Apex Frozen Foods Ltd Directors Report.

To,

The Members

Your Directors have pleasure in presenting the 8th Annual Report together with the Audited Financial Statements for the Financial Year ended 31st March, 2020.

Financial Results

The performance of the Company for the financial year ended 31st March, 2020, is summarized below:

(Rs. in lakhs)

Particulars 2019-20 2018-19
Revenue from Operations 82,710.54 87,471.05
Other income 1,899.45 2,146.23
Total Income 84,609.99 89,617.28
Profit Before Interest, Depreciation &Tax (EBITDA) 10,599.20 111,08.54
Interest 1,063.81 654.92
Depreciation 1,459.35 1,086.45
Profit before Tax 8,076.04 9,367.17
Current Tax 2,024.06 3,260.66
Deferred Tax -12.19 26.89
Total Tax Expenses 2,011.87 3,287.55
Net Profit for the period after tax 6,064.17 6,079.62
Earnings per share 19.41 19.45

Overview of financial performance

During the year under review, your company reported total income including net revenue and other income at ? 846.10 Crores as against ? 896.17 Crores in the previous year. At the EBITDA level, the company reported a profit of? 105.99 Crores for the current year as compared with ? 111.08 Crores in the previous year. Profit after tax for the current year stood at ? 60.64 Crores as compared with ? 60.79 Crores in the previous year.

Dividend

The Board of Directors at their meeting held on 14th March, 2020, has declared Interim dividend of ? 2.00/- (Rupees Two only) per equity share of ?10.00/- each (which is 20% of the face value of the equity shares) for the financial year ending on March 31,2020 and same was paid to the shareholders.

Transfer of unclaimed dividend to investor education and protection fund

There are no amounts due to be credited to Investor Education and Protection Fund in accordance with Section 125 of the Companies Act, 2013, as at the year end.

Material changes and commitments

There were no material changes and commitments affecting the financial position of the Company that have occurred between the end of the Financial Year 2019-20 of the Company and the date of the report.

Transfer to reserves

During the year under review, no amount has transferred to General Reserve.

Fixed deposits

Your Company has not accepted any fixed deposits and as such no principal or interest was outstanding as on the date of the Balance sheet.

Share capital

The Authorised Share Capital of the Company as on date of Balance Sheet is ?36,00,00,000/- divided into 3,60,00,000 equity shares of ?10/-each.

The paid up share capital of the company as on date of balance sheet is ?31,25,00,000/- divided into 3,12,50,000 equity shares of ?10/- each.

(a) Change in the capital structure of the Company

There was no change in the capital structure of the company

(b) Status of Shares

As the members are aware, the Companys shares are compulsorily tradable in electronic form. As on March 31, 2020, 99.99% of the Companys total paid up capital representing 3,12,49,990 shares are in dematerialized form.

(c) Other shares

Your Company has not issued any equity shares with differential rights, Sweat equity shares, Employee stock options and did not purchase its own shares. Hence there is no information to be provided as required under Rule 4(4), Rule 8(13), Rule 12(9) and Rule 16(4) of the Companies (Share Capital and Debentures) Rules, 2014 and Section 62 of the companies Act 2013 respectively.

Details of appointment/ Resignation of Directors and Key

Managerial Personnel (KMP):

During the year under review,

• Mr.Datla Chandrasekhar Raju (DIN:07714265) has resigned as, Independent Director from the Board of the Company w.e.f. 14.03.2020.

• On recommendation of the Nomination and Remuneration Committee, the Board of Directors have appointed Mrs. Deepthi Talluri (DIN: 08726143) as an Additional Director (Non Executive, Women Independent) for a period of 5 years w.e.f. 31st March, 2020, subject to the approval of the shareholders at the ensuing Annual General Meeting.

The appointment of Mrs.DeepthiTalluri (DIN: 08726143) is being placed for approval of the members at the ensuing Annual General Meeting. A brief profile of Mrs.DeepthiTalluri and other related information is provided in the AGM notice. The Board on the recommendation of Nomination & Remuneration Committee recommends her re-appointment at the ensuing Annual General Meeting.

• Mr. K Satyanarayana Murthy (DIN:05107525)has re-appointed as Managing Director for a period of 3 years w.e.f 01.12.2019 at Annual General meeting held on 19.09.2019.

• Mr. K. Subrahmanya Chowdary (DIN:03619259) has reappointed as Executive Director for a period of 3 years w.e.f 01.12.2019 at Annual General meeting held on 19.09.2019.

• Mrs. K. Neelimadevi (DIN:06765515), has re-appointed as whole time Director for a period of 3 years w.e.f 01.12.2019 at Annual General meeting held on 19.09.2019.

• In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. K Satyanarayana Murthy (DIN:05107525), Managing Director of the Company, will retire by rotation at the ensuing Annual General Meeting and being eligible, has offered himself for reappointment. The Board recommends his re-appointment.

Board Meetings:

The Board met six (6) times during the financial year. The meeting details are provided in the corporate governance report that forms part of this Annual Report. The maximum interval between any two meetings did not exceed 120 days, as prescribed in the Companies Act, 2013.

Committees of the Board

Audit Committee

The Audit Committee was constituted pursuant to the Board meeting held on 27.01.2017 and reconstituted on 14.03.2020. The scope and function of the Audit Committee is in accordance with Section 177 of the Companies Act,2013. The members of the Audit Committee as on 31.03.2020 are:

• Mr. D. Venkata Subba Raju - Chairman
• Mr. M. Lakshmi Pathiraju - Member
• Mr. K.Subramanya Chowdary - Member

None of the recommendations made by the Audit Committee were rejected by the Board. During the year under review, the Audit Committee was met 4 times.

The details of the Committees of the Board viz., Audit Committee, Nomination and Remuneration Committee, CSR Committee and Stakeholders Relationship Committee are reported in the Report on Corporate Governance, which forms part of the Boards Report.

Meeting of Independent Directors

The details of the separate meeting of the Independent Directors are reported in the Report on Corporate Governance, which forms part of the Boards Report.

Statement on declaration given by Independent Directors under sub-section (6) of section 149

The Independent Directors have submitted their disclosures to the Board that they fulfil all the requirements as stipulated in Section 149 of the Companies Act, 2013, so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules.

Familiarisation programme for Independent Directors

All new Independent Directors (IDs) inducted into the Board are presented with an overview of the Companys business operations, products, organization structures and about the Board constitution and its procedures. A policy on familiarization program for IDs has also been adopted by the Company. Policy for familiarisation of Independent Directors is available at www.apexfrozenfoods.in.

Annual evaluation of Board performance and Performance of its Committees and Directors

Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out the annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Audit and other Committees.

A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Boards functioning such as adequacy ofthe composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance.

A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution, independence of judgments, safeguarding the interest ofthe Company and its minority shareholders etc. The performance evaluation ofthe Independent Directors was carried out by the entire Board. The performance evaluation ofthe Chairman and the Non-Independent Directors was carried out by the Independent Directors who also reviewed the performance ofthe Secretarial Department. The Directors expressed their satisfaction with the evaluation process..

Policy on Directors and Key Managerial Personnel Appointment & Remuneration:

Your company adopted the policy on Directors Appointment & Remuneration. The objective of the policy is to ensure that Executive Directors and other employees are sufficiently compensated for their performance. The Policy seeks to provide criteria for determining qualifications, positive attributes, and independence of a director and also recommend a policy relating to the remuneration for the directors and key managerial personnel. Policy is available at www.apexfrozenfoods.in.

Vigil Mechanism / Whistle Blower Policy

The Company has a Whistle Blower Policy framed to deal with instance of fraud and mismanagement, if any. The details ofthe Policy are explained in the Corporate Governance Report and also posted on the website ofthe Company and is available at www.apexfrozenfoods.in.

Risk Management Policy

Risk management is embedded in your Companys operating framework. Your Company believes that managing risks helps in maximizing returns. The Companys approach to addressing business risks is comprehensive and includes periodic review of such risks and a framework for mitigating risks and reporting mechanism of such risks. The risk management framework is reviewed periodically by the Board and the Audit Committee.

In terms of the requirement of Section 134(3)(n) of the Companies Act, 2013, the Company has developed and implemented the Risk Management Policy. The details ofthe Policy is available on the Companys website www.apexfrozenfoods.in.

Related party transactions

There are no transactions with related parties except remuneration to Key Managerial Persons as mentioned in notes to accounts, which fall under the scope of section 188(1) ofthe Companies Act, 2013. The policy on Related Party Transactions as approved by the Board is uploaded on the website ofthe Company at www.apexfrozenfoods.in

Particulars of loans, guarantees or investments made under section 186 of the companies act, 2013

There were no loans, guarantees or investments made by the Company under Section 186 ofthe Companies Act, 2013, during the year under review and hence the said provision is not applicable.

Directors Responsibility Statement

In pursuance of Section 134(5) ofthe Companies Act, 2013, your directors hereby confirm that, to the best of their knowledge and belief and according to the information and explanation obtained by them,

1. In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

2. Such accounting policies as mentioned in the notes to the financial statements have been selected and applied consistently and made judgments and made estimates that are reasonable and prudent made so as to give a true and fair view of the state of affairs of the company at the end of the financial year 2019-20 and of the profit and loss of the Company for that period;

3. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. The annual accounts for the year 2019-20 have been prepared on a going concern basis.

5. That proper internal financial controls were in place and that the financial controls were adequate and were operating effectively.

6. That devised systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

Information about Subsidiary / Joint Ventures / Associate Companies

Your Company dont have any subsidiary or Joint Ventures or Associate Company. It is not a subsidiary or Joint Venture or Associate to any other Company.

Extract of Annual Return

Pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014, the details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as Annexure - I to this report.

Secretarial Standards

The Company has complied with Secretarial Standards formulated by the Institute of Company Secretaries of India and notified by the Central Government for implementation.

Corporate Governance Report

Your companys philosophy on Corporate Governance sets the goal of achieving the highest level of transparency with integrity in all its dealings with its stakeholders including shareholders, employees, lenders and others. A report on Corporate Governance along with a Certificate from M/s A.S. RamKumar & Associates, Company Secretaries regarding the Compliance of Conditions of Corporate Governance as stipulated under SEBI (LODR) Regulations forms part of the Annual Report as Annexure - II

Business Responsibility Report

The SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 and amendments made thereto mandates inclusion of the Business Responsibility Report (BRR) as part of the Annual Report for the top 1,000 listed entities based onmarket capitalization. In compliance with the regulation the BRR is enclosed as Annexure - X and forms part of the Annual Report.

Annual Secretarial Compliance Report

A Secretarial Compliance Report for the financial year ended 31st March, 2020 on compliance of all applicable SEBI Regulations and circulars/guidelines, issued by M/s.A.S.Ram Kumar & Associates, Compnay Secretaries, Secretarial Auditors was submitted to Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).

Auditors

a) Statutory Auditors

M/s. BodaRamam& Co., Chartered Accountants, Kakinada, (Firm Reg No. 005383S) were appointed as Statutory Auditors of the Company at Annual General meeting held on 19.09.2019 to hold the office for a period of 3 years.

b) Internal Auditors

"The Board of Directors at their meeting held on 22.05.2019, have appointed M/s Praturi & Sriram, Chartered Accountants, Hyderabad, as the Internal Auditors of your company to hold office for FY 2019-20. The Internal Auditors had submitted their reports to the management.

Atthe board Meeting held on 26.06.2020, Board of directors have appointed In-house Internal Auditteam headed by Mr. M.S Srikanth, a qualified Chartered Accountant & Cost Accountant, employee of the company as the Internal Auditor of the company.

c) Secretarial Auditors

The Board has appointed M/s. A.S Ram Kumar & Associates, Company Secretaries in Practice, to carry the Secretarial Audit under the provisions of section 204 of the Companies Act, 2013 for the financial year 2019-20. The Report of the Secretarial Auditor is annexed to this report as Annexure - VI

Auditors Report

The observations made in the Auditors Report are self explanatory and therefore, dont call for any further comments u/s 134 of the Companies Act, 2013.

Comments on Auditor Report

There are no adverse comments by the Auditor in the Audit Report and hence comments by Board of Directors of the Company on Auditor Report are not required.

Details in respect of frauds reported by auditors:

During the year under review, no frauds were reported by auditors under sub-section (12) of section 143 of companies act, 2013.

Disclosure under Sexual Harassment of Women at Workplace

The Company has in place the requisite Internal Committees as envisaged under the Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013.

No complaints on the issues covered by the above Act were received during the year.

Corporate Social Responsibility (CSR)

The Annual Report on CSR activities in terms of the requirements of Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed as Annexure - VII which forms part of this Report.

The Company has a Corporate Social Responsibility Policy and the same has been posted on the website of the Company at www.apexfrozenfoods.in .

Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo

Conservation of energy:

I. The steps taken or impact on conservation of energy:

a. Voltage frequency drives have been installed in machinery there by 20% power saving has been done.

b. Lighting in the processing unit and cold storage have been changed to LED from tube lights.

II. The steps taken by the company for utilizing alternate sources of energy:Solar water heaters have been installed in place of electrical heaters. Solar security fencing has been done in place of electrical fencing.

III. The capital investment on energy conservation equipments; NIL

Technology absorption: NOT APPLICABLE

Foreign Exchange Earnings and Outgo:

Particulars Year ended Year ended
31.03.2020 31.03.2019
Earnings in Foreign Exchange 70707.341 74655.89
Foreign Exchange Outgo 4920.09 6096.76

Particulars of Employees

The information required under Section 197 of the Act and the Rules made thereunder, in respect of employees of the Company has been disclosed in Annexure - VIII

Management Discussion and Analysis Report

The Management Discussion and Analysis as required by the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is incorporated herein by reference and forms an integral part of this report as Annexure -IX

Internal Control Systems & their Adequacy

The Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Companys policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records, and timely preparation of reliable financial disclosures.

Maintenance of Cost Records

The maintenance of Cost Records has not been specified by the Central Government under sub-section (1) of Section 148 of the Act, in respect of the business activities carried on by the Company.

Significant and material orders passed by the regulators or courts

There are no significant or material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations.

Human resources

Your Company considers its Human Resources as the key to achieve its objectives. Keeping this in view, your Company takes utmost care to attract and retain quality employees. The employees are sufficiently empowered and such work environment propels them to achieve higher levels of performance. The unflinching commitment of the employees is the driving force behind the Companys vision. Your Company appreciates the spirit of its dedicated employees.

The Board wishes to gratefully acknowledge the understanding and support received by the Company from its employees. It wishes also to thank the banking system, the Central Government, the various State Governments and the local authorities for the unstinted support received during the year.

This Report will be incomplete without a specific appreciation for the Members of the Company who have shown immense confidence and understanding in the Companys well being.

On Behalf of the Board For Apex Frozen Foods Limited

Sd/- Sd/-
D.V Subba Raju K. Satyanarayana Murthy
Place: Panasapadu, Kakinada Independent Director Chairman & Managing Director
Date: 28.08.2020 DIN 07717952 DIN 05107525