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DIRECTOR'S REPORT

APM Industries Ltd.

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Market Cap. (₹) 38.90 Cr. P/BV 0.32 Book Value (₹) 56.51
52 Week High/Low (₹) 48/16 FV/ML 2/1 P/E(X) 5.30
Bookclosure 28/09/2019 EPS (₹) 3.40 Div Yield (%) 2.78
Year End :2018-03 

BOARDS’ REPORT TO THE MEMBERS

The Directors hereby present the 44th Annual Report of the Company, together with the Audited standalone and consolidated financial statements for the financial year ended March 31, 2018. FINANCIAL SUMMARY

The statements of accounts have been prepared in accordance with Indian Accounting Standards (IND AS) which have been made applicable to the Company w.e.f April 1, 2017 as per rules laid down in this regard. Accordingly, accounts of the Company have been restated w.e.f April 1, 2016 (being comparative year for the current financial year) as per the IND AS requirements.

The highlights of the “Standalone Financial Results” are as under:

Particulars

(Rs in Lakhs)

2017-18

2016-17

Total Revenue

28,464

25,837

Total Expenses

26,662

23,519

Profit before tax

1,802

2,318

Less: Tax (including deferred tax)

548

715

Profit for the period

1,254

1,603

Other Comprehensive income

(1)

(4)

Total comprehensive profit for the year

1,253

1,599

Retained earnings:-

Balance brought forward

10,273

9,063

Total Comprehensive income for the year

1,254

1,603

Equity Dividend

(108)

(324)

Tax on equity dividend

(22)

(69)

Balance carried forward

11,397

10,273

The highlights of the “Consolidated Financial Results” are as

under:

Particulars

(Rs in Lakhs)

2017-18

2016-17

Total Revenue

28,495

25,847

Total Expenses

26,664

23,527

Profit before tax

1,831

2,320

Less: Tax (including deferred tax)

555

716

Profit for the period

1,276

1,604

Other Comprehensive income

(1)

(4)

Total comprehensive profit for the year

1,275

1,600

Retained earnings:-

Balance brought forward

10,274

9,063

Total Comprehensive income for the year

1,275

1,604

Equity Dividend

(108)

(324)

Tax on equity dividend

(22)

(69)

Balance carried forward

11,419

10,274

ii. Retirement by Rotation: - In accordance with the provisions of the Companies Act, 2013 and applicable Regulations issued by the Securities & Exchange Board of India, Shri Hari Ram Sharma (DIN: 00178632), Managing Director of the Company will retire by rotation at the forthcoming Annual General Meeting (‘AGM') and being eligible, offers himself for re-appointment. The Board recommends his re-appointment. The brief resume and others details as required under SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 and Companies Act, 2013 are provided in the Notice of Annual General Meeting of the Company.

iii. Revision in remuneration: - The Board of Directors in its Meeting held on August 6, 2018, on the recommendation of Nomination and Remuneration Committee at its Meeting held on the same day, approved revision in terms of remuneration of Shri Rajendra Kumar Rajgarhia, Chairman and Shri Hari Ram Sharma, Managing Director of the Company for a period of three years i.e., from June 1, 2018 to May 31, 2021. Revision in terms of remuneration of Shri Rajendra Kumar Rajgarhia, Chairman and Shri Hari Ram Sharma, Managing Director of the Company, as per the details provided in the Notice convening the Annual General Meeting, is recommended for the approval of members.

iv. Board/Directors’ Evaluation: - The Board has carried out an annual performance evaluation of its own performance, its committees and individual Directors pursuant to the provisions of the Act, SEBI Listing Regulations and the Guidance Note on Board evaluation issued by the Securities and exchange Board of India on January 5, 2017. The annual performance evaluation of all the Independent Directors has been done by the entire Board, excluding the Director being evaluated. Pursuant to the provisions of the Companies Act, 2013 and Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Nomination and Remuneration Committee has carried out evaluation of every Director's performance. The Independent Directors, in a separate meeting, has also carried out the performance evaluation of the Non-Independent Directors and the Board as a whole and of the Chairman of the company and has reviewed the performance of the Secretarial Department. The Directors expressed their satisfaction with the evaluation process. The performance evaluation criteria for independent directors are disclosed in the section on the corporate governance of the annual report.

AUDITORS

STATUTORY AUDITORS

At the 43rd Annual General Meeting of the Company held on September 25, 2017, pursuant to the provisions of the Act and the Rules made there under, M/s. Chaturvedi & Partners, Chartered Accountants (Firm Registration No. 307068E), were appointed as Statutory Auditors of the Company from the conclusion of the 43rd AGM until the conclusion of the 48th Annual General Meeting of the Company, at such remuneration and terms and conditions as may be decided by the Board of Directors of the Company, subject to ratification of their appointment at every AGM, if so required under the Act. M/s. Chaturvedi & Partners, Chartered Accountants have submitted a certificate confirming that their appointment is in accordance with Section 139 read with Section 141 of the Act. The Audit Report of M/s. Chaturvedi & Partners, Chartered Accountants on the Financial Statements of the Company for the Financial Year 2017-18 is a part of the Annual Report. The Auditor's Report does not contain any qualification, reservation or adverse remark.

-Ministry of Corporate Affairs (MCA) vide its notification dated May 7, 2018, omitted the requirement of ratification of Auditor's appointment by members at every Annual general Meeting. SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s RSM & Co., Company Secretaries, New Delhi to undertake the

The Company has received the Observation Letter from BSE Limited containing no adverse observation regarding draft scheme of arrangement, which is posted on the Company's website at the given link http://apmindustries.co.in/scheme-of-arrangement/

PUBLIC DEPOSIT

Your company has not accepted any public deposits during the Financial Year and as such, no amount of principal or interest was outstanding as on March 31, 2018.

DIVIDEND

Your Directors recommend a final dividend of Rs 1/- per equity share on face value of Rs 2/- each (50%) for the financial year 2017 - 18 (Previous year 100%), subject to approval of the members. DIRECTORS’ RESPONSIBILITY STATEMENT In accordance with the provisions of Section 134(3) (c) and 134(5) of the Companies Act, 2013 the Board hereby submits its responsibility Statement:

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year i.e. March 31, 2018 and of the profit and loss of the company for that period;

(c) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) the Directors have prepared the annual accounts on a going concern basis;

(e) the Directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively, and

(f) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

INTERNAL FINANCIAL CONTROLS

The Company has adequate internal control systems in place, and also has reasonable assurance on authorizing, recording and reporting transactions of its operations. The Company has a well-placed, proper and adequate internal controls environment, commensurate with its size, scale and complexities of its operations. The Company had already developed and implemented a framework for ensuring internal controls over financial reporting. Internal control systems are an integral part of your Company's Corporate Governance structure. These have been designed to provide reasonable assurance with regard to inter-alia a. recording and providing reliable financial and operational information; b. complying with the applicable statutes; c. safeguarding assets from unauthorized use; d. executing transactions with proper authorization, and ensuring compliance with corporate policies e. Prevention and detection of Frauds / errors; f. Continuous updating of IT systems. The Company's management has assessed the effectiveness of the Company's internal control over financial reporting as of March 31, 2018. Your Company has appointed M/s TN Chaturvedi & Co., Chartered Accountants; New Delhi to assess the effectiveness of internal financial controls of the Company. The Company's internal financial controls were adequate and operating effectively.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

i. Declaration by Independent Directors: - The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of Independence as prescribed both under the Companies Act, 2013 and Regulation 16(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

- STAKEHOLDER RELATIONSHIP COMMITTEE

The Stakeholder Relationship Committee has been constituted in terms of Section 178 of the Act and Regulation 20 of the Listing Regulations for redressal of Shareholders and Investors complaints and other shareholders related issues. The details pertaining to the composition, meetings and terms of reference of the committee are included in the Report on Corporate Governance which forms part of this Annual Report.

- RISK MANAGEMENT COMMITTEE

The Board has constituted a Risk Management Committee to frame, implement and monitor the risk management plan for the Company. The Committee is responsible for reviewing the risk management plan and ensuring its effectiveness. The details pertaining to the composition, meetings and terms of reference of the committee are included in the Report on Corporate Governance which forms part of this Annual Report.

The Risk Management Policy may be accessed on the Company's website at the link http://apmindustries.co.in/Annual%20Reports/Policy-RM.pdf VIGIL MECHANISM

The Company has a Whistle Blower Policy to deal with instances of unethical behavior, actual or suspected fraud or violation of the company's code of conduct. The Policy on Vigil Mechanism / Whistle Blower may be accessed on the Company's website at thelink http://apmindustries.co.in/Annual%20Reports/Policy-WBM.pdf RELATED PARTY TRANSACTIONS

All transactions entered into with Related Parties as defined under the Companies Act, 2013 and Regulation 23 of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 during the financial year were in the ordinary course of business and on an arm's length pricing basis and do not attract the provisions of Section 188 of the Companies Act, 2013. All related party transactions during the year 2017-18 are disclosed in Form No. AOC - 2 in ANNEXURE - V to this Report. Suitable disclosure as required by the Accounting Standards (AS18) has been made in the notes to the Financial Statements. The Board has approved a policy for related party transactions which has been uploaded on the Company's website at the link http://apmindustries.co.in/Annual%20Reports/Policy-RPT.pdf PREVENTION OF SEXUAL HARASSMENT

The Company is committed to provide a protective environment at workplace for all its women employees. To ensure that every woman employee is treated with dignity and respect and as mandated under “The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013” the Company has in place a formal policy for prevention of sexual harassment of its women employees.

The policy may be accessed on the Company's website at the link http://apmindustries.co.in/Annual%20Reports/Policy-PSH.pdf.

Your Directors further state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

POLICY FOR DETERMINING MATERIALITY FOR DISCLOSURES

This policy applies to disclosure of events affecting APM Industries limited. The policy may be accessed on the Company's website at the link http://apmindustries.co.in/Annual%20Reports/Policy-DME.pdf

DOCUMENTS RETENTION AND ARCHIVAL POLICY

This policy deals with retention and archival of corporate records of APM Industries Limited. The policy may be accessed on the Company's website at the link http://apmindustries.co.in/ Annual%>20Reports/Policy-PQD.pdf

PARTICULARS OF LOAN, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

Secretarial Audit of the Company for the financial year ended March,31, 2018. The Report of the Secretarial Audit Report (MR - 3) is annexed herewith as ANNEXURE - II to this Report.

COST AUDITOR

Pursuant to Section 148 of the Act read with the Rules made thereunder, the cost audit records maintained by the Company in respect of its manufacturing activities are required to be audited. The Board has, on the recommendation of the Audit Committee, re-appointed Shri Naresh Kumar Goel, Cost Accountant (Membership No. 9876), to audit the cost accounts of the Company for Financial Year 2018-19. As required under the Act, the remuneration payable to the Cost Auditors is required to be placed before the Members in the general meeting for their ratification. Accordingly, a resolution seeking Members ratification for the remuneration payable to Shri Naresh Kumar Goel, Cost Accountant, is included at item no. 6 of the Notice of the AGM.

INTERNAL AUDITOR

Pursuant to provisions of Section 138 of the Companies Act, 2013, the Board of Directors has re-appointed M/s MM Sharma & Co., Chartered Accountant, Delhi as an Internal Auditors of the Company, for the financial year 2018-19.

BOARD MEETINGS

The Board of Directors duly met 7 (Seven) times in respect of which proper notices were given and the proceedings were properly recorded and signed. The details of the Board Meetings and attendance of Directors are provided in the Report on Corporate Governance, which forms part of this Annual Report. The intervening gap between the meetings was within the period prescribed under the Act and Listing Regulations.

COMMITTEES OF THE BOARD

Currently the Board have five committees, they are:

- AUDIT COMMITTEE

The Company has in place an Audit Committee in terms of the requirements of Section 177 of the Act read with the Rules made thereunder and Regulation 18 of the Listing Regulations. The details pertaining to the composition, meetings and terms of reference of the committee are included in the Report on Corporate Governance which forms part of this Annual Report

- CORPORATE SOCIAL RESPONSIBILITY (CSR) COMMITTEE In compliance with the requirements of Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Board has constituted a Corporate Social Responsibility Committee. The details pertaining to the composition, meetings and terms of reference of the committee are included in the Report on Corporate Governance which forms part of this Annual Report.

The brief outline of the (CSR) policy of the Company and the initiatives undertaken by the Company on CSR activities during the year annexed herewith as ANNEXURE - III to this Report. The Policy on Corporate Social Responsibility may be accessed on the Company's website at the link http:// apmindustries.co.in/Annual%20Reports/Policy-CSR.pdf

- NOMINATION AND REMUNERATION (NRC) COMMITTEE

The Nomination and Remuneration Committee's role and terms of reference are in compliance with provisions of Section 178 of the Act and Regulation 19 read with Part D of the Schedule of the Listing Regulations, as amended from time to time. The details pertaining to the composition, meetings and terms of reference of the committee are included in the Report on Corporate Governance which forms part of this Annual Report. The Nomination and Remuneration Policy and Policy on fixation of criteria for selection & appointment of Directors & Senior Management Personnel annexed herewith as ANNEXURE - IV to this Report.

The policy may be accessed on the Company's website at the link http://apmindustries.co.in/Annual%20Reports/Policy-NRC.pdf

STATEMENT

Certain statements in the “Board's Report & Management Discussion and Analysis” describing the Company's views about the Industry, expectations/ predictions, objectives etc., may be forward looking within the meaning of applicable laws and regulations. Actual results may differ materially from those expressed in the Statement. Company's operations may inter-alia affect with the supply and demand stipulations, input prices and their availability, changes in Government regulations, taxes and other factors such as Industrial relations and economic developments etc.

GENERAL

No significant or material orders were passed by the regulators or Courts or Tribunals which impact the going concern status and Company's operation in future.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The prescribed details as required under Section 134(3) (m) of the Companies Act, 2013, read with the Companies (Accounts) Rules, 2014, are annexed as ANNEXURE - VI to this Report. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

Particulars of remuneration paid to the employees as required to be disclosed under section 197(12) of the Act read with Rule 5 of the Companies (Appointment & Remuneration of Managerial Personnel) Rules 2014, are set out in ANNEXURE - VII to this Report.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as ANNEXURE - VIII to this Report. CORPORATE GOVERNANCE

As per SEBI LODR Regulations, a separate section on Corporate Governance practices followed by the Company, together with a certificate from the Company's Auditors confirming compliance, is annexed herewith as ANNEXURE - IX to this Report. MANAGEMENT DISCUSSION AND ANALYSIS REPORT Management's Discussion and Analysis Report for the year 2017-18 under review, as stipulated under Regulation 34(e) of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 with the Stock Exchanges, is presented in a separate section forming part of the Annual Report.

MATERIAL CHANGES AND COMMITMENTS AFTER THE END OF FINANCIAL YEAR

No material changes or commitments, affecting the financial position of the Company have occurred between the end of the financial year of the company to which the financial statements relate, i.e. Change in nature of business No changes has been made in nature of business carried out by March 31, 2018 and the date of the Board's Report.

APPRECIATION

The Board of Directors wishes to express its gratitude and record its sincere appreciation for the commitment and dedicated efforts put in by all the employees. Your Directors take this opportunity to express their grateful appreciation for the encouragement, cooperation and support received by the Company from the local authorities, bankers, customers, suppliers and business associates. The directors are thankful to the esteemed shareholders for their continued support and the confidence reposed in the Company and its management.

For and on behalf of the Board

Rajendra Kumar Rajgarhia

Place : New Delhi Chairman

Dated : August 6, 2018 DIN : 00141766

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