2022-2023
To the Members,
Your Directors present their 58th Annual Report of the Company together with
the Audited Statements of Assets & Liabilities and Profit & Loss Account for the
year ended 31st March 2023.
FINANCIAL RESULTS
The Company's financial performance for the year under the review, along with previous
year figures are given hereunder:
Rs. in Lakhs
Particulars |
Year ended 31.03.2023 |
Year ended 31.03.2022 |
Net Sales /Income from Business Operations |
5148.94 |
5135.98 |
Other Income |
121.23 |
48.81 |
Total Income |
5270.17 |
5184.79 |
Interest |
301.53 |
478.78 |
Profit / (Loss) before Depreciation |
139.87 |
69.96 |
Less Depreciation |
44.94 |
37.62 |
Profit / (Loss)after depreciation and Interest |
94.93 |
32.34 |
Less Current Income Tax |
- |
- |
Less Deferred Tax |
- |
- |
Net Profit (Loss) after Tax |
94.93 |
32.34 |
Dividend (including Interim if any and final) |
- |
- |
Net Profit / (Loss) after dividend and Tax |
94.93 |
32.34 |
Amount transferred to General Reserve |
- |
- |
Balance carried to Balance Sheet |
94.93 |
32.34 |
Earning in Rupee per share (Basic) |
0.20 |
0.19 |
Earning in Rupee per Share (Diluted) |
0.20 |
0.19 |
1. REVIEW OF BUSINESS OPERATIONS AND FUTURE PROSPECTS
Stabilizing impact to Aplab's supply chain
Although supply chain conditions have improved substantially, digital signal processors
and microcontrollers in general are still struggling to catch up with post-Covid demand.
We expect this to continue for a while. Aplab has been able to acquire sufficient supplies
for short-term demands.
Commodity prices have stabilized but are still elevated, and company margins,
especially on the longer-term contracts that your company has with defense contractors are
still impacted until 2024.
Defense spending continues to be healthy and consequently your company continues to see
a healthy inflow of orders, and inflow is expected to remain at levels like prior years.
The company's order book is very promising and reflects the trust of the market in the
company. Aplab is one of the only players in this market that can provide pan-India
inhouse support network. We are everywhere our customers are - from Leh Ladakh to the
Andamans. Pending orders have increased over the previous year, however, the
unavailability of microcontrollers and other semiconductor devices has added to this
backlog. The company expects supplies to normalize by Q4 of FY22-23, and the backlog
remains a concern until then. The company continues to closely monitor its semiconductor
inventories and are constantly pushing OEMs for additional supplies, even at higher costs.
Working capital liquidity continues to be a challenge for Aplab, and this prevents
Aplab from actively seeking additional business, especially international business where
supply commitments are critical to success. Aplab is looking at ways to raise short-term
working capital, via traditional banking mechanisms and non-traditional means.
2. MANAGEMENT DISCUSSION AND ANALYSIS:
a) Industry Structure and Developments
Aplab competes in the Industrial Power electronics market. Most of Aplab's larger
competitors are now owned by multinationals. The renewed focus on "Make in India'
increases the number of opportunities available to your company. As mentioned earlier,
Aplab's strong support network makes Aplab an easy choice for Industrial customers, who
usually operate in rural areas.
Aplab hopes to launch AI and machine vision based self-service passbook kiosks by Q4.
Aplab has great hopes for these products in the Banking sector. Updating bank passbooks
takes an inordinate amount of time and resources of banks. Aplab is looking to launch a
product that reduces this to zero, with the use of AI.
b) Opportunities and Threats.
International distributors and resellers looking at alternatives to China remains a big
opportunity. However, the local supply chain continues to be modest in size, and local
companies continue to rely on manufacturing input imports for quality components.
Zero-tolerance policies, lockdowns and the Ukraine war are the immediate threats to a
steady supply-chain for manufacturing.
The domestic industrial power controls market is primarily dominated by the process
industry and the defense sector. Your company continues to be one of the few Indian power
electronics manufacturers with a pan-India presence. Unfortunately, this means that
Aplab's cost of operations is higher than newer entrants, and there are instances of order
losses on price for smaller defense project requirements where a large support network is
not critical. This continues to be a threat to the defense segment business.
New Make-in-India' localized public procurement requirements provide a
potentially exponential growth opportunity to your company, especially in a few product
segments that have zero local manufacturer competition.
An emerging threat is increasing interest in local manufacturing. India is one of the
few countries that IMF projects will escape a recession, making it an attractive
destination for marketing and sales budgets. This will lead to increased competition.
c) Segment-wise or product-wise performance.
Aplab 's Power Controls division, which comprises UPS systems, inverters, frequency
converters and continues to show sales growth and increased interest in Aplab's products.
The Test and Measurement division, which includes programmable power, and electrical
test equipment showed marginal improvements in sales growth. However, performance was
muted and below expectations for both divisions as Aplab continues to focus on reducing
debt and working capital. Additionally, semiconductor unavailability delayed product
shipments.
Banking automation is seeing new investments, and with our new product launches as
mentioned above, Aplab is hopeful of acquiring sizeable chunks of this business.
d) Outlook
Demand outlook continues to be healthy. Banking and the education sector should see a
sharp revival and some of Aplab's underperforming banking and retail automation product
lines should see an uptick in demand in the coming year.
e) Risks and concerns
Semiconductor shortages continue to be a big risk to Aplab's ability to be able to
deliver product and execute orders. A faster-paced jump in business and profitability will
require short-term borrowing of working capital, and sourcing this is still a large
concern.
f) Internal control systems and their adequacy
Company has adequate internal control system to optimize the use and protection of
assets, facilitate accurate and timely compilation of financial statements and management
reports and ensure compliance with statutory laws, regulations, and Company policies. The
management regularly reviews actual performance with reference to budgets and forecasts.
The Company has implemented internal control system at all levels and is confident that
Internal control systems implemented are adequate. But continuous efforts are being made
to improve further, wherever possible.
g) Discussion on financial performance with respect to operational performance.
The Company continues to gradually move towards increasing cash flows. However,
exceptional settlements with labour unions, etc. continue to pressure funds availability.
h) Material developments in Human Resources / Industrial Relations front, including
number of people employed.
Your Company continued its activities during the year in a cordial atmosphere with
utmost co-operation amongst employees. The management is committed to promoting safety,
occupational health and proper environment in design, planning, training, and execution of
all tasks. The company continues to reduce total head count.
3. Details of changes in key financial ratios are furnished below.
Ratio |
Year Ended 31st March, 2023 |
Year Ended 31st March, 2022 |
Debtors Turnover |
1.94 |
2.93 |
Inventory Turnover |
1.28 |
1.21 |
Interest coverage |
1.81 |
1.20 |
Current ratio |
0.52 |
0.49 |
Debt Equity Ratio |
(2.54) |
(2.29) |
Operating Profit Margin (%) |
7.70 |
9.95 |
Net Profit Margin (%) |
1.84 |
0.63 |
Return on net worth (%) |
(4.79) |
(156) |
4. DIVIDEND
Dividend is not recommended during the year since entire accumulated losses are not
wiped yet. (Previous Year - Nil)
5. TRANSFER OF DIVIDEND TO INVESTOR EDUCTION AND PROTECTION FUND
In terms of Section 125 of the Companies Act, 2013, no unclaimed or unpaid Dividend due
for remittance to the Investor Education and Protection Fund established by the Central
Government.
6. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE
COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THESE FINANCIAL STATEMENTS
RELATE AND THE DATE OF THE REPORT
On 2nd June 2023 Bombay Stock Exchange has given formal approval for
conversion of Loans from Promoters into Equity and Preference share capital and
accordingly allotment to promoters is made. Promoters can't sale any of their shareholding
for six months from the date of allotment as per the terms of conversion. With this
conversion Net worth has become positive.
7. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
The information pertaining to conservation of energy, technology absorption, foreign
exchange Earnings and outgo as required under Section 134 (3)(m) of the Companies Act,
2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished in Annexure
to the Directors' Report and is attached to this report.
8. STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY OF THE
COMPANY
The Risk Management Committee operates throughout the year to identify and evaluate
elements of business risks.
9. DETAILS OF POLICY DEVELOPEDAND IMPLEMENTED BY THE COMPANY ON ITS CORPORATE SOCIAL
RESPONSIBILITY INITIATIVE
Though there is no legal compulsion in view of the accumulated losses of the last many
years, during the year under review Corporate Social Responsibility could not be
implemented. However, with improved performance, the same will be implemented.
10. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE
COMPANIES ACT, 2013
The particulars of Loans, Guarantees or Investments made under Section 186 are
furnished in Notes to Financial Statement attached to this report.
11. RELATED PARTY TRANSACTIONS
All transactions entered into with Related Parties were on an arm's length basis and in
the ordinary course of business. There were no material significant related party
transactions made by the company during the year under review with Promoter/Directors or
Key Managerial Personnel. All related party transactions are placed before the Audit
Committee and also been placed at the Board Meeting for approval and omnibus approval was
obtained on a yearly basis for transactions which are of repetitive nature. The policy on
related party transactions as approved by the Board has been uploaded on the website of
the company. Form AOC-2 is not attached to the Directors' Report for the current year
since the related party transactions are mentioned in the Notes to Accounts attached to
this report.
12. EXPLANATION OR COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR
DISCLAIMERS MADE BY THE STATUTORY AUDITORS AND THE PRACTICING COMPANY SECRETARY IN THEIR
REPORTS
Statutory Auditors and Secretarial Auditors have qualified their reports for Impairment
Loss of receivables not provided, negative net worth and backlog of statutory liabilities.
The liability of past employees' dues has been substantially reduced during the current
year. The Board felt that provision for impairment will be made in the years ahead.
Management does an estimation of recoverability, however the impact is not quantified and
hence not ascertainable and the second qualification, the agreed terms of payment is above
45 days. With the conversion of unsecured loans of Promoters into equity and preference
share capital, net worth has become positive on 12th June, 2023. With orders on
hand, better profits will be made in the current year which will enable further
improvement in net worth along with payment of statutory liabilities.
13. COMPANY'S POLICY RELATING TO DIRECTORS' APPOINTMENT, PAYMENT OF REMUNERATION AND
DISCHARGE OF THEIR DUTIES
The Company is following Policy relating to appointment of Directors, Payment of
Managerial Remuneration, Directors' qualifications, positive attributes, independence of
Directors and other related matters as provided under Section 178(3) of the Companies Act,
2013, due to inadequate profit, the present Executive Director is not drawing any
remuneration.
14. ANNUAL RETURN
The extracts of Annual Return pursuant to provisions of section 92 read with rule 12 of
the companies (Management and Administration) Rules, 2014 is furnished in Annexure - B and
attached to this report.
15. NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW
The Board met 4 (Four) times during the financial year 2021-22 i.e., on 27th
May 2022, 10th August 2022, 14th November 2022 and 9th
February 2023. In respect of such meetings proper notices were given in time and the
proceedings were properly recorded and signed in the Minutes Book maintained for the
purpose. No Circular Resolutions were passed by the company during the financial year
under review.
The Board confirms compliance of Secretarial Standards issued by Institute of Company
Secretaries of India (ICSI).
16. CORPORATE GOVERNANCE REPORT
In terms of SEBI CIRCULAR CIR/CFD/ POLICYCELL/7/2014 dated September 15, 2014, which
was effective October 1, 2014, the Clause 49 of the Listing Agreement shall be applicable
to all companies whose equity shares are listed on a recognized stock exchange. However,
compliance with the provisions of erstwhile Clause 49 shall not be mandatory, for the time
being, in respect of the following class of companies:
Companies having paid up equity share capital not exceeding Rs.10 Crore and Net Worth
not exceeding Rs.25 Crore, as on the last day of the previous financial year; provided
that where the provisions of Clause 49 becomes applicable to a company at a later date,
such company shall comply with the requirements of Clause 49 within six months from the
date on which the provisions became applicable to the company.
In view of the above your company is not required to annex the Corporate Governance
Report to the Directors Report for the year ended March 31,2023.
17. DIRECTORS RESPONSIBILITY STATEMENT
In accordance with the provisions of Section 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 were
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 to give a true and fair
view of the state of affairs of the company at the end of the financial year and of the
profit 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 had prepared the annual accounts on a going concern basis; and
(e) The directors, in the case of a listed company, have laid down internal financial
controls to be followed by the company and that such internal financial controls are
adequate and were operating effectively. Internal financial control means the policies and
procedures adopted by the Company for ensuring the orderly and efficient conduct of its
business including adherence to Company's policies, the safeguarding of its assets, the
prevention and detection of frauds and errors, the accuracy and completeness of the
accounting records and the timely preparation of reliable financial information.
(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.
18. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES
The Company has no subsidiary company and no joint ventures during the year under
review.
19. DEPOSITS
The Company has neither accepted nor renewed any deposits during the year under review.
20. DIRECTORS
No shares are held by the Independent Directors. The details of Promoter Shareholding
are available in MGT-9 annexed to this report.
During the year Mr. Dinesh Kotecha, Independent Director expired on 18th
March 2023.
Mr. Sanjay N. Mehta was appointed as Additional Director for the year.
In accordance with the provisions of the Companies Act, 2013, Mrs. Amrita P. Deodhar
(DIN: 00538573) is liable to retire by rotation at the forthcoming Annual General Meeting
and, being eligible, has offered herself for reappointment.
21. DECLARATION OF INDEPENDENT DIRECTORS
The Independent Directors have submitted their disclosures to the Board that they
fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 to
qualify themselves to be appointed as Independent Directors under the provisions of the
Companies Act, 2013 and the relevant rules.
22. STATUTORY AUDITORS
At the 55th Annual General Meeting held on 30th September 2020
M/s Puranik Kane & Co., Chartered Accountants (Registration no. 120215W) are appointed
as the Statutory Auditors of the Company a period of five years to carry out the audit
from financial year 2020-2021 to 2024-2025 and shall hold office as such till conclusion
of the Annual General Meeting that will be held for adoption of financial statements for
the year 2024-2025. However M/s. Puranik Kane & Co., Chartered Accountants have
expressed their inability to continue as Statutory Auditors. The New Statutory Auditors
M/s. R Bhargava & Associates, Chartered Accountants have been appointed who will carry
out the audit from financial year 2023-2024 to 2027-2028 and shall hold office as such
till conclusion of the Annual General Meeting that will be held for adoption of financial
statements for the year 2027-2028. The remuneration payable to the Auditor is commensurate
with the audit work assigned to them.
23. DISCLOSURE OF COMPOSITION OF AUDIT COMMITTEE AND PROVIDING VIGIL MECHANISM
The Audit Committee consists of the following members.
i Dr. S.K. Hajela (DIN: 01001987)
ii Mrs. Amrita P. Deodhar (DIN: 00538573)
iii Mr. Dinesh Kotecha (DIN:02115860) (Expired)
The above composition of the Audit Committee consists of independent Directors viz.,
Mr. Dinesh A. Kotecha (DIN: 02115860) and Dr. S.K. Hajela (DIN: 01001987) who form the
majority.
The Company has established a vigil mechanism overseas through the committee, the
genuine concerns expressed by the employees and other Directors. The Company has also
provided adequate safeguards against victimization of employees and Directors who express
their concerns. The Company has also provided direct access to the chairman of the Audit
Committee on reporting issues concerning the interests of co employees and the Company.
24. SHARES
a. BUY BACK OF SECURITIES
The Company has not bought back any of its securities during the year under review.
b. SWEAT EQUITY
The Company has not issued any Sweat Equity Shares during the year under review.
c. BONUS SHARES
No Bonus Shares were issued during the year under review.
d. RIGHT ISSUE OF EQUITY SHARES
The Company has not issued any Rights Shares during the year under review.
e. EMPLOYEES STOCK OPTION PLAN
The Company has not provided any Stock Option Scheme to the employees.
f. PREFERNTIAL ISSUE TO PROMOTERS OF THE COMPANY
The Company has issued Equity Shares and Compulsorily Convertible Preference Shares on
Preferential basis to the Persons belonging to Promoter & Promoter Group' by
conversion of major portion of their unsecured loan.
25. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION,
PROHIBITION AND REDRESSAL ACT, 2013)
The Company has in place an Anti Sexual Harassment Policy in line with the requirements
of the Sexual Harassment of Women at the workplace (Prevention, Prohibition and Redressal)
Act, 2013. All employees (permanent, contractual, temporary, trainees) are covered under
this policy. No sexual harassment complaints were received during the year 2022-23.
26. PERSONNEL
Industrial relations during the year remained cordial. The Board appreciates the
willing co-operation and team spirit in the organization at all levels.
Statement under section 134(3) of the Companies Act, 2013 read with rule 5(2) of the
Companies (appointment and remuneration of managerial personnel) rules, 2014 giving
details of employees who were employed throughout the year and were in receipt of
remuneration not less than Rs. 1,02,00,000/- p.a. or Rs. 8,50,000/- p.m. if employed for
part of the year is not attached to this report as there are no employees in this
category.
27. ACKNOWLEDGEMENTS
Your Directors place on record their sincere thanks to Bankers, Business Associates,
Consultants, Employees and various Government Authorities for their continued support
extended to your Company's activities during the year under review. Your Directors also
gratefully acknowledge the shareholders for their support and confidence reposed on your
Company.
For and on behalf of the Board of Directors
P.S. Deodhar
Chairman & Managing Director
DIN: 00393117
Date: 11th August 2023
Place: Navi Mumbai
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