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Notes to Accounts of APL Apollo Tubes Ltd.

Mar 31, 2023

(i) As at March 31, 2021, Assets classified as held for sale consists of plot of land whose fair valuation was H64.26 crore. The valuation was performed by Government of India approved valuer. The fair value measurement categorised as a level 3 fair value based on the inputs of the valuation technique used. The fair value was derived using the market comparable approach based on recent market prices without any significant adjustments being made to the market observable data. No impairment loss was recognised in reclassification of the land as asset held for sale as the Directors of the Company, based on valuation report, expected that the fair value less cost to sell to be higher than the carrying amount.

During the previous year ended March 31,2022, the Company, instead of selling the said land to APL Apollo Building Products Private Limited (subsidiary company), decided to lease out the same on long term basis and accordingly reclassified the land to Investment Property. Fair value of land as on March 31,2023 is H71.52 crore (March 31, 2022 : H63.07 crore). The valuation was performed by Government of India approved valuer. The fair value measurement categorised as a level 3 fair value based on the inputs of the valuation technique used. The fair value was derived using the market comparable approach based on recent market prices without any significant adjustments being made to the market observable data.

(ii) The Company intends to sell guest house and freehold land & building at Attebele, which it no longer plans to utilise in next 12 months. Assets classified as held for sale consist of land and building whose aggregate fair value is H15.00 crore and H9.00 crore for guest house and freehold land & building at attebele respectively. The valuation was performed by Government of India approved valuer. The fair value measurement categorised as a level 3 fair value based on the inputs of the valuation technique used. The fair value was derived using the market comparable approach based on recent market prices without any significant adjustments being made to the market observable data. No impairment loss has been recognised in reclassification of the land and building as asset held for sale as the Directors of the Company, based on valuation report, expects that the fair value less cost to sell to be higher than the carrying amount.

The title deeds of Freehold land & building located Attebele, Karnataka included above having gross carrying value of H8.62 crore (March 31,2022 : H8.62 crore) (net carrying value of H7.93 crore as at March 31,2023, March 31,2022 : H8.04 crore) are in the name of Best Steel Logistics Limited (erstwhile name of Apollo Tricoat Tubes Limited). Apollo Tricoat Tubes Limited has been merged with the Company in the current year under section 230 and section 232 of the Companies Act, 2013 in terms of approval of Hon''ble National Company Law Tribunal, Principal bench, New Delhi and the land is pending transfer in the name of the Company post merger. The Company is holding the property since October 14, 2016. As at March 31, 2022, freehold land & building located at Attebele, Karnataka was classified in Property, plant & equipment.

(i) The Company in previous year ended March 31,2018 measured its investment in subsidiary on the date of transition to Ind-AS (i.e. April 1,2016) at its fair value and considered the same as its deemed cost. Accordingly the Company has recorded the investment in subsidiary at its fair value of H132.78 crore (original cost H7.21 crore).

(ii) The Company has during the year invested H57.23 crore (March 31,2022 : H17.05 crore) in Blue Ocean Projects Private Limited by subscribing to 20,639 equity shares of H10 each at a premium of H27,715.28 each (March 31, 2022 : 6,636 shares of H10 each at a premium of H25,678.47 each).

(iii) The Company has during the year invested H0.66 crore (March 31,2022 : Nil) in A P L Apollo Tubes Company L.L.C. by subscribing to 300 equity shares of AED 1,000 each.

(iv) The Company has during the year invested H340.00 crore (March 31,2022 : H154.30 crore) in APL Apollo Building Products Private Limited by subscribing to 340,000,000 equity shares (March 31,2022 : 154,312,500 equity share) of H10 each.

(v) The Company has during the year invested H103.98 crore (March 31,2022 : H0.10 crore) in APL Apollo Mart Limited by subscribing to 103,980,274 shares (including H75.66 crore to subscribe to 75,660,774 equity shares paid in previous year and pending allotment against right issue) (March 31,2022 : 100,000 equity shares of H10 each). APL Apollo Mart Limited was incorporated on December 7, 2021. During the current year, the shares pending allotment against the right issue were alloted.

(i) The Company holds 3.35% (March 31, 2022 : 3.35%) equity shares of Clover Energy Private Limited, a Company engaged in the business of providing solar energy to its customers.

(ii) The Company holds 3.91% (March 31, 2022 : 3.91%) equity shares of AMPSOLAR Urja Private Limited, a Company engaged in the business of providing solar energy to its cutomers.

(iii) The Company holds 26.00% (March 31,2022 : 3.91%) equity shares of Radiance Ka Sunrise Two Private Limited, a Company engaged in the business of providing solar energy to its cutomers.

(iv) The Company has during the year invested H0.08 crore in APL Apollo Foundation (''Foundation''), a Company registered under section 8 of the Companies Act, 2013. The Company was incorporated on April 19, 2022 and the purpose of the Foundation is to undertake CSR activities. As at March 31,2023, the Company holds 50.00% (March 31,2022 : Nil) equity shares of the Foundation.

a) During the year, the Company has given loan amounting to H280.00 crore (March 31, 2022 : Nil) carrying interest 8.00 % p.a. to a wholly owned subsidiary viz. APL Apollo Building Products Private Limited for the purpose of meeting its operational and capital requirements. The loan is repayable upto 5 years as and when funds are available with APL Apollo Building Products Private Limited. The maximum amount outstanding during the year was H280.00 crore (March 31,2022 : Nil).

b) During the year, the Company has paid a loan amounting to AED 30,000,000 (Equivalent H67.18 crore) (March 31,2022 : Nil) carrying interest 8.00 % p.a. to a wholly owned subsidiary viz. A P L Apollo Tubes Company L.L.C. for the purpose of meeting its capital expenditure requirements. The loan is repayable upto 5 years as and when funds are available with A P L Apollo Tubes Company L.L.C. The maximum amount outstanding during the year was H67.18 crore (March 31,2022 : Nil).

(ii) Rights, Preferences and restrictions attached to equity shares

The Company has one class of equity shares having a par value of H2 each (March 31, 2022 : H2 each). Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the Annual General Meeting. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

(vi) Share options granted under the Company''s employee share options plans

As at March 31,2023, executives and senior employees held options over 193,750 equity shares of H2 each of the Company. (March 31, 2022 : 387,500 equity shares of H2 each) (see note (vii) below). Share options granted under the Company''s employee share option plan carry no rights to dividends and no voting rights. Further details of the employee share option plan are provided in note 40.

(vii) The Board of Directors in its meeting held on August 6, 2021 recommended (subject to approval by shareholders) bonus issue of 1 (one) equity share of H2 each for every 1 (one) equity shares of H2 each held by shareholders of the Company as on the record date.

Pursuant to the approval of the shareholders through postal ballot (including remote e-voting), the Company alloted 124,896,000 bonus equity shares of H2 each as fully paid-up bonus equity shares, in the proportion of 1 (One) equity share of H2 each for every 1 (One) existing equity shares of H2 each to the equity shareholders of the Company as on record date of September 18, 2021. Consequently, the Company capitalised a sum of H24.98 crore from ''other equity''(securities premium) to ''equity share capital.

Nature and purpose of reserves

(i) Securities premium : Securities premium is used to record the premium on issue of shares. The reserve is utilised in accordance with the provisions of the Indian Companies Act, 2013 ("the Companies Act").

(ii) General reserve : The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. There is no policy of regular transfer. General reserves represents the free profits of the Company available for distribution. As per the Companies Act, certain amount was required to be transferred to General Reserve every time Company distribute dividend. General reserve is not an item of OCI, items included in the general reserve will not be reclassified to profit or loss.

(iii) Capital reserve : The excess of fair value of net assets acquired over consideration paid in a business combination is recognised as capital reserve. The reserve is not available for distribution.

(iv) Retained earnings : It represents unallocated/un-distributed profits of the Company. The amount that can be distributed as dividend by the Company as dividends to its equity shareholders is determined based on the separate financial statements of the Company and also considering the requirements of the Companies Act, 2013. Thus amount reported above are not distributable in entirety.

(v) Share option outstanding account : The Company offers ESOP under which options to subscribe for the Company''s share have been granted to certain employees and senior management. The share option outstanding account is used to recognise the value of equity settled share based payments provided as part of the ESOP scheme. (see note 40)

(i) Deferred liability arises in respect of import of property, plant and equipment without payment of custom duty under Export Promotion Capital Goods Scheme. The income is recognised in Profit or loss on a straight line basis over the useful life of the related assets. (see note 38(b)(2)).

(ii) The Company has deferred liability related to sales tax of H1.05 crore of year ending March, 2016 payable in March, 2026. Using prevailing market interest rates for an equivalent loan of 10.00% in the year of grant, the fair value of loan is estimated at H0.71 crore as on March 31,2023 (March 31,2022 : H0.85 crore). The difference of H0.14 crore (March 31,2022 : H0.20 crore) between the gross proceeds and the fair value of the loan is recognised as deferred income. (See note 21,24 & 25)

(iii) The Company during the year has received interest free loan aggregating to H26.45 crore from government repayable in financial year 2028-2029. Using prevailing market interest rates for an equivalent loan of 7.50% in the year of grant, the fair value of loan is H15.94crore (As at March 31,2022 : Nil). The difference of H10.51 crore (As at March 31,2022 : HNil) between the gross proceeds and the fair value of the loan is is recognised as deferred income. (see note 25)

Nature of security :

(i) Working capital facilities from banks are secured by first pari passu charge on entire present and future current assets and second charge on present and future movable fixed assets of the company situated at Plot No. A-19 and A-20, Sikandarabad Industrial Area, Distt. Bulandshahar, Uttar Pradesh and Plot No. 332 to 338, Alur Village, Perandapalli, Hosur, Tamilnadu and Khasra No. 215, 223/1, 225/7-8, 225/9-10, 227/4, 231/2, 217/1-2 Part, 231/6 Part at village Bendri, Tehsil Raipur, Dist. - Raipur, and M-1, Additional Murbad Industrial Area - V, Kudawali Murbad, Distt. Thane, Maharashtra and Residential Complex situated at Murbad, Distt. Thane, Maharashtra and 443,444,538,539 Wadiaram village Chegunta (Mandal) Medak district Telangana 502255 and KIADB Industrial Area, Plot No. 9-11, Balagaranahalli Village, Attibele, Anekal Taluk, Banglore and Dujana, Dadri, Gautam Budhha Nagar, Uttar Pradesh and Malur, Kolar, Karnataka.

Working capital facilities are further secured by second charge through equitable mortgage of the company land and building situated at Plot No. A-19/A-20, Sikandarabad Industrial Area, Distt. Bulandshahar, Uttar Pradesh and Plot No. 332 to 338, Alur Village, Perandapalli, Hosur, Tamilnadu and Khasra No. 215, 223/1,225/7-8, 225/9-10, 227/4, 231/2, 217/1-2 Part, 231/6 Part at village Bendri, Tehsil Raipur, Dist. - Raipur and 443,444,538,539 Wadiaram village Chegunta (Mandal) Medak district Telangana 502255 and KIADB Industrial Area, Plot No. 9-11, Balagaranahalli Village, Attibele, Anekal Taluk, Banglore and Dujana, Dadri, Gautam Budhha Nagar, Uttar Pradesh and Malur, Kolar, Karnataka. Credit facilities are further secured by personal gurantee of the Mr. Sanjay Gupta and Mr. Vinay Gupta.

36 Allocation of common expenses

(a) The Company has charged back the "Share based expenses" to employees (included under "Employee benefits expense" in note 32) incurred by it to its group companies on cost i.e. on cost to cost basis. The allocation of common expenses has been carried out on the basis of share options held of the Company by employees of the respective companies.

(b) The Company has charged back the common expenses (included under "Employee benefits expense" in note 32 & "Other expenses" in note 35) incurred by it to its group companies on cost i.e. on cost to cost basis. The allocation of common expenses has been carried out on the basis of turnover of the respective companies, as per latest financial statements.

38 Contingent liabilities and commitments (to the extent not provided for)

(H in crore)

Particulars

As at March 31, 2023

As at March 31, 2022

(a) Contingent liabilities (for pending litigations)

(1) Disputed claims/levies in respect of sales tax:

- Reversal of input tax credit

2.89

6.16

- Provisional Assessment

0.46

1.77

3.35

7.93

(2) Disputed claims/levies in respect of excise duty

5.53

6.34

(3) Disputed claims/levies in respect of service tax:

0.94

0.94

(4) Disputed claims/levies in respect of income tax

5.72

2.28

Total

15.54

17.49

(i) Based upon the legal opinion obtained by the management, there are various interpretation issues and thus management is in the process of evaluating the impact of the recent Supreme Court Judgement in relation to non-exclusion of certain allowances from the definition of "basic wages" of the relevant employees for the purpose of determining contribution to provident fund under the Employees Provident Fund & Miscellaneous provisions Act, 1952. Pending issuance of guidelines by the regulatory authorities on the application of this ruling, the impact on the Company, if any, can not be ascertained.

(ii) The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed as contingent liabilities where applicable, in its standalone financial statements. The Company does not expect the outcome of these proceedings to have a materially effect on its standalone financial statements.

(b) Commitments

(1) Estimated amount of contracts remaining to be executed on capital account and not provided for

(i) Property, plant and equipments 57.08 99.94

(2) The Company has obtained EPCG (Export Promotion Capital Goods Scheme) licenses for importing the capital goods without payment of basic custom duty against submission of bonds.

The export obligation is to be fulfilled within a period of 6 years from the date of issuance of license. Under this scheme the Company has to achieve FOB value of exports which will be 6 times of duty saved. Accordingly the Company is required to export of FOB value of H138.58 crore (March 31,2022 H254.24 crore) against which the Company has saved a duty of H23.11 crore (March 31,2022 H42.38 crore).

(3) The Company has given corporate guarantees amounting to H183.00 crore and H1010.00 crore on behalf of its subsidiaries i.e. Apollo Metalex Private Limited and APL Apollo Building Products Private Limited respectively for loans and credit facilities taken by them from banks and financial institutions.The loan outstanding as at March 31,2023 ofApollo Metalex Private Limited is H30.00 crore (March 31,2022 H3.65 crore) and APL Apollo Building Products Private Limited is H443.66 crore (March 31,2022 H238.74 crore).

(4) The Company has other commitments, for purchase orders which are issued after considering requirements per operating cycle forpurchaseofservices,employee''sbenefits.TheCompanydoesnothaveanyotherlongtermcommitmentsormaterialnon-cancellable contractual commitments /contracts, including derivative contracts for which there were any material foreseeable losses.

(c) There has been no delays in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

39 Employee benefit obligations

(a) Defined contribution plans

The Company makes provident fund contributions which are defined contribution plans, for qualifying employees. Under the scheme, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognised H5.18 crore (Year ended March 31,2022 H4.42 crore) for provident fund contributions in the statement of profit and loss. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes. The obligation of the Company is limited to the amount contributed and it has no further contractual nor any constructive obligation.

(b) Defined benefit plans a) Gratuity

The gratuity scheme provides for lump sum payment to vested employees at retirement/death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service or part thereof in excess of 6 months subject to a limit of H0.20 crore (March 31,2022 H0.20 crore). Vesting occurs upon completion of 5 years of service.

During the year, the Company has made contribution of H Nil (March 31, 2022 : H2.50 crore) to APL Apollo Tubes Limited Employees Group Gratuity Trust which has made further contribution to Kotak Mahindra Life Insurance Co. Ltd.

The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method i.e. projected unit credit method has been applied as that used for calculating the defined benefit liability recognised in the balance sheet.

(viii) Risk exposure

The defined benefit obligations have the undermentioned risk exposures :

Interest rate risk : The defined benefit obligation calculated uses a discount rate based on government bonds. If bond yields fall, the defined benefit obligation will tend to increase.

Salary Inflation risk : Higher than expected increases in salary will increase the defined benefit obligation.

Demographic risk : This is the risk of variability of results due to unsystematic nature of decrements that include mortality, withdrawal, disability and retirement. The effect of these decrements on the defined benefit obligation is not straight forward and depends upon the combination of salary increase, discount rate and vesting criteria.

Investment risk : The present value of the defined benefit plan liability is calculated using a discount rate determined by reference to high quality corporate bond yields; if the return on plan asset is below this rate, it will create a plan deficit.

40 Share Based Payments

(a) Employee Share Option Plan :

(i) The ESOS scheme titled "Employee Stock Option Scheme 2015" (ESOS 2015) was approved by the shareholders through postal ballot on July 27, 2015 and December 22, 2015. 7,50,000 options are covered under the Scheme for 750,000 Equity shares (before giving effect of share split and bonus issue).

(ii) During the financial year 2015-16, the Nomination and Remuneration Committee in its meeting held on July 28, 2015 has granted 724,000 options respectively under the ESOS to eligible employees of the Company and its subsidiaries. Each option comprises one underlying equity share. The options granted vest over a period of 4 years from the date of the grant in equal proportion of 25% each year. Options may be exercised within 4 years. The exercise price of each option was the market price of the shares on the stock exchange with the highest trading volume, one day before the date of grant of options. The exercise price was determined at H452.60 per share.

(iii) During the financial year 2016-17, the Nomination and Remuneration Committee in its meeting held on January 28, 2017 has granted 45,000 options under the ESOS to eligible employees of the Company and its subsidiaries. Each option comprises one underlying equity share. The options granted vest over a period of 4 years from the date of the grant in equal proportion of 25% each year. Options may be exercised within 4 years. The exercise price of each option was the market price of the shares on the stock exchange with the highest trading volume, one day before the date of grant of options. The exercise price was determined at H 1,028.80 per share.

(iv) During the financial year 2017-18, the the Nomination and Remuneration Committee in its meeting held on September 9, 2017 and February 5, 2018 has granted 96,000 and 70,000 options respectively, under the ESOS to eligible employees of the Company and its subsidiaries. Each option comprises one underlying equity share. The options granted vest over a period of 4 years from the date of the grant in equal proportion of 25% each year. Options may be exercised within 4 years. The exercise price of each option was the market price of the shares on the stock exchange with the highest trading volume, one day before the date of grant of options. The exercise price was determined at H1,633.05 and H2,124.10 respectively per share.

(v) During the financial year 2019-20, the Nomination and Remuneration Committee in its meeting held on November 9, 2019 has granted 95,000 options under the ESOS to eligible employees of the Company and its subsidiaries (whether in India or abroad). Each option comprises one underlying equity share. The options granted vest over a period of 4 years from the date of the grant in equal proportion of 25% each year. Options may be exercised within 5 years. The exercise price of each option is the market price of the shares on the stock exchange with the highest trading volume, one day before the date of grant of options. The exercise price has been determined at H1,438.55 per share.

(vi) During the financial year 2019-20, the Nomination and Remuneration Committee in its meeting held on November 9, 2019 also recommended reduction in exercise price of options granted on September 9, 2017 and February 5, 2018 to reflect the fall in Company''s share prices. The same was approved by shareholders of the Company on January 27, 2020 through postal ballot. The revised exercise price of each option was the market price of the shares on the stock exchange with the highest trading volume, one day before the date of reduction in exercise price. The revised exercise price was determined at H1,438.55 per share.

i) The earlier exercise price of the Options granted on September 9, 2017 and February 5, 2018 were H1,633.05 and H2,124.10 respectively. The exercise price of these options was reduced in earlier year (See note (a) (vi) above).

(c) Fair value of option granted/ modified

(i) No options were granted during the year ended March 31,2023 and March 31,2022.

(ii) During the previous year ended March 31,2020, the incremental fair value of the options granted on September 9, 2017 and February 5, 2018 due to modification were determined at H 131.46 and H372.36 respectively which has been recognised as expense over the period from the modification date to the end of vesting period. The expense of original option grant continues to be recognised as if the terms had not been modified.

(i) C.Y. represents amount as at and for the year ended March 31,2023 and P.Y. represents amount as at and for the year ended March 31, 2022.

(ii) Amount of expense of gratuity and compensated absences is taken on actuarial basis.

(iii) The term loan and other credit facilities of the Company are also secured by personal guarantee of directors of the Company, Mr. Sanjay Gupta and Mr. Vinay Gupta.

(iv) The Company has given corporate guarantees amounting to H183.00 crore and H1010.00 crore on behalf of its subsidiaries i.e. Apollo Metalex Private Limited and APL Apollo Building Products Private Limited respectively for loans and credit facilities taken by them from banks and financial institutions. The loan outstanding as at March 31, 2023 of Apollo Metalex Private Limited is H30.00 crore (March 31,2022 H3.65 crore) and APL Apollo Building Products Private Limited is H443.66 crore (March 31,2022 H238.74 crore).

(v) The treasury and finance operations of the Company and its subsidiaries (APL Group Companies) are managed centrally. Based on the funding requirement, APL group companies provide short term advances in the nature of loan to each other and these are repaid as and when funds are available with respective company. Also interest is charged for the period on such advance in the nature of loan remains outstanding to ensure arms'' length transaction. The above transactions are undertaken with the approval of the Board of Directors and the Audit Committee as applicable. The maximum amount outstanding during the year in respect of advance in nature of loan given by the Company to its subsidiaries is as under :

(b) Fair value hierarchy

This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard.

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments that have quoted price. The fair value of all equity instruments which are traded in the stock exchanges is valued using the closing price as at the reporting period.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities, security deposits included in level 3.

(c) Assets and liabilities which are measured at amortised cost for which fair values are disclosed

All the financial asset and financial liabilities measured at amortised cost, carrying value is an approximation of their respective fair value.

(i) The fair value was derived using the market comparable approach based on recent market prices carried out by an independent valuer without any significant adjustments being made to the market observable data.

(ii) There were no significant inter-relationships between unobservable inputs that materially affect fair values.

44 Financial risk management objectives

The Company''s activities expose it to market risk including foreign currency risk and interest rate risk, liquidity risk and credit risk.

This note explains the sources of risk which the entity is exposed to and how the entity manages the risk :

The Company''s risk management is carried out by a treasury department under policies approved by the Board of Directors. Treasury department identifies, evaluates and hedges financial risks in close co-operation with the Company''s operating units. The board provides principles for overall risk management, as well as policies covering specific areas, such as hedging of foreign currency transactions foreign exchange risk.

(a) Market risk

Market risk is the risk of any loss in future earnings, in realisable fair values or in future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as result of changes in interest rates, foreign currency exchange rates, liquidity and other market changes. Future specific market movements can not be normally predicted with reasonable accuracy.

(i) Foreign currency risk

The Company''s functional currency is Indian Rupees (H). The Company undertakes transactions denominated in the foreign currencies; consequently, exposure to exchange rate fluctuations arise. Volatility in exchange rates affects the Company''s revenue from export markets and the costs of imports, primarily in relation to import of capital goods. The Company is exposed to exchange rate risk under its trade and debt portfolio.

Adverse movements in the exchange rate between the Rupee and any relevant foreign currency result''s in the increase in the Company''s overall debt positions in Rupee terms without the Company having incurred additional debt and favourable movements in the exchange rates will conversely result in reduction in the Company''s receivable in foreign currency. In order to hedge exchange rate risk, the Company has a policy to hedge cash flows up to a specific tenure using forward exchange contracts and options. At any point in time, the Company hedges its estimated foreign currency exposure in respect of forecast sales over the following 6 months or as deemed appropriate based on market conditions. In respect of imports and other payables, the Company hedges its payable as when the exposure arises.

(b) Credit risk (see note 10)

Credit risk arises when a counter party defaults on contractual obligations resulting in financial loss to the Company.

Company''s trade receivables are generally categories into following categories:

1. Export customers

2. Institutional customers

3. Dealers

In case of export sales, in order to mitigate credit risk, generally sales are made on advance payment terms. Where export sales are not made on advance payment terms, the same are secured through letter of credit or bank guarantee, etc.

In case of sale to institutional customers, certain credit period is allowed. In order to mitigate credit risk, majority of the sales are secured by letter of credit, bank guarantee, post dated cheques, etc.

In case of sale to dealers certain, credit period is allowed. In order to mitigate credit risk, majority of the sales made to dealers are secured by way of post dated cheques (PDC).

Further, Company has an ongoing credit evaluation process in respect of customers who are allowed credit period.

In general, it is presumed that credit risk has significantly increased since initial recognition if the payments are more than 30 days past due.

(c) Liquidity risk

The Company has a liquidity risk management framework for managing its short term, medium term and long term sources of funding vis-a-vis short term and long term utilization requirement. This is monitored through a rolling forecast showing the expected net cash flow, likely availability of cash and cash equivalents, and available undrawn borrowing facilities.

The Company''s capital requirement is mainly to fund its capacity expansion, repayment of principal and interest on its borrowings and strategic acquisitions. The principal source of funding of the Company has been, and is expected to continue to be, cash generated from its operations supplemented by funding from bank borrowings and the capital markets. The Company is not subject to any externally imposed capital requirements.

The Company regularly considers other financing and refinancing opportunities to diversify its debt profile, reduce interest cost and elongate the maturity of its debt portfolio, and closely monitors its judicious allocation amongst competing capital expansion projects and strategic acquisitions, to capture market opportunities at minimum risk.

47 Merger of Apollo Tricoat Tubes Limited and Shri Lakshmi Metal Udyog Limited with APL Apollo Tubes Limited

The Board of Directors of APL Apollo Tubes Limited ("Company"), at its meeting held on February 27, 2021, had considered and approved a draft scheme of amalgamation (''scheme'') under Sections 230 to 232 of the Companies Act, 2013, of Shri Lakshmi Metal Udyog Limited (''SLMUL''- wholly owned subsidiary company) and Apollo Tricoat Tubes Limited (''Tricoat'' - subsidiary company of wholly owned subsidiary) with the Company. 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.

(i) In terms of the Scheme, the whole of undertaking of Tricoat and SLMUL as a going concern stands transferred to and vested in the Company with effect from the appointed date.

(ii) Tricoat and SLMUL were engaged in the business of manufacturing of ERW steel tubes.

(iii) The said amalgamation was accounted under the "Pooling of interest"method as prescribed under Ind AS 103 ''Business Combination'' for amalgamation of companies under common control.

Under "Pooling of interest" method, the assets and liabilities of the combining entities are reflected at their carrying amount as appearing in the respective financial statements of the subsidiary companies in accordance with Ind AS Technical Faciliation Group (ITGG) clarification bulliten. No adjustments are made to reflect fair values or recognise any new assets or liabilities. Further the financial information in the financial statements of the Company in respect of prior period are restated as if the business combination had occured from the beginning of the preceding period in the financial statements of the Company.

- the entire business and undertaking of Tricoat and SLMUL including all assets, liabilities and reserves as a going concern were transferred to and vested in the Company pursuant to the Scheme at their respective book value under the respective accounting heads of the Company from the appointed date.

- In case of SLMUL, as it was a wholly owned subsidiary of the Company and accordingly, no consideration was payable pursuant to the scheme of amalgamation. The equity shares held by the Company in the wholly owned subsidiary were cancelled and no shares were issued to effect the amalgamation.

- In case of Tricoat, the Company held 55.82% equity shares and accordingly, consideration was payable pursuant to the scheme of amalgamation. The equity shares held by the Company in Tricoat were cancelled and 26,860,000 shares at face value of H2.00 each amounting to H5.37 crore were issued to the minority shareholders of Tricoat to effect the amalgamation.

- all inter-company balances and transactions were eliminated.

- In terms of the Scheme, the authorised share capital of the Company has increased from H75.00 Crore to H97.00 Crore.

(f) Disclosures under Rule 11(e)(ii) of the Company (Audit & Auditors) Rule, 2014 :

No funds have been received by the Company in current and previous year (other than as disclosed under note 48(e) from any persons or entities, including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(g) Details of benami property held

No proceeding has been initiated or are pending against the company for holding any benami property under the Benami Transactions (Prohibitions) Act, 1988 (45 of 1988) and the rules made thereunder.

(h) Wilful defaulter

The Company has not been declared wilful defaulter by any bank or financial institution or any lender.

(i) Undisclosed Income

There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under the Income Tax Act, 1961, that has not been recorded in the books of account.

(j) Details of crypto currency or virtual currency

The Company has not traded or invested in crypto currency or virtual currency during the current or previous year.

(k) Valuation of PP&E, intangible asset and investment property

The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both during the current or previous year.

(l) Registration of charges or satisfaction with Registrar of Companies

There are no charges or satisfaction which are yet to be registered with the Registrar of Companies beyond the statutory period.

(m) Disclosures under Rule 11(f) of the Company (Audit & Auditors) Rule, 2014 - Dividends

The final dividend on shares is recorded as a liability on the date of approval by the shareholders. The Company declares and pays dividends in Indian rupees. Companies are required to pay / distribute dividend after deducting applicable taxes. The remittance of dividends outside India is governed by Indian law on foreign exchange and is also subject to withholding tax at applicable rates.

During the year ended March 31,2023, on account of the final dividend for year ended March 31,2022, the Company has incurred a net cash outflow of H87.60 crore. The Board of Directors in their meeting held on May 12, 2023 recommended a final dividend of H5.00 per equity share for the year ended March 31, 2023. This payment of dividend is subject to the approval of shareholders in the upcoming Annual General Meeting of the Company and if approved, would result in a net cash outflow of approximately H138.67 crore.


Mar 31, 2022

Notes

(1) Property, plant and equipment as detailed in note 2(a) have been pledged as security for term loans taken as at March 31,2022. See note 16 & 21 for loans taken against which these assets are pledged.

(2) See note 46(a) for the details of immovable property not held in name of the Company.

(i) ROU assets are amortised from the commencement date on a straight-line basis over the lease term. The lease term is 44-90 years for land and 3 years for building respectively. The aggregate depreciation expense on ROU assets is included under depreciation and amortisation expense in the standalone statement of Profit and Loss.

(ii) Above ROU assets have been pledged as security for term loans taken as at March 31,2022. See note 16 & 21 for loans taken against which these assets are pledged.

(iii) ROU asset includes leasehold land located at Murbad, Maharashtra having gross carrying value of ''1.44 crores (March 31, 2021 : ''1.44 crores) (net carrying value of ''1.06 crore as at March 31,2022, March 31,2021 : ''1.08 crore), the title deeds of whose is in the name of Lloyd Line Pipe Limited (LLPL). LLPL was merged with the Company in earlier year under section 230 and section 232 of the Companies Act, 2013 in terms of approval of Hon'' National Company Law Tribunal, Principal bench, New Delhi and the land is pending transfer in the name of the Company post merger. The Company is holding the property since September 26, 1994.

(i) As at March 31,2021, the management had intended to sell / transfer a parcel of land to its subsidiary Company which it no longer planned to utilise. As at March 31, 2021, Assets classified as held for sale consists of plot of land whose fair valuation was ''64.26 crore. The valuation was performed by Government of India approved valuer M/s. Bestech Consultants Private Limited. The fair value measurement categorised as a level 3 fair value based on the inputs of the valuation technique used. The fair value was derived using the market comparable approach based on recent market prices without any significant adjustments being made to the market observable data. No impairment loss was recognised in reclassification of the land as asset held for sale as the Directors, based on valuation report, of the Company expected that the fair value less cost to sell is higher than the carrying amount.

During the current year, the Company, instead of selling the said land to its subsidiary company, has decided to lease out the same land on long term basis to APL Apollo Building Products Private Limited (a wholly owned subsidiary) and accordingly reclassified the land to Investment Property. Fair valuation of land is ''63.07 crores. The valuation was performed by Government of India approved valuer M/s. Bestech Consultants Private Limited. The fair value measurement categorised as a level 3 fair value based on the inputs of the valuation technique used. The fair value was derived using the market comparable approach based on recent market prices without any significant adjustments being made to the market observable data.

(ii) As at April 1,2020, Assets classified as held for sale consisted of plot of land whose fair valuation was ''2.20 crore. The valuation was performed by Government of India approved valuer Mr. Virender Kumar Jain. The fair value measurement categorised as a level 3 fair value based on the inputs of the valuation technique used. The fair value was derived using the market comparable approach based on recent market prices without any significant adjustments being made to the market observable data.

In previous year ended March 31, 2021, considering the market conditions, management expected that the land would not be sold in a distant future. Accordingly, the land in previous year ceased to be classified as Asset held for sale and was reclassified to Property, plant and equipment.

(i) The Company in previous year ended March 31,2018 measured its investment in subsidiaries on the date of transition to Ind-AS (i.e. April 1,2016) at their respective fair value and considered the same as its deemed cost. Accordingly the Company has recorded the investment in subsidiaries at their fair value for Apollo Metalex Private Limited at ''132.78 crore (original cost ''7.21 crore) and Shri Lakshmi Metal Udyog Limited at ''223.41 crore (original cost ''36.30 crore) aggregating to ''356.19 crore (original cost of ''43.51 crore).

(ii) The Company has during the year invested ''17.05 crore (March 31, 2021 : ''4.82 crore) in Blue Ocean Projects Private Limited by subscribing to 6,636 equity shares of ''10 each at a premium of ''25,678.47 each (March 31,2021 : 1,875 shares of ''10 each at a premium of ''25,690.45 each).

(iii) The Company has during the year called back equity share capital against 10 equity shares of AED 1,000,000 each (''19.75 crores). The Company in previous year had invested ''19.75 crore in APL Apollo Tubes FZE by subscribing to 10 equity share of AED 1,000,000 each considering 1 AED equivalent to ''19.75 each.

(iv) The Company has during the year invested ''154.30 crore (March 31,2021 : ''105.69 crore) in APL Apollo Building Products Private Limited by subscribing to 154,312,500 equity shares (March 31,2021 : 105,687,500 equity share) of ''10 each.

(v) The Company has during the year invested ''0.10 crore in APL Apollo Mart Limited by subscribing to 100,000 equity shares of ''10 each. APL Apollo Mart Limited was incorporated on December 7, 2021. The Company has further paid ''75.66 crores to subscribe to 75,660,774 equity shares of ''10 each against the right issue. As at year end, the shares are pending allotment.

(i) a) As at March 31, 2021, ''100.00 crore was recoverable from a wholly owned subsidiary i.e. Shri Lakshmi Metal Udyog Limited. The loan was carrying interest of 8.5% p.a.The loan was given for the purpose of meeting its operational requirements. The Loan was repayable upto 5 years in tranches as and when funds are available with Shri Lakshmi Metal Udyog Limited. The maximum amount outstanding during the year ended March 31,2021 was ''100.00 crore. During the current year, the loan given has been paid back.

b) As at March 31,2021, ''0.16 crore was recoverable from a wholly owned subsidiary Company i.e. Blue Ocean Projects Private Limited, for the purpose of meeting its operational requirements. The loan was carrying interest of 8.5% p.a. The Loan was repayable upto 2 years as and when funds are available with Blue Ocean Projects Private Limited. The maximum amount outstanding during the year ended March 31,2021 was ''0.16 crore. During the year, the loan has been paid back.

c) As at March 31,2021, the Company has paid a loan amounting to ''7.13 crore carrying interest 8.5% p.a. to a wholly owned subsidiary viz. APL Apollo Building Products Private Limited for the purpose of meeting its operational requirements. The loan was repayable upto 2 years as and when funds are available with APL Apollo Building Products Private Limited. The maximum amount outstanding during the year ended March 31,2021 was ''7.13 crore. During the year, the loan has been paid back.

(vi) Share options granted under the Company''s employee share options plans

As at March 31, 2022, executives and senior employees held options over 387,500 equity shares of ''2 each of the Company. (March 31, 2021 : 438,000 equity shares of ''2 each) (see note (vii) & (viii) below). Share options granted under the Company''s employee share option plan carry no rights to dividends and no voting rights. Further details of the employee share option plan are provided in note 39.

(vii) The Board of Directors at their meeting held on October 28, 2020 approved the sub-division of each equity share of face value of ''10 each fully paid up into 5 equity shares of face value of ''2 each fully paid up. The same was approved by the members on December 3, 2020 through postal ballot and e-voting. The effective date of sub-division was December 16, 2020.

(viii) The Board of Directors in its meeting held on August 6, 2021 have recommended for approval by shareholders, bonus issue of 1 (one) equity share of ''2 each for every 1 (one) equity shares of ''2 each held by shareholders of the Company as on the record date, subject to approval of the shareholders.

Pursuant to the approval of the shareholders through postal ballot (including remote e-voting), the Company alloted 124,896,000 bonus equity shares of ''2 each as fully paid-up bonus equity shares, in the proportion of 1 (One) equity share of ''2 each for every 1 (One) existing equity shares of ''2 each to the equity shareholders of the Company as on record date of September 18, 2021. Consequently, the Company capitalised a sum of ''24.98 crores from ''other equity''(securities premium) to ''equity share capital''.

Nature and purpose of reserves

(i) Securities premium : Securities premium is used to record the premium on issue of shares. The reserve is utilised in accordance with the provisions of the Indian Companies Act, 2013 ("the Companies Act").

(ii) General reserve : The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. There is no policy of regular transfer. General reserves represents the free profits of the Company available for distribution. As per the Companies Act, certain amount was required to be transferred to General Reserve every time Company distribute dividend. General reserve is not an item of OCI, items included in the general reserve will not be reclassified to profit or loss.

(iii) Capital reserve : The excess of fair value of net assets acquired over consideration paid in a business combination is recognised as capital reserve. The reserve is not available for distribution.

(iv) Retained earnings : It represents unallocated/un-distributed profits of the Company. The amount that can be distributed as dividend by the Company as dividends to its equity shareholders is determined based on the separate financial statements of the Company and also considering the requirements of the Companies Act, 2013. Thus amount reported above are not distributable in entirety.

(v) Share option outstanding account : The Company offers ESOP under which options to subscribe for the Company''s share have been granted to certain employees and senior management. The share option outstanding account is used to recognise the value of equity settled share based payments provided as part of the ESOP scheme. (see note 39)

(i) Deferred income arises in respect of import of capital goods without payment of custom duty under Export Promotion Capital Goods Scheme. The income is recognised in Profit or loss on a straight line basis over the useful life of the related assets. (see note 37(b)(2)).

(ii) The Company has a deferred liability related to sales tax of ''1.05 crore of year ending March, 2016 payable in the year ending March, 2026. Using prevailing market interest rates for an equivalent loan of 10.00% in the year of grant, the fair value of loan is estimated at ''0.85 crore as on March 31,2022 (March 31,2021 : ''0.78 crore). The difference of ''0.20 crore (March 31,2021 : ''0.27 crore between the gross proceeds and the fair value of the loan is the benefit derived from the interest free deferred liability and is recognised as deferred income.

Nature of security :

(i) Working capital facilities of APL Apollo Tubes Limited from banks are secured by first pari passu charge on entire present and future current assets and second charge on present and future movable fixed assets of the company situated at Plot No. A-19 and A-20, Sikandarabad Industrial Area, Distt. Bulandshahar, Uttar Pradesh and Plot No. 332 to 338, Alur Village, Perandapalli, Hosur, Tamilnadu and Khasra No. 215, 223/1,225/7-8, 225/9-10, 227/4, 231/2, 217/1-2 Part, 231/6 Part at village Bendri, Tehsil Raipur, Dist. - Raipur, and M-1, Additional Murbad Industrial Area - V, Kudawali Murbad, Distt. Thane, Maharashtra and Residential Complex situated at Murbad, Distt. Thane, Maharashtra and 443,444,538,539 Wadiaram village Chegunta (Mandal) Medak district Telangana 502255.

Working capital facilities are further secured by second charge through equitable mortgage of the company land and building situated at Plot No. A-19/A-20, Sikandarabad Industrial Area, Distt. Bulandshahar, Uttar Pradesh and Plot No. 332 to 338, Alur Village, Perandapalli, Hosur, Tamilnadu and Khasra No. 215, 223/1,225/7-8, 225/9-10, 227/4, 231/2, 217/1-2 Part, 231/6 Part at village Bendri, Tehsil Raipur, Dist. - Raipur and 443,444,538,539 Wadiaram village Chegunta (Mandal) Medak district Telangana 502255. Credit facilities are further secured by personel gurantee of the Mr. Sanjay Gupta and Mr. Vinay Gupta.

35 Allocation of common expenses

(a) The Company has charged back the Share based expenses to employees (included under Employee benefits expense in note 31) incurred by it to its group companies on cost i.e. on cost to cost basis. The allocation of common expenses has been carried out on the basis of share options held of the Company by employees of the respective companies.

(b) The Company has charged back the common expenses (included under Employee benefits expense in note 31 & Other expenses in note 34) incurred by it to its group companies on cost i.e. on cost to cost basis. The allocation of common expenses has been carried out on the basis of turnover of the respective companies, as per latest financial statements / results.

(i) Based upon the legal opinion obtained by the management, there are various interpretation issues and thus management is in the process of evaluating the impact of the recent Supreme Court Judgement in relation to non-exclusion of certain allowances from the definition of basic wages of the relevant employees for the purpose of determining contribution to provident fund under the Employees Provident Fund & Miscellaneous provisions Act, 1952. Pending issuance of guidelines by the regulatory authorities on the application of this ruling, the impact on the Company, if any, can not be ascertained.

(ii) The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed as contingent liabilities where applicable, in its standalone financial statements. The Company does not expect the outcome of these proceedings to have a materially effect on its standalone financial statements.

(b) Commitments

(1) Estimated amount of contracts remaining to be executed on capital account and not provided for

(i) Property, plant and equipments 57.08 89.65

(2) The Company has obtained EPCG (Export Promotion Capital Goods Scheme) licenses for importing the capital goods without payment of basic custom duty against submission of bonds.

The export obligation is to be fulfilled within a period of 6 years from the date of issuance of license. Under this scheme the Company has to achieve FOB value of exports which will be 6 times of duty saved. Accordingly the Company is required to export of FOB value of ''106.76 crore (March 31,2021 ''117.79 crore) against which the Company has saved a duty of ''17.80 crore (March 31,2021 ''19.63 crore).

(3) The Company has entered in Power Supply Agreement with a Vendor. As per agreement, the Company is required to draw an ''Annual Contracted Quantity'' of 55 Lacs KWH for a period of 5 years having estimated power purchase price of ''3.08 crore (March 31,2021 : ''3.08 crore).

(4) The Company has given corporate guarantees on behalf of its subsidiaries i.e. Apollo Metalex Private Limited, Shri Lakshmi Metal Udyog Limited, Apollo Tricoat Tubes Limited and APL Apollo Building Products Private Limited for loans and credit facilities taken by them from banks and financial institutions. The loan outstanding as at March 31,2022 of Apollo Metalex Private Limited is ''3.65 crore (March 31,2021 ''70.43 crore), Shri Lakshmi Metal Udyog Limited is ''1.20 crore (March 31,2021 ''Nil crore), Apollo Tricoat Tubes Limited is ''48.99 crore (March 31, 2021 ''62.03 crore) and APL Apollo Building Products Private Limited is ''238.74 crores (March 31,2021 ''Nil crore).

(5) The Company has other commitments, for purchase orders which are issued after considering requirements per operating cycle for purchase of services, employee''s benefits. The Company does not have any other long term commitments or material non-cancellable contractual commitments /contracts, including derivative contracts for which there were any material foreseeable losses.

(a) Defined benefit plans a) Gratuity

The gratuity scheme provides for lump sum payment to vested employees at retirement/death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service or part thereof in excess of 6 months subject to a limit of ''0.20 crore (March 31,2021 ''0.20 crore). Vesting occurs upon completion of 5 years of service.

During the year, the Company has made contribution of ''2.50 crore (March 31, 2021 : ''1.00 crore) to APL Apollo Tubes Limited Employees Group Gratuity Trust which has made further contribution to Kotak Mahindra Life Insurance Co. Ltd.

(b) Defined contribution plans

The Company makes provident fund contributions which are defined contribution plans, for qualifying employees. Under the scheme, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognised ''3.35 crore (Year ended March 31,2021 ''3.00 crore) for provident fund contributions in the statement of profit and loss. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes. The obligation of the Company is limited to the amount contributed and it has no further contractual nor any constructive obligation.

Notes :

(1) The discount rate is based on the prevailing market yield of Indian Government Securities as at Balance Sheet date for the estimated term of obligation.

(2) The estimate of future salary increase considered in actuarial valuation takes into account inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market.

(h) The Company expects to make a contribution of ''8.84 crores (March 31,2021: ''9.83 crores) to the defined benefit plans during the next financial year.

The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method i.e. projected unit credit method has been applied as that used for calculating the defined benefit liability recognised in the balance sheet.

(j) Risk exposure

The defined benefit obligations have the undermentioned risk exposures :

Interest rate risk : The defined benefit obligation calculated uses a discount rate based on government bonds. If bond yields fall, the defined benefit obligation will tend to increase.

Salary Inflation risk : Higher than expected increases in salary will increase the defined benefit obligation.

Demographic risk : This is the risk of variability of results due to unsystematic nature of decrements that include mortality, withdrawal, disability and retirement. The effect of these decrements on the defined benefit obligation is not straight forward and depends upon the combination of salary increase, discount rate and vesting criteria.

Investment risk : The present value of the defined benefit plan liability is calculated using a discount rate determined by reference to high quality corporate bond yields; if the return on plan asset is below this rate, it will create a plan deficit.

39 Share Based Payments

(a) Employee Share Option Plan :

(i) The ESOS scheme titled Employee Stock Option Scheme 2015 (ESOS 2015) was approved by the shareholders through postal ballot on July 27, 2015 and December 22, 2015. 7,50,000 options are covered under the Scheme for 750,000 Equity shares (before giving effect of share split and bonus issue).

(ii) During the financial year 2015-16, the Nomination and Remuneration Committee in its meeting held on July 28, 2015 has granted 724,000 options respectively under the ESOS to eligible employees of the Company and its subsidiaries. Each option comprises one underlying equity share. The options granted vest over a period of 4 years from the date of the grant in equal proportion of 25% each year. Options may be exercised within 4 years. The exercise price of each option is the market price of the shares on the stock exchange with the highest trading volume, one day before the date of grant of options. The exercise price has been determined at ''452.60 per share.

(iii) During the financial year 2016-17, the Nomination and Remuneration Committee in its meeting held on January 28, 2017 has granted 45,000 options under the ESOS to eligible employees of the Company and its subsidiaries. Each option comprises one underlying equity share. The options granted vest over a period of 4 years from the date of the grant in equal proportion of 25% each year. Options may be exercised within 4 years. The exercise price of each option is the market price of the shares on the stock exchange with the highest trading volume, one day before the date of grant of options. The exercise price has been determined at ''1,028.80 per share.

(iv) During the financial year 2017-18, the the Nomination and Remuneration Committee in its meeting held on September 9, 2017 and February 5, 2018 has granted 96,000 and 70,000 options respectively, under the ESOS to eligible employees of the Company and its subsidiaries. Each option comprises one underlying equity share. The options granted vest over a period of 4 years from the date of the grant in equal proportion of 25% each year. Options may be exercised within 4 years. The exercise price of each option is the market price of the shares on the stock exchange with the highest trading volume, one day before the date of grant of options. The exercise price has been determined at ''1,633.05 and ''2,124.10 respectively per share.

(v) During the financial year 2019-20, the Nomination and Remuneration Committee in its meeting held on November 9, 2019 has granted 95,000 options under the ESOS to eligible employees of the Company and its subsidiaries (whether in India or abroad). Each option comprises one underlying equity share. The options granted vest over a period of 4 years from the date of the grant in equal proportion of 25% each year. Options may be exercised within 5 years. The exercise price of each option is the market price of the shares on the stock exchange with the highest trading volume, one day before the date of grant of options. The exercise price has been determined at ''1,438.55 per share.

(vi) During the financial year 2019-20, the Nomination and Remuneration Committee in its meeting held on November 9, 2019 also recommended reduction in exercise price of options granted on September 9, 2017 and February 5, 2018 to reflect the fall in Company''s share prices. The same was approved by shareholders of the Company on January 27, 2020 through postal ballot. The revised exercise price of each option is the market price of the shares on the stock exchange with the highest trading volume, one day before the date of reduction in exercise price. The revised exercise price has been determined at ''1,438.55 per share.

i) The earlier exercise price of the Options granted on September 9, 2017 and February 5, 2018 were ''1,633.05 and ''2,124.10 respectively. The exercise price of these options has been reduced in earlier year (See note (a) (vi) above).

(c) Fair value of option granted/ modified

(i) No options were granted during the year ended March 31,2022 and March 31,2021.

(ii) During the previous year ended March 31, 2020, the incremental fair value of the options granted on September 9, 2017 and February 5, 2018 due to modification were determined at ''131.46 and ''372.36 respectively which has been recognised as expense over the period from the modifcation date to the end of vesting period. The expense of original option grant will continue to be recognised as if the terms had not been modified.

(i) Figures in the bracket relates to previous year ended March 31,2021.

(ii) Amount of expense of gratuity and compensated absences is taken on actuarial basis.

(iii) The term loan and other credit facilities of the Company are also secured by personal guarantee of directors of the Company, Mr. Sanjay Gupta and Mr. Vinay Gupta.

(iv) The Company has given corporate guarantees on behalf of its subsidiaries i.e. Apollo Metalex Private Limited, Shri Lakshmi Metal

Udyog Limited, Apollo Tricoat Tubes Limited and APL Apollo Building Products Private Limited for loans and credit facilities taken by them from banks and financial institutions. The loan outstanding as at March 31,2022 of Apollo Metalex Private Limited is ''3.65 crore (March 31, 2021 ''70.43 crore), Shri Lakshmi Metal Udyog Limited is ''1.20 crore (March 31, 2021 ''Nil crore), Apollo Tricoat Tubes Limited is ''48.99 crore (March 31, 2021 ''62.03 crore) and APL Apollo Building Products Private Limited is ''238.74 crores (March 31,2021 ''Nil crore).

(v) The treasury and finance operations of the Company and its subsidiaries (APL Group Companies) are managed centrally. Based

on the funding requirement, APL group companies provide short term advances in the nature of loan to each other and these are repaid as and when funds are available with respective company. Also interest is charged for the period on such advance in the nature of loan remains outstanding to ensure arms'' length transaction. The above transactions are undertaken with the approval of the Board of Directors and the Audit Committee as applicable. The maximum amount outstanding during the year in

Fair value of forward contracts determined by reference to quote from financial institution.

(b) Fair value hierarchy

This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard.

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments that have quoted price. The fair value of all equity instruments which are traded in the stock exchanges is valued using the closing price as at the reporting period.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities, security deposits included in level 3.

(c) Assets and liabilities which are measured at amortised cost for which fair values are disclosed

All the financial asset and financial liabilities measured at amortised cost, carrying value is an approximation of their respective fair value.

43 Financial risk management objectives

The Company''s activities expose it to market risk including foreign currency risk and interest rate risk, liquidity risk and credit risk. This note explains the sources of risk which the entity is exposed to and how the entity manages the risk :

The Company''s risk management is carried out by a treasury department under policies approved by the Board of Directors. Treasury department identifies, evaluates and hedges financial risks in close co-operation with the Company''s operating units. The board provides principles for overall risk management, as well as policies covering specific areas, such as hedging of foreign currency transactions foreign exchange risk.

(a) Market risk

Market risk is the risk of any loss in future earnings, in realisable fair values or in future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as result of changes in interest rates, foreign currency exchange rates, liquidity and other market changes. Future specific market movements can not be normally predicted with reasonable accuracy.

(i) Foreign currency risk

The Company''s functional currency is Indian Rupees (INR). The Company undertakes transactions denominated in the foreign currencies; consequently, exposure to exchange rate fluctuations arise. Volatility in exchange rates affects the Company''s revenue from export markets and the costs of imports, primarily in relation to import of capital goods. The Company is exposed to exchange rate risk under its trade and debt portfolio.

Adverse movements in the exchange rate between the Rupee and any relevant foreign currency result''s in the increase in the Company''s overall debt positions in Rupee terms without the Company having incurred additional debt and favourable movements in the exchange rates will conversely result in reduction in the Company''s receivable in foreign currency. In order to hedge exchange rate risk, the Company has a policy to hedge cash flows up to a specific tenure using forward exchange contracts and options. At any point in time, the Company hedges its estimated foreign currency exposure in respect of forecast sales over the following 6 months or as deemed appropriate based on market conditions. In respect of imports and other payables, the Company hedges its payable as when the exposure arises.

(ii) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is exposed to interest rate risk because funds are borrowed at both fixed and floating interest rates. Interest rate risk is measured by using the cash flow sensitivity for changes in variable interest rate. The borrowings of the Company are principally denominated in rupees and US dollars with a mix of fixed and floating rates of interest. The Company hedges its US dollar interest rate risk through interest rate swaps to reduce the floating interest rate risk. The Company has exposure to interest rate risk, arising principally on changes in base lending rate. The Company uses a mix of interest rate sensitive financial instruments to manage the liquidity and fund requirements for its day to day operations like short term loans. The risk is managed by the Company by maintaining an appropriate mix between fixed and floating rate borrowings, and by the use of interest rate swap contracts.

(b) Credit risk (see note 9)

Credit risk arises when a counter party defaults on contractual obligations resulting in financial loss to the Company.

Company''s trade receivables are generally categories into following categories:

1. Export customers

2. Institutional customers

3. Dealers

In case of export sales, in order to mitigate credit risk, generally sales are made on advance payment terms. Where export sales are not made on advance payment terms, the same are secured through letter of credit or bank guarantee, etc.

In case of sale to institutional customers, certain credit period is allowed. In order to mitigate credit risk, majority of the sales are secured by letter of credit, bank guarantee, post dated cheques, etc.

In case of sale to dealers certain, credit period is allowed. In order to mitigate credit risk, majority of the sales made to dealers are secured by way of post dated cheques (PDC).

Further, Company has an ongoing credit evaluation process in respect of customers who are allowed credit period.

In general, it is presumed that credit risk has significantly increased since initial recognition if the payments are more than 30 days past due.

(c) Liquidity risk

The Company has a liquidity risk management framework for managing its short term, medium term and long term sources of funding vis-a-vis short term and long term utilization requirement. This is monitored through a rolling forecast showing the expected net cash flow, likely availability of cash and cash equivalents, and available undrawn borrowing facilities.

45 Capital management (a) Risk management

The Company being in a capital intensive industry, its objective is to maintain a strong credit rating, healthy capital ratios and establish a capital structure that would maximise the return to stakeholders through optimum mix of debt and equity.

The Company''s capital requirement is mainly to fund its capacity expansion, repayment of principal and interest on its borrowings and strategic acquisitions. The principal source of funding of the Company has been, and is expected to continue to be, cash generated from its operations supplemented by funding from bank borrowings and the capital markets. The Company is not subject to any externally imposed capital requirements.

The Company regularly considers other financing and refinancing opportunities to diversify its debt profile, reduce interest cost and elongate the maturity of its debt portfolio, and closely monitors its judicious allocation amongst competing capital expansion projects and strategic acquisitions, to capture market opportunities at minimum risk.

The Company monitors its capital using gearing ratio, which is net debt divided to total equity. Net debt includes, interest bearing loans and borrowings less cash and cash equivalents, bank balances other than cash and cash equivalents.

Consequent to the Companies (Corporate Social Responsibility Policy) Amended Rules, 2021 (the rules), the Company has subsequent to balance sheet date has deposited amount of ''0.25 crore (March 31,2021 : ''1.00 crore) to a separate bank account.

Notes :

Based on legal opinion, the Company is of the view that the past unspent CSR obligation till March 31,2020 not carried forward will be treated as lapsed and accordingly does not require to be spent / transferred to a separate bank account.

Explanation of formulas used in calculating ratios :

(1) Net debt includes borrowings (long term and short term) net of cash & cash equivalents and bank balances.

(2) Earnings available for debt service includes profit after tax, finance costs, depreciation and other non cash expense.

(3) Debt service includes finance costs paid and principal repayment of borrowings (long term and short term).

(4) Earning before interest and taxes includes Profit before tax plus depreciation.

(5) Capital employed includes Tangible net worth (Total assets - total liability - intangible assets), net debt and deferred tax liability. Note :

Revenue growth resulting in increase in profits along with higher efficiency on working capital improvement has resulted improvement in the ratios.

(f) The Company has no transactions with the companies struck off under Companies Act, 2013 or Companies Act, 1956.

(h) Disclosures under Rule 11(e)(ii) of the Company (Audit & Auditors) Rule, 2014 :

No funds (which are material either individually or in the aggregate) have been received by the Company from any persons or entities, including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

The Board of Directors have recommended a final dividend of ''3.50 per share for the year ended March 31,2022 which is subject to the approval of the shareholders in the ensuing annual general meeting.

(j) The Board of Directors of APL Apollo Tubes Limited ("Company"), at its meeting held on February 27, 2021, has considered and approved a draft scheme of amalgamation (''scheme'') under Sections 230 to 232 of the Companies Act, 2013, of Shri Lakshmi Metal Udyog Limited (''Shri Lakshmi'' - wholly owned subsidiary company) and Apollo Tricoat Tubes Limited (''Apollo Tricoat'' - subsidiary company of wholly owned subsidiary) with the Company. Requisite no objection certificate from BSE Limited, approvals from the shareholders and creditors of the Company have been received. The Scheme is subject to sanction of the Hon''ble NCLT.


Mar 31, 2021

(i) Effective April 1, 2019, the Company adopted Ind AS 116 "Leases" and applied the standard to all lease contracts existing on April 1, 2019 using the modified retrospective method. Consequently, the Company recorded the lease liability at the present value of the lease payments discounted at the incremental borrowing rate and the right of use asset at its carrying amount as if the standard had been applied since the commencement date of the lease.

On transition, the adoption of the new standard resulted in recognition of ''Right of Use'' asset of C 19.36 crore and a lease liability of C 0.60 crore. The effect of this adoption is insignificant on the profit before tax and earnings per share.

The following is the summary of practical expedients elected on initial application:

- Applied a single discount rate to a portfolio of leases of similar assets in similar economic environment with a similar end date.

- Applied the exemption not to recognize right-of-use assets and liabilities for leases with less than 12 months of lease term on the date of initial application.

- Excluded the initial direct costs from the measurement of the right-of-use asset at the date of initial application.

(ii) ROU assets are amortised from the commencement date on a straight-line basis over the lease term. The lease term is 44-90 years for land and 3 years for building respectively. The aggregate depreciation expense on ROU assets is included under depreciation and amortisation expense in the standalone statement of Profit and Loss.

(iii) Above ROU assets have been pledged as security for term loans taken as at March 31,2021. See note 16 & 21 for loans taken against which these assets are pledged.

(iv) Leasehold land located at Murbad, Maharashtra having value of C 1.08 crore as at March 31,2021 (March 31,2020 : C 1.19 crore), is in the name of Lloyd Line Pipe Limited which was merged with the Company in earlier year under section 230 and section 232 of the Companies Act, 2013 in terms of approval of Hon'' National Company Law Tribunal, Principal bench, New Delhi.

(v) The following is the break-up of current and non-current lease liabilities as at March 31,2021 and March 31,2020 :

The Company intends to dispose of a parcel of land to its subsidiary Company which it no longer plans to utilise in the next 12 months. As at March 31, 2021, Assets classified as held for sale consists of plot of land whose fair valuation is C 64.26 crore. The valuation was performed by Government of India approved valuer M/s. Bestech Consultants Private Limited. The fair value measurement categorised as a level 3 fair value based on the inputs of the valuation technique used. The fair value was derived using the market comparable approach based on recent market prices without any significant adjustments being made to the market observable data. No impairment loss has been recognised in reclassification of the land as asset held for sale as the Directors of the Company expects that the fair value less cost to sell is higher than the carrying amount.

As at March 31,2020, Assets classified as held for sale consisted of plot of land whose fair valuation was C 2.20 crore. The valuation was performed by Government of India approved valuer Mr. Virender Kumar Jain. The fair value measurement categorised as a level 3 fair value based on the inputs of the valuation technique used. The fair value was derived using the market comparable approach based on recent market prices without any significant adjustments being made to the market observable data.

In current year, considering the present market conditions, management does not expect that the land would be sold in a distant future. Accordingly, the land in current year, ceases to be classified as ""Asset held for sale"" and has been reclassified to Property, plant and equipment.

(i) The Company in previous year ended March 31,2018 measured its investment in subsidiaries on the date of transition to Ind-AS (i.e. April 1,2016) at their respective fair value and considered the same as its deemed cost. Accordingly the Company has recorded the investment in subsidiaries at their fair value for Apollo Metalex Private Limited at C 132.78 crore (original cost C 7.21 crore) and Shri Lakshmi Metal Udyog Limited at C 223.41 crore (original cost C 36.30 crore) aggregating to C 356.19 crore (original cost of C 43.51 crore).

(ii) The Company has during the year invested C 4.82 crore (March 31,2020 : C 1.04 crore) in Blue Ocean Projects Private Limited by subscribing to 1,875 equity shares of C 10 each at a premium of C 25,690.45 each (March 31,2020 : 600 shares of C 10 each at a premium of C 17,290 each).

(iii) The Company has during the year invested C 19.75 crore (March 31,2020 : C 1.90 crore) in APL Apollo Tubes FZE by subscribing to 10 equity share (March 31,2020 : 1 equity share) of AED 1,000,000 each considering 1 AED equivalent to C 19.75 each (March 31,2020 : C 19.00 each).

(iv) The Company has during the year invested C 105.69 crore (March 31,2020 : C 0.01 crore) in APL Apollo Building Products Private Limited by subscribing to 105,687,500 equity shares (March 31,2020 : 10,000 equity share) of C 10 each. The Company was incorporated on December 19, 2019.

(i) a) As at March 31,2021, C 100.00 crore (March 31,2020 : C 75.00 crore) is recoverable from a wholly owned subsidiary i.e. Shri Laksh-mi Metal Udyog Limited. The loan is carrying interest of 8.5% p.a. (previous year 10.00% p.a.). The loan has been given for the purpose of meeting its operational requirements. The Loan is repayable upto 5 years in tranches as and when funds are available with Shri Lakshmi Metal Udyog Limited. The maximum amount outstanding during the year was C 100.00 crore (March 31,2020 : C 75.00 crore).

b) During the year, the Company has given a loan amounting to C 0.16 crore (March 31, 2020 : C Nil) carrying interest 8.5% p.a. to a wholly owned subsidiary Company i.e. Blue Ocean Projects Private Limited, for the purpose of meeting its operational requirements. The Loan is repayable upto 2 years as and when funds are available with Blue Ocean Projects Private Limited. The maximum amount outstanding during the year was C 0.16 crore (March 31,2020 : C Nil). Closing balance as at March 31,2021 is C 0.16 crore (March 31,2020 : C Nil)

c) During the year, the Company has given a loan amounting to C 7.13 crore (March 31, 2020 : C Nil) carrying interest 8.5% p.a. to a wholly owned subsidiary viz. APL Apollo Building Products Private Limited for the purpose of meeting its operational requirements. The loan is repayable upto 2 years as and when funds are available with APL Apollo Building Products Private Limited. The maximum amount outstanding during the year is C 7.13 crore (March 31,2020 : C Nil). Closing balance as at March 31,2021 is C 7.13 crore (March 31,2020 : C Nil).

(i) The average credit period on sale of goods is 0-60 days. No interest is charged on the trade receivables for the amount overdue above the credit period. There are no customers who represent more than 10% of the total balance of trade receivables.

(ii) In determining the allowance for credit losses of trade receivables, the Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and is adjusted for forward looking information. The expected credit loss allowance is based on the ageing of the receivables that are due and rates used in the provision matrix.

(i) During the year, the Company has given a advance towards purchase of raw materials amounting to C 8.76 crore (March 31, 2020 : C Nil crore) to a subsidiary viz. Apollo Tricoat Tubes Liimited and the material has been received subsequently.

(ii) During the previous year 2019-20, the Company had given a advance towards purchase of raw materials amounting to C 5.16 crore to a wholly owned subsidiary viz. Apollo Metalex Private Limited and the material has been received in current year.

During the previous year ended March 31, 2020, the shareholders of the Company through postal ballot on April 4, 2019 approved the issuance of 400,000 equity shares and 500,000 fully convertible warrants on preferential basis to APL Infrastructure Private Limited, an entity belonging to promoter category at an issue price of C 1,800 per share and C 2,000 per warrant respectively. The Board of Directors of the Company in its meeting held on April 12, 2019, allotted the said equity shares and warrants. On October 28, 2019, the finance committee of the Board of Directors allotted 500,000 equity shares on conversion of said warrants.

(2) Rights, Preferences and restrictions attached to equity shares

The Company has one class of equity shares having a par value of C 2 each (March 31,2020 : C 10 each). Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the Annual General Meeting. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

During the previous year ended March 31, 2020, the shareholders of the Company through postal ballot on April 4, 2019 approved the issuance of 400,000 equity shares and 500,000 fully convertible warrants on preferential basis to APL Infrastructure Private Limited, an entity belonging to promoter category at an issue price of C 1,800 per share and C 2,000 per warrant respectively. The Board of Directors of the Company in its meeting held on April 12, 2019, allotted the said equity shares and warrants. On October 28, 2019, the finance committee of the Board of Directors allotted 500,000 equity shares on conversion of said warrants.

(4) Share options granted under the Company''s employee share options plans

As at March 31, 2021, executives and senior employees held options over 438,000 equity shares of C 2 each of the Company. As at March 31,2020, executives and senior employees held options over 216,748 equity shares of C 10 each of the Company. (See note 5 below). Share options granted under the Company''s employee share option plan carry no rights to dividends and no voting rights. Further details of the employee share option plan are provided in note 40.

(5) The Board of Directors at their meeting held on October 28, 2020 approved the sub-division of each equity share of face value of C 10 each fully paid up into 5 equity shares of face value of C 2 each fully paid up. The same was approved by the members on December 3, 2020 through postal ballot and e-voting. The effective date of sub-division was December 16, 2020.

Nature and purpose of reserves

(i) Securities premium : Securities premium is used to record the premium on issue of shares. The reserve is utilised in accordance with the provisions of the Indian Companies Act, 2013 ("the Companies Act”).

(ii) Debenture redemption reserve : The Companies Act requires that where a Company issues debentures, it shall create a debenture redemption reserve out of profits of the Company available for payment of dividend. The amounts credited to the debenture redemption reserve cannot be utilised by the Company except to redeem debentures. On redemption of debentures, amount is transferred to Retained earnings.

(iii) General reserve : The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. There is no policy of regular transfer. General reserves represents the free profits of the Company available for distribution. As per the Companies Act, certain amount was required to be transferred to General Reserve every time Company distribute dividend. General reserve is not an item of OCI, items included in the general reserve will not be reclassified to profit or loss.

(iv) Capital reserve : The excess of fair value of net assets acquired over consideration paid in a business combination is recognised as capital reserve. The reserve is not available for distribution.

(v) Retained earnings : It represents unallocated/un-distributed profits of the Company. The amount that can be distributed as dividend by the Company as dividends to its equity shareholders is determined based on the separate financial statements of the Company and also considering the requirements of the Companies Act, 2013. Thus amount reported above are not distributable in entirety.

(vi) Share option outstanding account : The Company offers ESOP under which options to subscribe for the Company''s share have been granted to certain employees and senior management. The share option outstanding account is used to recognise the value of equity settled share based payments provided as part of the ESOP scheme. (see note 40)

(vii) Items of other comprehensive income : It represents profits / (loss) of the Company which will not be reclassified to statement of profit or loss.

(i) Deferred income arises in respect of import of capital goods without payment of custom duty under Export Promotion Capital Goods Scheme. The income will be recognised in Profit or loss on a straight line basis over the useful life of the related assets. (see note 38(b)(2)).

(ii) The Company has a deferred liability related to sales tax of C 1.05 crore of year ending March, 2016 payable in the year ending March, 2026. Using prevailing market interest rates for an equivalent loan of 10.00%, the fair value of loan is estimated at C 0.78 crore as on March 31,2021. The difference of C 0.27 crore between the gross proceeds and the fair value of the loan is the benefit derived from the interest free deferred liability and is recognised as deferred income.

(i) Working capital facilities of APL Apollo Tubes Limited from banks are secured by first pari passu charge on entire present and future current assets and second charge on present and future movable fixed assets of the company situated at Plot No. A-19 and A-20, Sikandarabad Industrial Area, Distt. Bulandshahar, Uttar Pradesh and Plot No. 332 to 338, Alur Village, Perandapalli, Hosur, Tamilnadu and Khasra No. 215, 223/1,225/7-8, 225/9-10, 227/4, 231/2, 217/1-2 Part, 231/6 Part at village Bendri, Tehsil Raipur, Dist. - Raipur, and M-1, Additional Murbad Industrial Area - V, Kudawali Murbad, Distt. Thane, Maharashtra and Residential Complex situated at Murbad, Distt. Thane, Maharashtra and 443,444,538,539 Wadiaram village Chegunta (Mandal) Medak district Telangana 502255.

Working capital facilities are further secured by second charge through equitable mortgage of the company land and building situated at Plot No. A-19/A-20, Sikandarabad Industrial Area, Distt. Bulandshahar, Uttar Pradesh and Plot No. 332 to 338, Alur village, Perandapalli, Hosur, Tamilnadu and Khasra No. 215, 223/1,225/7-8, 225/9-10, 227/4, 231/2, 217/1-2 Part, 231/6 Part at village Bendri, Tehsil Raipur, Dist. - Raipur and 443,444,538,539 Wadiaram village Chegunta (Mandal) Medak district Telangana 502255. Credit facilities are further secured by personal gurantee of the Mr. Sanjay Gupta and Mr. Vinay Gupta.

(a) The Company has charged back the "Share based expenses" to employees (included under "Employee benefits expense" in note 31) incurred by it to its group companies on cost i.e. on cost to cost basis. The allocation of common expenses has been carried out on the basis of share options held of the Company by employees of the respective companies.

(b) The Company has charged back the common expenses (included under "Employee benefits expense" in note 31 & "Other expenses" in note 34) incurred by it to its group companies on cost i.e. on cost to cost basis. The allocation of common expenses has been carried out on the basis of turnover of the respective companies, as per latest financial statements / results.

(i) During the year, the Company has discounted the sales bill from the banks for C Nil crore (March 31,2020 C 0.28 crore).

(ii) Based upon the legal opinion obtained by the management, there are various interpretation issues and thus management is in the process of evaluating the impact of the recent Supreme Court Judgement in relation to non-exclusion of certain allowances from the definition of "basic wages" of the relevant employees for the purpose of determining contribution to provident fund under the Employees Provident Fund & Miscellaneous provisions Act, 1952. Pending issuance of guidelines by the regulatory authorities on the application of this ruling, the impact on the Company, if any, can not be ascertained.

(iii) The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed as contingent liabilities where applicable, in its standalone financial statements. The Company does not expect the outcome of these proceedings to have a materially effect on its standalone financial statements.

(b) Commitments

(1) Estimated amount of contracts remaining to be executed on capital account and not provided for

(i) Property, plant and equipments 89.65 169.06

(2) The Company has obtained EPCG (Export Promotion Capital Goods Scheme) licenses for importing the capital goods without payment of basic custom duty against submission of bonds.

The export obligation is to be fulfilled within a period of 6 years from the date of issuance of license. Under this scheme the Company has to achieve FOB value of exports which will be 6 times of duty saved. Accordingly the Company is required to export of FOB value of C 117.79 crore (March 31,2020 C 174.73 crore) against which the Company has saved a duty of C 19.63 crore (March 31,2020 C 29.12 crore).

(3) The Company has entered in Power Supply Agreement with a Vendor. As per agreement, the Company is required to draw an ''Annual Contracted Quantity'' of 55 Lacs KWH for a period of 5 years having estimated power purchase price of C 3.08 crore (March 31,2020 : C 3.08 crore).

(4) The Company has given corporate guarantees on behalf of its three subsidiaries i.e. Apollo Metalex Private Limited, Shri Laksh-mi Metal Udyog Limited and Apollo Tricoat Tubes Limited for loans and credit facilities taken by them from banks and financial institutions. The loan outstanding as at March 31,2021 of Apollo Metalex Private Limited is C 70.43 crore (March 31,2020 C 90.01 crore), Shri Lakshmi Metal Udyog Limited is C Nil crore (March 31,2020 C 67.28 crore) and Apollo Tricoat Tubes Limited is C 62.03 crore (March 31,2020 C 112.56 crore).

(5) The Company has other commitments, for purchase orders which are issued after considering requirements per operating cycle for purchase of services, employee''s benefits. The Company does not have any other long term commitments or material non-cancellable contractual commitments /contracts, including derivative contracts for which there were any material foreseeable losses.

(a) Defined benefit plans

a) Gratuity

The gratuity scheme provides for lump sum payment to vested employees at retirement/death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service or part thereof in excess of 6 months subject to a limit of C 0.20 crore (March 31, 2020 C 0.20 crore). Vesting occurs upon completion of 5 years of service.

During the year, the Company has made contribution of C 1.00 crore (March 31,2020 : C 0.68 crore) to APL Apollo Tubes Limited Employees Group Gratuity Trust which has made further contribution to Kotak Mahindra Life Insurance Co. Ltd.

(b) Defined contribution plans

The Company makes Provident Fund contributions which are defined contribution plans, for qualifying employees. Under the schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognised C 3.00 crore (Year ended March 31, 2020 C 3.02 crore) for Provident Fund contributions in the statement of profit and loss. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes. The obligation of the Company is limited to the amount contributed and it has no further contractual nor any constructive obligation.

(i) The Company completed the acquisition of a production unit (located at Chegunta, Hyderabad of M/s Taurus Value Steel & Pipes Private Limited ("Taurus") on May 27, 2019 along with its employees (see note 46). The Company has carried out acturial valuation of such employees. Further Taurus has transferred gratuity fund of such employees to the APL Apolo Tubes Limited Employee Group Gratuity Trust and accordingly gratuity liability in the Company has been recognised.

(ii) The Company has transferred some employees on payroll of APL Apollo Tubes Limited to Apollo Building Products Private Limited, (a wholly owned subsidiary of the Company). Accordingly, corresponding liability has been transferred to the Apollo Building Products Private Limited.

(1) The discount rate is based on the prevailing market yield of Indian Government Securities as at Balance Sheet date for the estimated term of obligation.

(2) The estimate of future salary increase considered in actuarial valuation takes into account inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market.

(h) The Company expects to make a contribution of C 9.83 crores (March 31, 2020: C 11.02 crores) to the defined benefit plans during the next financial year.

The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method i.e. projected unit credit method has been applied as that used for calculating the defined benefit liability recognised in the balance sheet.

(j) Risk exposure

The defined benefit obligations have the undermentioned risk exposures :

Interest rate risk : The defined benefit obligation calculated uses a discount rate based on government bonds. If bond yields fall, the defined benefit obligation will tend to increase.

Salary Inflation risk : Higher than expected increases in salary will increase the defined benefit obligation.

Demographic risk : This is the risk of variability of results due to unsystematic nature of decrements that include mortality, withdrawal, disability and retirement. The effect of these decrements on the defined benefit obligation is not straight forward and depends upon the combination of salary increase, discount rate and vesting criteria.

Investment risk : The present value of the defined benefit plan liability is calculated using a discount rate determined by reference to high quality corporate bond yields; if the return on plan asset is below this rate, it will create a plan deficit.

40 Share Based Payments

(a) Employee Share Option Plan :

(i) The ESOS scheme titled "Employee Stock Option Scheme 2015" (ESOS 2015) was approved by the shareholders through postal ballot on July 27, 2015 and December 22, 2015. 7,50,000 options are covered under the Scheme for 750,000 Equity shares (before giving effect of share split).

(ii) During the financial year 2015-16, the Nomination and Remuneration Committee in its meeting held on July 28, 2015 has granted 724,000 options respectively under the ESOS to eligible employees of the Company and its subsidiaries. Each option comprises one underlying equity share. The options granted vest over a period of 4 years from the date of the grant in equal proportion of 25% each year. Options may be exercised within 4 years. The exercise price of each option is the market price of the shares on the stock exchange with the highest trading volume, one day before the date of grant of options. The exercise price has been determined at C 452.60 per share.

(iii) During the financial year 2016-17, the Nomination and Remuneration Committee in its meeting held on January 28, 2017 has granted 45,000 options under the ESOS to eligible employees of the Company and its subsidiaries. Each option comprises one underlying equity share. The options granted vest over a period of 4 years from the date of the grant in equal proportion of 25% each year. Options may be exercised within 4 years. The exercise price of each option is the market price of the shares on the stock exchange with the highest trading volume, one day before the date of grant of options. The exercise price has been determined at C 1,028.80 per share.

(iv) During the financial year 2017-18, the the Nomination and Remuneration Committee in its meeting held on September 9, 2017 and February 5, 2018 has granted 96,000 and 70,000 options respectively, under the ESOS to eligible employees of the Company and its subsidiaries. Each option comprises one underlying equity share. The options granted vest over a period of 4 years from the date of the grant in equal proportion of 25% each year. Options may be exercised within 4 years. The exercise price of each option is the market price of the shares on the stock exchange with the highest trading volume, one day before the date of grant of options. The exercise price has been determined at C 1,633.05 and C 2,124.10 respectively per share.

(v) During the financial year 2019-20, the Nomination and Remuneration Committee in its meeting held on November 9, 2019 has granted 95,000 options under the ESOS to eligible employees of the Company and its subsidiaries (whether in India or abroad). Each option comprises one underlying equity share. The options granted vest over a period of 4 years from the date of the grant in equal proportion of 25% each year. Options may be exercised within 5 years. The exercise price of each option is the market price of the shares on the stock exchange with the highest trading volume, one day before the date of grant of options. The exercise price has been determined at C 1,438.55 per share.

(vi) During the financial year 2019-20, the Nomination and Remuneration Committee in its meeting held on November 9, 2019 also recommended reduction in exercise price of options granted on September 9, 2017 and February 5, 2018 to reflect the fall in Company''s share prices. The same was approved by shareholders of the Company on January 27, 2020 through postal ballot. The revised exercise price of each option is the market price of the shares on the stock exchange with the highest trading volume, one day before the date of reduction in exercise price. The revised exercise price has been determined at C 1,438.55 per share.

(i) Figures in the bracket relates to previous year ended March 31,2020.

(ii) Amount of expense of gratuity and compensated absences is taken on actuarial basis.

(iii) The term loan and other credit facilities of the Company are also secured by personal guarantee of directors of the Company, Mr. Sanjay Gupta and Mr. Vinay Gupta.

(iv) The Company has given corporate guarantees on behalf of its three subsidiaries i.e. Apollo Metalex Private Limited, Shri Lakshmi Metal Udyog Limited and Apollo Tricoat Tubes Limited for loans and credit facilities taken by them from banks and financial institutions. The loan outstanding as at March 31,2021 of Apollo Metalex Private Limited is C 70.43 crore (March 31,2020 C 90.01 crore), Shri Lakshmi Metal Udyog Limited is C Nil crore (March 31, 2020 C 67.28 crore) and Apollo Tricoat Tubes Limited is C 62.03 crore (March 31,2020 C 112.56 crore).

The Company during the previous year elected to be assessed at lower tax rate of 25.168% (inclusive of surcharge and cess) under section 115BAA of the Income Tax Act, 1961 as introduced by the Taxation Laws (Amendment) Ordinance 2019. The impact of this change is included in deferred tax credit for year ended March 31, 2020. This change has resulted in reversal of deferred tax expense of C 26.57 crores on account of remeasurement of deferred tax liability as at March 31,2019.

(b) Fair value hierarchy

This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard.

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments that have quoted price. The fair value of all equity instruments which are traded in the stock exchanges is valued using the closing price as at the reporting period.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities, security deposits included in level 3.

(c) Assets and liabilities which are measured at amortised cost for which fair values are disclosed

All the financial asset and financial liabilities measured at amortised cost, carrying value is an approximation of their respective fair value.

44 Financial risk management objectives

The Company''s activities expose it to market risk including foreign currency risk and interest rate risk, liquidity risk and credit risk

This note explains the sources of risk which the entity is exposed to and how the entity manages the risk :

The Company''s risk management is carried out by a treasury department under policies approved by the Board of Directors, Company Treasury Department identifies, evaluates and hedges financial risks in close co-operation with the Company''s operating units. The board provides principles for overall risk management, as well as policies covering specific areas, such as hedging of foreign currency transactions foreign exchange risk.

(a) Market risk

Market risk is the risk of any loss in future earnings, in realisable fair values or in future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as result of changes in interest rates, foreign currency exchange rates, liquidity and other market changes. Future specific market movements can not be normally predicted with reasonable accuracy.

(i) Foreign currency risk

The Company''s functional currency is Indian C (INR). The Company undertakes transactions denominated in the foreign currencies; consequently, exposure to exchange rate fluctuations arise. Volatility in exchange rates affects the Company''s revenue from export markets and the costs of imports, primarily in relation to raw material. The Company is exposed to exchange rate risk under its trade and debt portfolio.

Adverse movements in the exchange rate between the Rupee and any relevant foreign currency result''s in the increase in the Company''s overall debt positions in Rupee terms without the Company having incurred additional debt and favourable movements in the exchange rates will conversely result in reduction in the Company''s receivable in foreign currency. In order to hedge exchange rate risk, the Company has a policy to hedge cash flows up to a specific tenure using forward exchange contracts and options. At any point in time, the Company hedges its estimated foreign currency exposure in respect of forecast sales over the following 6 months. In respect of imports and other payables, the Company hedges its payable as when the exposure arises.

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is exposed to interest rate risk because funds are borrowed at both fixed and floating interest rates. Interest rate risk is measured by using the cash flow sensitivity for changes in variable interest rate. The borrowings of the Company are principally denominated in rupees and US dollars with a mix of fixed and floating rates of interest. The Company hedges its US dollar interest rate risk through interest rate swaps to reduce the floating interest rate risk. The Company has exposure to interest rate risk, arising principally on changes in base lending rate and LIBOR rates. The Company uses a mix of interest rate sensitive financial instruments to manage the liquidity and fund requirements for its day to day operations like short term loans. The risk is managed by the Company by maintaining an appropriate mix between fixed and floating rate borrowings, and by the use of interest rate swap contracts. Hedging activities are evaluated regularly to align with interest rate views and defined risk appetite, ensuring the most cost-effective hedging strategies are applied.

Credit risk arises when a counter party defaults on contractual obligations resulting in financial loss to the Company.

Company''s trade receivables are generally categories into following categories:

1. Export customers

2. Institutional customers

3. Dealers

In case of export sales, in order to mitigate credit risk, generally sales are made on advance payment terms. Where export sales are not made on advance payment terms, the same are secured through letter of credit or bank guarantee, etc.

In case of sale to institutional customers certain credit period is allowed. In order to mitigate credit risk, majority of the sales are secured by letter of credit, bank guarantee, post dated cheques, etc.

In case of sale to dealers certain credit period is allowed. In order to mitigate credit risk, majority of the sales made to dealers are secured by way of post dated cheques (PDC).

Further, Company has an ongoing credit evaluation process in respect of customers who are allowed credit period.

In general, it is presumed that credit risk has significantly increased since initial recognition if the payments are more than 30 days past due.

In current year ended March 31, 2021, revenues arising from direct sales of goods as disclosed in note 27(a) does not include revenue from any customer who contributed more than 10% to the Company''s revenue.

In previous year ended March 31,2020, revenues arising from direct sales of goods as disclosed in note 27(a) includes revenue of approximately C 828.11 crore from customer who contributed more than 10% to the Company''s revenue.

(c) Liquidity risk

The Company has a liquidity risk management framework for managing its short term, medium term and long term sources of funding vis-a-vis short term and long term utilization requirement. This is monitored through a rolling forecast showing the expected net cash flow, likely availability of cash and cash equivalents, and available undrawn borrowing facilities.

46 Acquisition of business

During the previous year ended March 31,2020, The Company completed the acquisition of a production unit (located at Chegunta, Hyderabad), of M/s Taurus Value Steel & Pipes Private Limited, a subsidiary of M/s Shankara Building Products Limited, Bangalore. The acquisition was approved by the Board of Directors of the Company in their meeting held on April 12, 2019 and completed on May 27, 2019. The acquisition of above unit (assets) was accounted for under ''Ind-AS 103 : Business Combination'' whereby assets acquired were fair valued. Details of purchase consideration, fair value of net assets acquired and resultant capital reserve is as under :-

(a) Risk management

The Company being in a capital intensive industry, its objective is to maintain a strong credit rating, healthy capital ratios and establish a capital structure that would maximise the return to stakeholders through optimum mix of debt and equity.

The Company''s capital requirement is mainly to fund its capacity expansion, repayment of principal and interest on its borrowings and strategic acquisitions. The principal source of funding of the Company has been, and is expected to continue to be, cash generated from its operations supplemented by funding from bank borrowings and the capital markets. The Company is not subject to any externally imposed capital requirements.

The Company regularly considers other financing and refinancing opportunities to diversify its debt profile, reduce interest cost and elongate the maturity of its debt portfolio, and closely monitors its judicious allocation amongst competing capital expansion projects and strategic acquisitions, to capture market opportunities at minimum risk.

The Company monitors its capital using gearing ratio, which is net debt divided to total equity. Net debt includes, interest bearing loans and borrowings less cash and cash equivalents, Bank balances other than cash and cash equivalents.


Mar 31, 2018

1 (i) Company background

APL Apollo Tubes Limited (“the Company”) is a public limited Company incorporated in India on February 24, 1986 with its registered office in Delhi, India, The Company is listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE), The Company is engaged in the business of production of ERW steel tubes, The Company has four manufacturing units, one at Sikanderabad, Uttar Pradesh, one at Hosur, Tamilnadu, one at Raipur, Chhattisgarh and one at Murbad, Maharashtra,

The standalone financial statements for the year ended March 31, 2018 were approved by the Board of Directors and authorized for issue on May 25, 2018,

1(ii) Recent accounting pronouncements

The new Standards, amendments to Standards that are issued but not yet effective until the date of authorisation for issuance of the said financial statements are discussed below. The Company has not early adopted these amendments and intends to adopt when they become effective.

(a) Ind AS 115 - Revenue from Contracts with Customers

Ministry of Corporate affairs has notified Ind AS 115 ‘Revenue from Contracts with customers’, which is effective from April 1, 2018. The new standard outlines a single comprehensive control-based model for revenue recognition and supersedes current revenue recognition guidance based on risks & rewards. The Company is evaluating the requirements of Ind AS 115 and its effect of the financial statements.

(b) Ind AS 21 - Foreign currency transactions and advance consideration

Appendix B to Ind AS 21, Foreign currency transactions and advance consideration : On March 28, 2018, Ministry of Corporate Affairs (“MCA”) has notified the Companies (Indian Accounting Standards) Amendment Rules, 2018 containing Appendix B to Ind AS 21, Foreign currency transactions and advance consideration which clarifies the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income, when an entity has received or paid advance consideration in a foreign currency. The amendment will come into force from April 1, 2018. The Company is evaluating requirements of Ind AS 21 and its effect of the financial statements.

(c) Amendments to Ind AS 12 - Recognition of Deferred Tax Assets for Unrealised Losses

The amendments clarify that an entity needs to consider whether tax law restricts the sources of taxable profits against which it may make deductions on the reversal of that deductible temporary difference. Furthermore, the amendments provide guidance on how an entity should determine future taxable profits and explain the circumstances in which taxable profit may include the recovery of some assets for more than their carrying amount. Entities are required to apply the amendments retrospectively. However, on initial application of the amendments, the change in the opening equity of the earliest comparative period may be recognised in opening retained earnings (or in another component of equity, as appropriate), without allocating the change between opening retained earnings and other components of equity. Entities applying this relief must disclose that fact. These amendments are effective for annual periods beginning on or after April 1 2018. These amendments are not expected to have material effect on Company’s financial statements.

Notes :

(1) The Company has elected to continue with the carrying value of all of its property, plant and equipment as at the transition date, viz, April 1, 2016 measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date.

(2) The Company’s investment properties consists of commercial properties in India,

(3) As at March 31, 2018 , March 31, 2017, and April 1, 2016 , fair value of the investment property is Rs.11,48 crore, Rs.14,78 crore and Rs.15,97 crore , respectively, These valuation is based on valuation performed by Government of India approved valuer Mr, Virender Kumar Jain who have Degree of Bachelor of Architecture and is having more than 25 years of experience in valuation of properties, The fair value measurement of all the investment properties has been categorised as a level 3 fair value based on the inputs of the valuation technique used, The fair value was derived using the market comparable approach based on recent market prices without any significant adjustments being made to the market observable data,

(4) The Company has no restriction on the realisability of its investment properties and there is no contractual obligations to purchase, construct or develop investment properties or for repairs, maintenance and enhancements,

(5) During the year, borrowing cost amounting Rs.1,16 crore (Year ended March 31, 2017 Rs.0,50 crore, Year ended March 31, 2016 Rs. Nil) has been capitalised on qualifying assets (Refer note 31),

(6) Property, plant & equipment as detailed in note 2(a) have been pledged as security for term loan taken as at March 31, 2018, Refer note 15 for loans taken against which these assets are pledged,

(i) The average credit period on sale of goods is 0-60 days. No interest is charged on the trade receivables for the amount overdue above the credit period. There are no customers who represent more than 5% of the total balance of trade receivables.

(ii) I n determining the allowance for credit losses of trade receivables, the Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and is adjusted for forward looking information. The expected credit loss allowance is based on the ageing of the receivables that are due and rates used in the provision matrix.

Note :

The Company has given a loan towards working capital requirements amounting to Rs.0.29 crore (March 31, 2017: Rs. Nil , April 1, 2016: Rs. Nil) carrying interest 10% p.a. on February 19, 2018 to a wholly owned subsidiary viz. Blue Ocean Projects Private Limited. The Loan is repayable on February 18, 2019. The maximum amount outstanding during the year is Rs.0.29 crore (March 31, 2017: Rs. Nil , April 1, 2016: Rs. Nil).

(2) Rights, Preferences and restrictions attached to equity shares

The Company has one class of equity shares having a par value of Rs.10 each. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the Annual General Meeting. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

(3) Share options granted under the Company’s employee share options plans

As at March 31, 2018, executives and senior employees held options over 447,250 equity shares of the Company. As at March 31, 2017, executives and senior employees held options over 521,889 equity shares of the Company.

Share options granted under the Company’s employee share option plan carry no rights to dividends and no voting rights. Further details of the employee share option plan are provided in note 39.

Nature and purpose of Reserves :-

(i) Securities premium account: Securities premium reserve is used to record the premium on issue of shares, The reserve is utilised in accordance with the provisions of the Indian Companies Act, 2013 (“the Companies Act”),

(ii) Debenture redemption reserve: The Companies Act requires that where a Company issues debentures, it shall create a debenture redemption reserve out of profits of the Company available for payment of dividend, The Company is required to maintain a Debenture Redemption Reserve of 25% of the value of debentures issued, either by a public issue or on a private placement basis, The amounts credited to the debenture redemption reserve cannot be utilised by the Company except to redeem debentures,

(iii) General reserve: General reserves represents the free profits of the company available for distribution, As per the Companies Act, certain amount was required to be transferred to General Reserve every time company distribute dividend,

(iv) Surplus in Statement of profit and loss: It represents unallocated/un-distributed profits of the company, The same is available for distribution,

(v) Share option outstanding account: The Company offers ESOP under which options to subscribe for the Company’s share have been granted to certain employees and senior management, The share option outstanding account is used to recognise the value of equity settled share based payments provided as part of the ESOP scheme, (Refer note 39)

(i) Details of debentures issued by the Company

As at April 1, 2016 debenture were secured by hypothecation of current assets and movable assets of the Company (both present and future). Further these were secured by hypothecation of immovable property situated at A 19 and A 20, Industrial Area, Sikandrabad, UP and 332-338, Alur Village, Perandapalli, Hosur (Tamilnadu).

During financial year 2016-2017 charge has been changed to first pari passu charge on both movable and immovable property, plant & equipments , present and future, of the company on the property situated at A 19 and A 20, Industrial Area, Sikanderabad, UP, 332-338, Alur Village, Perandapalli, Hosur, Tamilnadu , and at village Bendri, Tehsil Raipur, Dist. - Raipur and second pari passu charge on entire current assets (present and future) of the company. There is no change in security in current financial year.

These debentures are redeemable at face value in one single instalment on September 28, 2019.

Nature of security:

(i) Working capital facilities of APL Apollo Tubes Limited from banks are secured by first pari passu charge on present and future current assets, movable property, plant & equipments, of the company and further secured by equitable mortgage on the Company’s land and building situated at A-19 and A-20 Industrial Area, Sikanderabad, U.P, and at 332-338, Alur Village, Perandapalli - Hosur on first pari passu basis. Working capital limit for certain banks have been arranged against the security of all present and future movable property, plant & equipment and current assets on first passu charge basis (these working capital limit do not have any charge on immovable property, plant & equipment of the company and collaterals). Further working capital limit for one bank has only second pari passu charge on moveable and immovable property, plant & equipment of the Company.

For buyer credit facilities from one bank , these are further secured by hypothecation of imported inventories. These credit facilities are further collaterally secured by personal guarantee of Mr. Sameer Gupta, Mr. Vinay Gupta and Mr. Sanjay Gupta (Promoter Directors). However for working capital facilities of certain banks, these are only secured by personal guarantee of Mr. Sanjay Gupta.

During the financial year 2016-2017, charge has been changed to first pari passu charge on current assets of the Company and second Pari Passu charge on property, plant & equipments (movable and immovable both) situated at A-19 and A-20 Industrial Area, Sikanderabad, U.P and 332-338, Alur-Village, Perandapalli - Hosur. These credit facilities are further collaterally secured by personal guarantee of Mr. Vinay Gupta and Mr. Sanjay Gupta (Promoter Directors). The corporate guarantee of V.S. Exim has been released during the financial year 2016-2017 and personal guarantee of Mr. Sameer Gupta has been released during the year 2016-2017 except one bank . In the financial year 2017-2018, charge has been changed to first pari passu charge on present and future current assets of the company and second pari passu charge on property, plant & equipment (movable and immovable both) of the Company’s land and building situated at A-19 and A-20 Industrial Area, Sikanderabad, U.P, and at 332-338, Alur Village, Perandapalli - Hosur and at village Bendri, Teshil Raipur, Dist - Raipur. These credit facilities are further collaterally secured by personal guarantee of Mr. Sanjay Gupta and Mr. Vinay Gupta (Promoter Director).

Working capital facilities of APL Apollo Tubes Limited (erstwhile known as Lloyds Line Pipes Limited) from banks are secured by first Pari Passu charge on present and future current assets and property, plant & equipment of the Company and further secured by exclusive charge on Company’s land and building situated at Murbad, Thane, Maharashtra. These credit facilities are further collaterally secured by personal guarantee of directors of the Company i.e. Mr. Sameer Gupta, Mr. Vinay Gupta and Mr. Sanjay Gupta (Promoter Directors), these are further secured by corporate guarantee of APL Apollo Tubes Limited, Holding Company. However in one of the bank personal guarantee has been given by Mr. Sanjay Gupta (Director).

During the financial year 2016-2017 charge has been changed to first Pari Passu charge on current assets, present and future, of the Company and further secured by second Pari Passu charge on company’s entire property, plant & equipments, movable and immovable, situated at Murbad, Thane, Maharashtra. During the year personal guarantee of Mr. Sameer Gupta has been released. In the financial year 2017-2018 there has been no change in the existing security structure.

(ii) Buyer’s credit includes Rs.93.63 crore taken for capital goods which has been approved as a sublimit under the term loan facility taken. The tenor of buyer’s credit is six months which can be roll forward upto the tenor of three years

The term loan including buyer credit is secured by first pari passu charge on property, plant & equipments, movable and immovable, present and future, of the Company situated at A-19 and A-20, Industrial Area, Sikanderabad, UP, 332-338, Alur Village, Perandapalli, Hosur (Tamilnadu) and land at village Bendri, Raipur (Chhattisgarh) and second pari passu charge on current assets of the Company, The loan is further guaranteed by personal guarantee of Director of the Company i,e, Mr, Sanjay Gupta and Mr, Vinay Gupta,

(iii) Details of debentures issued by the Company:

(a) The debenture are secured by first pari passu charge on both movable and immovable property, plant & equipment, present and future, of the company on the property situated at A 19 and A 20, Industrial Area, Sikanderabad, UP, 332-338, Alur Village, Perandapalli, Hosur, Tamilnadu and at village Bendri, Tehsil Raipur, Dist, - Raipur

The debentures have the following Call/Put Options :

Put Option: First Put Option at par, at the end of 12th Month from the deemed date of allotment and second Put Option at par, at the end of 24th Month from the deemed date of allotment,

Call Option: First Call Option at par, at the end of 12th Month from the deemed date of allotment and second Call Option at par, at the end of 24th Month from the deemed date of allotment,

These debentures are redeemable at face value in one single instalment on February 28, 2020,

(iv) The term loan facility was secured by first pari passu charge on land & building located at A-19 & A-20 Industrial Area, Sikanderabad, Plot No 332-338, Village Alur, Perandapalli, Hosur, Tamil Nadu & at village Bendri, Raipur (Chhattisgarh) and second charge on current assets of the Company, The loan was further guaranteed by personal guarantee of Mr, Sanjay Gupta and Mr, Vinay Gupta The loan was repayable in one single instalment on September 8, 2018, Applicable rate of interest is 8,20%

Further the term loan has call and put option which can be exercised for this facility at the end of 9 months from the date of disbursement,

During year 2017-18 the Loan has been fully repaid,

The amount due to Micro and small enterprises as defined in “The Micro, Small and Medium Enterprises Development act, 2006” has been determined to the extent such parties have been identified on the basis of information available with the Company, The disclosures relating to Micro and Small Enterprises are as below:

(i) 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 ‘Ind-AS 18 : Revenue’and Schedule III of the Companies Act, 2013, GST is not included in Revenue from operations for applicable periods. In view of the aforesaid restructuring of indirect taxes, Revenue from operations for year ended March 2018 is not comparable with the year ended March, 2017. Following additional information is being provided to facilitate such comparison:

4 Corporate social responsibility

As per section 135 of the Companies Act, 2013 and rules therein, the Company is required to spend at least 2% of average net profit of past three years towards Corporate Social Responsibility (CSR), Details of CSR Expenditure as required by the Management are as follows :

5 Allocation of common expenses

During the year, the Company has charged back the common expenses incurred by it to its group companies (except Blue Ocean Projects Private Limited) on cost i,e, on cost to cost basis, The allocation of common expenses has been carried out on the basis of turnover of the respective companies, as per audited financial statements of immediate preceding financial year,

(i) During the previous financial year ended March 31, 2017, the Company received a demand of Rs.114.37 crore under Central Sales Tax Act, 1956 on account of non submission of various statutory forms under the mentioned Act. During current year, the Company has deposited the all required forms and said demand has been withdrawn by the sales tax authority.

(ii) During the previous financial year ended March 31, 2017, the Company received a demand of Rs.1.41 crore under Income Tax Act, 1961 due to disallowance of certain expenses. The Company has filed the appeal before the CIT (Commissioner of Income Tax) Appeal against the order. During the current year, the CIT-Appeal has withdrawn the above demand.

No Provision has been considered necessary since the Company expects favourable decision in appeals.

(iii) During the year, the Company has discounted the sales bill from the banks for Rs.10.61 crore (March 31, 2017 Rs.0.92 crore, April 1, 2016 Rs.0.26 crore).

(b) Commitments

(1) Estimated amount of contracts remaining to be executed on capital account and not provided for

(i) Property, plant & equipments (‘in crore) 40.43 69.37 139.05

(2) The Company has obtained advance licenses under the Duty Exemption Scheme for importing input materials without payment of customs duty against submission of bonds.

The export obligation is to be fulfilled within a period of 18 months from the date of issuance of license. Under this scheme the Company has to achieve both the quantity and FOB value of exports specified in the license. Accordingly the Company is required to export goods of FOB Value of at least Rs.64.06 crore (March 31, 2017 Rs.52.85 crore, April 1, 2016 Rs.145.68 crore) against which the Company has saved a duty of Rs.7.16 crore (March 31, 2017 Rs.9.25 crore, April 1, 2016 Rs.62.68 crore).

(3) The Company has obtained EPCG (Export Promotion Capital Goods Scheme) licenses for importing the capital goods without payment of basic custom duty against submission of bonds.

The export obligation is to be fulfilled within a period of 6 years from the date of issuance of license. Under this scheme the Company has to achieve FOB value of exports which will be 6 times of duty saved. Accordingly the Company is required to export of FOB value of at least Rs.149.49 crore (March 31, 2017 Rs.71.84 crore, April 1, 2016 Rs. Nil) against which the Company has saved a duty of Rs.24.91 crore (March 31, 2017 Rs.11.98 crore, April 1, 2016 Rs. Nil).

(4) The Company has entered in Power Supply Agreement with a Vendor. As per agreement, the Company is required to draw an ‘Annual Contracted Quantity’of 55 Lacs KWH for a period of 5 years.

(5) The Company has given corporate guarantees on behalf of its two subsidiaries i.e. Apollo Metalex Private Limited and Shri Lakshmi Metal Udyog Limited for loans and credit facilities taken by them from banks and financial institutions. The loan outstanding as at March 31, 2018 of Apollo Metalex Private Limited is Rs.32.66 crore (March 31, 2017 Rs.102.51 crore, April 1, 2016 Rs.67.61 crore) and Shri Lakshmi Metal Udyog Limited is Rs.4.37 crore (March 31, 2017 Rs.26.01 crore, April 1, 2016 Rs.11.62 crore).

(6) The Company has other commitments, for purchase orders which are issued after considering requirements per operating cycle for purchase of services, employee’s benefits. The Company does not have any other long term commitments or material non-cancellable contractual commitments /contracts, including derivative contracts for which there were any material foreseeable losses.

(c) There has been no delays in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

(a) Defined benefit plans

(a) Gratuity

The Company has an unfunded defined benefit gratuity plan, The gratuity scheme provides for lump sum payment to vested employees at retirement/death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service or part thereof in excess of 6 months subject to a limit of Rs.0,20 crore (March 31, 2017 Rs.0,10 crore), Vesting occurs upon completion of 5 years of service,

(b) Defined contribution plans

The Company makes Provident Fund and Employee State Insurance Scheme contributions which are defined contribution plans, for qualifying employees, Under the schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits, The Company recognised Rs.2,00 crore (Year ended March 31, 2017 Rs.1,90 crore) for Provident Fund contributions, and Rs.0,56 crore (Year ended March 31, 2017 Rs.0,40 crore) for Employee State Insurance Scheme contributions in the statement of profit and loss, The contributions payable to these plans by the Company are at rates specified in the rules of the schemes, The obligation of the company is limited to the amount contributed and it has no further contractual nor any constructive obligation,

(c) Movement of defined benefit obligation:

The amounts recognised in the balance sheet and the movements in the net defined benefit obligation over the year are as follows:

Notes :

(1) The discount rate is based on the prevailing market yield of Indian Government Securities as at Balance Sheet date for the estimated term of obligation.

(2) The estimate of future salary increase considered in actuarial valuation takes into account inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market.

(e) Sensitivity analysis

The sensitivity of the defined benefit obligation to changes in the weighted principal assumptions is :

The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method i.e. projected unit credit method has been applied as that used for calculating the defined benefit liability recognised in the balance sheet.

(f) Risk exposure

The defined benefit obligations have the under mentioned risk exposures :

Interest rate risk : The defined benefit obligation calculated uses a discount rate based on government bonds. If bond yields fall, the defined benefit obligation will tend to increase.

Salary Inflation risk : Higher than expected increases in salary will increase the defined benefit obligation.

Demographic risk : This is the risk of variability of results due to unsystematic nature of decrements that include mortality, withdrawal, disability and retirement. The effect of these decrements on the defined benefit obligation is not straight forward and depends upon the combination of salary increase, discount rate and vesting criteria.

(g) Defined benefit liability and employer contributions

The weighted average duration of the defined benefit obligation is 23.57 years.

The expected maturity analysis of undiscounted gratuity is as follows:

6 Share Based Payments

(a) Employee Share Option Plan :

(i) The ESOS scheme titled “Employee Stock Option Scheme 2015” (ESOS 2015) was approved by the shareholders through postal ballot on July 27, 2015 and December 22, 2015. 7,50,000 options are covered under the Scheme for 750,000 Equity shares.

(ii) During the financial year 2015-16, the Nomination and Remuneration Committee in its meeting held on July 28, 2015 has granted 724,000 options respectively under the ESOS to eligible employees of the Company and its subsidiaries. Each option comprises one underlying equity share. The options granted vest over a period of 4 years from the date of the grant in equal proportion of 25% each year. Options may be exercised within 5 years. The exercise price of each option is the market price of the shares on the stock exchange with the highest trading volume, one day before the date of grant of options. The exercise price has been determined at Rs.452.60 per share.

(iii) During the financial year 2016-17, the Nomination and Remuneration Committee in its meeting held on January 28, 2017 has granted 45,000 options under the ESOS to eligible employees of the Company and its subsidiaries. Each option comprises one underlying equity share. The options granted vest over a period of 4 years from the date of the grant in equal proportion of 25% each year. Options may be exercised within 4 years. The exercise price of each option is the market price of the shares on the stock exchange with the highest trading volume, one day before the date of grant of options. The exercise price has been determined at Rs.1,028.80 per share.

(iv) During the financial year 2017-18, the the Nomination and Remuneration Committee in its meeting held on September 9, 2017 and February 5, 2018 has granted 96,000 and 70,000 options respectively, under the ESOS to eligible employees of the Company and its subsidiaries. Each option comprises one underlying equity share. The options granted vest over a period of 4 years from the date of the grant in equal proportion of 25% each year. Options may be exercised within 4 years. The exercise price of each option is the market price of the shares on the stock exchange with the highest trading volume, one day before the date of grant of options. The exercise price has been determined at Rs.1,633.05 and Rs.2,124.10 respectively per share.

(c) Fair value option granted in the year

The weighted average fair value of the share options granted during the financial year is Rs.665,18 (during the year ended March 31, 2016: Rs.354,56), Options were priced using Black Scholes Model,

(d) Movement in share option during the year

The following reconciles the share options outstanding at the beginning and end of the year:

(f) Expense arising from share-based payment transactions

Total expenses arising from share-based payment transactions, i,e,, employee share option plan during the year recognised in profit or loss as part of employee benefit expense is Rs.2,68 crore ( March 31, 2017 Rs.3,05 crore),

(g) No option expired during the year

Notes :

(1) Figures in the bracket relates to previous year ended March 31, 2017 and April 1, 2016

(2) As the future liability for gratuity and compensated absences is provided on an actuarial basis for the Company as a whole, the amount pertaining to individual is not ascertainable and therefore not included above.

(3) The term loan and other credit facilities of the Company are also secured by personal guarantee of directors of the Company, Mr. Sanjay Gupta and Mr. Vinay Gupta.

In February, 2018, the Indian Corporate effective tax rate were changed from 34.608% to 34.944% and substantively enacted and will be effective from April 1, 2018. As a result, the relevant deferred tax balances have been remeasured.

7 Fair value measurements

The following tables presents the carrying value and fair value of each category of financial assets and liabilities as at March 31, 2018, March 31, 2017 and April 1, 2016,

Fair value of forward contracts determined by reference to quote from financial institution,

(b) Fair value hierarchy

This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements, To provide an indication about the reliability of the inputs used in determining fair value, the company has classified its financial instruments into the three levels prescribed under the accounting standard,

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments that have quoted price. The fair value of all equity instruments which are traded in the stock exchanges is valued using the closing price as at the reporting period.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities, security deposits included in level 3.

(c) Assets and liabilities which are measured at amortised cost for which fair values are disclosed

All the financial asset and financial liabilities measured at amortised cost, carrying value is an approximation of their respective fair value.

The fair value was derived using the market comparable approach based on recent market prices without any significant adjustments being made to the market observable data.

*There were no significant inter-relationships between unobservable inputs that materially affect fair values.

8 Financial risk management objectives

The company’s activities expose it to market risk including foreign currency risk and interest rate risk, liquidity risk and credit risk.

This note explains the sources of risk which the entity is exposed to and how the entity manages the risk :

The Company’s risk management is carried out by a treasury department under policies approved by the Board of Directors, Company Treasury Department identifies, evaluates and hedges financial risks in close co-operation with the company’s operating units. The board provides principles for overall risk management, as well as policies covering specific areas, such as hedging of foreign currency transactions foreign exchange risk.

(a) Market risk

Market risk is the risk of any loss in future earnings, in realisable fair values or in future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as result of changes in interest rates, foreign currency exchange rates, equity price fluctuations, liquidity and other market changes. Future specific market movements can not be normally predicted with reasonable accuracy.

(i) Foreign currency risk

The Company’s functional currency in Indian ‘(INR). The Company undertakes transactions denominated in the foreign currencies; consequently, exposure to exchange rate fluctuations arise. Volatility in exchange rates affects the Company’s revenue from export markets and the costs of imports, primarily in relation to raw material. The Company is exposed to exchange rate risk under its trade and debt portfolio.

Adverse movements in the exchange rate between the ‘and any relevant foreign currency result’s in the increase in the Company’s overall debt positions in ‘terms without the Company having incurred additional debt and favourable movements in the exchange rates will conversely result in reduction in the Company’s receivable in foreign currency. In order to hedge exchange rate risk, the Company has a policy to hedge cash flows up to a specific tenure using forward exchange contracts and options. At any point in time, the Company hedges its estimated foreign currency exposure in respect of forecast sales over the following 6 months. In respect of imports and other payables, the Company hedges its payable as when the exposure arises.

(ii) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is exposed to interest rate risk because funds are borrowed at both fixed and floating interest rates. Interest rate risk is measured by using the cash flow sensitivity for changes in variable interest rate. The borrowings of the Company are principally denominated in ‘and US dollars with a mix of fixed and floating rates of interest. The Company hedges its US dollar interest rate risk through interest rate swaps to reduce the floating interest rate risk. The Company has exposure to interest rate risk, arising principally on changes in base lending rate and LIBOR rates. The Company uses a mix of interest rate sensitive financial instruments to manage the liquidity and fund requirements for its day to day operations like non-convertible bonds and short term loans. The risk is managed by the Company by maintaining an appropriate mix between fixed and floating rate borrowings, and by the use of interest rate swap contracts. Hedging activities are evaluated regularly to align with interest rate views and defined risk appetite, ensuring the most cost-effective hedging strategies are applied.

(b) Credit risk

Credit risk arises when a counter party defaults on contractual obligations resulting in financial loss to the company. Company’s trade receivables are generally categories into following categories:

1. Export customers

2. Institutional customers

3. Dealers

In case of export sales, in order to mitigate credit risk, generally sales are made on advance payment terms. Where export sales are not made on advance payment terms, the same are secured through letter of credit or bank guarantee, etc.

In case of sale to institutional customers certain credit period is allowed. In order to mitigate credit risk, majority of the sales are secured by letter of credit, bank guarantee, post dated cheques, etc.

In case of sale to dealers certain credit period is allowed, In order to mitigate credit risk, majority of the sales made to dealers are secured by way of post dated cheques (PDC),

Further, Company has an ongoing credit evaluation process in respect of customers who are allowed credit period,

In general, it is presumed that credit risk has significantly increased since initial recognition if the payments are more than 30 days past due,

(c) Liquidity risk

The Company has a liquidity risk management framework for managing its short term, medium term and long term sources of funding vis-a-vis short term and long term utilization requirement, This is monitored through a rolling forecast showing the expected net cash flow, likely availability of cash and cash equivalents, and available undrawn borrowing facilities,,

(i) Financing arrangements: The position of undrawn borrowing facilities at the end of reporting period are as follows:

(ii) Maturities of financial liabilities

The table below analyses the company’s all non-derivative financial liabilities into relevant maturity based on their contractual maturities, The amounts disclosed in the table are the contractual undiscounted cash flows,

9 Capital management

(a) Risk management

The Company being in a capital intensive industry, its objective is to maintain a strong credit rating, healthy capital ratios and establish a capital structure that would maximise the return to stakeholders through optimum mix of debt and equity.

The Company’s capital requirement is mainly to fund its capacity expansion, repayment of principal and interest on its borrowings and strategic acquisitions. The principal source of funding of the Company has been, and is expected to continue to be, cash generated from its operations supplemented by funding from bank borrowings and the capital markets. The Company is not subject to any externally imposed capital requirements.

The Company regularly considers other financing and refinancing opportunities to diversify its debt profile, reduce interest cost and elongate the maturity of its debt portfolio, and closely monitors its judicious allocation amongst competing capital expansion projects and strategic acquisitions, to capture market opportunities at minimum risk.

The Company monitors its capital using gearing ratio, which is net debt divided to total equity. Net debt includes, interest bearing loans and borrowings less cash and cash equivalents, Bank balances other than cash and cash equivalents.

The Board of Directors have recommended a final dividend of Rs.14 per share for the year ended March 31, 2018 which is subject to the approval of the shareholders in the ensuing annual general meeting.

10 Scheme of Amalgamation

APL Apollo Tubes Limited (““Company”“ or ““Transferee Company”“) had filed a scheme of amalgamation (‘the Scheme’) of LLoyds Line Pipes Limited (““a wholly owned subsidiary”“ or ““Transferor Company”“) with APL Apollo Tubes Limited under section 391 read with section 394 of the Companies Act, 1956 or any corresponding provisions of Companies Act, 2013.

Hon’ble National Company Law Tribunal, Principal Bench at New Delhi vide its order dated August 7, 2017 and rectification order dated September 19, 2017 approved the scheme of amalgamation (““Scheme”“) of Lloyds Line Pipes Limited with APL Apollo Tubes Limited (APL) under Section 230 and 232 of Companies Act, 2013 with effect from the appointed date i.e. April 1, 2015. The scheme became effective upon filing of the aforesaid order with Registrar of Companies (‘ROC’) on October 18, 2017. Pursuant to the scheme :

- All assets and liabilities of the Transferor Companies stand transferred to and vested in the Transferee Company.

- The Amalgamation has been accounted under the ““ Pooling of interest method”“ as per then prevailing Accounting Standard (AS 14) referred in the scheme which requires line by line addition into APL and excess of the amount of investment in subsidiary cancelled on amalgamation of subsidiary with the Company has been adjusted against the accumulated reserves in terms of accounting treatment for amalgamation prescribed under the scheme. Further pursuant to the scheme, authorised share capital of the Company has increased by corresponding Authorised Share capital of transferor company of 2 crore equity shares of Rs.10 each aggregating to Rs.20 crore.

11 First-time adoption of Ind AS

These are the Company’s first financial statements prepared in accordance with Ind AS,

The accounting policies set out in Note 1(ii) have been applied in preparing the financial statements for the year ended March 31, 2018, the comparative information presented in these standalone financial statements for the year ended March 31, 2017 and in the preparation of an opening Ind AS balance sheet at April 1, 2016 (Company’s date of transition to Ind AS), In preparing its opening Ind AS Balance Sheet, the company has adjusted the amounts reported previously in standalone financial statements prepared in accordance with the applicable accounting standards notified under Companies (Accounting Standards) Rules, 2006 (as amended) and other relevant provisions of the Act,

An explanation of how the transition from previous GAAP to Ind AS has affected the Company’s financial position, financial performance and cash flows is set out in the following tables and notes,

Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from previous GAAP to Ind AS,

A Exemptions and exceptions availed

(a) Ind AS optional exemptions

(i) Deemed cost

I nd AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognised in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition. This exemption is also used for intangible assets covered by Ind AS 38 Intangible Assets.

Accordingly, the Company has elected to measure all of its property, plant and equipment and intangible assets at their previous GAAP carrying value, which has been considered as deemed cost.

(ii) Investments in subsidiaries

I nd AS 101, for the purpose of standalone financial statements, permits a first-time adopter to measure its investment in subsidiaries on the date of transition at deemed cost which can be either its:

(i) fair value at the date of transition to Ind AS; or

(ii) previous GAAP carrying amount at that date.

The company has decided to measure its investment in subsidiaries on the date of transition to Ind AS at fair value as their respective deemed cost.

(b) Ind AS mandatory exceptions

(i) Estimates

Estimates made under Ind AS at April 1, 2016 are consistent with the estimates as under previous GAAP.

(ii) Classification and measurement of financial assets

Ind AS 101 requires that an entity should assess the classification of its financial assets on the basis of facts and circumstances exist on the date of transition. Accordingly, in its Opening Ind AS Balance Sheet, the company has classified all the financial assets on basis of facts and circumstances that existed on the date of transition, i.e., April 1, 2016.

(iii) Business combination

In accordance with Ind AS transitional provision, the Company opted not to restate business combination which occurred prior to the transition date.

As the presentation requirements under previous GAAP differ from Ind AS, the previous GAAP information has been regrouped for ease and facilitation of reconcilisation with Ind AS.

Notes to the reconciliation

1 Under the previous GAAP, advance rentals paid for land lease were disclosed under property, plant and equipment and amortised to profit and loss over the operating lease period. Under Ind AS, all lease arrangements are classified as operating or finance lease based on transfer of risks and rewards and the period of use relative to the economic life. The effect of this change has resulted in reclassification of amounts from property, plant and equipment to other financial assets on transition date (April 1, 2016) and as March 31, 2017. Further depreciation expenses for the year ended March 31, 2017 has been reclassified to rental expenses.

2 Ind AS 101, for the purpose of standalone financial statements, permits a first-time adopter to measure its investment in subsidiaries at fair value on the date of transition as its deemed cost. Accordingly, the company has fair valued its investment in subsidiaries at fair value on the date of transition with corresponding impact in retained earnings.

3 Under previous GAAP, excess, if any, of the closing market price on the day prior to the grant of the options under ESOS over the exercise price was amortized by the company on straight-line basis over the vesting period.

Under Ind AS, all the stock options granted to the employees are required to be measured at fair value at each reporting period. Accordingly, outstanding options as on the date of transition (granted but not vested) has been measured at fair value with corresponding impact to the equity.

4 Under previous GAAP, premium on forward contracts were amortised over the period of contracts on straight line basis. Further, mark-to-market (MTM) gain/losses were recognised on the basis of closing rate on the forward contract with similar maturity.

Under Ind AS, no premium expense on forward contract is recognised and MTM gains/losses are recognised on the basis of fair value of the similar forward contract of remaining tenure.

Accordingly, deferred premium on forward contracts outstanding on the date of transition has been derecognised with corresponding impact in retained earnings. Further, MTM difference between previous GAAP and Ind AS has been recognised with corresponding impact to retained earnings.

5 Under the previous GAAP, dividends proposed by the board of directors after the balance sheet date but before the approval of the financial statements was considered as an adjusting event, Accordingly, provision for proposed dividend was recognised as a liability, Under Ind AS, such dividends are recognised when the same is approved by the shareholders in the general meeting, Accordingly, the liability for proposed dividend included under provisions has been reversed with corresponding adjustment to retained earnings,

6 Relates to prior period expense of year ended March 31, 2016 which were debited in year ended March 31, 2017 under previous GAAP, Under Ind AS, the same have been restated to respective years,

7 Under Ind AS, the Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix, The provision matrix takes into account historical credit loss experience and is adjusted for forward looking information, The expected credit loss allowance is based on the ageing of the receivables that are due and rates used in the provision matrix,

8 The Company has obtained EPCG (Export Promotion Capital Goods Scheme) licenses for importing the capital goods without payment of basic custom duty against submission of bonds, Under Ind AS, these grants are required to be capitalised in the property, plant & equipment with the corresponding deferred income liability in Balance Sheet, Property, plant & equipment are depreciated over the useful life of assets and deferred income liability is amortised over the useful life of asset,

9 In order to promote export, the Reserve Bank of India (RBI) has issued the scheme of Interest Subvention on the behalf of Government of India whereby the Company is entitled to reduced interest rate on its borrowings (by 3 % p,a,), Under Ind AS, interest saved under government grants is recognised as interest income and corresponding interest expense in finance costs,

10 Under previous GAAP, revenue from sale of goods was presented net of excise duty whereas under Ind AS, the revenue from sale of goods is presented inclusive of excise duty, The excise duty is presented on the face of Statement of Standalone Profit & Loss as part of expense,

11 Other GAAP adjustments includes adjustment on account of financial assets and liabilities measured at amortised cost

12 The various transitional adjustments have deferred tax implications which have been accounted for by the Company, Deferred tax adjustment have been recognised in relation to the underlying transaction either in retained earnings or other comprehensive income, on the date of transition,

13 Under Ind AS, all items of income and expense recognised in a period should be included in profit or loss for the period, unless a standard requires or permits otherwise, Items of income and expense that are not recognised in profit or loss but are shown in the statement of profit and loss as ‘other comprehensive income’includes remeasurements of defined benefit plans, The concept of other comprehensive income did not exist under previous GAAP, Accordingly, gain/loss on remeasurements of post-employment benefit obligation has been reclassified to the Other Comprehensive Income for the year ended March 31, 2017,


Mar 31, 2017

A. General Information

APL Apollo Tubes Limited, the Company was incorporated on 24 February 1986. The Company is engaged in the business of production of ERW steel tubes. The Company has two manufacturing units, one at Sikandrabad, Uttar Pradesh and another at Hosur, Tamil nadu.

Nature of security:

(i) Working capital facilities from banks are secured by first pari passu charge on present and future current assets, movable fixed assets, of the company and further secured by equitable mortgage on the Company’s land and building situated at A-19 and A-20 Industrial Area, Sikanderabad, U.P, and at 332-338, Alur Village, Perandapalli -Hosur on first pari passu basis. Working capital limit for certain banks have been arranged against the security of all present and future movable fixed assets and current assets on first passu charge basis (these working capital limit do not have any charge on immovable fixed assets of the company and collaterals). For working capital limit for one bank has only second pari passu charge on moveable and immovable fixed assets of the Company.

For buyer credit facilities from one bank , these are further secured by hypothecation of imported inventories. These credit facilities are further collaterlly secured by personal guarantee of Mr. Sameer Gupta, Mr. Vinay Gupta and Mr. Sanjay Gupta (Promoter Directors). However for working capital facilities of certain banks, these are only secured by personal guarantee of Mr. Sanjay Gupta. Also in case of working capital limit from one banks, these are only secured by corporate guarantee of V.S. Exim Private Limited, a Company under significant influence of the directors.

During the current year charge has been changed to first pari passu charge on current assets of the Company and second Pari Passu charge on fixed assets (movable and immovable both) situated at A-19 and A-20 Industrial Area, Sikandarabad, U.P and 332-338, Alur-Village, Perandapalli - Hosur. These credit facilities are further collaterally secured by personal guarantee of Mr. Vinay Gupta and Mr. Sanjay Gupta (Promoter Directors). The corporate guarantee of V.S. Exim Private Limted has been released during the year and personal guarantee of Mr. Sameer Gupta has been released during the year except one bank.

(i) Buyer’s credit includes Rs.36.99 crore taken for capital goods which has been approved as a sublimit under the term loan facility taken during the financial year. The tenor of buyer’s credit is six months which can be roll forward upto the tenor of three years.

The term loan including buyer credit is secured by first pari passu charge on fixed assets, movable and immovable, present and future, of the Company situated at A-19 and A-20, Industrial Area, Sikandrabad, UP, 332-338, Alur Village, Perandapalli, Hosur (Tamilnadu) and land at village Bendri, Raipur (Chattisgarh) and second pari passu charge on current assets of the Company. The loan is furhter guaranteed by personal guarantee of Director of the Company i.e. Mr. Sanjay Gupta and Mr. Vinay Gupta.

(a) As per term sheet debentures will be secured by hypothecation of on both movable and immovable assets of the Company (both present and future) situated at A-19 and A-20, Industrial Area, Sikandrabad, UP, 332-338, Alur Village, Perandapalli, Hosur (Tamilnadu) and land at village Bendri, Raipur (Chattisgarh). The Company is in process of creating of charge on asset for debentures.

The debentures have the following Call/Put Options:

Put Option: First Put Option at par, at the end of 12 Month days from the deemed date of allotment and second Put Option at par, at the end of 24 Month from the deemed date of allotment.

Call Option: First Call Option at par, at the end of 12 Months from the deemed date of allotment and second Call Option at par, at the end of 24 Month from the deemed date of allotment.

These debentures are redeemable at face value in one single installment on 28 February, 2020

(ii) The term faciltiy has been secured by first pari passu charge on fixed assets, movable and immovable, present and future, of the Company situated at A-19 and A-20, Industrial Area, Sikandrabad, UP, 332-338, Alur Village, Perandapalli, Hosur (Tamilnadu) and land at village Bendri, Raipur (Chattisgarh) and second charge on current assets of the Company. The loan is furhter guaranteed by personal guarantee of Director of the Company i.e. Mr. Sanjay Gupta and Mr. Vinay Gupta. The loan is repayble in one single installment on 08 September 2018. Applicable rate of interest is 8.20%.

Futher the term loan has Call and put option which can be exercise for this facility at the end of 9 months from the date of disbursement.

1.1 During the previous year ended 31 March, 2016, the brand image expenses and entry tax receivables carried forward from previous year aggregating to Rs.17.57 crore and Rs.7.72 crore respectively have been fully written off and disclosed as exceptional items

Note 2 : Disclosures under Accounting Standards

2.1 Employee benefit obligations

(a) Defined contribution plans:

The Company makes Provident Fund and Employee State Insurance Scheme contributions which are defined contribution plans, for qualifying employees. Under the schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognised Rs.9.38 crore (Year ended 31 March, 2016 Rs.9.19 crore) for Provident Fund contributions, and Rs.0.37 crore (Year ended 31 March, 2016 Rs.0.35 crore) for Employee State Insurance Scheme contributions in the statement of profit and loss. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.

(b) Defined benefit plans

The Company offers the following employee benefit schemes to its employees:

The Company has an unfunded defined benefit gratuity plan. The gratuity scheme provides for lump sum payment to vested employees at retirement/death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service or part thereof in excess of 6 months subject to a limit of Rs.0.10 crore (Previous Year Rs.0.10 crore). Vesting occurs upon completion of 5 years of service.

2.2 The Company has only one segment i.e, manufacturing of ERW steel tubes, therefore no further disclosure is required under Accounting Standard-17.

3 Allocation of common expenses

During the year, the Company has charged common expenses incurred by it to its group companies (except Blue Ocean Project Private Limited) on cost i.e. on cost to cost basis. The allocation of common expenses has been carried out on the basis of turnover of the respective companies, as per audited financial statements of immediate preceding financial year.

4 Corporate social responsibility

As per section 135 of the Companies Act, 2013 and rules therein, the Company is required to spend at least 2% of average net profit of past three years towards Corporate Social Responsibility (CSR). Details of CSR expenditure as certified by the Management are as follows:

5 Disclosure on specified bank notes (SBNs):

During the year, the Company had specified bank notes or other denomination note as defined in the MCA notification G.S.R. 308(E) dated 31 March, 2017 on the details of Specified Bank Notes (SBN) held and transacted during the period from 08 November, 2016 to 30 December, 2016 the denomination wise SBNs and other notes as per the notification is given below:

* For the purposes of this clause, the term ‘Specified Bank Notes’ shall have the same meaning provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407(E), dated the 08 November, 2016.

6 Previous year figures have been regrouped/ reclassified wherever necessary to correspond with the current year classification/disclosure.


Mar 31, 2016

1 Disclosures required under Section 22 of the Micro, Small and Medium Enterprises Development Act, 2006

The Group has no amounts payable to Micro and Small Enterprises as defined in section 7(1) of the Micro, Small and Medium Enterprises Development Act, 2006, to the extent such parties have been identified on the basis of information collected by the Management. This has been relied upon by the auditors.

2. Details on derivative instruments and unhedged foreign currency exposures

(a) Outstanding forward exchange contracts entered into by the Group as on 31 March, 2016

3. Employee Stock Option Scheme

(a) The ESOP scheme titled "Employee Stock Option Scheme 2015" (ESOP 2015) was approved by the shareholders through postal ballot on 27 July, 2015 and 22 December, 2015. 7,50,000 options are covered under the Scheme for 750,000 Equity shares.

During the financial year 2015-16, the Remuneration / Compensation Committee in its meeting held on 28 July, 2015 has granted Rs, 724,000 options respectively under the ESOP to eligible employees of the Company and its subsidiaries (whether in India or abroad). Each option comprises one underlying equity share. The options granted vest over a period of 4 years from the date of the grant in equal proportion of 25% each year. Options may be exercised within 5 years. The exercise price of each option is the market price of the shares on the stock exchange with the highest trading volume, one day before the date of grant of options. The exercise price has been determined at Rs, 452.60 per share.

4. During the financial year ended 31 March, 2016, the brand image expenses and entry tax receivables carried forward from previous years aggregating to Rs, 17.57 crore and Rs, 7.72 crore respectively have been fully written off and disclosed as exceptional items.

Note 5 : Disclosures under Accounting standard 29.1 Employee benefit obligations

(a) Defined contribution plans:

The Group makes Provident Fund, Superannuation Fund and Employee State Insurance Scheme contributions which are defined contribution plans, for qualifying employees. Under the Schemes, the Group is required to contribute a specified percentage of the payroll costs to fund the benefits. The Group recognized Rs, 2.11 crore (Year ended 31 March, 2015 Rs, 1.87 crore) for Provident Fund contributions, and Rs, 0.63 crore (year ended 31 March, 2015 Rs, 0.54 crore) for Employee State Insurance Scheme contributions in the Statement of Profit and Loss. The contributions payable to these plans by the Group are at rates specified in the rules of the schemes.

(b) Defined benefit plans

The Group offers the following employee benefit schemes to its employees:

The Group has an unfunded defined benefit gratuity plan. The gratuity scheme provides for lump sum payment to vested employees at retirement/death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service or part thereof in excess of 6 months subject to a limit of Rs, 0.10 crore (year ended 31 March, 2015 Rs, 0.10 crore). Vesting occurs upon completion of 5 years of service.

The discount rate is based on the prevailing market yields of Government of India securities as at the balance sheet date for the estimated term of the obligations.

The estimate of future salary increases considered, takes into account the inflation, seniority, promotion, increments and other relevant factors.

6. Related party transactions Details of related parties:

Description of relationship Names of related parties

(i) Key Management Personnel (KMP) Shri Sanjay Gupta (Chairman)

Shri Ashok Kumar Gupta (Managing Director)

Shri Vinay Gupta (Director)

Shri Sameer Gupta (Director)

(ii) Relatives of KMP Mrs. Saroj Rani Gupta (Mother of Director)

Mrs. Neera Gupta (Wife of Shri Sanjay Gupta)

Mrs. Vandana Gupta (Wife of Shri Vinay Gupta)

Mrs. Meenakshi Gupta (Wife of Shri Sameer Gupta) Shri Rahul Gupta (Son of Shri Sanjay Gupta)

(iii) Enterprises over which persons able to APL Infrastructure Private Limited exercise significant influence Apollo Pipes Limited

V.S. Exim Private Limited Assawa Associates Private Limited

7. Transfer pricing

The Group has established a comprehensive system of maintenance of information and documents as required by transfer pricing legislation under section 92D for its specified domestic transactions. The Group will further update above information and records and expects these to be in existence latest by due date of the filing of return, as required under law. The management is of the opinion that all above transactions are at arm''s length so that aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

8. The previous year financials were audited by VAPS & Co, another firm of Chartered accountants.

9. Previous year figures have been regrouped / reclassified wherever necessary to correspond with the current year classification/disclosure.


Mar 31, 2015

1: Exceptional Item

During the year the Company has sold Plant & Machinery and Vehicles consequently, there is profit on sale of Rs. 0.93 Million.

2: Depreciation

During the year, pursuant to the notification of Schedule II to the Companies Act, 2013 with effect from April 1, 2014, the Company revised estimated useful life of some of its assets to align the useful life with those specified in Schedule II. Further, assets individually costing Rs. 5,000/- or less that were depreciated fully in the year of purchase are now depreciated based on the useful life considered by the Company for the respective category of assets.The details of previously applied depreciation method, rates / useful life are as follows:

3: Contingent Liability

Contingent liability not provided for in respect of; (Rs. in million)

S. No. Particulars 2014-2015 2013-2014

1. Counter guarantee to Union Bank of India for performance guarantee 15.41 12.03 given to various departments

2. Corporate Guarantee(s) have been given for securing working capital facilities sanctioned to its Subsidiary Companies.

3. Sales Invoice Discounted (Under channel financing scheme from Banks/Institutions 358.94 50.87 to customers for which the company has given counter guarantee)

Note 4:

The Company has only one segment i.e. manufacturing of Steel tubes and pipes,therefore segment reporting as required under Accounting Standard -17 is considered as not applicable.

Note 5: Brand building Expense

During the Year the company has incurred an expenditure of Rs. 74.96 Millions (Previous Year Rs. 14.01 Millions) on Brand building exercise, which has been grouped under miscellaneous expenses and will be amortized in 5 years equally.

Note 6:

Provision for IncomeTax for the current year has been computed based on Minimum Alternate Tax in accordance with Section 115JB of the IncomeTax Act, 1961. Taking into consideration the future profitability and the taxable position in the subsequent years,the Company has recognized MAT Credit Entitlement to the extent of Rs. 42.37 Millions (Previous Year Rs. 16.87 Millions) in accordance with the Guidance Note on Accounting for Credit Available in respect of Minimum Alternate Tax under Income Tax Act,1961 issued by the Institute of Chartered Accountants of India.

Note 7: Related Party Disclosures (AS-18)

a) Name of the related parties and description of relationships;

Related Parties with whom transaction have taken place during the year and balances outstanding as on the last day of the year;

Name of related parties where control exists irrespective of whether transactions have occurred or not Wholly Owned Subsidiary companies

Apollo Metalex (P) Ltd. Shri Lakshmi Metal Udyog Ltd. Lloyds Line Pipes Limited

Name of other related parties with whom transactions have taken place during the year

Associates Key Management Personnel

Apollo Pipes Ltd. Promoter Group: V. S. Exim (P) Ltd. Mr. Sanjay Gupta (Chairman) APL Infrastructure (P) Ltd. Mr. Ashok K. Gupta (Managing Director) Mr. Vinay Gupta (Director) Mr. Sameer Gupta (Director)

Other than promoter : Mr. Deepak Goyal (CFO)

Relatives of Key Management Personnel

Mrs. Saroj Rani Gupta (Mother of Directors) Mrs. Neera Gupta (Wife of Mr. Sanjay Gupta) Mrs. Vandana Gupta (Wife of Mr. Vinay Gupta) Mrs. Meenakshi Gupta (Wife of Mr. Sameer Gupta)

Note 8: The Company could not identify whether any of its creditors is SSI undertaking and Micro, Small and Medium Enterprises covered under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act). Particulars of amount as at March 31, 2015, if any, due to such undertaking could, therefore, not to be disclosed.

Note 9: Amounts except number of shares and earnings per share are rounded off to the nearest rupees.

Note 10: The figures of previous year have been regrouped/rearranged wherever considered necessary.

Note 11: Corporate Social Responsibility

As per section 135 of Companies Act, 2013,The Company was to require an amount of Rs. 6.77 Million in CSR activities, which remain unspent at the end of the year.


Mar 31, 2014

Note 1 : Exceptional Item

During the year the Company has sold Plant & Machinery of Rs 4.49 million & Vehicle of Rs 1.45 million consequently there is loss on sale of Rs 1.35 million.

Note 2 : Contingent Liability

Contingent liability not provided for in respect of;

1. Counter guarantee to Union Bank of India for 12.03 33.55 performance guarantee given to various departments

2. Corporate Guarantee(s) have been given for securing working capital facilities sanctioned to its Subsidiary Companies.

3. Sales Invoice/Bills Discounted (Domestic/Foreign) 50.87 Nil

Note 3 : Employee Benefits

Long Term Employee Benefits

The following table sets forth the status of the Gratuity Plan of the company, and the amounts recognized in the balance sheet and statement of profit and loss account. The liability for Gratuity as at March 31, 2014 have been actuarially determined and provided for in the accounts.

Note 4 :

The Company has only one segment i.e. manufacturing of Steel tubes and pipes, therefore segment reporting as required under Accounting Standard - 17 is considered as not applicable.

Note 5 : Brand building Expense

During the Year the Group incurred an expenditure of Rs. 14.01 millions (Previous Year Rs. 69.74 millions) on Brand building exercise, which has been grouped under miscellaneous expenses and will be amortized in 5 years equally.

Note 6 :

Provision for Income Tax for the current year has been computed based on Minimum Alternate Tax in accordance with Section 115JB of the Income Tax Act, 1961. Taking into consideration the future profitability and the taxable position in the subsequent years, the Company has recognized MAT Credit Entitlement to the extent of Rs. 16.87 Millions (Previous Year Rs. 4.17 Millions) in accordance with the Guidance Note on Accounting for Credit Available in respect of Minimum Alternate Tax under Income Tax Act, 1961 issued by the Institute of Chartered Accountants of India.

Note 7 : Related Party Disclosures (AS-18)

a) Name of the related parties and description of relationships;

Related Parties with whom transaction have taken place during the year and balances outstanding as on the last day of the year;

Name of related parties where control exists irrespective of whether transactions have occurred or not Wholly Owned Subsidiary companies

Apollo Metalex (P) Ltd.

Shri Lakshmi Metal Udyog Ltd.

Lloyds Line Pipes Limited

Name of other related parties with whom transactions have taken place during the year Associates

Apollo Pipes Ltd. V. S. Exim (P) Ltd. APL Infrastructure (P) Ltd.

Key Management Personnel

Promoter Group

Mr. Sanjay Gupta (Chairman)

Mr. Ashok K Gupta (Managing Director)

Mr. Vinay Gupta (Director)

Mr. Sameer Gupta (Director)

Relatives of Key Management Personnel

Mrs. Saroj Rani Gupta (Mother of Directors) Mrs. Neera Gupta (Wife of Sh. Sanjay Gupta) Mrs. Vandana Gupta (Wife of Sh. Vinay Gupta) Mrs. Meenakshi Gupta (Wife of Sh. Sameer Gupta)


Mar 31, 2013

NOTE 1 EXCEPTIONAL ITEM

During the year the Company has sold Plant & Machinery of Rs.2.00 Million and Vehicle of Rs.0.22 Million consequently, there is loss on sale of Rs.3.66 Million.

NOTE 2 CONTINGENT LIABILITY

Contingent liability not provided for in respect of;

(Rs.Million)

SI. No. Particulars Current Year Previous Year

1. Counter guarantee to Union Bank of India for performance 133.55 3.52 guarantee given to various departments

2. Corporate Guarantee(s) have been given for securing working capital facilities sanctioned to its Subsidiary Companies.

NOTE 3 EMPLOYEE BENEFITS Long Term Employee Benefits

The following table sets forth the status of the Gratuity Plan of the company, and the amounts recognized in the balance sheet and statement of profit and loss account. The liability for Gratuity as at March 31, 2013 have been actuarially determined and provided for in the accounts.

NOTE 4

The Company has only one segment i.e. manufacturing of Steel tubes and pipes, therefore segment reporting as required under Accounting Standard -17 is considered as not applicable.

NOTE 5 BRAND BUILDING EXPENSE

During theYearthe Company incurred an expenditure of Rs.69.74 Millions (Previous Year Rs.14.85 Millions) on Brand building exercise, which has been grouped under miscellaneous expenses and will be amortized in 5 years equally.

NOTE 6

Provision for Income Tax for the current year has been computed based on Minimum Alternate Tax in accordance with Section 115JB of the Income Tax Act, 1961. Taking into consideration the future profitability and the taxable position in the subsequent years, the Company has recognized MAT Credit Entitlement to the extent of Rs.4.17 Millions (Previous Year Rs.21.21 Millions) in accordance with the Guidance Note on Accounting for Credit Available in respect of Minimum Alternate Tax under Income Tax Act, 1961 issued by the Institute of Chartered Accountants of India.

NOTE 7 RELATED PARTY DISCLOSURES (AS-18)

a) Name of the related parties and description of relationships;

Related Parties with whom transaction have taken place during the year and balances outstanding as on the last day of the year;

Name of related parties where control exists irrespective of whether transactions have occurred or not Wholly Owned Subsidiary companies Apollo Metalex (P) Ltd.

Shri Lakshmi Metal Udyog Ltd.

Lloyds Line Pipes Limited

Name of other related parties with whom transactions have taken place during the year Associates Apollo Pipes Ltd.

V. S. Exim (P) Ltd.

APL Infrastructure (P) Ltd.

Key Management Personnel Promoter Group

Mr. Sanjay Gupta (Chairman)

Mr. Ashok K Gupta (Managing Director)

Mr. Vinay Gupta (Director)

Mr. Sameer Gupta (Director)

Relatives of Key Management Personnel Mrs. Saroj Rani Gupta (Mother of Directors)

Mrs. Neera Gupta (Wife of Sh. Sanjay Gupta)

Mrs. Vandana Gupta (Wife of Sh. Vinay Gupta)

Mrs. Meenakshi Gupta (Wife of Sh. Sameer Gupta)

NOTE 8

The Company could not identify whether any of its creditors is SSI undertaking and Micro, Small and Medium Enterprises covered under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act). Particulars of amount as at March 31, 2013, if any, due to such undertaking could, therefore, not to be disclosed.

NOTE 9

Amounts except number of shares and earnings per share are rounded off to the nearest rupees.

NOTE 10

The figures of previous year have been regrouped/rearranged wherever considered necessary.


Mar 31, 2012

Note No. 1: Segment Reporting

The Company has only one segment i.e. manufacturing of Steel tubes and pipes, therefore segment reporting as required under Accounting Standard –17 is considered as not applicable.

Note No. 2 : Brand building

During the Year the Company incurred an expenditure of Rs.14.85 Millions (Previous Year Rs.13.64 Millions) on Brand building exercise, which has been grouped under miscellaneous expenses and will be amortized in 5 years equally.

Note No. 3 : MAT Credit Entitlement

Provision for Income Tax for the current year has been computed based on Minimum Alternate Tax in accordance with Section 115JB of the Income Tax Act, 1961. Taking into consideration the future profitability and the taxable position in the subsequent years, the Company has recognized MAT Credit Entitlement to the extent of Rs. 21.21 Millions (Previous Year Rs.12.49 Millions) in accordance with the Guidance Note on Accounting for Credit Available in respect of Minimum Alternate Tax under Income Tax Act, 1961 issued by the Institute of Chartered Accountants of India.

Note No. 4: Tie Company could not identify whether any of its creditors is SSI undertaking and Micro, Small and Medium Enterprises covered under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act). Particulars of amount as at March 31, 2012, if any, due to such undertaking could, therefore, not to be disclosed.

Note No. 5 : Amounts except number of shares and earnings per share are rounded off to the nearest multiple of ten thousand

Note No. 6 : The figures of previous year have been regrouped/rearranged wherever considered necessary-


Mar 31, 2011

1) Contingent Liability

Contingent liability not provided for in respect of;

(Rs. in Lacs)

S.No. Particulars 31.03.2011 31.03.2010 1. Counter guarantee to Union Bank of India for performance guarantee given to various departments 539.20 493.34

2. Corporate Guarantee(s) have been given for securing working capital facilities sanctioned to its Subsidiary Companies.

3) The closing stock of finished goods has been valued nclusive of Excise Duty amounting to Rs. 22,706,411 (Previous Year Rs. 28,711,068) as per ASI-14 (Revised) issued by the Institute of Chartered Accountants of India

4) The Company has, on a preferential basis, issued the following securities to APL Infrastructure Private Limited, in accordance with the provisions of SEBI (Issue of Capita and Disclosure Requirements) Regulations, 2009 (SEBI ICDR Regulations 2009)

Warrants: 16,41,953 where each Warrant would entitle APL Infrastructure Private Limited to subscribe to one Ordinary Share of the Company at a price of Rs. 176 per share. As per the SEBI ICDR Regulations 2009, an amount equivalent to 25% of the price i.e. Rs. 44 per Warrant aggregating to Rs. 7,22,45,932 has been received from APL Infrastructure Private Limited on allotment of the Warrants.

5) The Company has only one segment i.e. manufacturing of Steel tubes and pipes, therefore segment reporting as required under Accounting Standard - 17 is considered as not applicable.

6) Brand Building

During the Year the Company incurred an expenditure of Rs. 13,636,008 (Previous Year Rs. 8,663,961) on Brand building exercise, which has been grouped under miscellaneous expenses and will be amortised in 5 years equally.

7) Provision for Income Tax for the current year has been computed based on Minimum Alternate Tax in accordance with Section 115JB of the Income Tax Act, 1961. Taking into consideration the future profitability and the taxable position in the subsequent years, the Company has recognised MAT Credit Entitlement to the extent of Rs. 12,489,285 (Previous Year Rs. 4,439,480) in accordance with the Guidance Note on Accounting for Credit Available in respect of Minimum Alternate Tax under Income Tax Act, 1961 issued by the Institute of Chartered Accountants of India

8) Related Party Disclosures (AS 18)

a) Name of the related parties and description of relationships;

Related Parties with whom transaction have taken place during the year and balances outstanding as on the last day of the year;

Name of related parties where control exists irrespective of whether transactions have occurred or not Wholly Owned Subsidiary companies

Apollo Metalex (P) Ltd

Shri Lakshmi Metal Udyog Ltd

Lloyds Line Pipes Limited

Name of other related parties with whom transactions have taken place during the year Associates

Apollo Pipes Ltd

V. S. Exim (P) Ltd

APL Infrastructure Pvt. Ltd

Key Management Personnel

Mr. Sanjay Gupta (Chairman-cum-Managing Director)

Relatives of Key Management Personnel

Mrs. Saroj Rani Gupta (Mother of Directors) Mrs. Neera Gupta (Wife of Sh. Sanjay Gupta)

9) The outstanding balance of Debtors/Creditors in the books of the company is subject to confirmation.

10) The Company could not identify whether any of its creditors is SSI undertaking and Micro, Small and Medium Enterprises covered under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act). Particulars of amount as at March 31, 2011, if any, due to such undertaking could, therefore, not be disclosed.

11) Amounts except number of shares and earnings per share are rounded off to the nearest rupees.

12) The figures of previous year have been regrouped / rearranged wherever considered necessary.


Mar 31, 2010

1) Contingent liability not provided for in respect of: (In Lacs)

S. No. Particular 31.03.2010 31.03. 2009

1. Counter guarantee to Union Bank of India for performance guarantee given to various departments 565.96 242.55

2. Outstanding Letter of Credit 335.00 554.00

3. As on March 31, 2010, there was a foreign currency loan amounting US$ 50 Lacs (Previous year: US$ 50 Lacs).

4) Brand Building:

During the year the Company incurred an expenditure of X 8,663,961 on Brand building exercise, which has been grouped under miscellaneous expenses and will be amortized in 5 years equally.

5) Related Party Disclosures:

A) Name of related parties and description of relationships: Associates

Apollo Pipes Ltd.

V. S. Exim (P) Ltd.

APL Infrastructure (P) Ltd.

Key Management Personnel

Sh. Sanjay Gupta - Managing Director

Relatives of Key Management Personnel

Mrs. Neera Gupta - Wife of Sh. Sanjay Gupta Mrs. Saroj Rani Gupta - Mother of Director

6) On the basis of information available with the Company, it does not owe any outstanding dues towards Small Scale Industrial Undertaking amended Schedule VI of the Companies Act, 1956 vide Notification No. GSR 129 (E) dated 22.02.99, in case the sum owned is Rs 1.00 Lac or more which is outstanding for more than 30 days as at March 31, 2010.

7) On the basis of information available with the Company, the Company does not have any amounts due to suppliers under the Micro, Small and Medium Enterprises covered under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) as at March 31, 2010.

8) The figures of previous year have been regrouped/ rearranged/ recasted to conform to those of the current year.


Mar 31, 2009

1. CONTINGENT LIABILITY NOT PROVIDED FOR IN RESPECT OF

S. Particulars 31.03.2009 31.03.2008 No. (In Lacs) (In Lacs)

1. Couner guarantee to Union Bank 242.55 56.24 of India for performance guarantee given to various departments

2. Outstanding Letter of Credit 554.00 185.32

3. As on March 31, 2009, there was a foreign currency loan amounting US$ 50 Lacs (Previous year: US$ 50 Lacs).

4. Corporae Guarantee for securing working capital facilities sanctioned by Union Bank of India to its Subsidiary Companies.

4. The closing stock of finished goods has been valued inclusive of Excise Duty amounting to Rs.12,186,361.00 (Previous Year Rs. 35,625,233.00) as per ASI-14 ( Revised) issued by the Institute of Chartered Accountants of India.

5. None of the employees was in receipt of remuneration in excess of Rs. 2,400,000.00 p.a. or Rs. 200,000.00 p.m. if employed for part of the year as prescribed under section 217 (2) (A) of the Companies Act, 1956.

6. (a) During the year the Company completed

the offering of Global Depository Receipts aggregating US$ 20 Million and issued 5,882,350 Equity Shares of Rs. 10/- each as underlying security to 2,941,175 Global Depositary Receipts [GDRs]. Each GDR represents two Equity Shares and was sold at a price of US $ 6.80 per GDR. Total Issue Proceeds were Rs. 8,582.00 Lacs (considering US$ 1 = Rs. 42.91/-) before underwriting commission and other offer expenses.

Companys Global Depository Receipts [GDRs] have been officially listed on the Euro MTF Market [Euro MTF] at Luxembourg Stock Exchange [LuxSE]

(b)There were 1,034,500 warrants outstanding, issued in previous year to promoters and other strategic investors on preferential basis, pending for conversion out of which 969,500 share warrants were converted during the year into 969,500 (including 391,000 Equity Shares to promoter group) equity shares of Rs. 10/- each at a price (determined in accordance with SEBI prescribed pricing formula applicable at the time of exercise of warrants ) of Rs. 140/- per share involving an amount of Rs. 1357.30 lacs. The Company has also issued 959,500 (including 391,000 equity shares to promoter group) bonus shares on these 959,500 shares allotted on conversion of share warrants.

Allottees for remaining 65,000 Warrants didnt exercise their option of conversion of warrants into equity shares and consequently, in terms of the Special Resolution passed by the members at their Extra ordinary General Meeting held on 14th May 2007, these warrants were lapsed / cancelled and amount of deposit Rs. 9.10 Lacs (being 10% of the total consideration paid at the time of warrant allotment) was forfeited by the Company and transferred to General Reserves.

7. The Company has only one segment i.e. manufacturing of Steel tubes and pipes, therefore segment reporting as required under Accounting Standard 17 is considered as not applicable.

8 (a) During the year the Company has acquired Shri Lakshmi Metal Udyog Limited [SLMUL] in a Share Swap (non cash) deal. For acquisition of 100% Equity of SLMUL (i.e. 53,95,000 Equity Shares of Rs. 10/- each) from its shareholders; the Company issued 17,98,333 Equity Shares of Rs. 10/- each on preferential basis to the then shareholders of SLMUL.

(b) Further to augment financial resources of its subsidiaries, the Company infused Rs. 790.00 Lacs by subscribing 500,000 Equity Shares of Rs. 10/- each of Shri lakshmi Metal udyog Ltd on premium and Rs. 600.00 Lacs by subscribes 1500,000 Equity Shares of Rs. 10/- each of Apollo Metalex Pvt. Ltd on premium.

9. The outstanding balance of Debtors/Creditors in the books of the company are subject to confirmation.

10. Related Party Disclosures

(A) Names of related parties and description of relationships:

1. Wholly Owned Subsidiary

a. Apollo Metalex (P) Ltd.

b. Shri Lakshmi Metal Udyog Ltd.

2. Associates

a. Apollo Pipes (P) Ltd.

b. V. S. Exim (P) Ltd.

c. APL Infrastructure (P) Ltd.

3. Key Management Personnel

a. Sh. Sanjay Gupta - Managing Director

4. Relatives of Key Management Personnel

a. Mrs. Neera Gupta - Wife of Sh. Sanjay Gupta

b. Mrs. S. R. Gupta - Mother of Managing Director

11. The Company has no system as to whether any of its creditors constitute small scale industrial undertakings and therefore particulars of the amounts, if any, due to such undertakings has not been identified and disclosed.

12. The figures of previous year have been regrouped/ rearranged/ recasted wherever considered necessary.

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