most of the
world, the overall downward trend continued into the first quarter of
2009 in tandem with the global downturn. Reduced demand and falling
prices put extreme pressure on the profits, margins and liquidity of
the steel companies.
The slowdown in the real economy the world over is likely to delay
recovery in the steel industry in 2009. Steel demand is likely to
stabilise in the latter part of 2009 leading to a recovery in 2010.
Emerging economies were also affected by the economic crisis, but to a
lesser degree. The Indian economy, which is recovering faster than its
global peers from the current slowdown, appears better positioned
Detailed analysis covered in Management Discussion and Analysis pages
forms part of Directors Report.
ACQUISITIONS
To strengthen your Companys position in the emerging markets,
especially in high end segment, and in southern part of India and for
the accelerated pace of growth in the market expansion geographically,
your Company has strategically acquired Shri Lakshmi Metal Udyog
Limited [herein after known as SLMUL] in a non cash deal . For
acquisition of 100% Equity of SLMUL from its shareholders your Company
issued 17,98,333 (Seventeen Lacs Ninety Eight Thousand Three Hundred
and Thirty Three) Equity Shares of Rs. 10/- (Rupees Ten) each on
preferential basis on 28th April 2008 to the then shareholders of
SLMUL.
SLMUL has installed capacity of 60,000 MTPA for manufacturing ERW Black
Pipe, Galvanized Pipes, Hollow Sections, and Structural Tubes. The
acquisition will be a high degree integration resulting in an extremely
strong balance sheet, earning per share on consolidated basis, and very
strong earning potential. This will further help the Company in
extending its brand APL Apolloî in promising markets, and additional
installed capacity will enable your company to take advantage of
increased demand for its all products.
In addition to these visible benefits, some yet unidentified synergies
are also anticipated from, among other things, the new customer
franchise, product development, the impact of consolidation, bidding
synergies and other financial synergies etc.
HOSUR PROJECT
Company has been examining various potential growth opportunities from
time to time in line with its long term objectives and riding on growth
drivers of the Industry, the Company has significantly increased its
installed capacity, expanded its value added quality product range,
added pre galvanized sheet manufacturing facility and manufacturing
facilities in southern part of India through acquisition route in the
recent past.
All these acquisitions and expansion of existing installed capacities
have helped the Company in achieving its Goals. However, for
accelerated pace of growth, strengthen the Companys position in the
emerging markets, especially in southern part of India, (there is huge
demand-supply gap in this particular region) it became necessary to set
up a green field project thereat and accordingly, your Companys
international standards mega project with installed capacity of
2,00,000 MTPA is under implementation at Hosur (Tamilnadu) a
strategically preferred location to cater southern India demand and
exports to Sri Lanka and other south asian countries.
Commercial production of the first phase of Hosur Project is expected
by third week of September 2009
DIVIDEND
The Company is planning major expansions ahead. Keeping in view of the
Companys growth momentum, execution of expansion plans, the
capital-intensive nature of the business and the consequent higher
expenditure on account of depreciation and interest, no dividend is
being recommended.
SUBSIDIARIES
The Company has two wholly owned subsidiaries namely Apollo Metalex
Pvt. Ltd. and Shri Lakshmi Metal Udyog Ltd. A Statement of the
Companys interest in the subsidiary along with all other statutory
information pursuant to sec. 212 of the Companies Act, 1956 is enclosed
and form part of Annual Report.
DIRECTORS
In accordance with the Companies Act, 1956 and pursuant to Article No.
89 of Articles of Association of the Company, Mr. C S Johri and Mr. S T
Gerela retires by rotation at ensuing Annual General Meeting and being
eligible, offers themselves for reappointment.
Further, to strengthen the board and boost the professionalism across
the organization Mr. Mukesh K Jain was appointed as additional
directors of the Company on April 30, 2009 and as such hold office up
to the date of the ensuing Annual General Meeting. In terms of Section
257 of the Companies Act, 1956 he is proposed to be appointed in the
ensuing AGM.
Necessary resolutions for the appointment / re- appointment of the
aforesaid directors have been included in the notice convening the AGM.
None of the directors are disqualified from being appointed as
directors as specified in terms of Section 274(1)(g) of the Companies
Act, 1956.
AUDITORS & AUDIT REPORT
The Auditors M/s VAPS & Co. Chartered Accountants retire at the Annual
General Meeting and have confirmed their eligibility and willingness to
accept office, if re-appointed.
Notes to the Accounts referred in the Auditors Report are
self-explanatory and therefore do not call for any further comment. The
Company does not have any approved gratuity fund and it is the policy
of the company to provide gratuity at the time it is paid.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 217 (2AA) of the Companies (Amendment) Act, 2000,
your directors confirm that:
- In the preparation of the annual accounts for the financial year
ended March 31, 2009 the applicable accounting standards have been
followed;
- They have selected such accounting policies and applied them
consistently and made judgment and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company at the end of financial year and of the profit of the
Company for year under review;
- They have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
- They have prepared the annual accounts for the financial year ended
March 31, 2009 on a going concern basis.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, R & D CELL AND FOREIGN
EXCHANGE EARNING & OUTGO.
Information Pursuant to Section 217 (1) (e) of the Companies Act, 1956,
Read with Companies (Disclosure of Particulars in the Report of the
Board of Directors) Rules, 1988 in respect of conservation of Energy,
Technology Absorption and Foreign Exchange Earnings & outgo are as
below:
(Amount in Rs.)
Particulars 2009 2008
I. Purchase
Unit 45,92,289 44,08,250
Total Amount (Rs.) 2,19,04,304 1,85,56,423.00
Rate per unit in Rs. 4.77 4.21
II. Own Generation Through
Diesel Generator
Unit 13,50,600 14,02,323
Fuel Consumed ( in Ltr.) 4,49,975 4,56,500
Fuel Consumed ( in Rs.) 1,43,14,137.75 130,62,985.49
Cost per Unit in Rs. 10.60 9.32
III. Foreign Exchange
Earnings 82,57,08,230.12 32,78,22,912.82
Foreign Exchange outgo 4,04,48,237.00 6,74,84,625.68
CONSOLIDATED FINANCIAL STATEMENT
A Consolidated Financial Statements have been prepared by your company
in accordance with AS-21 issued by ICAI. The audited Consolidated
Financial Statements together with Auditors Report thereon forms part
of the Annual Report.
PERSONNEL
The Company believes that its employees are key contributors to its
business success and efficient operations. With prime focus on
attracting and retaining the talent in the industry, the company offers
excellent working environment and compensations. The company has a rich
pool of technical and managerial skills required for the efficient
growth of operations.
Your Company enjoys very cordial relations with all its employees.
During the year under report, there is no employee in respect of whom
the particulars are required to be disclosed under section 217 (2A) of
the Companies Act, 1956 read with the Companies (Particulars of
Employees) Rules 1975.
CORPORATE GOVERNANCE REPORT
As per the requirements of Clause 49 of the Listing Agreement with the
Stock Exchange, a detailed report on compliance on Corporate Governance
is annexed herewith and form part of the annual report. The auditors
certificate on compliance with the mandatory requirements of clause 49
is annexed to this report.
FIXED DEPOSITS
We have not accepted any fixed deposits till date and, as such, no
amount of principal or interest was outstanding as of the balance sheet
till date.
ACKNOWLEDGMENT
The directors take this opportunity to places on record their thankful
appreciation for the assistance and co- operation received from the
companys shareholders, customers, suppliers, bankers, government and
all other concerned authorities. The Board also wish to place on record
their sincere appreciation of the employees of all levels for their
hard work, dedication and commitment.
For and on behalf of the Board
(SANJAY GUPTA) (VINAY GUPTA)
MANAGING DIRECTOR DIRECTOR
Regd. Office:
37, Hargobind Enclave,
Vikas Marg, Delhi-110092.
Delhi 110 092
September 4, 2009
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