Apollo Pipes Ltd Directors Report.

To the members of Apollo Pipes Limited,

Your Directors are pleased to present the 35th Annual Report on the business and operations of your Company along with the Audited Financial Statement for the financial year ended March 31,2021.

FINANCIAL PERFORMANCE:

The Companys financial performance for the year under review along with the previous years figures is given hereunder:

(Rs. In Lakh)

Particulars 1 FY 2020-21 1 1 FY 2019-20
Gross sales 51,806.83 40,795.81
Add : Other income 841.14 1,013.27
Total revenue 52,647.98 41,809.08
Operating expenses 44,381.80 36,160.67
EBIDTA 8,266.17 5,648.41
Less : Finance cost 436.26 606.76
Less : Depreciation and amortisation 1,762.76 1,269.98
Profit before tax (PBT) 6,067.16 3,771.67
Less : Tax expense 1,619.72 919.09
Profit after tax for the year (PAT) 4,447.43 2,852.58
Prior period adjustments - -
Add: Profit brought forward 9,270.03 6,575.50
Final dividend on equity shares - 131.09
Tax on dividends - 26.96
Balance carried over to balance sheet 13,717.46 9,270.03

The Companys gross turnover in financial year 2020-21 increased significantly by 27% from RS. 40,795.81 lakh to RS. 51,806.83 lakh. The EBIDTA has been increased by 46% from RS. 5,648.41 lakh to RS. 8,266.17 lakh for the year under review. The net profit of the Company has also increased by 56% from RS. 2,852.58 lakh to RS. 4,447.43 lakh during the year under review.

DIVIDEND

The Board of Directors of the Company has deemed it prudent not to recommend any dividend for the financial year under report and to retain the profits, in order to mitigate the adverse impact caused by the outbreak of Covid-19 pandemic and to augment the resources for meeting the future business objectives

Pursuant to Regulation 43A of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 (as amended), the Company has Dividend Distribution Policy. During the year, there have been no changes to the policy. Hence, the same is not annexed to this report, however, same is available on our website at https://www.apollopipes.com/media/product/2135595372_ DividendDistributionPolicy.pdf.

TRANSFER TO RESERVES

The Board of Directors of your Company, has decided not to transfer any amount to the Reserves for the year under review.

OVERVIEW

The Indian economy was expected to contract of earlier years in FY21. India announced the largest lockdown in the world that extended more than 5 weeks which brought the wheels of the economy to a grinding halt.

Lives and livelihoods were severely impacted. Businesses struggled. Consumer confidence plummeted. And India reported its a 24% plus GDP contraction in Q1 of FY21 - the highest quarterly GDP contraction since independence.

A resurgent India bounced back with vigour. The wheels of the economy gathered momentum. The phased unlocking enabled businesses to capitalise on the pent up demand. Moreover, the geo-political issues prevailing in the global landscape and the China+1 strategy adopted by a number of global conglomerates created considerable growth opportunities for India Inc.

The nation reported a GDP growth of 1.6% in the fourth quarter of FY21.

BUSINESS PERFORMANCE

FY21 was one of uncertain operations as pandemic and the lockdown halted operations for close to a month. The subsequent drop in demand impacted the Companys operations initially. But it recovered smartly in the second half of the year as commercial activity picked up and demand resurfaced. Sales in the second half of the fiscal stood at 24,432 MT - 6.68% higher than the production in the first half of FY21.

Despite the initial operational challenges, the Company reported a 27% increase in Revenue from Operations from Rs 408 crore in FY20 to Rs 518 crore in FY21. This jump was contributed by growing sales volumes and a larger proportion of value-added products.

In line with the Companys long-term strategy of widening its product offering, it launched water tanks in North India. The product received an overwhelming response from the markets. To the extent that Apollo Pipes needed to create capacities for water tanks in our other manufacturing units.

The Company prudently utilised the cash flow between retiring high-cost debt even as it invested in capacity enhancement. In addition, the Company undertook important measures to create awareness about its products among discerning customers in key markets.

PROSPECTS

Government programmes such as the programme - Jal Jeevan Mission (Urban & Rural) - promise to provide piped water supply and tap connections to all households in smaller cities and town over the next four years. This is expected to open large opportunities over the medium-term.

PROJECTS

In keeping with the growing demand for the Companys products - primarily tanks and fittings - the Company undertook and successfully completed its brownfield manufacturing extensions across facilities located at Dadri, Tumkur, and Sikanderabad. The Companys greenfield facility at Raipur is expected to commence operation in FY22.

COVID-19: THE SECOND WAVE

India was hit hard by the second wave of the pandemic in April 2021. The state governments announced simultaneous lockdowns across the country. Major impact of Covid-19 has been felt in the first quarter with both revenue and profit being affected. With opening of domestic market post lockdown in June 2021, business prospects and performance is expected to improve gradually from the second quarter of FY22 onwards.

INTERNAL FINANCIAL CONTROL

The Company has in place adequate internal financial controls within the meaning of Section 134(5)(e) of the Companies Act, 2013. For the financial year ended March 31, 2021, the Board is of the opinion that the Company had sound Internal Financial Controls commensurate with the size and nature of its operations and are operating effectively and no reportable material weakness was observed in the system during the year.

Based on annual Internal Audit programme as approved by Audit Committee of the Board, regular Internal Audits are conducted covering all offices, factories and key areas of the business. Findings are placed before Audit Committee, which reviews and discusses the actions taken with the management. The Audit Committee also reviews the effectiveness of Companys internal controls and regularly monitors implementation of audit recommendations.

ANNUAL RETURN

In accordance with the provisions of Section 134 (3)(a) of the Companies Act, 2013, the Annual Return as required under Section 92 of the Act for the financial year 2020-21, is available on Companys website at https://www.apollopipes.com/media/ product/1224662331 Annual Return for FY 2020-21.pdf

SUBSIDIARIES COMPANIES, JOINT VENTURES AND ASSOCIATES

During the year under review, the Company had no subsidiary, joint venture(s) or associate(s) Companies. Hence, disclosure in form AOC-1 is not applicable to the Company.

DEPOSITS

Your Company has neither accepted nor renewed any public deposits within the meaning of Section 73 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014 during the year under report.

SHARE CAPITAL

As on March 31,2021 the authorized share capital of the Company stood at C16,55,00,000/- (Rupees Sixteen Crore and Fifty Five Lakh only) divided into 1,65,50,000 (One Crore Sixty Five Lakh and Fifty Thousand only) equity shares of C10 (Rupees Ten Only) each.

The paid up Equity Share capital of the Company as on March 31, 2021, was RS. 13,10,94,020/- (Rupees Thirteen Crore Ten Lakh Ninety Four Thousand and Twenty only) divided into 1,31,09,402 (One Crore Thirty One Lakh Nine Thousand Four Hundred and Two only) equity shares of RS. 10/- (Rupees Ten only) each.

During the year, 13,60,000 outstanding fully convertible Warrants, held by Mr. Sameer Gupta and Mrs. Meenakshi Gupta (4,60,000 and 9,00,000 each respectively), stand lapsed on account of failure to exercise the right to acquire Equity Shares underlying the said warrants within 18 months of such allotment by the Warrant- holders in terms of Chapter V of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018. Thereby, diluted share capital of Company RS. 14,46,94,020 is reduced to RS. 13,10,94,020. The Company has neither issued shares with differential voting rights nor has issued any sweat equity shares. Further it did not issue any bonus shares also during the year under review.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

In accordance with the provisions of Section 152 of the Companies Act, 2013 and in terms of Articles of Association of the Company, Mr. Saket Agarwal will retire at the ensuing Annual General Meeting (AGM) and being eligible, offer himself for reappointment.

The Company has received declaration 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 SEBI (LODR), 2015. Further, pursuant to the Regulation 25(8) of the SEBI (LODR), 2015, Independent Directors of the Company declared that they are not aware of any circumstances or situation that exists or can be anticipated which could render them incapable of performing their duties with reasonable independent judgement and without any external influence. The Board took the same on record after undertaking assessment of its veracity. In the opinion of the Board, all Independent Directors possess strong sense of integrity and having requisite experience, qualification and expertise.

Pursuant to Companies (Appointment and Qualification of Directors) Rules, 2014 all the Independent Directors has registered themselves under the Independent Directors databank.

Composition of the Board of Directors of the Company as on 31.03.2021:

1. Mr. Sameer Gupta (DIN: 00005209) - Managing Director (Executive)

2. Mr. Sanjay Gupta (DIN: 00233188) - Chairman (Non-executive Director)

3. Mr. Saket Agarwal (DIN: 00203084) - Director (Non-Executive and Non-Independent)

4. Mr. Pradeep Kumar Jain (DIN: 08063400) - Director (NonExecutive and Independent)

5. Ms. Neeru Abrol (DIN: 01279485) - Director (Non-Executive and Independent)

6. *Mr. Abhilash Lal (DIN: 03203177) - Director (Non-Executive and Independent)

*Mr. Abhilash Lal was appointed as Additional Director w.e.f. March 22, 2020 and his appointment was regularized by members as Independent Director in 34th AGM of Company, held on September 29, 2020.

PARTICULARS OF REMUNERATION

Disclosure of ratio of the remuneration of each Executive Director to the median remuneration of the employees of the Company and other requisite details pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended, is annexed to this report as Annexure A. Further, particulars of employees pursuant to Rule 5(2) & 5(3) of the above Rules form part of this report. However, in terms of provisions of section 136 of the said Act, the report and accounts are being sent to all the members of the Company and others entitled thereto, excluding the said particulars of employees. Any member interested in obtaining such particulars may write to the Company Secretary at compliance@apollopipes.com. The said information is available for inspection at the registered office of the Company during working days of the Company upto the date of ensuing Annual General Meeting.

AUDITORS AND AUDITORS REPORT

A. Statutory Auditors

The tenure of the Statutory Auditors M/s. VAPS & Company, Chartered Accountants, (Firm Registration No. 003612N) got expired in 34th AGM dated September 29, 2020 and consequently, the members of the Company in the said AGM, on recommendation of Board in their meeting held on August 04, 2020, had re-appointed M/s. VAPS & Company, Chartered Accountants for second term of five years till the conclusion of 39th AGM to be held in year 2025.

The Statutory Audit Report on the financial statements for the financial year ended on March 31, 2021 does not contain any qualification, reservation or adverse remark or disclaimer. The Auditor has not reported any incidence of fraud during the period under review.

B. Cost Auditors

In terms of Section 148 of the Act, the Company is required to get the audit of its cost records conducted by a Cost Accountant. In this connection, the Board of Directors of the Company had, on the recommendation of the Audit Committee, approved the appointment of M/s HMVN & Associates, Cost Accountants (FRN: 000290) as the Cost Auditors of the Company for the year ended March 31,2021.

In accordance with the provisions of Section 148(3) of the Act read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditors as recommended by the Audit Committee and approved by the Board has to be ratified by the members of the Company. Accordingly, appropriate resolution was passed by members in their 34th AGM for ratification of remuneration of Cost Auditor for financial year ended March 31,2021.

M/s HMVN & Associates, Cost Accountants (FRN: 000290), have vast experience in the field of cost audit and have been conducting the audit of the cost records of various big Companies for many years. The Cost Audit Report of the Company for the financial year ended March 31, 2021 will be filed with the MCA. The Company has maintained accounts and records as specified under subsection (1) of 148 of the Act.

C. Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act, 2013, the Board of Directors had appointed M/s Anjali Yadav & Associates, Company Secretaries in practice, as Secretarial Auditor to carry out the Secretarial Audit of the Company for the financial year 2020-21. The report given by them for the said financial year in the prescribed format is annexed to this report as Annexure B. The Secretarial Audit Report is self explanatory and does not contain any qualification, reservation or adverse remark.

RELATED PARTY TRANSACTIONS

During the financial year ended March 31,2021, all the contracts or arrangements or transactions entered into by the Company with the related parties were in the ordinary course of business and on arms length basis and were in compliance with the applicable provisions of the Companies Act, 2013, read with Regulation 23 of SEBI (LODR), 2015.

Further, the Company has not entered into any contract or arrangement or transaction with the related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions. In view of the above, disclosure in form AOC-2 is not applicable.

EMPLOYEE STOCK OPTION SCHEME (ESOS)

The Company, under the Apollo Pipes Limited Employee Stock Option Scheme - 2020 "the Scheme", approved by the shareholders vide a postal ballot on April 23, 2020, grants share- based benefits to eligible employees of the Company with a view to attracting and retaining the best talent, encouraging employees to align individual performances with Company objectives, and promoting increased participation by them in the growth of the Company. The total number of equity shares to be allotted pursuant to the exercise of the stock incentives under the Scheme to the employees of the Company shall not exceed 4,00,000 equity shares. The following disclosures are being made under Rule 12 of the Companies (Share Capital and Debentures) Rules, 2014 and the said disclosure is also available on the website of the Company at www.apollopipes.com.:

Particulars (During the financial year ended March 31, 2021) Apollo Pipes Limited Employee Stock Option Scheme - 2020
1 Options granted 91,400
2 Options vested; The said options shall vest, as under:-
• At the end of 1st year from the grant date - 25% of options granted.
• At the end of 2nd year from the grant date - 25% of options granted.
• At the end of 3rd year from the grant date - 25% of options granted.
• At the end of 4th year from the grant date - 25% of options granted.
3 Options exercised - -
4 Total number of shares arising as a result of exercise of option 91,400 Equity Shares of face value RS. 10/- each will arise deeming all granted options are vested and exercised.
5 Options lapsed - -
6 Exercise price Since the Shares were acquired from the Secondary Market, the exercise price is fixed at RS. 498/- per Option.
7 Variation of terms of options Not Applicable
8 Money realized by exercise of options -
9 Total number of options in force 81,200
10 Employee wise details of options granted to;- (i) Key managerial personnel;
- Mr. Ajay Kumar Jain 4,000
- Mr. Ankit Sharma 2,000
Particulars (During the financial year ended March 31,2021) Apollo Pipes Limited Employee Stock Option Scheme - 2020
(ii) Any other employee who receives a grant of options in any one year of option amounting to five percent or more of options granted during that year.
- Mr. Parag Dadeech* 5,000
(iii) Identified employees who were granted option, during any one year, equal to or exceeding one percent of the issued capital (excluding outstanding warrants and conversions) of the company at the time of grant;

*Mr. Parag Dadeech was appointed as Chief Operating Officer w.e.f. December 01,2020 and he was granted 5,000 options pursuant to the above ESOP scheme and subject to the above mentioned vesting schedule. However, due to personal reasons, he had resigned the office on April 09 2021, thereby his options stand cancelled and moved back to ESOP pool.

Following is the list of person who has resigned the office and consequently their options revered back to the pool.

S. No Name Number of Options granted
1. Mr. Parag Dadeech 5,000
2. Mr. Priyotosh Mandal 2,800
3. Ms. Tanu Jain 400
4. Mr. Sumit Sharma 400
5. Mr. Giribabu Buddi 400
6. Mr. Nagendrababu.K 400
7. Mr. Anand Sharma 400
8. Mr. Yogesh Goswami 400
Total 10,200

The Certificate from the Merchant Banker of the Company certifying that the Scheme is being implemented in accordance with the Share Based Employee Benefits (SBEB) Regulations 2014 and the resolution passed by the Members, would be placed at the Annual General Meeting for inspection by Members.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to provisions of Section 134 sub-section 3(c) and sub-section 5 of the Companies Act, 2013, your Directors to the best of their knowledge hereby state and confirm that:

a. In the preparation of the annual accounts for the year ended March 31, 2021, the applicable accounting standards have been followed along with proper explanations relating to material departures.

b. Such accounting policies have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent to give a true and fair view of the Companys state of affairs as at March 31,2021 and of the Companys profit for the year ended on that date.

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

d. The annual financial statements have been prepared on a going concern basis.

e. The internal financial controls were laid down to be followed that and such internal financial controls were adequate and were operating effectively.

f. Proper systems were devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

In line with the provisions of Section 135, Schedule VII of the Companies Act, 2013, the Company has framed its Corporate Social Responsibility (CSR) policy for development of programmes and projects for the benefit of weaker sections of the society and the same has been approved by Corporate Social Responsibility Committee (CSR Committee) and the Board of Directors of the Company. The Corporate Social Responsibility (CSR) policy of the Company provides a road map for its CSR activities.

During the year under review, the Company has made contribution of RS. 128.48 lakh for various CSR purposes in compliance to the provisions of Companies Act, 2013 relating to Corporate Social Responsibility.

The Annual Report on CSR activities is annexed herewith as Annexure C.

Ministry of Corporate Affairs has revised the provisions of Section 135 of Companies Act, 2013, notified on January 22, 2021, which consequently obliged the Company to revise Corporate Social Responsibility Policy by incorporating necessary changes such as, change in function of CSR Committee, Distinction of CSR projects or programmes and others in terms ofshort term" and "long term" manner of determining ongoing projects and such other matters as prescribed under the new law.

The revised CSR Policy has been uploaded on the Companys website and may be accessed at the link: https://www.apollopipes.com/media/product/244084920_CSR_Policy_of_ Apollo_Pipes_Limited.pdf.

Pursuant to the above amendment, Company had received a certificate from Chief Financial Officer dated April 28, 2021, regarding the utilization of funds.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186

In terms of Section 186 of the Companies Act, 2013 and rules framed thereunder, details of Loans, Guarantees given and Investments made have been disclosed in the notes to the financial statements for the year ended March 31,2021.

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

Information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo as required under Section 134 (3)(m) of Companies Act, 2013 read with the Rule 8 (3) of the Companies (Accounts) Rules, 2014, is furnished as Annexure D, forming part of this Report.

CORPORATE GOVERNANCE

Your Company reaffirms its commitment to the highest standards of corporate governance practices. Pursuant to Regulation 34 read with schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Corporate Governance Report is annexed to this report Annexure E.

The Corporate Governance Report which forms part of this report, inter-alia, also covers the following:

a) Particulars of the five Board Meetings held during the financial year under review.

b) Policy on Nomination and Remuneration of Directors, Key Managerial Personnel and Senior Management including, inter alia, the criteria for performance evaluation of Directors.

c) The manner in which formal annual evaluation has been made by the Board of its own performance and that of its Committees and individual Directors.

d) The details with respect to composition of Audit Committee and establishment of Vigil Mechanism.

e) Details regarding Risk Management.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

As per the requirement of Regulation 34(2) (e) and Schedule V of the SEBI (Listing Obligation and Disclosure Requirements) Regulation 2015, a detailed Management Discussion and Analysis Report forms part of the Annual Report of the Company.

COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND ANNUAL GENERAL MEETINGS

During the period under review, the Company has duly complied with the applicable provisions of the Secretarial Standards issued by the Institute of Company Secretaries of India on Meetings of the Board of Directors (SS-1) and General Meetings (SS-2).

DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has complied with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and has in place a Policy on Prevention of Sexual Harassment at the Workplace in line with the provisions of the said Act and an Internal Complaints Committee has also been set up to redress complaints received regarding Sexual Harassment.

No complaint of sexual harassment was received during the financial year 2020-21.

OTHER DISCLOSURES AND REPORTING

Your Directors state that no disclosure or reporting is required with respect to the following items as there were no transactions on these items during the year under review:

1. Change in the nature of business of the Company.

2. Issue of shares (including sweat equity shares) to employees of the Company under any scheme save and except ESOS referred to in this report.

3. Significant or material orders passed by the regulators or courts or tribunal which impacts the going concern status and companys operations in future.

4. During the year under review no applications was filed under Insolvency and Bankruptcy Code, 2016.

APPRECIATION

Yours Directors take this opportunity to express their appreciation for the co-operation received from the customers, vendors, bankers, stock exchanges, depositories, auditors, legal advisors, consultants, stakeholders, business associates, Government of India, State Government and Local Bodies during the period under review. The Directors also wish to place on record their appreciation of the devoted and dedicated services rendered by the employees of the Company.

For and on behalf of Board of Directors of
Apollo Pipes Limited
Sanjay Gupta
Chairman
(DIN: 00233188)
Place: Noida
Date: July 26, 2021