Date: 3rd September, 2020

BSE Limited, National Stock Exchange of India Ltd.,

Phiroze Jeejeebhoy Towers, Exchange Plaza, C-1, Block G,
Dalal Street, Mumbai – 400 001 Bandra Kurla Complex,
Bandra (E), Mumbai – 400 051

Scrip Code: 540879 Symbol: APOLLO ISIN: INE713T01010

Dear Sir(s),

Sub: Annual Report of the Company for the financial year 2019-20 along with the Notice
of the 23rd Annual General Meeting
This is to inform that the 23rd Annual General Meeting (“AGM”) of the Company will be
held on Friday, 25th September, 2020 at 11:00 A.M (IST) through Video Conferencing /
Other Audio Visual Means.
Pursuant to Regulation 34(1) of Securities Exchange Board of India (Listing Obligations and
Disclosure Requirements) Regulations, 2015 (“SEBI Listing Regulations”), we are enclosing
herewith the Annual Report of the Company along with the Notice of AGM for the financial
year 2019-20 which is being sent through electronic mode to the Members.

The Annual Report containing the Notice is also uploaded on the Company’s website
[Link] under the section “Investors”.

Kindly take the same on your record and bring to the notice of all concerned.
Thanking you,

For Apollo Micro Systems Limited

Digitally signed by V C SIVA SHANKAR

V C SIVA DN: cn=V C SIVA SHANKAR, c=IN,

st=ANDHRA PRADESH, o=Personal,
serialNumber=eebff98b600edf86a3e785cee

SHANKAR b26790993626934585a857cca4a937eb962
a80d
Date: 2020.09.03 [Link] +05'30'

Vitta Chaitanya Siva Shankar

Company Secretary & Compliance Officer

Enclosures: as above
 Achieving
Tomorrow
by TODAY

Apollo Micro Systems Ltd | Annual Report 2019-20

CONTENTS
Corporate Overview Financial Statements

Company Overview 02 Independent Auditor’s Report 98

Chairman’s Message 04 Balance Sheet 106

Message from Managing Director 06 Statement of Profit and Loss 107

Financial Performance Statement of Cash Flows 108

Highights - 5 Years 08
Statement of Changes in Equity 110
Sustainably Catering to Stakeholders 10
Notes of the Financial Statements 111
Focused on Research & Development 12

Towards a brighter future 14

Improving Visibility 16

Building strength- with our people 18 Statutory Reports

Committed to holistic development 20 Notice 29

Profile of Board of Directors 22 Board’s Report 37

Profile of Leadership Team 24 Report on Corporate Governance 69

Corporate Information 27 Management Discussion & Analysis 90

Forward-looking statements

Some information in this report may contain forward-looking

statements which include statements regarding Company’s
expected financial position and results of operations, business plans
and prospects etc. and are generally identified by forward-looking
words such as “believe,” “plan,” “anticipate,” “continue,” “estimate,”
“expect,” “may,” “will” or other similar words. Forward-looking
statements are dependent on assumptions or basis underlying
such statements. We have chosen these assumptions or basis in
good faith, and we believe that they are reasonable in all material
respects. However, we caution that actual results, performances or
achievements could differ materially from those expressed or implied
You can also find this report online on: in such forward-looking statements. We undertake no obligation to
[Link] update or revise any forwardlooking statement, whether as a result
of new information, future events, or otherwise.
Navigating our
FUTURE

Standing at the cusp of a new world order,

we are feeling the contours of change.
Our relentless focus on accomplishing
goals, delivering cutting-edge solutions
and defying norms endows us with the
courage to look beyond today and carve
the foundations for a better tomorrow.
AMS believes in capitalizing on emerging
opportunities and therefore, remains
unfazed by changing industry dynamics.
Bolstered by our capacity to innovate and
act decisively amidst crisis, we continue to
outperform competition while successfully
strengthening our roots. Today, we rest
on our endearing capabilities to pursue our
growth goals and remain confident about
accelerating transformations to navigate
our future.
 APOLLO MICRO SYSTEMS LIMITED Annual Report 2019-20

Company
OVERVIEW
An established business entity in the
Aerospace, Defence, Space and Homeland
security sectors, Apollo Micro Systems Limited
(AMS) is a pioneer in design, development,
assembly and testing of electronic and electro
mechanical solutions.
We continue to leverage state-of-the-art technology to develop innovative and unique
solutions that meet diverse customer requirements. Our ability to sustain in a constantly
evolving business landscape, offer ground-breaking products & solutions and strategic
abilities to stay ahead of the curve has established AMS as a trusted and reputed player in
the industry.

Vision How AMS delivers value

To emerge as a world-class company Our technical expertise enables us to markets provides an opportunity to
and a unique solution provider with ‘Total conceptualize and deliver innovative grow and expand our operations.
Solutions under One Roof’ products and solutions critical to our
customers. Constant focus on operational
improvement to assure highest quality
Established brand reputation and standards, ensure on-time delivery
Mission market presence empowers us to and sustain cost synergies to improve
provide superior return on investment profitability and margins.
AMS mission is to convert concepts of our
customers into reality by using state of the Growing demand for our products and
art technologies services in domestic and international

02
 Corporate Overview Statutory Reports Financial Statements

Highlighting Performance
FY 2019-20

Rs 24590.41 Lakhs Rs 5026 Lakhs

Revenue from operations EBITDA

Rs 1401.12 Lakhs Rs 29591.52 Lakhs

PAT Networth

Rs 6.75
EPS

Our Solutions

Avionic Systems: On-Board & Ground Naval Systems: On-Board Weapon Homeland Security: Integrated
Support Equipment for Avionics electronics and Ground Support Surveillance systems, Perimeter
equipment for Torpedoes, Decoys Security Systems
Aerospace Systems: On-Board -Jammers, Submarines and Ships
Electronic Weapon Systems & Ground Transportation: Passenger Information
Support Equipment for Missile Systems Satellite Space Systems: Payload Systems (i.e. Token Display System,
Checkout Systems and Earth Station Arrival/ Departure Information Display
acquisition systems for Space System)
applications

Our services

Electronic manufacturing IT & Software Mechanical - CAD

Hardware designing Electronic – CAD

03
 APOLLO MICRO SYSTEMS LIMITED Annual Report 2019-20

Chairman’s
MESSAGE

Dear Shareholders,

The fiscal 2019-20 was yet another

Challenging year from varied domestic and
global macroeconomic factors added to this

We are perfectly poised to offer was a hit by pandemic at the fag end of the
year. Despite this, your company delivered
the finest quality products that sustained performances and continued
to create value for its customers across
help customers to retain their sectors including aerospace, defence and
space, and homeland security.
competitiveness in a robust and
The year was marked by several
dynamic industry. headwinds including the escalation of
trade wars between major economies,
uncertainties around BREXIT, rising

04
 Corporate Overview Statutory Reports Financial Statements

To effectively utilize upcoming

opportunities, we remained vigilant
about enhancing our capabilities, on strengthening our existing facilities and
operational efficiencies and its expanding to newer territories, globally.

investments in R&D. I would like to take this opportunity to

sincerely thank our shareholders for their
continuous support and encouragement. I
debt levels in emerging economies and areas of working. These technological also express my deepest gratitude towards
sustained geopolitical tensions. Amidst areas are expected to benefit AMS, and the management, our business partners,
this, the COVID-19 pandemic caused consolidate our dominance in the ESDM suppliers and other stakeholders for
severe social and economic distress across industry in varied verticals. To effectively their sustained contributions towards our
the globe. Many countries, including India, utilize upcoming opportunities, we success.
imposed nationwide lockdowns to curb the remained vigilant about enhancing our
spread of the virus and businesses were capabilities, operational efficiencies and We look forward with enthusiasm and
compelled to shut down, forcing economic investments in R&D. We continue to foster optimism, to another year of innovation,
activity to slow down and subsequently a ourselves in new technological reaches rewarding experiences and greater
complete halt. and we outreach to meet the goals through operational efficiencies – to scale our
a strategic steps to achieve the same. In business and accomplish goals to reiterate
The Indian economy too continued to line to this we have acquired 51% stake in our market leadership.
reel under domestic as well as global Anaya SIP RF Technologies Private Limited.
pressures. However, despite challenges, We also intend to set-up a state of the art
India ranked among the fastest growing microwave design cum production facility. Warm Regards,
emerging economies in the world.
Favourable government policies added This strategic move will further strengthen
some strength to an ailing economy and our technological prowess and empowers
Sd/-
a stimulus package of Rs. 20 lakh crore us to deliver competitive and innovative
Raghupathy Goud Theegala
was announced to revive growth. The products which are a combination of RF
Chairman & Independent Director
government’s sustained emphasis on & Digital and would take us to a different
‘Atmanirbhar Bharat’ also aimed to improve league of competition.
industry confidence.
Our ability to innovate and ideate novel
The government is also set to spend Rs. concepts allows us to translate our
8000 crore on the National Mission on customer’s concepts into reality. With
Quantum Technologies & Applications, our constant R&D investments, we are
over a period of 5 years (2020-2025). perfectly poised to offer the finest quality
It is expected to benefit aero-space products that help customers to retain their
engineering, IOT’s, Drones and Artificial competitiveness in a robust and dynamic
intelligence which are relevant to our core industry. In the years to come, we will focus

05
 APOLLO MICRO SYSTEMS LIMITED Annual Report 2019-20

Message from
MANAGING DIRECTOR

Dear Shareholders,

In the fiscal year 2019-20, we continued

to make steady progress towards
accomplishing our mission of turning our
customers’ requirements into reality. We
remained focused on building an agile and
resilient business, with an ability to sustain
excellence and efficient operational
performances.

During the year under review, our revenue

from operations stood at Rs. 245 crores,
as against Rs 262 crores in the in the
FY 2018-19. Our EBITDA was Rs. 50.2 crores
in FY 2019-20, as compared to Rs. 51.6
crores in FY 2018-19 and PAT stood at Rs 14
crores in FY 2019-20 from Rs. 29 crores in
FY 2018-19.

As we strengthened our balance sheet

further, our debt equity ratio stood at
0.57 times, as on 31st March 2020. To
sustain our growth in the short term and
improve return on capital employed, we

To sustain our growth in the short emphasised on investments in state-

of-the-art technology, a strong product
term and improve return on capital pipeline and a keen interest to enhance
our operational capabilities.
employed, we emphasised on In a constant thirst to innovate new
investments in state-of-the-art technologies, which are the basis of
our sustenance and our future, we have
technology, a strong product pipeline developed several new technologies and
also improved the existing technologies
and a keen interest to enhance our which have seen success in trials

operational capabilities. conducted by our customers. Our constant

technological innovation and our goal
to develop globally acceptable and
competitive technologies has marked a

06
 Corporate Overview Statutory Reports Financial Statements

significant phase in this fiscal year 2019- We have also marked this year
20, wherein we have signed a strategic
alliance with Israel Defence company
towards initiation of developing
for developing and producing Inertial
Navigation Solutions which is still a
critical SONAR systems which would
relatively new area for Indian Defence safe guard Indian Coastal belt, which
Private Players. We have also marked
this year towards initiation of developing would be ready for trials during fiscal
critical SONAR systems which would
safeguard Indian Coastal belt, which would year 2020-21.
be ready for trials during fiscal year 2020-
21. Our team has collaborated with DRDO to create exceptional outcomes that drive As we look forward to the government’s
during the Lockdown for the development the Company to newer heights of success. positive steps and its focus on Indigenization
of advanced Ultra Violet Germicidal Curing in Defence and Space sector provides our
Conveyor machine to deactivate the DNA/ We believe, our employees are our biggest
Company a huge opportunity to lay the
RNA of microbial organisms. At a time, when asset and therefore continue to invest in
path for achieving a sustained turnover of
the world is grappling with the Coronavirus their growth and development. We provide
Rs 1000 crores by FY 2025. We have set this
outbreak, this is expected to be a path a conducive working environment and
target under our mission “Sahasra-2025”.
breaking innovation for curbing the virus. offer opportunities for availing trainings
The word “Sahasra” means thousand and
The system has passed stringent tests and and apprenticeships in a safe and
our target is to achieve this milestone by
is certified to be used in public places like rewarding environment, encouraging them
2025. We re-affirm all our stakeholders
airports, hospitals and schools to eliminate to develop long and rewarding careers
that our plans for continual and sustained
virus thriving on bags and luggage. This is with us. I would like to take this opportunity
growth cannot be dented by the temporary
our contribution to the society battling with to appreciate our team for their continued
phases and we shall strive to work with more
pandemic. commitment, hard work and sincerity to
velocity and steer the company to the next
fulfil organizational objectives.
level with the support of our stakeholders
Government of India has recently including employees, Customers, Bankers,
announced embargo on 101 Defence The COVID-19 pandemic developed
rapidly into a global crisis, forcing Investors and Suppliers. The huge gamut of
items for a period of four years, and initiatives by Government of India through
it further voices a strong intention to government to enforce lock-downs of
all economic activity. The Pandemic has Self Reliance and Make in India is a big
promote Indian Defence companies. boost for Indian Defence and Space sector
India’s premier defence research institute, affected the supply chain of the business.
As our business involves inspection and and the voice of Indigenous companies
DRDO, has identified 108 military systems like AMS is heard well by the Government
and subsystems like navigation radars, testing at every stage and so the same has
slowed down since mid January 2020 and and the approach implemented by Indian
tank transporters and missile canisters Government is going to reap good benefits
which can be designed, developed and subsequent lock-down in March 2020 has
further added to the effect. Although there and growth for AMS in future. We also strive
manufactured by the domestic defence to preserve our innovative culture with
industry. Indian Defence Industry is are uncertainties due to the pandemic but
the Company is well positioned to navigate significant investments in technology, R&D
delighted with these twin decisions and our people. Remaining steadfast in our
amidst a challenging period during the the challenges ahead and gain better
sustainability both in terms of growth and approach to augur business sustainability,
pandemic. These strategic moves by the we seek to uncover new avenues of
Ministry of Defence and DRDO shall lay a unlocking new opportunities in the years to
come. success.
solid foundation for sustained growth of
the Indian Defence Industry, working to
At AMS, we ensured the safety of our
establish its Self Reliance. Regards,
employees and the community during
Our success as a company is strongly the recent COVID-19 crisis. We followed
safety protocols across our operations and Sd/-
rooted in our strategic ability to invest in
implemented necessary changes in the Karunakar Reddy Baddam
products and solutions that enhance our
Standard Operating Procedures (SOP) to Managing Director
efficiency and cater to evolving customer
requirements. Our teams, therefore, strive protect our people and enable business
continuity.

07
 APOLLO MICRO SYSTEMS LIMITED Annual Report 2019-20

Financial Performance
Highights - 5 YEARS
Revenue from Operations EBITDA PAT

(Rs. in lakhs) (Rs. in lakhs) (Rs. in lakhs)

26,297.53

5,165.52

2,911.85
5,026.08
4,953.03
24,590.41
22,046.13

4,248.67
20,086.71

1,916.65
1,745.34
15,791.48

2,578.04

1,401.12
1,291.61
FY 16 FY 17 FY 18 FY 19 FY 20 FY 16 FY 17 FY 18 FY 19 FY 20 FY 16 FY 17 FY 18 FY 19 FY 20

Net worth RoCE EPS

(Rs. in lakhs) (in %) (in Rs.)

29,591.52

14.03
45.7
28,192.67

12.73

12.46
25,558.81

31.6

9.42
6,362.64

6.75
4,957.19

15.8

15.5

13.3

FY 16 FY 17 FY 18 FY 19 FY 20 FY 16 FY 17 FY 18 FY 19 FY 20 FY 16 FY 17 FY 18 FY 19 FY 20

08
 Corporate Overview Statutory Reports Financial Statements

Five years at a glance

(Amount in H)
2019-20 2018-19 2017-18 2016-17 2015-16
Statement of Profit and Loss
Revenue from operations 2,459,041,260 2,629,753,243 2,204,613,913 2,008,670,952 1,579,148,852
EBIDTA 502,608,398 516,552,977 495,303,492 424,867,581 257,803,751
Depreciation 98,954,464 61,950,838 64,984,581 39,259,661 27,237,059
Finance costs 151,044,733 127,604,212 120,737,974 114,375,551 81,436,795
Profit before exceptional items and tax 252,609,201 326,997,926 321,773,041 257,822,929 149,129,897
Exceptional items - - 12,192,105 13,409,440 -
Profit before tax 252,609,201 326,997,926 309,580,936 271,232,369 149,129,897
Tax expenses 112,496,424 35,812,660 117,915,736 96,697,406 19,968,652
Profit after tax 140,112,777 291,185,266 191,665,200 174,534,963 129,161,245
EBIDTA / Revenue 20.44% 19.64% 22.47% 21.15% 16.33%
PBT / Revenue 10.27% 12.43% 14.04% 13.50% 9.44%
PAT / Revenue 5.70% 11.07% 8.69% 8.69% 8.18%

Balance sheet
Share capital 207,588,860 207,588,860 207,638,860 137,117,000 137,117,000
Reserves and surplus 2,751,563,221 2,611,678,763 2,348,242,133 499,147,190 358,602,014
Share warrants - - - - -
Networth 2,959,152,081 2,819,267,623 2,555,880,993 636,264,190 495,719,014
Non-current liabilities
Long-term liabilities and provisions 7,454,290 9,446,381 47,564,688 138,874,448 227,984,902
Deferred tax liability 131,971,561 94,439,404 121,212,106 68,385,601 6,542,159
Current liabilities 1,552,589,916 1,583,317,150 1,909,890,031 1,615,059,144 1,263,116,013
Total liabilities 4,651,167,848 4,506,470,559 4,634,547,818 2,458,583,383 1,993,362,088
Non-current assets
Gross fixed assets 767,563,162 584,247,340 394,690,757 339,079,647 304,889,898
Accumulated depreciation 264,948,849 166,195,081 104,244,243 39,259,661 93,525,387
Unallocated expenditure pending capitalisation - -
Net fixed assets 502,614,313 418,052,260 290,446,514 299,819,986 211,364,511
Capital work in progress 365,231,912 283,479,718 286,916,657 128,645,850 101,182,148
Other net intangible assets 802,780
Investments - - - - -
Other non-current assets - - 25,915,382 43,590,382 -
Current assets 3,782,518,844 3,804,938,581 4,031,269,265 1,986,527,165 1,680,815,429
Total assets 4,651,167,848 4,506,470,559 4,634,547,818 2,458,583,383 1,993,362,088
Return on capital employed 13.3% 15.5% 15.8% 45.7% 31.6%
Return on networth 4.7% 10.3% 7.5% 27.4% 26.1%
Debt / equity 0.57 0.60 0.81 2.86 3.02
Current ratio 2.44 2.40 2.11 1.23 1.33

Per share
Book value per share - Rs. 142.51 135.78 123.09 46.40 36.15
Earnings per share (basic) - Rs. 6.75 14.03 12.46 12.73 9.42
Earnings per share (dilluted) - Rs. 6.75 14.02 12.08 12.73 9.42
*Dividend per share - Rs. 1/- - - -
No. of shares 20,763,886 20,763,886 20,763,886 13,711,700 13,711,700

*Board recommended Dividend @ 5% i.e. Rs 0.5 per share for FY 2019-20

09
 APOLLO MICRO SYSTEMS LIMITED Annual Report 2019-20

Sustainably Catering to
STAKEHOLDERS
Our inputs Process

Financial resources

Our financial resources enable us to pursue

our growth and expansion plans and also
support our customers throughout the project
lifecycle.

State-of-the-art facilities

Through our state-of-the-art facilities, we

embed advance technologies in our products Identifying Research and
quickly and efficiently. customer’s need Development

People and culture

We leverage the skills, commitment,

determination and ingenuity of our employees
to steadily work towards our common goal.

Long-standing relationship

We maintain healthy and mutually beneficial

Bidding and
relationships with customers, suppliers,
contracting
business partners and other stakeholders.

Engineering capabilities

Our technical know-how and robust

engineering capabilities enable us to develop
innovative and unique products and solutions.

Service capabilities
Initiating Designing and
Our ability to provide efficient and timely manufacturing development
service sensure maximum customer
satisfaction while improving our ability to
deliver exceptional products, every time.

Quality Final
check dispatch

10
 Corporate Overview Statutory Reports Financial Statements

Strategy Value created

Clear goals Customers

We remain focused on achieving our vision We have earned the Trust of our customers by delivering
and mission, keeping us on the right track to superior Quality Products and solutions
success
Customized
Sound governance
Solutions that meet customers’ requirement
We strive to adopt the highest standards of Shareholders and investors
governance and foster transparency among
stakeholders about our operations Sustaining market capitalization

Operating responsibly Dividend

Board recommended Dividend @ 5% i.e. Rs 0.5 per share for

We strive to operate in a responsible manner,
FY 2019-20
taking into account its possible impact on the
environment and communities in which we Credit rating
operate.
Long-Term Rating [ICRA] BBB- (pronounced ICRA triple B
Managing risk MINUS)

We constantly monitor, identify, manage Short-Term Rating [ICRA] A3 (pronounced ICRA A three)
and mitigate any possible risks in our daily
Credit rating by ICRA Limited
operations.
Community
Rewarding success
Rs. 51.5 lakhs
We acknowledge and reward the performance Spent towards CSR activities in FY 2019-20
of our people to ensure prolonged
organizational success. Reduction

Develop differentiated products In our environmental footprint

We significantly invest towards the Constantly investing towards the upliftment of society at
development of new and differentiated large
products and solutions for our customers. People

Investments to ensure operational excellence Rs. 762 lakhs

and build capabilities Employee benefit expenses

We constantly invest in processes andfacilities Imparting training and development to Engineers An

that enable us to manufacture cost efficient inclusive and diverse workplace provides multiple
andsuperior quality products and solutions. opportunities for career growth Invested in training and
Further, we also build strong partnerships with development
various organizations across the globe to drive
economies of scale and broaden our offerings.

11
 APOLLO MICRO SYSTEMS LIMITED Annual Report 2019-20

Focused on Research
& DEVELOPMENT
At AMS, our desire to deliver innovative and
advanced products drives us to improve our
technological capacities. We continue to
focus on latest technological innovations and
aspire to improve our engineering excellence
to lay the foundation for robust research and
development programmes.
Our in-house designing team constantly strives to develop reliable and futuristic solutions
for our customers. We leverage our expertise and technical know-how to develop and
deliver state-of-the-art solutions, tailored to meet customer requirements. Our solutions
cater to diverse customers from varied fields including Aerospace, Avionics, Space, Naval
and Defence sectors. We also utilize our exceptional R&D facilities to offer customized
solutions for our valued customers.

Rs 1967 Lakhs 150

Spent towards R&D in FY 2019-20 Team size of R&D team as on 31st March 2020

Collaborative R&D Partner CEMILAC

Recognized by Bharat Electronics Limited Certified R&D centre

Focus areas electronics which is a potential import Automatic Test Equipment (ATE) for
substitution. A new foray of technologies IC, semiconductor, relay and circuit
During the year under 2019-20, we have are developed which are not only unique board testing.
developed critical technologies On-Board but also laid foundation to the future
Aircraft technologies like Next Generation roadmap of the companies growth which
Gimbals and Fire Control Systems. We Inertial Navigation Solutions
would get converted into volume business.
continued our development activity on
We have launched Inertial
SONAR systems in this year as well, on Portfolio of New Products and
Navigation Solutions (INS) such as
underwater Homing and Signal Processing Solutions
Inertial Measurement Unit (IMUs),
which has given excellent results in
Automatic Test Equipment (ATE) IRU, Gyrocompass and North Finder
initial phase of trials. Our team has also
In association with ‘FORM Co. in association with Cielo Inertial
invested significant efforts in development
Ltd’, Russia, we have launched Solutions Ltd, Israel.
of Coastal Surveillance Moored Mine

12
 Corporate Overview Statutory Reports Financial Statements

Ultra Violet Germicidal Baggage Disinfector Conveyor

Systems - INVISIBLE ENEMY V/S INVISIBLE LIGHT
It is a very proud moment for us (λ = 253.7nm) have the potential rays. The system has undergone
at AMS as we introduce a truly to destroy genetic material of rigorous testing and has been
novel technology to fight the living organisms, if exposed to certified to successfully address
‘Invisible’ enemy with invisible appropriate wavelengths of UVC the problem.
light rays.

AMS, in collaboration with

Defence Research and
Development Organisation
(DRDO) and has developed
a technology to mitigate the
potential risks of the novel
coronavirus on bags and
luggage. It is an ideal technology
to cope with invisible microbes
in areas such as airports, malls,
theatres, schools, government
institutions and other public
places frequented by a large
number of people.

The technology will be used

to deactivate DNA/RNA of
microbial organisms to prevent
the virus from mutating and
spreading further. UVC rays

Application Usage Advantage

Airports FFP / N95 Masks 360 degrees of irradiation

Commercial Buildings Respiration Masks and disinfection

Customs Shoes Simple handling

Govt. buildings Cutlery Short disinfection times

Prisons Glasses Material-friendly disinfection

Seaports Money Long lifespan of UV lamps

Security Checkpoints Plastic Jars Highest safety standards

Malls Mobile Phones Chemical-free, dry

disinfection
Colleges Baggage
Schools And many more
Worship Areas

13
 APOLLO MICRO SYSTEMS LIMITED Annual Report 2019-20

Towards a
BRIGHTER FUTURE
In today’s world of rapid changes, it is pivotal
for us to upgrade our processes, systems and
strategy to ensure business sustainability.
At AMS, our aim is to deliver sustainable
value through engineering and operational
excellence, strategizing novel ways to create a
future ready organization.

Aspiring to build a brighter future,

we continue to focus on the
following:

Designing a stronger portfolio

Our continued investments in differentiated

technology and R&D facilities are aimed at
developing a strong pipeline of products.
We constantly look for opportunities in
defence as well as non-defence segments
to further expand our operations. We also
undertake strategic alliances with various
organizations to further strengthen our
capabilities to build best-in-class products
for our customers.

Delivering finest quality products

Our products undergo stringent quality

checks, right from sourcing of raw
materials to delivery of products, to ensure
adherence to the highest standards of
quality. Further, we also offer product
lifecycle support services to increase its
longevity and efficiency. During the year
under review, we have obtained ‘AS 9100D’
certification from NVT Quality Certification
Pvt. Ltd. for implementation of the Quality
Management System. This certificate
stands testimony to our ability to produce
and offer superior quality products that are
at par with global standards.

14
 Corporate Overview Statutory Reports Financial Statements

Strengthening our infrastructure Building a high performance culture Agile and resilient business model

We constantly fortify our manufacturing We strive to build a work environment At AMS, we have built a strong and resilient
facilities with cutting edge technology and that is encouraging, motivating, diverse business model that enables us to mitigate
machinery. Our investments are aimed and inclusive. We believe that a motivated unforeseen challenges on our way. Further,
at driving cost synergies, increasing and engaged workforce is the key to our ability to quickly and smoothly adapt
operational efficiency and reducing our success. Therefore, we encourage to changing industry dynamics gives us a
defects. Our robust facilities also enable us employees to participate in various training competitive edge over our competitors.
to undertake small as well as bulk orders and skill development programs to further
from customers across the globe. improve their capabilities in line with
changing market dynamics.

15
 APOLLO MICRO SYSTEMS LIMITED Annual Report 2019-20

Improving
VISIBILITY
At AMS, we believe that it is pivotal to showcase
our products and capabilities to expand our
reach and acquire more customers. Thereby,
we continue to participate in various trade fairs
and expos to enhance our visibility and further
strengthen our market share.
During the year under review, we
participated in various trade fairs and
expos including DEFEXPO 2020,
organized by the Department of Defence
Production, Ministry of Defence. During the
expo, we showcased Defence products
and latest technologies utilized by AMS.
It also provided us a unique opportunity
to strengthen our business network. We
also participated in Defence & Aerospace
10th Strategic Electronics Summit 2019,
organized by the Electronic Industries
Association of India (ELCINA).

16
 Corporate Overview Statutory Reports Financial Statements

AMS participation in DEFEXPO 2020

17
 APOLLO MICRO SYSTEMS LIMITED Annual Report 2019-20

Building strength-
WITH OUR PEOPLE
At AMS, we realize the value of our people
– as enablers of our success. Therefore,
we constantly focus on building a work
environment that promotes well-being, fosters
a high performances culture, rewards hard
work and provides opportunities to enable
professional and personal growth. We also
strive to make AMS a diverse workplace,
nurturing an inclusive culture where people
are valued, respected and supported.

285
2
24
11

Employees as on 31st March 2020

63

24% Age Mix (in %)

Female employees

Less than 25 years

25 – 40

41 – 60

60 above

18
 Corporate Overview Statutory Reports Financial Statements

Training and Development Employee engagement Our response to COVID-19

pandemic
At AMS, training and development is an We strive to develop a motivated and
integral part of our people strategy. It not engaged workforce to promote a culture Amidst the COVID-19 outbreak, our priority
only improves the efficiency of our people of ownership, improve productivity and was to ensure the health and well-being
but, also prepares our employees to increase overall employee satisfaction. of our employees. We followed stringent
successfully navigate through challenging We ensure regular interaction and social distancing norms and regularly
circumstances. We organize induction discussions between employees and the sanitized premises, maintained hygiene
programs for new joinees and provide senior management to ensure transparent within the organization and conducted
role based technical trainings to existing communication across organizational thermal screening of employees and
employees on a regular basis. hierarchies. Further, team meetings are visitors to ensure maximum safety of our
also organized regularly to answer queries people. We also organized COVID-19 tests
and allay concerns. At AMS, we are keen to for employees and distributed immunity
listen to our employees and provide them a boosting kits & medicine. Further, we have
platform to share their issues and mitigate installed automatic sanitizer machines in
issues congenially. our premises and hot water cans to keep
our employees healthy and safe.

19
 APOLLO MICRO SYSTEMS LIMITED Annual Report 2019-20

Committed to
HOLISTIC DEVELOPMENT
At AMS, we believe that business success and
sustainability is integrally associated with our
endeavours to create meaningful contributions
to people and communities. As a responsible
organization, we remain committed to uplifting
the marginal sections of society, empowering
them to lead better lives and in turn, contribute
to the holistic development of society at large.
We undertake CSR activities in collaboration with third party agencies like Zion Educational Focus areas:
Society, All India Social Education Charitable Trust, Women Development Society and
Suraksha old age & health society. Women empowerment, child support
and assistance for differently abled
people

Healthcare services for underprivileged

people through medical and health
camps

Education for children and differently

abled

Rs 51.5 Lakhs
Spent towards CSR activities in FY 2019-20

Medical camp organized by Suraksha Old Age Society

20
 Corporate Overview Statutory Reports Financial Statements

Our response to COVID-19 pandemic

The COVID-19 outbreak has wreaked havoc around the world, causing massive loss of lives
and livelihoods. As jobs were lost and people suffered from unfathomable hardships, we
tried to alleviate sufferings by delivering essentials. At AMS we stepped up efforts to serve
communities by distributing ration packages consisting of 5kg rice, 1kg dal and 1 litre oil
for every family. It helped financially distressed families to sustain during the crisis. 2000
families were benefited from our endeavours during the virus outbreak.

2000
Families benefited by ration distribution
during lock down due to Covid pandemic

21
 APOLLO MICRO SYSTEMS LIMITED Annual Report 2019-20

Profile of
BOARD OF DIRECTORS

01 02 03

04 05 06

22
 Corporate Overview Statutory Reports Financial Statements

01 Raghupathy Goud Theegala 03 Venkata Siva Prasad quality processes, building robust supply
Chairman and Independent Director Chandrapati chain management. He is actively involved
Whole-Time Director (Technical) in business development and focuses on
He holds a Bachelor’s degree in commerce enhancing the footprints of the company
from Osmania University and a Bachelor’s He is the Whole-Time Director (Technical) into various forays under defence and non
degree in law from Bangalore University. of the Company. Mr. Venkata Siva Prasad defence areas.
He practiced law for a period of three years Chandrapati has 23 years of experience
before joining A.P Police through Public working on varied technologies. He
05 Karunasree Samudrala
Service Commission as Sub Inspector. Prior has done his M. Tech in Digital Signal
Independent director
to joining our Company, he worked with Processing and his technical proficiency
the Andhra Pradesh Lokayukta and Upa – in the Industry is unmatched. His technical She is a Fellow Member of the Institute
Lokayukta and is experienced in handling expertise, knowledge and managerial skills of Chartered Accountants of India and
matters related to financial irregularities, drive the Research & Development (R&D) a Commerce Graduate from Kakatiya
abuse of power and corruption etc. He groups of the Company. He undertakes University, Telangana, having 20 years
has been on the board of our Company the responsibility of heading & successful of wide experience in Accounting,
since August 21, 2017 as an Independent execution of the Defence projects of the Audit, and Taxation. She has a Post
Director. Company. Qualification experience in handling Audits
Engagements, Extensive experience in
He started his journey with AMS in 1999,
02 Baddam Karunakar Reddy after serving with several other companies
handling Corporate Audits – Statutory,
Founder and Managing Director Internal and Tax Audits, FMCG, stock
for over eight years. His expertise in
market, Bank Audits etc., working and
design and product development makes
Mr. Karunakar Reddy Baddam has over Liaisoning with Statutory Auditors, Income
him the best available in the industry. He
35 years of business experience. He is Tax Authorities and handling Investor
is the architect who has built complex
the Founder and Managing Director of Relationship Management.
weapon system electronics which have
the Company. Under his leadership, AMS contributed to the success of several
has grown from a design company to a She also holds various certifications like
indigenous defence programmes. His International Financial Reporting Standards
turnkey solutions provider and now we are profound knowledge on Space systems
at the stage of successful delivery of sub- (IFRS), Certified Internal Auditor (CIA), and
has delivered complex Payload Checkout Concurrent Audit of Bank from Institute of
systems and systems as a whole. systems and Telemetry Systems for Space Chartered Accountants of India (ICAI). She
Programmes. has been inducted on the Board of the
He was instrumental in successfully
developing solutions for defence & space Company in May 2018 as an Independent
programmes with his innovative ideas and 04 Krishna Sai Kumar Addepalli Director.
miniaturization techniques. He is visionary Whole-Time Director (Operations)
and has relentlessly worked on developing
06 Sri Lakshmi Reddy Vangeti
import substitution. He is the core person He is the Whole-time Director (Operations)
Non – Executive Director
in AMS to give direction, a layout to go of the Company. He is an Engineering
forward and a stimulus to the success Graduate in Electronics and Communication She holds a Bachelor’s degree in
achieved by the Company over the years. with 19 Years of varied experience in Science from Osmania University. She
His journey has been marked by his marketing, finance & operations. He is experienced in human resources and
ambitious and entrepreneurial vision that is serving AMS since 2003, and was management. She has been on the board
enabled the Company to eventually build instrumental in expanding its customer of our Company since April 1, 1999.
the growth ladder in sustainable manner base, diversifying the company into various
and achieve milestones. markets and implementing reforms in

23
 APOLLO MICRO SYSTEMS LIMITED Annual Report 2019-20

Profile of
LEADERSHIP TEAM

01 02 03

04 05 06

07 08 09

10

24
 Corporate Overview Statutory Reports Financial Statements

01 Ramidi Narasimha Reddy 03 Vitta Chaitanya Siva Shankar signal processing, communication systems
Chief Operating Officer Company Secretary and Compliance and image processing.
Officer
*Ramidi Narasimha Reddy is the Chief Dr Ratnamani is a Fellow of Institute of
Operating Officer (COO) of our Company. Vitta Chaitanya Siva Shankar is the Company Engineers (FiE), Fellow of Institute of
He has completed his diploma in electrical Secretary (CS) and Compliance Officer Electronics and telecommunication of
communications engineering from State of our Company. He holds a Bachelor’s Engineers (FIETE) and Life Member of
Board of Technical Education and Training degree in business management from Acoustical Society of India and Indian
and holds a Bachelor’s degree in Engineering Krishnadevaraya University and a Master’s Society of Technical Education. She has
and a Master’s in Engineering from degree in business administration from published more than fifteen papers in
Osmania University. He is also a member Jawaharlal Nehru Technological University. National and international journals and
of the Institution of Telecommunication He is also a member of the Institute of conferences.
Engineers and Institution of Electronics Company Secretaries of India. He joined
is experienced in human resources and
and Telecommunication Engineers. He is our Company as a Company Secretary
management. She has been on the board
experienced in information technology, on February 1, 2017 and responsible for
of our Company since April 1, 1999.
administration services and corporate handling Corporate secretarial functions at
sector. Prior to joining our Company, he AMS.
was working with Bharat Dynamics Limited, 05 Tara Singh
Sigma Microsystems Private Limited and Vice President- Heading Western
04 [Link]
Vem Technologies Private Limited. He has Zone
Vice President-Technology
been associated with our Company since
March 4, 2016. T. Ratnamani, is the Vice President- Tara Singh is serving as the Vice
Technology of AMS. Dr T. Rtatnamani, is a President- Heading Western Zone since
* Resigned w.e.f July 17, 2020
retired Scientist ‘G’ from DRDO a premier R& December 2018 at AMS .He is a retired
D organisation of Govt. of India. She holds Scientist after having a distinguished
02 Sudarshan Chiluveru a PhD degree- Electronics Engineering and service of more than 37 years at ARDE
Chief Financial Officer posses30+ years of experience. (DRDO). His professional experience
includes as Principal Investigator for
Sudarshan Chiluveru is the Chief Financial Her major contribution have been in Testing of Electronic Fuze modules of
Officer (CFO) of our Company. He is an the field of design, development and munitions and Field trials of Prachand
associate of the Indian Institute of Bankers verification of systems for underwater device, worked on Ceramic Technology
and prior to joining our Company, he was acoustic application, underwater projects and process development and
working with State Bank of Hyderabad. He communication systems ,embedded establishing Ceramic Technology Centre,
is experienced in banking and finance. He systems for digital signal processing, signal Development of Magnesium Production
has been associated with our Company conditioning and data acquisition. Her Technology at Defence Metallurgical
since April 1, 2017 and is currently research expertise also includes modelling Research Lab (DMRL), acted as a
responsible for handling the financial and simulation, algorithm development, Division Head (Planning), infrastructure
matters like cash management, maintaining algorithm optimization and implementation. development and establishment of
credit institution relationships etc. in She has successfully completed projects facilities like Rocket Technology Centre,
our Company. He is actively involved in based on various advances processors and NFM Facility, Information Centre for
coordinating with Bankers of the Company embedded hardware. Dr. Ratnamani has Armament Technology, Gun Integration
to have cordial relations and looks after good expertise on DSP-processors from Bay for Advanced Towed Artillery Gun
overall financial matters. Analog devices/TI with DSP-architectures. Project, Climatic Test Centre, etc. at DRDO-
She has wide experience in the fields of Armament Research & Development Estt.

25
 APOLLO MICRO SYSTEMS LIMITED Annual Report 2019-20

Profile of
LEADERSHIP TEAM
(ARDE) etc. He hold a Bachelor degree 07 Supriya Kondap 09 Jani Sulthana Begum
B. Tech (E & TC) from Pune University, Associate Vice President (Projects) Manager (Quality Control)
Graduate of The Institute of Electronics
and Telecommunication Engineers (India) Supriya Kondap, is the Associate Vice Jani Sulthana Begum is the Manager
Diploma in Electronics and communication President (Projects) of our Company. She (Quality Control) of our Company. She
in Electrical Engineering Engg at Govt. is a Qualified Electronics Engineer and holds a diploma in electronics and
Polytechnic Hyderabad. MBA in Operations. She holds 20+ years of communication engineering from State
experience in the engineering industry as
Board of Technical Education and Training.
a Senior Technical professional. She has a
She is experienced in assessment of quality
06 KC Satyanarayana Track record of setting up, establishing and
heading Electronics Design and Operations sector and prior to joining our Company,
Head of Special Products
teams and delivering targets in sync with she was working with Analogics Tech
KC Satyanarayana, is the head of Special the overall organizational goals. Expertise in India Limited, Kernex Microsystems (India)
Products group of AMS. He joined system designing and integration, program Limited, Tisht Computer Education and Siri
the AMS in July, 2019. He possess management, proposal engineering, Control Systems. She has been associated
operations, process improvements, cost with our Company since September 16,
30+ years of experience in the field
optimization, and resource management. 2015 and is responsible for looking after
of design, development of products,
She possess Analytical, problem solving the quality control and other allied activities
project management across domains and leadership qualities inherited by
like Embedded Software, DSP Software, of our Company.
delivering solutions in conjunction with
Application Software for M2M/ IoT, SoCs, operational requirements. She joined the
VoIP SoCs, 1394, USB and Defense
10 A.S. Saranghapaani
Company on May 17, 2018. She has also
Applications. He expertises in handling worked at LARSEN & TOUBRO LIMITED Associate Vice President
Embedded Software & Hardware Defence IC Strategic System Complex,
Talegoan, Pune, an Indian multi-national A.S. Saranghapaani is the Associate Vice
Development. Digital Signal Processing
conglomerate with business interests in President of our Company. He joined the
Software related to Voice/ Telecom/ Electro
engineering, construction, manufacturing Company in March, 2020 and handling
Optics. He worked for the projects like
goods, information technology, and marketing activities. He holds the Bachelor
Railway Display Network (RDN): RDN is an
financial services. Degree of Engineering (B.E.) in Electronics
IoT platform - proposed to become one of
& Communication Engineering (ECE) and
the biggest Digital Signage System across
having nearly 4 decades of experience
Indian Railway Stations; Development 08 Venkateswara Rao Aluri
and a certified holder of Green Belt on
of Thermal (Infrared) Module; Products Associate Vice President
Six Sigma with expertise in Production
in Electro Optics Domain: both Image
Venkateswara Rao Aluri is the Associate Planning & Control, Operations and Quality
Intensifier Based and IR based Devices.
Vice President of our Company. He holds a Management, Testing and Marketing
Worked on Systems like Real Time Train
Master’s degree in business administration Operations. Before joining our Company
Information – IoT- System for CRIS, Indian
from Shivaji University. Prior to joining he was associated with Bharat Electronics
Railways; Automatic Identification System
our Company, he was working with Limited (BEL) and headed Assembly,
(AIS) for Maritime Communication for
Trident Infosol Private Limited, Realtime Testing, Quality Management, Marketing &
Coast Guard; Radar Trans/ Receive system;
Techsolutions Private Limited and HBL Engineering Services in BEL Chennai unit
Vehicle-Tracking Solutions based on GPS/
Power Systems Limited and is experienced and production & assembly of transistors,
GSM/GPRS technology; Development of
in marketing sector. He has been diodes quality functions including QCC, Six
Android based Application on a Rugged
associated with our Company since July 2, Sigma, ISO Certification, EMI/EMC Lab, RE-
Hand Held Device for Marine Commandos
2016 and currently handling the sales and Lab, inspection & dispatch of Mechanical
to transmit/ receive messages etc.
marketing activities of our Company. Parts ,DGQA evaluation & acceptance
of EDM-14 &20 motors, cable assembly
inspection.

26
 Corporate Overview Statutory Reports Financial Statements

Corporate
INFORMATION
Board of Directors Registered Office Committees of the Board

Raghupathy Goud Theegala Audit Committee

Chairman and Independent director Plot No 128/A, Road No. 12, BEL Road
DIN: 07785738 IDA Mallapur, Uppal Mandal, Hyderabad, Karunasree Samudrala,
Rangareddy, Telangana – 500 076 India Chairman
Karunakar Reddy Baddam Email: cs@[Link] Raghupathy Goud Theegala,
Managing Director Phone: 91 40 27167000 Member
DIN: 00790139 Fax: 91 40 27150820
Raghupathy Goud Theegala,
Website: [Link]
Sri Lakshmi Reddy Vangeti Member
CIN: L72200TG1997PLC026556
Non Executive Director
Nomination and Remuneration
DIN: 02757567
Statutory Auditors Committee
Krishna Sai Kumar Addepalli
Karunasree Samudrala,
Whole Time Director (Operations)
M/s. S T Mohite & Co. Chairman
DIN: 03601692
Chartered Accountants, Sri Lakshmi Reddy Vangeti,
Venkata Siva Prasad Chandrapati G-5/B, Paragon Venkatadri Apts, Member
Whole Time Director (Technical) Street No.1, Barkatpura,
Raghupathy Goud Theegala,
DIN: 03601703 Hyderabad– 500 029
Member

Karunasree Samudrala Internal Auditors

Stakeholders Relationship Committee
Independent director
M/s. Surya Pavan & Co.
DIN: 06960974 Raghupathy Goud Theegala,
Chartered Accountants
Chairman
[Link].29-7-3, Vishnuvardhan Rao Street,
Chief Financial Officer Suryarao pet, Vijayawada 520 010 Karunakar Reddy Baddam,
Member
Sudarshan Chiluveru Secretarial Auditors Venkata Siva Prasad Chandrapati,
Member
Venkatesh Reddy Datla
Company Secretary and Practicing Company Secretary
Compliance Officer # 6-3-552/2, Flat No.: 203,
Classic Court Annexe, Banjara Hills Road,
Vitta Chaitanya Siva Shankar
Erramanzil, Hyderabad,
Telangana-500 082

27
 APOLLO MICRO SYSTEMS LIMITED Annual Report 2019-20

Corporate
INFORMATION
Corporate Social Responsibility Bankers to the Company Investor Grievance Email
Committee
1. State Bank of India investor@[Link]
Karunakar Reddy Baddam, Commercial Branch Hyderabad
Chairman P.O Kothi (Putli Bowli),Bank Street, Kothi Listing
Sri Lakshmi Reddy Vangeti, Hyderabad
Member BSE Limited (BSE)
2. ICICI Bank Limited
Raghupathy Goud Theegala, Commercial Branch National Stock Exchange of India Limited
Member 6-2-1012, TGV Mansion (NSE)
Khairatabad, Hyderabad
Risk Management Committee
3. Axis Bank Limited
Venkata Siva Prasad Chandrapati,
Corporate Banking Branch
Chairman
1st Floor, G. Pullareddy Building,
Karunakar Reddy Baddam,
Greenlands, Begumpet Road,
Member
Hyderabad-500 016
Karunasree Samudrala,
Member
Registrar and Transfer Agent
Executive Committee of Directors & CFO
Bigshare Services Private Limited
Karunakar Reddy Baddam, (Unit: Apollo Micro Systems Limited)
Chairman 306, Right Wing, 3rd Floor,
Venkata Siva Prasad Chandrapati, Amrutha Ville,
Member Opp: Yashoda Hospital,
Rajbhavan Road,
Krishna Sai Kumar Addepalli,
Hyderabad – 500 082
Member
Telangana, India.
Sudarshan Chiluveru (CFO)
Tel : 040 4014 4582,
Member
Email: bsshyd@[Link]
Website: [Link]

SEBI Registration No.: INR000001385

28
 Corporate Overview Statutory Reports Financial Statements

Notice
Dear Member, 011410S) as Statutory Auditors of the Company for one term
of five consecutive financial years from the conclusion of
Notice is hereby given that the Twenty Third (23rd) Annual General Twentieth Annual General Meeting till the conclusion of the
Meeting (“AGM”) of the Members of Apollo Micro Systems Limited Twenty Fifth Annual General Meeting of the Company, subject
(“the Company”) will be held on Friday the 25th September, 2020 to the ratification by the Members at the every Annual General
at 11:00 A.M. (IST) through Video Conferencing (“VC”) / Other Audio Meeting held during the said term, in terms of the proviso
Visual Means (“OAVM”) to transact the following business: under section 139 (1) of the Act.

The mandatory requirement of ratification of appointment of

ORDINARY BUSINESS
auditors by the Members at every Annual General Meeting
1. To receive, consider and adopt the Audited Financial Statement has been omitted vide notification dated May 7, 2018 issued
of the Company for the financial year ended March 31, 2020 by the Ministry of Corporate Affairs. Accordingly, no resolution
together with the Reports of the Board of Directors and the is proposed for ratification of appointment of Auditors at this
Auditors thereon. AGM.

2. To declare the Final dividend on the Equity shares for the 3. Details of Directors seeking appointment/re-appointment
financial year 2019-20. as required under SEBI Listing Regulations and Secretarial
Standards on General Meetings issued by the Institute of
3. To appoint a Director in place of Mrs. Sri Lakshmi Reddy Vangeti Company Secretaries of India in respect of directors seeking
[DIN 02757567], who retires by rotation and, being eligible, appointment / re-appointment at this Annual General Meeting
offers herself for re-appointment and in this connection to (“AGM”/ “the meeting”) is annexed hereto.
consider and if deemed fit, to pass the following Resolution as
an Ordinary Resolution: 4. The Register of Directors’ and Key Managerial Personnel
and their shareholding maintained under Section 170 of the
“RESOLVED THAT pursuant to the provisions of Section 152(6) Act, the Register of contracts or arrangements in which the
of the Companies Act, 2013 and Companies (Appointment Directors are interested under Section 189 of the Act and all
and Qualification of Directors) Rules, 2014 Mrs. Sri Lakshmi other documents referred to in the Notice will be available for
Reddy Vangeti, having [DIN: 02757567], be and is hereby re- inspection in electronic mode.
appointed as a Director of the Company, who is liable to retire
by rotation.” 5. Pursuant to the provisions of the Act, a Member entitled to
attend and vote at the AGM is entitled to appoint a proxy to
Notes: attend and vote on his/her behalf and the proxy need not
be a Member of the Company. Since this AGM is being held
1. In view of the continuing Covid-19 pandemic, the Ministry of
pursuant to the MCA Circulars through VC / OAVM, physical
Corporate Affairs (“MCA”) has vide its circular dated May 5,
attendance of Members has been dispensed with. Accordingly,
2020 read with circulars dated April 8, 2020 and April 13,
the facility for appointment of proxies by the Members will
2020 (collectively referred to as “MCA Circulars”) permitted
not be available for the AGM and hence the Proxy Form and
the holding of the Annual General Meeting (“AGM”) through
Attendance Slip are not annexed to this Notice.
VC / OAVM, without the physical presence of the Members
at a common venue. In compliance with the provisions of the However, the Body Corporates are entitled to appoint
Companies Act, 2013 (“Act”), SEBI (Listing Obligations and authorised representatives to attend the AGM through VC/
Disclosure Requirements) Regulations, 2015 (“SEBI Listing OAVM and participate thereat and cast their votes through
Regulations”) and MCA Circulars, the AGM of the Company is e-voting.
being held through VC / OAVM.
6. Institutional / Corporate Shareholders (i.e. other than
2. At the Adjourned Twentieth Annual General Meeting held on individuals / HUF, NRI, etc.) are required to send a scanned
August 26, 2017 Members approved the appointment of M/s. copy (PDF/JPG Format) of its Board or governing body
S T Mohite & Co., Chartered Accountants (Registration number Resolution/Authorization etc., authorizing its representative to

29
 APOLLO MICRO SYSTEMS LIMITED Annual Report 2019-20

attend the AGM through VC / OAVM on its behalf and to vote (“IEPF”). The shares in respect of such unclaimed dividends
through remote e-voting. The said Resolution/Authorization are also liable to be transferred to the demat account of the
shall be sent to the Scrutinizer by email through its registered IEPF Authority. In view of this, Members are requested to
email address to csvenkateshreddy25@[Link] with a copy claim their dividends from the Company, within the stipulated
marked to cs@[Link] timeline. The Interim Dividend declared for the financial year
2018-19 would be the first to become due for transfer to IEPF
7. The Company has fixed Friday, 18th September 2020 as in December, 2025. Members, who have not claimed the
the ‘Record Date’ for determining entitlement of members Unpaid Dividend so far, are requested to make their claim to
to dividend for the financial year ended March 31, 2020, if the Company’s Registrar & Transfer Agents (R & T Agents).
approved at the AGM.
Pursuant to the provisions of the Companies act, 2013, rules
8. The Register of Members and the Share Transfer Books of the made there under and IEPF rules the details of the unpaid/
Company will remain closed from Saturday, 19th September unclaimed dividend of the shareholders w.r.t to the interim
2020 to Friday, 25th September 2020 (both days inclusive) for dividend declared for the FY 2018-19 is available on the
the purpose of Annual General Meeting. website of the Company under the section “Investors”.

9. Subject to the provisions of the Act, the dividend as Members may please note that in the event of transfer of such
recommended by the Board of Directors for the financial year shares and the unclaimed dividends to IEPF, members are
2019-20, if approved/declared at the AGM, the payment of entitled to claim the same from IEPF authorities by submitting
such dividend subject to deduction of tax at source will be an online application in the prescribed Form IEPF-5 available
made within a period of 30 days from the date of declaration. on the website [Link] and sending a physical copy of
the same duly signed to the Company along with the requisite
i. To all Beneficial Owners in respect of shares held in
documents enumerated in the Form IEPF- 5.
dematerialized form as per the data as may be made
available by the National Securities Depository Limited Members are requested to refer to the Corporate Governance
(“NSDL”) and the Central Depository Services (India) Report for information in connection with the unpaid /
Limited (“CDSL”), collectively “Depositories”, as of the unclaimed dividend along with underlying shares thereto liable
close of business hours on Friday, 18th September 2020 to be transferred to Investor Education and Protection Fund
the ‘Record Date’. (IEPF) administered by the Central Government. Members are
requested to refer the website of the Company for the details
ii. To all Members in respect of shares held in physical form
made available by the Company pursuant to the Investor
after giving effect to transmission or transposition requests
Education and Protection Fund Authority (Accounting, Audit,
lodged with the Company as of the close of business
Transfer and Refund) Amendment Rules, 2017.
hours on Friday, 18th September 2020 the ‘Record Date’.
13. In compliance with the aforesaid MCA Circulars and SEBI
10. Members are requested to intimate changes, if any, pertaining
Circular dated May 12, 2020, Notice of the AGM along with the
to their name, postal address, email address, telephone/ mobile
Annual Report 2019-20 is being sent only through electronic
numbers, Permanent Account Number (PAN), mandates,
mode to those Members whose email addresses are registered
nominations, power of attorney, bank details such as, name
with the Company/ Depositories. Members may note that the
of the bank and branch details, bank account number, MICR
Notice and Annual Report 2019-20 will also be available on the
code, IFSC code, etc., to their Depository Participants in case
Company’s website [Link] under the section
the shares are held in electronic form and to the Company’s
“Investors”, websites of the Stock Exchanges i.e. BSE Limited
RTA in case the shares are held in physical form.
and National Stock Exchange of India Limited at [Link].
11. Members seeking any information with regard to the accounts com and [Link] respectively, and on the website
or any matter to be placed at the AGM, are requested to write of CDSL i.e. [Link].
to the Company at least 10 days before the meeting to email
14. Members attending the AGM through VC / OAVM shall be
id cs@[Link]. The same will be replied by the
counted for the purpose of reckoning the quorum under
Company suitably.
Section 103 of the Act.
12. Members are requested to note that, dividends if not encashed
15. Pursuant to Finance Act 2020, dividend income will be taxable
for a consecutive period of 7 years from the date of transfer
in the hands of shareholders w.e.f. April 1, 2020 and the
to Unpaid Dividend Account of the Company, are liable to be
Company is required to deduct tax at source from dividend
transferred to the Investor Education and Protection Fund

30
 Corporate Overview Statutory Reports Financial Statements

paid to shareholders at the prescribed rates. For the prescribed shares in electronic mode may contact their respective Depository
rates for various categories, the shareholders are requested Participant (DP) for availing this facility.
to refer to the Finance Act, 2020 and amendments thereof. 18. As directed by SEBI ,Members are requested to-
The shareholders are requested to update their PAN with the
Company/ RTA (in case of shares held in physical mode) and i) Intimate to the DP, changes if any, in their registered
depositories (in case of shares held in demat mode). addresses and/or changes in their bank account details,
if the shares are held in dematerialized form.
A Resident individual shareholder with PAN and who is not liable
to pay income tax can submit a yearly declaration in Form No. ii) Intimate to the Company’s RTA, changes if any, in their
15G/15H, to avail the benefit of non-deduction of tax at source registered addresses, in their bank account details, if the
by email to cs@[Link] or bsshyd@bigshareonline. shares are held in physical form (share certificates).
com or by uploading the same on the RTA website at https://
iii) Consolidate their holdings into one folio in case they
[Link]//[Link] by 11:59 p.m. IST
hold Shares under multiple folios in the identical order of
on Friday, 18th September 2020. Shareholders are requested
names.
to note that in case their PAN is not registered, the tax will be
deducted at a higher rate of 20%. Non-resident shareholders iv) Dematerialize the Physical Shares to Electronic Form
can avail beneficial rates under tax treaty between India and (Demat) to eliminate all risks associated with Physical
their country of residence, subject to providing necessary Shares. Our Registrar and Transfer Agents viz., Bigshare
documents i.e. No Permanent Establishment and Beneficial Services Private Limited, Hyderabad (Phone 91 40 401
Ownership Declaration, Tax Residency Certificate, Form 10F, 44582) may be contacted for assistance, if any, in this
any other document which may be required to avail the tax regard. Further, as per amendment to Regulation 40 of
treaty benefits by sending an email to cs@[Link] or SEBI (Listing Obligation and Disclosure Requirements)
bsshyd@[Link] or by uploading the same on the Regulations, 2015 except in case of transmission or
RTA website at [Link] transposition of securities, requests for effecting transfer
aspx. The aforesaid declarations and documents need to be of securities shall not be processed unless the securities
submitted by the shareholders by 11:59 p.m. IST on Friday, 18th are held in the dematerialized form effective April 01,
September 2020. 2019. Members are advised to Dematerialize the shares
held by them in physical form.
16. The Company’s Registrar and Transfer Agents for its share
registry work (Physical and Electronic) are Bigshare Services 19. The Securities and Exchange Board of India has made it
Private Limited (herein after referred to as “RTA”). All mandatory for all companies to use the bank account details
documents, transfers, dematerialization requests and other furnished by the Depositories for payment of dividend through
communications in relation thereto should be addressed electronic modes of payment to investors wherever bank
directly to the Company’s Registrar & Share Transfer Agents, details are available. In case Bank details are not available
at the address mentioned below: or incorrect, the Company will print the available details on
the payment instrument for distribution of dividend. Due to
Bigshare Services Private Limited
prevailing pandemic Covid-19 the postal service’s are not
(Unit: Apollo Micro Systems Limited)
working widely as it used to be, thus members are requested
306, Right Wing, 3rd Floor, Amrutha Ville,
to update their bank account details with the Depositories and
Opp: Yashoda Hospital, Rajbhavan Road,
Company’s Registrar and Transfer Agents for receiving the
Hyderabad – 500 082, Telangana, India.
dividend though electronic mode of payment.
Tel : 040 4014 4582
Email: bsshyd@[Link] 20. The Securities and Exchange Board of India has mandated
Website: [Link] the submission of Permanent Account Number (PAN) by
every participant in securities market. Members holding
17. Members can avail the facility of nomination in respect of
shares in electronic form who have not done so are
securities held by them in physical form pursuant to the provision of
requested to submit the PAN to their Depository Participant
Section 72 of the Companies Act, 2013. Members desiring to avail
with whom they are maintaining their demat accounts.
of this facility may send their nomination in the prescribed form
Members holding shares in physical form can submit their
No SH-13 duly filled in to the Company’s RTA. Members holding
PAN details to RTA.

31
 APOLLO MICRO SYSTEMS LIMITED Annual Report 2019-20

21. To support ‘Green Initiative’ Members are requested to 18th September 2020 may cast their vote by remote
register their e-mail address/ addresses and Bank Account e-voting. The members will not be able to cast their vote
details with the Depository Participants, if the shares electronically beyond the date and time mentioned above
are held in dematerialized form and with the Company’s and the remote e-voting module shall be disabled for
Registrar and Transfer Agents, if the shares are held in voting by CDSL thereafter.
physical form, in case you have not registered your email
ids till now. Members who have not registered their email v) The voting rights of the members shall be in proportion
addresses so far are requested to register them for receiving to their share in the paid up equity share capital of the
all communication including Annual Report and other Company as on the Cut-off date i.e. Friday, 18th September
Notices from the Company electronically. 2020.

22. Since the AGM will be held through VC / OAVM, the Route Map vi) Facility of joining the AGM through VC / OAVM shall open
is not annexed in this Notice. 30 minutes before the time scheduled for the AGM and
will be available for Members on first come first served
23. PROCESS AND MANNER FOR MEMBERS OPTING FOR basis.
VOTING THROUGH ELECTRONIC MEANS:
vii) The Members who have cast their vote by remote e-voting
i) Pursuant to the provisions of Section 108 of the Act prior to the AGM may also attend/ participate in the AGM
read with Rule 20 of the Companies (Management and through VC / OAVM but shall not be entitled to cast their
Administration) Rules, 2014 (as amended), Regulation 44 vote again
of SEBI Listing Regulations (as amended), and the Circulars
issued by the MCA dated April 8, 2020, April 13, 2020 and viii) Institutional / Corporate Shareholders (i.e. other than
May 5, 2020 the Company is providing facility of remote individuals / HUF, NRI, etc.) are required to send a
e-voting to its Members in respect of the business to be scanned copy (PDF/JPG Format) of its Board or governing
transacted at the AGM. For this purpose, the Company body Resolution/Authorization etc., authorizing its
has entered into an agreement with Central Depository representative to attend the AGM through VC / OAVM
Services (India) Limited (“CDSL”) as the authorised on its behalf and to vote through remote e-voting.
e-Voting agency for facilitating voting through electronic The said Resolution/Authorization shall be sent to the
means. The facility of casting votes by members using Scrutinizer by email through its registered email address
remote e-voting as well as e-voting system on the date of to csvenkateshreddy25@[Link] with a copy marked
the AGM will be provided by CDSL. to cs@[Link]

ii) Members whose names are recorded in the Register ix) The Company has appointed CS Venkatesh Reddy Datla,
of Members or in the Register of Beneficial Owners Practising Company Secretary (Membership No: 36504
maintained by the Depositories as on the Cut-off date CP: 14074), to act as the Scrutinizer for conducting the
i.e. Friday, 18th September 2020 shall be entitled to avail remote e-voting process as well as the e-voting system
the facility of remote e-voting as well as e-voting system on the date of the AGM, in a fair and transparent manner.
on the date of the AGM. Any recipient of the Notice, who
x) The AGM will be convened through VC/OAVM in
has no voting rights as on the Cut-off date, shall treat this
compliance with applicable provisions of the Companies
Notice as intimation only.
Act, 2013 read with MCA Circular No. 14/2020 dated
iii) A person who has acquired the shares and has become a April 8, 2020 and MCA Circular No. 17/2020 dated April
member of the Company after the dispatch of the Notice 13, 2020 and MCA Circular No. 20/2020 dated May 05,
of the AGM and prior to the Cut-off date i.e. Friday, 18th 2020.
September 2020, shall be entitled to exercise his/her
A. THE INSTRUCTIONS FOR SHAREHOLDERS FOR REMOTE
vote either electronically i.e. remote e-voting or e-voting
VOTING ARE AS UNDER:
system on the date of the AGM by following the procedure
mentioned in this part. i) The voting period begins on 22nd September 2020 (9:00
am) and ends on 24th September 2020 (5:00 pm). During
iv) The remote e-voting period commences on Tuesday, 22nd
this period shareholders of the Company, holding shares
September 2020 (9:00 am) and ends on Thursday, 24th
either in physical form or in dematerialized form, as on
September 2020 (5:00 pm). During this period members
the cut-off date i.e. Friday, 18th September 2020 may cast
of the Company, holding shares either in physical form or
their vote electronically. The e-voting module shall be
in dematerialized form, as on the cut-off date i.e., Friday,
disabled by CDSL for voting thereafter.

32
 Corporate Overview Statutory Reports Financial Statements

ii) Shareholders who have already voted prior to the meeting ‘Password Creation’ menu wherein they are required
date would not be entitled to vote at the meeting. to mandatorily enter their login password in the new
password field. Kindly note that this password is to be
iii) The shareholders should log on to the e-voting website
also used by the demat holders for voting for resolutions
[Link].
of any other company on which they are eligible to vote,
iv) Click on Shareholders. provided that company opts for e-voting through CDSL
platform. It is strongly recommended not to share your
v) Now Enter your User ID-
password with any other person and take utmost care to
a. For CDSL: 16 digits beneficiary ID, keep your password confidential.
b. For NSDL: 8 Character DPID followed by 8 Digits xi) For members holding shares in physical form, the details
Client ID, can be used only for e-voting on the resolutions contained
c. Members holding shares in Physical Form should in this Notice.
enter Folio Number registered with the Company.
xii) Click on the EVSN of the Company
vi) Next enter the Image Verification as displayed and Click
xiii) On the voting page, you will see “RESOLUTION
on Login.
DESCRIPTION” and against the same the option “YES/
vii) If you are holding shares in demat form and had logged NO” for voting. Select the option YES or NO as desired.
on to [Link] and voted on an earlier The option YES implies that you assent to the Resolution
voting of any Company, then your existing password is to and option NO implies that you dissent to the Resolution.
be used.
xiv) Click on the “RESOLUTIONS FILE LINK” if you wish to view
viii) If you are a first time user follow the steps given below: the entire Resolution details.

For Members holding shares in Demat xv) After selecting the resolution you have decided to vote on,
Form and Physical Form click on “SUBMIT”. A confirmation box will be displayed.
If you wish to confirm your vote, click on “OK”, else to
PAN Enter your 10 digit alpha-numeric *PAN
change your vote, click on “CANCEL” and accordingly
issued by Income Tax Department
modify your vote.
(Applicable for both demat shareholders
as well as physical shareholders) xvi) Once you “CONFIRM” your vote on the resolution, you will
*Members who have not updated their not be allowed to modify your vote.
PAN with the Company/Depository
xvii) You can also take a print of the votes cast by clicking on
Participant are requested to use the
“Click here to print” option on the Voting page.
sequence number indicated in the PAN
field. xviii) If a demat account holder has forgotten the login password
Dividend Enter the Dividend Bank Details or then Enter the User ID and the image verification code and
Bank Details Date of Birth (in dd/mm/yyyy format) as click on Forgot Password & enter the details as prompted
OR Date of recorded in your demat account or in the by the system.
Birth (DOB) Company records in order to login.
xix) Shareholders can also cast their vote using CDSL’s mobile
If both the details are not recorded with app m-Voting. The m-Voting app can be downloaded from
the Depository or Company please enter Google Play Store. Apple and Windows phone users can
the member id / folio number in the download the app from the App Store and the Windows
Dividend Bank details field as mentioned Phone Store respectively. Please follow the instructions
in instruction (v). as prompted by the mobile app while voting through your
mobile.
ix) After entering these details appropriately, click on
xx) Note for Non–Individual Shareholders and Custodians
“SUBMIT” tab.
• Non-Individual shareholders (i.e. other than
x) Shareholders holding shares in physical form will then
Individuals, HUF, NRI etc.) and Custodians are
directly reach the Company selection screen. However,
required to log on to [Link] and
shareholders holding shares in demat form will now reach
register themselves in the “Corporates” module.

33
 APOLLO MICRO SYSTEMS LIMITED Annual Report 2019-20

• A scanned copy of the Registration Form bearing the iii) If any Votes are cast by the members through the e-voting
stamp and sign of the entity should be emailed to available during the AGM and if the same shareholders
[Link]@[Link]. have not participated in the meeting through VC/OAVM
facility, then the votes cast by such shareholders shall be
• After receiving the login details a Compliance considered invalid as the facility of e-voting during the
User should be created using the admin login and meeting is available only to the shareholders attending
password. The Compliance User would be able to the meeting.
link the account(s) for which they wish to vote on.
iv) Shareholders who have voted through remote e-Voting
• The list of accounts linked in the login should be will be eligible to attend the AGM. However, they will not
mailed to [Link]@[Link] and on be eligible to vote at the AGM.
approval of the accounts they would be able to cast
their vote. C. INSTRUCTION FOR MEMBERS FOR ATTENDING THE AGM
THROUGH VC/OAVM ARE AS UNDER: -
• A scanned copy of the Board Resolution and Power
of Attorney (POA) which they have issued in favour i) Members will be provided with a facility to attend the AGM
of the Custodian, if any, should be uploaded in PDF through VC/OAVM through the CDSL e-Voting system.
format in the system for the scrutinizer to verify the Shareholders may access the same at [Link]
same. [Link] under shareholders/members login by
using the remote e-voting credentials. The link for VC/
• Alternatively Non Individual shareholders are OAVM will be available in shareholder/members login
required to send the relevant Board Resolution/ where the EVSN of Company will be displayed.
Authority letter etc. together with attested specimen
signature of the duly authorized signatory who are ii) Members are encouraged to join the Meeting through
authorized to vote, to the Scrutinizer and to the Laptops / I Pads for better experience.
Company at the email address cs@[Link],
if they have voted from individual tab & not uploaded iii) Further, Members will be required to allow Camera and
same in the CDSL e-voting system for the scrutinizer use Internet with a good speed to avoid any disturbance
to verify the same. during the meeting.

In case you have any queries or issues regarding e-voting, v) Please note that Participants Connecting from Mobile
you may refer the Frequently Asked Questions (“FAQs”) Devices or Tablets or through Laptop connecting via
and e-voting manual available at [Link], Mobile Hotspot may experience Audio/Video loss due
under help section or write an email to [Link]@ to Fluctuation in their respective network. It is therefore
[Link] or call 1800225533. recommended to use Stable Wi-Fi or LAN Connection to
mitigate any kind of aforesaid glitches.
All grievances connected with the facility for voting by
electronic means may be addressed to Mr. Rakesh Dalvi, vi) For ease of conduct, Members who would like to express
Manager, (CDSL,) Central Depository Services (India) their views or ask questions during the AGM may register
Limited, A Wing, 25th Floor, Marathon Futurex, Mafatlal themselves as a speaker by sending their request from
Mill Compounds, N M Joshi Marg, Lower Parel (East), their registered email address mentioning their name, DP
Mumbai - 400013 or send an email to [Link]@ ID and Client ID/folio number, PAN, mobile number along
[Link] or call 1800225533. with their queries at “cs@[Link] till Friday,
September 18, 2020 (11:59 P.M.) and register themselves
B. THE INSTRUCTIONS FOR SHAREHOLDERS VOTING ON THE as speaker.
DAY OF THE AGM ON E-VOTING SYSTEM ARE AS UNDER: -
vii) The Members who do not wish to speak during the AGM
i) The procedure for e-Voting on the day of the AGM is same but have queries may send their queries in advance
as the instructions mentioned above for Remote e-voting. mentioning their name, demat account number/folio
number, email id, mobile number at cs@[Link]
ii) Only those members/shareholders, who are present in till Friday, September 18, 2020 (11:59 P.M.). These queries
the AGM through VC/OAVM facility and have not casted will be replied by the company suitably by email.
their vote on the Resolutions through remote e-Voting and
are otherwise not barred from doing so, shall be eligible to viii) Those Members who have registered themselves as a
vote through e-Voting system available during the AGM. speaker will only be allowed to express their views/ask
questions during the meeting.

34
 Corporate Overview Statutory Reports Financial Statements

24. Process for those Members whose email addresses are iii) The company/RTA shall co-ordinate with CDSL and will
not registered with the depositories for obtaining login provide the login credentials to the above mentioned
credentials for e-voting for the resolutions proposed in this Members.
notice:
25. The Scrutinizer shall, immediately after the conclusion of
i) Members holding shares in Physical mode - please voting at the AGM, first count the votes cast during the AGM,
provide necessary details like Folio No., Name of thereafter unblock the votes cast through remote e-voting
shareholder, PAN, AADHAR (self attested scanned copy and make, not later than 48 hours of conclusion of the AGM,
of PAN & Aadhar Card) by email to RTA at marketing@ a consolidated Scrutinizer’s Report of the total votes cast in
[Link] or to Company at cs@apollo-micro. favour or against, if any, to the Chairman or a person authorised
com by him in writing, who shall countersign the same.

ii) Members holding shares in Demat mode can get their 26. The result declared along with the Scrutinizer’s Report shall
e-mail id registered by contacting their respective be placed on the Company’s website [Link]
Depository Participant or by email to RTA at marketing@ under the section “Investors” and on the website of CDSL
[Link] or to Company at cs@apollo-micro. [Link] immediately. The Company
com by providing Demat account details (CDSL-16 digit shall simultaneously forward the results to National Stock
beneficiary ID or NSDL-16 digit DPID + CLID) Name of Exchange of India Limited and BSE Limited, where the shares
shareholder, PAN, AADHAR (self attested scanned copy of the Company are listed.
of PAN & Aadhar Card).

By Order of the Board

For Apollo Micro Systems Limited

Sd/-
Place: Hyderabad Chaitanya Siva Shankar Vitta
Date: 29th August, 2020 Company Secretary and Compliance Officer

35
 APOLLO MICRO SYSTEMS LIMITED Annual Report 2019-20

DETAILS OF DIRECTORS SEEKING APPOINTMENT / RE-APPOINTMENT AT THE ANNUAL GENERAL MEETING

[PURSUANT TO REGULATIONS 26(4) AND 36(3) OF THE SEBI LISTING REGULATIONS AND SECRETARIAL
STANDARDS ON GENERAL MEETINGS]

Particulars Mrs. Sri Lakshmi Reddy Vangeti

Director Identification Number (DIN) 02757567
Date of Birth / Age 20/06/1974 (46 Years)
Date of first appointment on the Board April 01, 1999
Educational Qualification Bachelor’s degree in Science from Osmania University.
Experience (including expertise in specific functional areas) / She has experience in human resources and management.
Brief Resume
Directorships held in other companies Nil
Memberships/ Chairmanships of committees across Apollo Micro Systems Limited-Member of Nomination and
companies Remuneration Committee and Corporate Social Responsibility
Committee
Relationship with other Directors/Key Managerial Personnel Related to the Managing Director of the Company.
No. of shares held in the Company either by self or on a Ten (10) Equity shares
beneficial basis for any other person

For details regarding the number of meetings of the Board/Committees attended by the above Directors during the year and remuneration
drawn/sitting fees received, please refer to the Boards’ Report and the Corporate Governance Report forming part of the Annual Report.

In terms of the provisions of Section 152(6) of the Act, Mrs. Lakshmi Reddy Vangeti (DIN: 02757567), retires by rotation at the meeting. The
Board of Directors recommends her re-appointment.

36
 Corporate Overview Statutory Reports Financial Statements

Board’s REPORT
To the Members,

The Directors are pleased to present you the 23rd Annual Report of Apollo Micro Systems Limited (“the Company or AMS”) along with the
audited financial statements for the financial year ended March 31, 2020.

1. FINANCIAL RESULTS

The summary of financial performance for the Financial Year ended March 31, 2020 and the corresponding figures for the Financial
Year ended March 31, 2019 are as under:
(Figures in H)
For the financial year ended
Particulars
March 31, 2020 March 31, 2019
Revenue from Operations 2,45,90,41,260 2,62,97,53,243
Other Income 1,59,57,933 3,22,63,837
Total Revenue 2,47,49,99,193 266,20,17,081
Cost of materials Consumed 1,92,18,00,418 1,95,17,50,782
Changes in inventories of finished goods, WIP, stock- in –trade (12,06,94,406) 3,58,00,179
Employee Benefit Expenses 7,62,44,152 7,02,16,057
Other Expenses 9,50,40,631 8,76,97,087
Earnings Before Interest, Tax, Depreciation, & Amortization (EBITDA) 50,26,08,398 51,65,52,977
Financial charges 15,10,44,733 12,76,04,212
Depreciation 9,89,54,464 6,19,50,838
Profit or Loss Before exceptional and extraordinary items and tax 25,26,09,201 32,69,97,926
Exceptional Items 0.00 0.00
Profit or Loss Before tax (PBT) 25,26,09,201 32,69,97,926
Tax Expenses: a)Current Tax 3,80,14,414 6,29,58,384
b)Earlier Tax Adjustments 3,68,56,052 -
c)Deferred Tax 3,76,25,958 (2,71,45,724)
Total Tax Expense 11,24,96,424 3,58,12,660
Net Profit or Loss After Tax (NP) 14,01,12,777 29,11,85,266
Earnings Per Share (Basic) 6.75 14.03
Earnings Per Share (Diluted) 6.75 14.02
(Previous year figures have been regrouped wherever necessary to confirm to the current year’s presentation)

The financial statements for the year ended March 31, 2020 and March 31, 2019 have been prepared as per the Ind AS (Indian
Accounting Standards).

2. COMPANY’S PERFORMANCE

During the year under review 2019-20, your company reported by 51.88% to Rs 14,01,12,777/- against Rs 29,11,85,266/- in the
the revenue from operations of Rs 2,45,90,41,260/- against Rs previous year. The Earning per Share (“EPS”) of the Company
2,62,97,53,243/- in the previous year. The Earnings Before for the year under review is Rs 6.75/- per share basic & diluted.
Interest, Tax, Depreciation & Amortization (“EBITDA”) has
been reduced by Rs 2.70% to Rs 50,26,08,398/- against
3. COVID-19
Rs 51,65,52,977/- in the previous year. The Profit before Tax
(“PBT”) for the year under review is Rs 25,26,09,201/- as The COVID-19 pandemic developed rapidly into a global crisis,
against Rs 32,69,97,926/- in the previous year. The Net profit forcing governments to enforce lock-downs of all economic
of the Company for the year under review has been reduced activity. The Pandemic has affected the supply chain of the

37
 APOLLO MICRO SYSTEMS LIMITED Annual Report 2019-20

business. As our business involves inspection and testing acquisitions. We have lived upto our commitment and have
at every stage and so the same has slowed down since mid entered into multiple alliances and also acquired a RF Systems
January 2020 and subsequent lock-down in March 2020 has design company in line to our commitments and the results of
further added to the effect. During the lock-down period our which would be visible year after year. The growing demand for
R&D team worked remotely and there had been continuous RF Systems design and production creates a great opportunity
review of the critical projects through video conferencing. for your company through this acquisition.
During the lock-down period the company has developed the
counter COVID related products like “Ultra Violet Baggage 5. CREDIT RATING
Disinfection Conveyor” in collaboration with Defence Research &
Development Organisation (DRDO) . In May 2020 first week we During the year under review your Company has obtained the
resumed our operations by abiding the social distancing norms Credit Rating from ICRA Limited to Rs 142 Crores Line of Credit
and all other safety protocols to protect our people and enable of the Company which is as follows:
business continuity. Although there are uncertainties due to the
pandemic but the Company is well positioned to navigate the Long-Term Rating [ICRA] BBB- (pronounced ICRA triple B
challenges ahead and gain better sustainability both in terms of MINUS)
growth and unlocking new opportunities in the years to come.
Short-Term Rating [ICRA] A3 (pronounced ICRA A three)

4. BUSINESS OUTLOOK The outlook on the long term rating has been revised to
“Negative”.
“Eventually all things will fall into place. Until then, be Vigilant,
keep yourself agile to adapt to the situation. EVERYTHING
6. SHARE CAPITAL
HAPPENS FOR A REASON.”
(a) Changes in Capital structure of the Company
This is a famous quote which is in talk recently. A time where
entire world is battling to survive to make their business During the financial year 2019-20, there has been no
sustain and leaving the growth trajectories they have built in change in the Capital Structure of the Company and
their roadmaps, we in India have taken the situation positively, the Company has not issued any sweat equity shares or
piercing the negativity and steering the country to be “Self-
bonus shares or equity shares with differential rights.
Reliant”. This is a huge leap for the industry by the Government
and more specifically to Indian Defence and Space Industries. (b) Status of Shares

The continued insurgence and notorious approach of our As the members are aware, the Company’s shares are
neighboring and their continual aggression in the border, and compulsorily tradable in electronic form. Out of the total
severe cut of Global business movement has given a great kick paid up capital representing 2,07,63,886 equity shares,
start for country to set a tone under single voice and agenda the following equity shares of the Company are in
to make India Self-Reliant under “Atmanirbhar Bharat”. This has
dematerialized and physical form as on March 31, 2020:
overall created positive approach amongst business fraternity
and setting a good beginning for a better future. Sr. Capital Details No. of % of Total
The long pending procurement decisions on Indigenous No Shares issued Capital
weapon systems and electronic warfare systems are cleared 1. Held in 31,05,630 14.95
by Government in past one year and more so during the dematerialised
Pandemic time. Country is well prepared to achieve the $5Bn form in CDSL
export target set by Government of India. This is a huge
2. Held in 1,76,48,248 85.00
opportunity for Indian Defence companies and would set a
dematerialised
robust growth for this industry in the years to come.
form in NSDL
The augmentation of security within the country by protecting 3. Physical 10,008 0.05
critical assets of the country with technologies like Artificial
Total 2,07,63,886 100.00
Intelligence, PIDS (Perimeter Intrusion detection systems), drones
and Anti-Drones is a booming opportunity for our company. We Note: Pursuant to the amendment in Regulation 40 of
have integrated our technologies with third party technologies SEBI (LODR) Regulations, 2015, dated June 8, 2018 &
with strategic partnership to tap this growing market. SEBI date extension circular dated Dec 03, 2018, has
Your company has promised to foray itself into different mandated that transfer of securities would be carried out
technological areas by strategic partnerships, alliances and in dematerialized form only effective April 01, 2019. So

38
 Corporate Overview Statutory Reports Financial Statements

it is requested to all the Members holding the shares in (d) the directors have prepared the annual accounts on a
physical form to dematerialize the same for giving effect going concern basis;
to any transfer of company’s securities.
(e) the directors have laid down internal financial controls
to be followed by the company and that such internal
7. EXTRACT OF THE ANNUAL RETURN [SECTION 134 financial controls are adequate and were operating
(3) (a) & SECTION 92(3)] effectively;
As per the requirements of Section 92(3) of the Act and Rules (f) the directors have devised proper systems to ensure
framed there under, the extract of the annual return for FY compliance with the provisions of all applicable laws
2019- 20 is given in ANNEXURE -A in the prescribed Form and that such systems were adequate and operating
[Link]-9, which is a part of this annual report. effectively.

8. NUMBER OF MEETINGS OF THE BOARD OF 10. DETAILS OF FRAUDS REPORTED BY AUDITORS

DIRECTORS [SECTION 134 (3) (b)]: UNDER SECTION 143(12) OTHER THAN THOSE
WHICH ARE REPORTABLE TO THE CENTRAL
During the year under review, five (5) meetings of the Board of
GOVERNMENT [SECTION 134 (3) (ca)]:
Directors of the Company were held on May 17, 2019, August
14, 2019, October 18, 2019, November 14, 2019 and February During the year under review, Statutory Auditor and Secretarial
01, 2020. The attendance of Directors for the above meetings Auditor have not reported any incident of fraud under section
is given in the Corporate Governance Report that forms part 143(12) of the Act.
of this annual report. The maximum interval between any two
meetings did not exceeded 120 days.
11. STATEMENT ON DECLARATION GIVEN BY
In terms of requirements of Schedule IV of the Act, a separate INDEPENDENT DIRECTORS [SECTION 134 (3)(d)]
meeting of Independent Directors was also held on January
30, 2020 to review the performance of the Non Independent The Company has received and taken on record the
Directors; the Chairperson; the entire Board and its Committees declarations received from the Independent Directors of
thereof and; assess the quality, quantity and timelines of the the Company confirming their Independence in accordance
flow of information between the Management and the Board. with the Section 149(6) of the Companies Act, 2013 and
sub regulation (8) and (9) of regulation 25 of SEBI (LODR )
Regulations, 2015.
9. DIRECTOR’S RESPONSIBILITY STATEMENT
[SECTION 134 (3) (c) & 134(5)]
12. FAMILIARISATION PROGRAMME
Pursuant to Section 134(5) of the Companies Act, 2013 (the
“Act”), the Board of Directors, to the best of its knowledge and In compliance with the requirements of the SEBI (LODR)
ability, confirm that: Regulations, 2015, the Company has put in place a
familiarisation programme for the Independent Directors to
(a) in the preparation of the annual accounts for the period familiarise them with their roles, rights and responsibilities as
ended March 31, 2020, the applicable accounting Independent Directors, the working of the Company, nature of
standards had been followed along with proper the industry in which the Company operates, business model
explanation relating to material departures; and so on. The same is also available on the Company website
at [Link] under the Section “Investors”.
(b) the directors have selected such accounting policies
and applied them consistently and made judgments and
estimates that are reasonable and prudent so as to give 13. COMMITTEES OF THE BOARD
a true and fair view of the state of affairs of the company
The Board of Directors has constituted various mandatory
at the end of the financial year and of the profit of the
and non-mandatory Committees to deal with specific areas
company for that period;
and activities which concern the Company and requires a
(c) the directors have taken proper and sufficient care for closer review. The Committees are formed with approval of
the maintenance of adequate accounting records in the Board and function under their respective Charters. These
accordance with the provisions of this Act for safeguarding Committees play an important role in the overall management
the assets of the company and for preventing and of day-to-day affairs and governance of the Company.
detecting fraud and other irregularities; The Board Committees meet at regular intervals and take

39
 APOLLO MICRO SYSTEMS LIMITED Annual Report 2019-20

necessary steps to perform its duties entrusted by the Board. One Lakh Fifty Thousand only) which fulfils the Company’s
The Minutes of the Committee Meetings are placed before outstanding CSR obligation for the previous FY 2018-19
the Board for noting. The Board currently has the following and partly for the FY 2019-20. Further, the unspent CSR
Committees: obligation for the FY 2019-20 will be duly spend by the
Company. The Company is actively looking for the new
(a) Audit Committee avenues or projects in the direction of Company’s CSR
Policy, so that the benefits of such an initiative can reach
The Audit Committee was constituted by our Board in
to the downtrodden people of the society.
accordance with Section 177 of the Companies Act, 2013
and Regulation 18 of the SEBI (LODR) Regulations, 2015. (c) Stakeholder’s Relationship Committee
The composition, quorum, terms of reference, functions,
powers, roles and scope are in accordance with Section Stakeholder’s Relationship Committee has been
177 of the Companies Act, 2013 and the provisions of constituted by the Board in accordance with Section 178
Regulation 18 of the SEBI (LODR) Regulations, 2015. All (5) of the Companies Act, 2013.
the members of the committee are financially literate and
Mrs. Karunasree Samudrala, Chartered Accountant the The details regarding composition, terms of references,
Chairman of the Committee is an Independent Director powers, functions, scope, meetings, attendance of
and possesses the relevant financial expertise. members and the status of complaints received during
the year are included in Corporate Governance Report
The details regarding composition, terms of references, which forms part of the Annual Report.
powers, functions, scope, meetings and attendance of
members are included in Corporate Governance Report (d) Nomination and Remuneration Committee
which forms part of the Annual Report.
The Nomination and Remuneration Committee has been
(b) Corporate Social Responsibility (CSR) Committee constituted by the Board in accordance with section 178
of Companies Act, 2013 and Regulation 19 of SEBI (LODR)
The Company believes in undertaking business in such Regulations, 2015.
a way that it leads to overall development of all stake
holders and society. The Company considers social The details regarding composition, terms of references,
responsibility as an integral part of its business activities powers, functions, scope, meetings and attendance of
and endeavours to utilize allocable CSR budget for the members are included in Corporate Governance Report
benefit of society. which forms part of the Annual Report.

The CSR Committee has been constituted as required Policy on Remuneration of Directors, KMPs and other
under the provisions of section 135 of the Companies employees
Act, 2013. The details regarding composition, objectives,
The Policy of the Company on remuneration of Directors,
powers, functions, scope, meetings and attendance of
KMPs, Senior Management and other employees including
members are included in Corporate Governance Report
criteria for determining qualifications, positive attributes,
which forms part of the Annual Report.
independence of a Director and other matters provided
The Committee formulated and recommended to the under sub-section (3) of section 178 is made available on the
Board the CSR Policy. On the recommendations of the Company’s website [Link] under the section
CSR Committee, the Board approved and adopted “Investors”. The website link is [Link]
the CSR Policy of the Company. The Corporate Social content/uploads/2017/09/REMUNERATION_POLICY.pdf.
Responsibility Policy is posted under the Investors section
(e) Risk Management Committee
of the Company’s website at: [Link]
com/investor_relations/[Link]. The Risk Management Committee was constituted
pursuant to resolution of the Board, which has been
As per Rule 8 of the Companies (Corporate Social
entrusted with the responsibility to assist the Board in
Responsibility Policy) Rules, 2014, annual report on CSR is
overseeing and approving the Company’s enterprise
prepared and the same is enclosed as Annexure-B to this
wide risk management framework.
Report.
The details regarding composition, terms of references,
During the financial year 2019-20, the company has made
powers, functions, scope, meetings and attendance of
a total CSR expenditure of Rs 51,50,000/- (Rupees Fifty

40
 Corporate Overview Statutory Reports Financial Statements

members are included in Corporate Governance Report 17. PARTICULARS OF CONTRACTS OR

which forms part of the Annual Report. ARRANGEMENTS WITH RELATED PARTIES
[SECTION 134 (3) (h)]
(f) Executive Committee of Directors & CFO
All related party transactions entered into by the Company
The Executive Committee of Directors and Chief Financial
during the financial year 2019-20 were in the ordinary course
Officer (CFO) (“Executive Committee”) has been formed
of business and on arm’s length basis and in compliance with
by the Board, under the provisions of Section 179(3) of the
the applicable provisions of the Companies Act, 2013 and the
Companies Act, 2013 and rules made there under in order
SEBI (LODR) Regulations 2015. During the financial year under
to have the timely and expeditious execution of routine
review, none of the transactions entered into with related
financial matters.
parties were material as defined under the Act and SEBI
The details regarding composition, terms of references, (LODR) Regulations 2015.
powers, responsibilities, scope, meetings and attendance
The particulars of contract or arrangements entered into by
of members are included in Corporate Governance Report
the Company, during the financial year 2019-20, with related
which forms part of the Annual Report.
parties referred to in sub-section (1) of section 188 of the
Companies Act, 2013 including certain arms length transactions
14. EXPLANATIONS OR COMMENTS BY THE BOARD under third proviso thereto has been disclosed in Form No.
ON EVERY QUALIFICATION, RESERVATION AOC -2, attached to the Board’s report as Annexure-C. The
OR ADVERSE REMARK OR DISCLAIMER MADE Policy on Related Party Transactions as approved by the Board
[SECTION 134 (3) (f)]: is uploaded on the Company’s website [Link]
under the Section “Investors”.
By the Statutory Auditor in their Report: has no qualification or
adverse remarks
18. RESERVES [SECTION 134 (3) ( j)]
By Company Secretary in Practice in Secretarial Audit Report:
has no qualification or adverse remarks During the financial year 2019-20, the Board of Directors has
not recommended transfer of any amount of profit to any
reserves. Hence, the amount of profit for the financial year
15. PARTICULARS OF LOANS, GUARANTEES OR under review has been carried forward to the Statement of
INVESTMENTS UNDER SECTION 186 [SECTION Profit and Loss.
134 (3) (g)]

During the financial year 2019-20, the Company has not 19. DIVIDEND [SECTION 134 (3) (k)]
given any loans or guarantees to any person or other bodies
corporate or acquired securities of any other body corporate Your Director have pleasure in recommending a dividend of
as referred to in Section 186 of the Companies Act, 2013 and 5% i.e. Rs 0.5/- per equity share of face value of Rs 10/- each
the Companies (Meetings of Board and its Powers) Rules, 2014. for the financial year 2019-20, amounting to Rs 1,03,81,943/-.
Further, the company has not made any investment during the The dividend payout is subject to approval of members at the
period under review. ensuing Annual General Meeting.

The dividend payout for the year under review has been
16. SUBSIDIARIES AND ASSOCIATES [RULE 8(5)(iv) finalized in accordance with the dividend distribution policy of
OF COMPANIES (ACCOUNTS) RULES, 2014] the company.

As on 31st March, 2020, Company does not have any

subsidiaries/joint ventures/Associate Companies. 20. DIVIDEND DISTRIBUTION POLICY

During the year under review, the Company has entered Pursuant to Regulation 43A of the SEBI (LODR) Regulations,
into an Investment Cum Shareholders Agreement with the 2015 mandates top 500 Listed Companies based on their
Company M/s Ananya SIP RF Technologies Private Limited market capitalization to formulate Dividend Distribution Policy.
(CIN: U74990TG2015PTC097610) to acquire 51% stake in the As per Regulation 43A of SEBI (LODR) Regulations, 2015, your
aforementioned Company. However, the investment is yet to company has voluntarily adopted the Dividend Distribution
be made by the Company to acquire the 51% stake. policy.

Accordingly, the policy was adopted to set out parameters and

circumstances that will be taken into account by the Board in

41
 APOLLO MICRO SYSTEMS LIMITED Annual Report 2019-20

determining the distribution of dividend to the shareholders. the energy consumption like usage of LED Lights and
The Policy is also available on the Company’s website under power saving centralized air conditioners.
the web link [Link] The Policy is
also annexed herewith as Annexure-D to the Board’s Report. Research & Development

During the year under review, we have developed

21. MATERIAL CHANGES AND COMMITMENTS, IF critical technologies On-Board Aircraft technologies like
ANY [SECTION 134 (3) (l)] Next Generation Gimbals and Fire Control Systems. We
continued our development activity on SONAR systems
There were no material changes and commitments affecting in this year as well, on underwater Homing and Signal
the financial position of the Company which have occurred Processing which has given excellent results in initial
between the end of the financial year of the company to which phase of trials. Our team has also invested significant
the financial statements relate and the date of this report. efforts in development of Coastal Surveillance Moored
Mine electronics which is a potential import substitution.
22. CONSERVATION OF ENERGY, TECHNICAL A new foray of technologies are developed which are not
ABSORPTION AND FOREIGN EXCHANGE only unique but also laid foundation to the future roadmap
EARNINGS AND OUTGO [SECTION 134 (3) (m)]: of the company’s growth which would get converted
into volume business. In Fiscal 2020, we have spent
A. Conservation of Energy Rs.19,67,17,430/- towards our R&D activities.

The operations of the company are not energy intensive. B. Technical Absorption
Adequate measures are taken to conserve and reduce
The Company works on in house Technology.

C. Foreign Exchange Earnings and Outgo:

Foreign Exchange outgo and earnings

(Figures in H)
Particulars Year ended March 31, 2020 Year ended March 31, 2019

Value of imported raw-materials on CIF basis 16,65,88,143/- 18,16,79,070/-

Other Expenses: Foreign Travel Expenses 7,37,366/- --
Earnings in foreign currency:
FOB Value of Exports -- --
For Services Rendered -- --

23. ANNUAL EVALUATION ON PERFORMANCE The Independent Directors at their separate meeting
[SECTION 134(3) (p)]: held on January 30, 2020 reviewed the performance of
Non-Independent Directors (Executive & Non- Executive),
Pursuant to the provisions of the Act and SEBI (LODR) Chairperson, performance of the Board as a whole and its
Regulations, 2015, the Board has carried out an annual various committees and also assessed the quality, quantity
evaluation of performance of its own, the Committees thereof and timelines of flow of information between the Company
and the Directors. Management and the Board.

The Board is pleased to report that the result thereof show that The Independent Directors expressed their satisfaction
the Company is well-equipped in the management as well as on the overall functioning and effectiveness of the Board,
the governance aspects.

42
 Corporate Overview Statutory Reports Financial Statements

Committees and performance of individual Non-Independent During the financial year 2019-20, there were no appointments
Board members and the Chairman. or resignation on the Board of the Company.

The Board (excluding the Independent Directors being Pursuant to the provisions of the Section 149 of the Act, the
evaluated) has evaluated the performance of the Independent Independent Directors have submitted declarations that each
Directors on parameters such as Knowledge, Experience, of them meets the criteria of independence as provided in
Integrity, Independence of judgment, adherence to Code of Section 149(6) of the Act along with the rules framed under
Conduct, Corporate Governance, Contribution, attendance& the SEBI (LODR) Regulations, 2015. There has been no change
level of participation and fulfilment of Independence Criteria in the circumstances affecting their status as Independent
etc. Directors of the Company.

The Board has expressed its satisfaction to the performance Ministry of Corporate Affairs vide its Notification number
of the Independent Directors and appreciated the level of G.S.R. 804(E) dated October 22nd, 2019 had amended the
participation of Independent Directors. Companies (Appointment and Qualification of Directors) Rules,
2014 requiring the registration of Independent Directors in the
databank maintained by the Indian Institute of Corporate Affairs
24. EMPLOYEE STOK OPTIONS SCHEME [RULE
(“IICA”) and passing the online proficiency self-assessment
12(9) OF COMPANIES (SHARE CAPITAL AND
test conducted by the IICA within one(1) year from the date of
DEBENTURES) RULES, 2014]:
inclusion of his/her name in the data bank.
The Company has in place the Employee Stock Option
Mr. Raghupathy Goud Theegala, Independent Director
Scheme 2018 (ESOS-2018) to attract, reward, motivate and
has duly registered his name in the data bank of IICA w.e.f
retain its employees, who have shown high levels of individual
February 25, 2020 and the passing of the online proficiency
performance and for the unusual efforts, put in by them to
self-assessment test is still pending. As per the the Companies
improve the operational and financial performance of the
(Appointment and Qualification of Directors) Rules, 2014 the
Company, which ultimately contributes to the success of the
date up to which proficiency test can be passed is February
Company.
24, 2021.
During the financial year 2019-20, no grant of options were
Mrs. Karunasree Samudrala, Independent Director has duly
made to the employees of the company, under the ESOS-2018.
registered her name in the data bank of IICA w.e.f February 25,
The disclosures according to the provisions of the Act and
2020 and passed the online proficiency self-assessment test
SEBI (Share Based Employee Benefits) Regulations, 2014 as
on April 10, 2020.
on March 31, 2020 with regard to the Apollo Employee Stock
Option Scheme 2018 (ESOS-2018) are annexed to this Report In opinion of the Board, they fulfill the conditions specified in
as Annexure-E. the Act and the Rules made there under for the appointment
as Independent Directors and are independent of the
25. CHANGE IN THE NATURE OF BUSINESS [RULE management.
8(5)(ii) OF COMPANIES (ACCOUNTS) RULES, 2014]
The Independent Director’s possess the relevant integrity,
There is no change in the nature of the business of the expertise, experience and proficiency.
Company during the financial year 2019-20.
During the year under review, the non executive directors the
Company had no pecuniary relationship or transactions with
26. CHANGE IN THE DIRECTORS OR KEY MANAGERIAL the Company other than sitting fees, commission, if any.
PERSONNEL [RULE 8(5)(iii) & 8(5)(iiia) OF
COMPANIES (ACCOUNTS) RULES, 2014] During the financial year 2019-20, there was no change in the
Key Managerial Persons (KMP’s) of the Company.
The composition of the Board is in conformity with Regulation
17 of the SEBI (LODR) Regulations, 2015 and Section 149 of Retire by rotation
the Companies Act, 2013. There is an optimum combination
Mrs. Sri Lakshmi Reddy Vangeti (DIN: 02757567) retires by
of Executive and Non-Executive Directors. The Company
rotation at the ensuing 23rd Annual General Meeting and
has 6 (six) Directors as on March 31, 2020. Out of the 6 (six)
being eligible, offers herself for reappointment.
Directors 3 (three) are Executive Directors, 2(two) Non-
Executive- Independent Directors and 1 (one) Non- Executive Additional information on reappointment of Mrs. Sri Lakshmi
Non Independent Director. Reddy Vangeti as director and as required under regulation

43
 APOLLO MICRO SYSTEMS LIMITED Annual Report 2019-20

36 of the SEBI (LODR) Regulations 2015 is given in the Notice the Companies (Appointment and Remuneration of Managerial
convening the forthcoming AGM. Personnel) Rules, 2014, will be provided upon request. In terms
of Section 136 of the Act, the Report and Accounts are being
sent to the members and others entitled thereto, excluding
27. DEPOSITS [RULE 8(5) (v) OF COMPANIES
the information on employees’ particulars which is available
(ACCOUNTS) RULES, 2014]
for inspection by the members at the Registered Office of
The Company has not accepted any deposits within the the Company during business hours on working days of the
meaning of Section 73 of the Companies Act, 2013 read with Company. If any member is interested in obtaining a copy
the Companies (Acceptance of Deposits) Rules, 2014. There thereof, such member may write to the Company Secretary in
are no unpaid or unclaimed deposits as the Company has this regard.
never accepted deposits within the meaning of the Act and
the rules made there under. 31. AUDITORS AND AUDIT REPORT

(a) Statutory Auditors & their Reports

28. SIGNIFICANT AND MATERIAL ORDERS [RULE 8(5)
(vii) OF COMPANIES (ACCOUNTS) RULES, 2014] M/s. S T Mohite & Co., Chartered Accountants (FRN
011410S), Hyderabad were appointed as Statutory Auditors
During the financial year 2019-20, the Company hasn’t
of the Company in the adjourned Annual General Meeting
received any significant and material orders that impact the
held on August 26, 2017 for a period of 5 Years and holds
going concern status and company’s operations in future.
office until the conclusion of the 25th Annual General
Meeting to be held in the calendar year 2022 (subject to
29. INTERNAL FINANCIAL CONTROLS [RULE 8(5)(viii) ratification by the shareholders at each Annual General
OF COMPANIES (ACCOUNTS) RULES, 2014] Meeting) on such remuneration as may be determined
by the Board. Pursuant to notification dated May 7, 2018
The Company has kept in place adequate financial controls
issued by the Ministry of Corporate Affairs, New Delhi,
to check and control any defects and frauds in the Company.
requirement to place the matter relating ratification to
Adequate internal control systems commensurate with the
appointment of Auditors by members at every Annual
nature of the Company’s business, its size, and complexity of its
General Meeting is omitted.
operations are in place and have been operating satisfactorily.
Internal control systems comprising policies and procedures Further, M/s. S T Mohite & Co. have confirmed their
are designed to ensure reliability of financial reporting, timely eligibility for their appointment as Statutory Auditors and
feedback on achievement of operational and strategic goals, the same are within the limits as specified in section 141
compliance with policies, procedure, applicable laws and of the Companies Act, 2013 and have also confirmed that
regulations and that all assets and resources are acquired they are not disqualified from continuing as Auditors of
economically, used efficiently and adequately protected. the Company.

The Board of Directors of the Company have adopted various The Notes on financial statement referred to in the
policies like Related Party Transactions Policy, Vigil Mechanism Auditors’ Report are self-explanatory and do not call for
Policy and such other procedures for ensuring the orderly and any further comments.
efficient conduct of its business for safeguarding of its assets,
the prevention and detection of frauds and errors, the accuracy The statutory auditors’ report is forming the part of this
and completeness of the accounting records, and the timely report. The notes on financial statements referred to in
preparation of reliable financial information. the Auditors’ Report are self-explanatory and do not call
for any further comments. There are no specifications,
reservations, adverse remarks on disclosure by the
30. PARTICULARS OF EMPLOYEES
statutory auditors in their report. They have not reported
The information required under section 197(12) of the any incident of fraud to the Board of the Company during
Companies Act, 2013 read with Rule 5(1) of the Companies the year under review.
(Appointment and Remuneration of Managerial Personnel)
(b) Internal Auditors
Rules, 2014 respectively, are given in Annexure-F, which forms
partof this Report. As per the provisions of Section 138 of the Companies
Act, 2013 and the rules made there under, the Board of
The statement containing particulars of employees as
Directors had appointed M/s Surya Pavan & Co, Chartered
required under Section 197 of the Act read with rule 5(2) of
Accountants, Vijaywada (ICAI Firm Registration No.

44
 Corporate Overview Statutory Reports Financial Statements

015612S), as Internal Auditor to conduct the internal audit under the SEBI (LODR) Regulations, 2015. A separate section
of the Company for the Financial Year 2019-20. titled ‘Corporate Governance Report’ Annexure-H under
the SEBI (LODR) Regulations, 2015 along with a Corporate
The Internal Audit Report for the Financial Year 2019-20 Governance certificate from the Practicing Company Secretary
issued by M/s Surya Pavan & Co, Chartered Accountants, in the Annexure-I and CFO Certificate in the Annexure-J forms
Vijaywada is submitted which is self-explanatory and do the part of this report.
not call for any further explanation of the Board.

Further, on the recommendation of audit committee, the 34. INTERNAL CONTROL SYSTEMS AND THEIR
Board of Directors of the Company has approved the re- ADEQUACY
appointment of aforesaid audit firm as internal auditors for
the Financial Year 2020-21. The Company has an Internal Control System, commensurate
with the size, scale and complexity of its operations. To
(c) Cost Auditors maintain its objectivity and independence, the Internal Audit
Functions reports to the Board including Audit Committee of
As per Cost Audit applicability, cost compliance is not the Company. Based on the report of internal audit function,
applicable for FY 2019-20 as the Company is small scale process owners undertake corrective action in their respective
industry under MSME. Hence, the maintenance of cost areas and thereby strengthen the controls.
records as specified by the Central Government under
sub section (1) of section 148 of the Companies Act, 2013
is not required. 35. VIGIL MECHANISM

(d) Secretarial Auditors The Company’s Board of Directors, pursuant to the provisions
of Section 177(9) of the Companies Act, 2013 read with Rule
As per the provisions of Section 204 of the Companies 7 of the Companies (Meetings of Board and its Powers)
Act, 2013 and the rules made there under, the Board of Rules, 2014, has framed ‘Whistle Blower Policy’ for Directors
Directors had appointed Mr. Venkatesh Reddy Datla, and employees of the Company. The policy is to provide
Practicing Company Secretary, Hyderabad (Membership a mechanism, which ensures adequate safeguards to
No: 36504; CP No: 14074), as Secretarial Auditor to employees and Directors from any victimisation on raising of
conduct the Secretarial audit of the Company for the concerns of any violations of legal or regulatory requirements,
Financial Year 201-20. incorrect or misrepresentation of any, financial statements and
reports, and so on. The employees of the Company have the
The Secretarial Audit Report, pursuant to the provisions right/option to report their concern/grievance to the Chairman
of Section 204 read with Section 134(3) of the Companies of the Audit Committee. The Company is committed to adhere
Act, 2013, issued by Mr. Venkatesh Reddy Datla, Practicing to the highest standards of ethical, moral and legal conduct
Company Secretary, in Form MR-3 for the financial year of business operations. The Whistle Blower Policy is hosted
2019-20 is annexed to the Board’s Report as Annexure-G on the Company’s website [Link] under the
section “Investors”.
Further, the Board has approved the re- appointment of Mr.
Venkatesh Reddy Datla, Practicing Company Secretary,
Hyderabad (Membership No: 36504; CP No: 14074) as the 36. INVESTORS EDUCATION AND PROTECTION FUND
Secretarial Auditor of the Company for the Financial Year (IEPF)
2020-21.
Pursuant to section 124 of the Act, Dividends that are unclaimed
for a period of seven years are required to be transferred to the
32. MANAGEMENT DISCUSSION AND ANALYSIS IEPF, established by the Government of India. During the year
under review, there was no outstanding amount of unclaimed
The Management Discussion and Analysis Report (“MD&A”)
dividends which was liable to be transfer to the IEPF.
for the year under review as stipulated under the SEBI (LODR)
Regulations, 2015 is presented in a separate section forming
part of this Annual Report. 37. HUMAN RELATIONS

The Company continues to have cordial and harmonious

33. REPORT ON CORPORATE GOVERNANCE relationship with its employees and thank all employees for
their cooperation and the contribution towards harmonious
The Company has complied with the Corporate Governance
relationship and progress of the company.
requirements under the Companies Act, 2013 and as stipulated

45
 APOLLO MICRO SYSTEMS LIMITED Annual Report 2019-20

38. POLICY ON SEXUAL HARASSMENT Prohibition, & Redressal) Act, 2013. The Committee has been
set up to redress complaints received regarding sexual
Your Company is committed to provide work environment that harassment. The detail of the committee members is available
ensures every employee is treated with dignity and respect on the website of the Company [Link] under
and afforded equitable treatment. The Company is also the section “Investors”. All employees (permanent, contractual,
committed to promoting a work environment that is conducive trainees, temporary) are covered under this policy. During the
to the professional growth of its employees and encourages year under review, there were no cases filed under the Sexual
equality of opportunity and will not tolerate any form of sexual Harassment of Women at Workplace (Prevention, Prohibition
harassment and to take all necessary steps to ensure that its and Redressal) Act, 2013.
employees are not subjected to any form of harassment.

Thus, in order to create a safe and conducive work environment 39. ACKNOWLEDGEMENTS
the Company has in place a policy for prevention of sexual
The Directors thank all customers, bankers, investors,
harassment in accordance with the requirements of the Sexual
shareholders, vendors and other stakeholders for their
Harassment of women at workplace (prevention, Prohibition, &
continued support and patronage during the year under
Redressal) Act, 2013.
review. The Board appreciates its employees for their efforts,
Further, the Company has complied with provisions relating to hard work and dedication, which enabled the Company to
constitution of Internal Complaints Committee (“ICC”) under achieve the targets and recognitions.
Sexual Harassment of women at workplace (Prevention,

For and on behalf of the Board

APOLLO MICRO SYSTEMS LIMITED

Sd/- Sd/-
Place: Hyderabad Karunakar Reddy Baddam Krishna Sai Kumar Addepalli
Date: June 26, 2020 Managing Director Whole Time Director (Operations)
DIN: 00790139 DIN: 03601692

46
 Corporate Overview Statutory Reports Financial Statements

ANNEXURE-A
Form No. MGT-9
EXTRACT OF ANNUAL RETURN
as on March 31, 2020
[Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014]

I. REGISTRATION AND OTHER DETAILS:

I CIN L72200TG1997PLC026556
Ii Registration Date 03/03/1997
Iii Name of the Company Apollo Micro Systems Limited
Iv Category / Sub-Category of the Company Company Limited by Shares
Non-Government Indian Company
V Address of the Registered Office and contact details Plot No 128/A, Road No. 12, BEL Road IDA Mallapur, Uppal
Mandal, Hyderabad, Rangareddy, Telangana, India – 500 076
Phone: 91 40 27167000; Fax No. 91 40 27150820 Email id: cs@
[Link]
Vi Whether listed company Yes
Vii Name, Address and Contact details of Registrar and Bigshare Services Private Limited
Transfer Agent, if any (Unit: Apollo Micro Systems Limited)
306, Right Wing, 3rd Floor, Amrutha Ville,
Opp: Yashoda Hospital, Rajbhavan Road,
Hyderabad – 500 082, Telangana, India.
Tel : 040 4014 4582
Email: bsshyd@[Link]
Website: [Link]

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY:

All the business activities contributing 10 % or more of the total turnover of the company shall be stated:-

Sl. Name and Description of main products / NIC Code of the Product/ service % to total turnover of the Company
No. services

1 Manufacture of electronic components and 2610 100%

services

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES:

Sl. Name and address of the company CIN/GLN Holding/ Subsidiary/ % of shares held Applicable section
No. Associate Company

1 NIL NIL NIL NIL NIL

47
 APOLLO MICRO SYSTEMS LIMITED Annual Report 2019-20

IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity):

i) Category-wise Share Holding:

No. of Shares held at the beginning of the year No. of Shares held at the end of the year % Change
Category of
% of Total % of Total During the
Shareholders Demat Physical Total Demat Physical Total
Shares Shares year

A. Promoters &Promoter Group

(1) Indian
a) Individual /HUF 1,32,71,700 0 1,32,71,700 63.92 1,32,71,700 0 1,32,71,700 63.92 Nil
b) Central Govt 0 0 0 0 0 0 0 0 0
c) State Govt (s) 0 0 0 0 0 0 0 0 0
d) Bodies Corp. 0 0 0 0 0 0 0 0 0
e) Banks / FI 0 0 0 0 0 0 0 0 0
f) Any Other 0 0 0 0 0 0 0
Sub-total (A) (1):- 1,32,71,700 0 1,32,71,700 63.92 1,32,71,700 0 1,32,71,700 63.92 Nil
(2) Foreign
a) NRIs - Individuals 0 0 0 0 0 0 0 0 Nil
b) Other –Individuals 0 0 0 0 0 0 0 0 0
c) Bodies Corp. 0 0 0 0 0 0 0 0 0
d) Banks / FI 0 0 0 0 0 0 0 0 0
e) Any Other 0 0 0 0 0 0 0 0 0
Sub-total (A) (2):- 0 0 0 0 0 0 0 0 0
Total shareholding of Promoter 1,32,71,700 0 1,32,71,700 63.92 1,32,71,700 0 1,32,71,700 63.92 Nil
& Promoter Group (A) =(A)
(1)+(A)(2)
B. Public Shareholding
1. Institutions
a) Mutual Funds 12,55,752 0 12,55,752 6.05 8,98,000 0 8,98,000 4.32 (1.73)
b) Banks / FI 1,34,903 0 1,34,903 0.65 71,157 0 71,157 0.34 (0.31)
c) Central Govt. 0 0 0 0 0 0 0 0 0
d) State Govt(s) 0 0 0 0 0 0 0 0 0
e) Venture Capital Funds 0 0 0 0 0 0 0 0 0
f) Insurance Companies 0 0 0 0 0 0 0 0 0
g) FIIs 0 0 0 0 0 0 0 0 0
h) Foreign Venture 0 0 0 0 0 0 0 0 0
Capital Funds
i) Others (specify)- 8,83,892 0 8,83,892 4.26 8,09,642 0 8,09,642 3.90 (0.36)
Foreign Portfolio
Investor
Sub-total (B)(1):- 22,74,547 0 22,74,547 10.95 17,78,799 0 17,78,799 8.56 (2.4)
2. Non-Institutions
a) Bodies Corp. 12,81,341 0 12,81,341 6.17 2,92,669 0 2,92,669 1.41 (4.76)
b) Individuals
i) Individual 29,41,656 20,008 29,61,664 14.26 33,22,747 10,008 3,332,755 16.05 1.79
shareholders holding
nominal share capital
upto Rs.1 lakh
ii) Individual 4,02,833 0 4,02,833 1.94 15,54,093 0 15,54,093 7.48 5.54
shareholders holding
nominal share capital
in excess of Rs. 1 lakh

48
 Corporate Overview Statutory Reports Financial Statements

No. of Shares held at the beginning of the year No. of Shares held at the end of the year % Change
Category of
% of Total % of Total During the
Shareholders Demat Physical Total Demat Physical Total
Shares Shares year

c) Others (specify)
i) Clearing Members 1,04,859 0 1,04,859 0.51 87,266 0 87,226 0.42 (0.08)
ii) Employees 1,02,548 0 1,02,548 0.49 1,02,824 0 1,02,824 0.50 0.01
iii) Non-Resident 3,58,194 0 3,58,194 1.73 3,37,580 0 3,37,580 1.63 (0.1)
Indian (NRI)
iv) Trusts 1,200 0 1,200 0.01 1,200 0 1,200 0.01 Nil
Sub-total (B)(2):- 51,92,631 20,008 52,12,639 25.11 56,98,379 10,008 57,08,387 27.49 2.4
Total Public Shareholding 74,67,178 20,008 74,87,186 36.06 74,77,178 10,008 74,87,186 36.06 Nil
(B)=(B)(1)+(B)(2)
C. Shares held by Custodian 0 0 0 0 0 0 0 0 0
for GDRs & ADRs
D. Non Promoter- Non Public
Shareholding
i) Employee ESOS Trust- 5,000 0 5,000 0.02 5,000 0 5,000 0.02 Nil
Apollo Employees
Foundation
Total Non Promoter- Non 5,000 0 5,000 0.02 5,000 0 5,000 0.02 Nil
Public Shareholding (D)
Grand Total (A+B+C+D) 2,07,43,878 20,008 2,07,63,886 100 2,07,53,878 10,008 2,07,63,886 100 0.00

ii) Shareholding of Promoters

Shareholding at the beginning of the
Shareholding at the end of the year
year % change In
Sl. % of total %of Shares % of total %of Shares shareholding
Shareholder’s Name No. of
No No. of Shares of Pledged / Shares Pledged / during the
Shares
Shares the encumbered of the encumbered year
Company to total shares company to total shares
1 Karunakar Reddy Baddam 1,32,71,690 63.92% 0 1,32,71,690 63.92% 0 Nil
2 Sri Lakshmi Reddy Vangeti * 10 Negligible 0 10 Negligible 0 Nil
Total 1,32,71,700 63.92% 0 1,32,71,700 63.92% 0 Nil
*Relative of Promoter-Forms part of Promoter Group

(iii) Change in Promoters’ Shareholding (please specify, if there is no change):

Date wise increase/(decrease) during

Shareholding at the Cumulative Shareholding
the year specifying the reasons(e.g.
beginning of the year during the Year
Sl. buy, sell, allotment, transfer)
Name of the Promoter
No % of total % of total
No. of Number
shares of the Date Nature No. of shares shares of the
shares of Shares
company company
1 Karunakar Reddy Baddam 1,32,71,690 63.92 - - - 1,32,71,690 63.92%
2 Sri Lakshmi Reddy Vangeti 10 Negligible - - - 10 Negligible
During the FY 2019-20 there was no change in the Promoter’s Shareholding.

49
 APOLLO MICRO SYSTEMS LIMITED Annual Report 2019-20

(iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs) as on March 31,
2020:
Shareholding at the beginning of the Cumulative Shareholding during the
Sl. year year
Name, Date and Reasons
No % of total shares % of total shares
No. of shares No. of shares
of the Company of the Company
1. SUNDARAM MUTUAL FUND A/C
SUNDARAM INFRASTRUCTURE
ADVANTAGE FUND
At the beginning of the year 8,98,000 4.32 8,98,000 4.32
At the end of the year 8,98,000 4.32

2. VIRAL AMAL PAREKH

At the beginning of the year Nil 0 Nil 0
March 06, 2020-Increase 3,00,000 1.44 3,00,000 1.44
March 13, 2020-Increase 3,00,000 1.44 6,00,000 2.89
March27, 2020-Increase 2,75,000 1.32 8,75,000 4.21
At the end of the year 8,75,000 4.21

3. NATIONAL WESTMINSTER BANK PLC AS

TRUSTEE OF THE JUPITER INDIA FUND
At the beginning of the year 6,97,605 3.36 6,97,605 3.36
February 21, 2020-Decrease (8,282) (0.04) 6,89,323 3.32
March 06, 2020-Decrease (8,377) (0.04) 6,80,946 3.28
6,80,946 3.28
4. ARINDAM BHATTACHARJEE
At the beginning of the year 1,80,000 0.87 1,80,000 0.87
September 06, 2019-Decrease (996) (0.01) 1,79,004 0.86
September 13, 2019-Decrease (9,004) (0.04) 1,70,000 0.82
October 25, 2019-Decrease (5,000) (0.02) 1,65,000 0.79
November 01, 2019-Decrease (5,000) (0.02) 1,60,000 0.77
November 15, 2019-Decrease (1,988) (0.01) 1,58,012 0.76
December 20, 2019-Decrease (2,205) (0.01) 1,55,807 0.75
January 31, 2020-Decrease (120) Negligible 1,55,687 0.75
At the end of the year 1,55,687 0.75

5. JUPITER SOUTH ASIA INVESTMENT

COMPANY LIMITED - SOUTH ASIA ACCESS
FUND
At the beginning of the year 1,55,116 0.75 1,55,116 0.75
September 20, 2019-Decrease (9,253) (0.04) 1,45,863 0.70
December 20, 2019-Decrease (1,564) (0.01) 1,44,299 0.69
December 27, 2019-Decrease (1,546) (0.01) 1,42,753 0.69
February 28, 2020-Decrease (14,075) (0.07) 1,28,678 0.62
At the end of the year 1,28,678 0.62

6. OHM EDUBRIDGE PRIVATE LIMITED

At the beginning of the year 10,00,000 4.82 10,00,000 4.82
February 28, 2020- Decrease (1,00,000) (0.48) 9,00,000 4.33
March 06, 2020- Decrease (4,00,000) (1.92) 5,00,000 2.41
March 13, 2020- Decrease (1,00,000) (0.48) 4,00,000 1.93
March 20, 2020- Decrease (2,00,000) (0.96) 2,00,000 0.96
March 27, 2020- Decrease (77,000) (0.37) 1,23,000 0.59
At the end of the year 1,23,000 0.59

50
 Corporate Overview Statutory Reports Financial Statements

Shareholding at the beginning of the Cumulative Shareholding during the

Sl. year year
Name, Date and Reasons
No % of total shares % of total shares
No. of shares No. of shares
of the Company of the Company

7. SUNEETA VARADRAYA KAMATH

At the beginning of the year 1,00,000 0.48 1,00,000 0.48
At the end of the year 1,00,000 0.48

8. ATUL KAYAN
At the beginning of the year Nil 0 Nil 0
June 07, 2019-Increase 7,500 0.03 7,500 0.04
June 14, 2019-Decrease (842) (0.00) 6,658 0.03
July 19, 2019-Increase 73,905 0.36 80,563 0.39
August 02, 2019-Decrease (80,000) (0.39) 563 0.00
August 30, 2019-Increase 6,095 0.01 6,658 0.03
September 26, 2019-Increase 80,000 0.39 86,658 0.42
October 25, 2019-Decrease (86,000) (0.41) 658 0.00
November 01, 2019-Increase 86,000 0.41 86,658 0.42
March 27, 2020-Decrease (12,658) (0.06) 74,000 0.36
At the end of the year 74,000 0.36

9. BABULA VADILAL SHAH

At the beginning of the year Nil 0 Nil 0
November 08, 2019-Increase 15,000 0.07 15,000 0.07
November 15, 2019-Increase 3,000 0.01 18,000 0.09
December 27, 2019-Decrease (18,000) (0.09) 0 0
March 27, 2020-Increase 65,000 0.31 65,000 0.31
At the end of the year 65,000 0.31

10. AXIS BANK LIMITED

At the beginning of the year 40,016 0.19 40,016 0.19
April 12, 2019-Increase 8,630 0.04 48,646 0.23
April 19, 2019-Decrease (311) (0.00) 48,335 0.23
April 26, 2019-Increase 16,625 0.08 64,960 0.31
May 03, 2019-Decrease (330) (0.00) 64,630 0.31
May 10, 2019-Increase 2,573 0.01 67,203 0.32
May 17, 2019-Decrease (8,662) (0.04) 58,541 0.28
May 24, 2019-Decrease (328) (0.00) 58,213 0.28
May 31, 2019-Decrease (1,083) (0.01) 57,130 0.28
June 07, 2019-Decrease (6,408) (0.03) 50,722 0.24
June 14, 2019-Decrease (557) (0.00) 50,165 0.24
June 21, 2019-Increase 225 0.00 50,390 0.24
June 28, 2019-Increase 592 0.00 50,982 0.25
July 05, 2019-Increase 265 0.00 51,247 0.25
July 12, 2019-Decrease (1,000) (0.01) 50,247 0.24
July 26, 2019-Increase 1,100 0.01 51,347 0.25
August 02, 2019-Decrease (450) (0.00) 50,897 0.25
August 09, 2019-Decrease (855) (0.01) 50,042 0.24
August 16, 2019-Decrease (108) (0.00) 49,934 0.24
August 23, 2019-Increase 1,133 0.01 51,067 0.25
August 30, 2019-Increase 1,866 0.01 52,933 0.25
September 06, 2019-Increase 865 0.00 53,798 0.26

51
 APOLLO MICRO SYSTEMS LIMITED Annual Report 2019-20

Shareholding at the beginning of the Cumulative Shareholding during the

Sl. year year
Name, Date and Reasons
No % of total shares % of total shares
No. of shares No. of shares
of the Company of the Company
September 13, 2019-Increase 1,402 0.01 55,200 0.27
September 20, 2019-Decrease (10,240) (0.05) 44,960 0.22
September 26, 2019-Decrease (6,816) (0.03) 38,144 0.18
September 30, 2019-Increase 7,952 0.04 46,096 0.22
October 04, 2019-Decrease (236) (0.00) 45,860 0.22
October 11, 2019-Decrease (75) (0.00) 45,785 0.22
October 18, 2019-Decrease (732) (0.00) 45,053 0.22
October 25, 2019-Increase 914 0.00 45,967 0.22
November 01, 2019-Decrease (1,575) (0.01) 44,392 0.21
November 08, 2019-Decrease (29,721) (0.14) 14,671 0.07
December 06, 2019-Increase 29,617 0.14 44,288 0.21
December 13, 2019-Decrease (16,633) (0.08) 27,655 0.13
December 20, 2019-Increase 2,100 0.01 29,755 0.14
December 27, 2019-Decrease (195) (0.00) 29,560 0.14
December 31, 2019-Decrease (19,510) (0.09) 10,050 0.05
January 03, 2020-Increase 37 0.00 10,087 0.05
January 31, 2020-Increase 500 0.00 10,587 0.05
February 07, 2020-Increase 19,110 0.09 29,697 0.14
February 14, 2020-Decrease (2,116) (0.01) 27,581 0.13
February 28, 2020-Decrease (220) (0.00) 27,361 0.13
March 06, 2020-Increase 18,192 0.09 45,553 0.22
March 13, 2020-Decrease (80) (0.00) 45,473 0.22
March 20, 2020-Increase 14,875 0.07 60,348 0.29
March 27, 2020-Decrease (100) (0.00) 60,248 0.29
At the end of the Year 60,248 0.29
Note: Reasons for increase / decrease unless stated, may be trade / transfer

(v) Shareholding of Directors and Key Managerial Personnel:

Shareholding at the Cumulative Shareholding
beginning of the year till end of the year
Date wise increase/(decrease) during
Sl. For each of the Directors % of total % of total
the year specifying the reasons(e.g. buy,
No and KMP No. of shares No. of Shares
sell, allotment, transfer)
shares of the shares of the
company company
1. Karunakar Reddy Baddam, 1,32,71,690 63.92 - - - 1,32,71,690 63.92
Managing Director
2 Sri Lakshmi Reddy Vangeti- 10 Negligible - - - 10 Negligible
Non Executive Director
3. Krishna Sai Kumar 41,910 0.20 December 100 Buy 42,010 0.20
Addepalli- Whole Time 20, 2019
Director(Operations) December 50 (Market 42,060 0.20
24, 2019 Purchase)
March 26, 250 Buy 42,310 0.20
2020

52
 Corporate Overview Statutory Reports Financial Statements

Shareholding at the Cumulative Shareholding

beginning of the year till end of the year
Date wise increase/(decrease) during
Sl. For each of the Directors % of total % of total
the year specifying the reasons(e.g. buy,
No and KMP No. of shares No. of Shares
sell, allotment, transfer)
shares of the shares of the
company company
4. Chandrapati Venkata 50,000 0.24 - (Market 50,000 0.24
Siva Prasad -Whole Time Purchase)
Director( Technical)
5. Raghupathy Goud Theegala- Nil Nil - - Buy Nil Nil
Independent Director
6. Karunasree Samudrala- Nil Nil - (Market Nil Nil
Independent Director Purchase)
7. Sudarshan Chiluveru- CFO 1900 0.01 - - - 1900 0.01
8. Chaitanya Siva Shankar 750 Negligible - - - 750 Negligible
Vitta- Company Secretary &
Compliance Officer

V. INDEBTEDNESS:

Indebtedness of the Company including interest outstanding/accrued but not due for payment as on March 31, 2020:

(Figures in H)
Indebtedness at the beginning of the financial year Secured Loans Unsecured Deposits Total
excluding deposits Loans Indebtedness

i) Principal Amount 1,03,74,56,530 8,36,312 103,82,92,842

ii) Interest due but not paid - - - -
iii) Interest accrued but not due 1,16,170.94 1,62,944.43 - 2,79,115.37
Total (i+ii+iii) 1,03,75,72,701 9,99,256.43 1,03,85,71,957
Change in Indebtedness during the financial year - - - -
• Addition 3,71,24,494 - - 3,71,24,494
• Reduction (24,63,66,229) (9,99,256) (24,73,65,485)
Net Change (20,92,41,735) (9,99,256) (21,02,40,991)
Indebtedness at the end of the financial year
i) Principal Amount 82,82,96,941 - 82,82,96,941
ii) Interest due but not paid - - - -
iii) Interest accrued but not due 34,025 - - 34,025
Total (i+ii+iii) 82,83,30,966 - 82,83,30,966

53
 APOLLO MICRO SYSTEMS LIMITED Annual Report 2019-20

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL:

A. Remuneration to Managing Director, Whole-time Directors and/or Manager

Name of MD/WTD/Manager
Chandrapati Krishna
Karunakar Venkata Siva Sai Kumar
Sl. Total amount
Particulars of Remuneration Reddy Baddam* Prasad Addepalli**
No in J
(Managing (Whole Time (Whole Time
Director) Director- Director-
Technical) Operations)
1. Gross salary (IT Act)
a) Salary 1,18,38,710 23,67,742 23,67,742 1,65,74,194
(b) Value of perquisites - - - -
(c) Profits in lieu of salary - - - -
2. Stock Option - - - -
3. Sweat Equity - - - -
4. Commission
- as % of profit 15,00,000 - - 15,00,000
- others, specify… - -
5. Others, please specify- 21,600 21,600 21,600 64,800
Provident Fund Contribution
Total 1,33,60,310 23,89,342 23,89,342 1,81,38,994
Overall Ceiling as per the Act Rs. 270.75 Lakhs (being the 10% of the Net Profits of the Company calculated
as per Section 198 of the Companies Act, 2013) and Rs 135.37 Lakhs (being
the 5% of the Net Profits of the Company calculated as per Section 198 of the
Companies Act, 2013)
*During the year under review FY 2019-20 the remuneration of the Managing Director has been increased to Rs 10,00,000/- per month w.e.f 1st April, 2019.
** During the year under review FY 2019-20 the remuneration of the Whole Time Director (Operations) has been increased to Rs 2,00,000/- per month w.e.f 1st April, 2019.

B. Remuneration to other directors:

Sl. Total Amount
Particulars of Remuneration Name of Directors
No. (in J)
1. Independent Directors Raghupathy Goud Theegala Karunasree Samudrala
(Independent Director) (Independent Director)
Fee for attending board / committee meetings 1,80,000 1,20,000 3,00,000
Commission - - -
Others, please specify - - -
Total (1) 1,80,000 1,20,000 3,00,000

2. Other Non-Executive Directors Sri Lakshmi Reddy Vangeti

(Non- Executive Director)
Fee for attending board / committee meetings Nil
Commission -
Others, please specify -
Total (2) Nil
Total (B)= (1+2) 3,00,000
Total Managerial Remuneration (A+B) 1,84,38,994

54
 Corporate Overview Statutory Reports Financial Statements

C. Remuneration to key managerial personnel other than MD/Manager/WTD:

Sl. Total Amount

Particulars of Remuneration Key managerial personnel other than MD/Manager/WTD
No. (in J)
Sudarshan Chiluveru* Chaitanya Siva Shankar Vitta**
Chief Financial Officer (CFO) Company Secretary& Compliance
Officer
1. Gross salary (IT Act)
(a) Salary 13,98,226 3,84,032 17,82,258
(b) Value of perquisites - - -
(c) Profits in lieu of salary - - -
2. Stock Option - - -
3. Sweat Equity - - -
4. Commission - - -
- as % of profit
- others, specify…
5. Others, please specify- - 20,134 20,134
Provident Fund Contribution
Total 13,98,226 4,04,166 18,02,392
*During the year under review FY 2019-20 the remuneration of the CFO has been increased to Rs 1,35,000/- per month w.e.f 1st December, 2019
** During the year under review FY 2019-20 the remuneration of Company Secretary & Compliance Officer has been increased to Rs 45,000 per month/- w.e.f 1st
November, 2019

VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:

Type Section of The Brief Details of Penalty Authority [RD / Appeal made,
Companies Act Description /Punishment/ NCLT/ COURT] if any
Compounding (give details)
fees imposed

A. Company
Penalty
Punishment NIL
Compounding
B. Directors
Penalty
Punishment NIL
Compounding
C. Other officers in Default
Penalty
Punishment NIL
Compounding

For and on behalf of the Board

APOLLO MICRO SYSTEMS LIMITED

Sd/- Sd/-
Place: Hyderabad Karunakar Reddy Baddam Krishna Sai Kumar Addepalli
Date: June 26, 2020 Managing Director Whole Time Director (Operations)
DIN: 00790139 DIN: 03601692

55
 APOLLO MICRO SYSTEMS LIMITED Annual Report 2019-20

ANNEXURE-B
ANNUAL REPORT ON CORPORATE SOCIAL RESPONSIBILITY AS PER RULE 8 OF THE COMPANIES
(CORPORATE SOCIAL RESPONSIBILITY POLICY) RULES, 2014

1. A brief outline of the Company’s CSR policy, including 3. Average net profit of the Company for the last Three financial
overview of projects or programmes proposed to be years
undertaken and a reference to the web-link to the CSR
policy and projects or programmes: Financial Year Profit Before Tax (in J)

2016-17 25,82,75,805
On the recommendations of the Corporate Social Responsibility
Committee, the Board approved and adopted the Corporate 2017-18 32,17,73,041
Social Responsibility Policy of the Company. The Company 2018-19 32,24,29,555
proposes to adopt projects or programmes under one or Total 90,24,78,401
more of the activities as prescribed under Schedule VII of the
Average of the PBT 30,08,26,134
Companies Act, 2013, as amended from time to time and as
stated in the Corporate Social Responsibility Policy. 4. Prescribed CSR expenditure (2% of Average Net Profits):
Rs 60,16,522/-
The Corporate Social Responsibility Policy is posted under
the Investors section of the Company’s website at: [Link] 5. Details of CSR spent during the financial year 2019-20:
[Link]/investorrelations/[Link]
(a) Total amount to be spent for the financial year:
2. Composition of the CSR Committee:- Rs 60,16,522 /-

Sr. Name of Member Designation (b) Amount unspent, if any: Rs 56,82,955/-

No (c) Amount spent during the year 2019-20: Rs 51,50,000/-*
1. Karunakar Reddy Baddam Chairman *During the year under review, the total CSR Expenditure amounts to
2. Raghupathy Goud Theegala Member Rs 51,50,000/- which fulfils the unspent Company’s CSR obligation for
the previous Financial Year 2018-19 of Rs 48,16,433/- and Out of the
3. Sri Lakshmi Reddy Vangeti Member above expenditure Rs 3,33,567/- is towards the FY 2019-20. Further,
the unspent CSR obligation for the FY 2019-20 of Rs 56,82,955/-
will be duly spent by the Company. Our Company has not made any
provisions in the books of accounts for the financial year 2015-16 and
petition for compounding with appropriate authorities has been filed.

(c) Manner in which the amount spent during the financial year is detailed below:

(Figures in H)
Sr. CSR Project or activity Sector in Project or Amount Amount Spent (2) Cumulative Amount spent
No identified which the programme outlay on the Overheads expenditure Direct or
project is (1) Local area or (budget) projects or up to the through
covered other (2) project programmes reporting implementing
Specify the or programme sub heads period agency
state and wise (1) Direct
district where expenditure on
projects or projects
programmes and
was undertaken programmes

1. Donation to All India Social Education Ahmedabad Rs 16,50,000/- Rs 16,50,000/- - Rs 16,50,000/- Implementing
Education Charitable Trust Agency (i)
2. Donation to Women Women Empowerment Telangana Rs 20,00,000/- Rs 20,00,000/- - Rs 20,00,000/- Implementing
Development Society Agency (ii)
3. Donation to Suraksha Old Medical Camps Andhra Pradesh, Rs 10,00,000/- Rs 10,00,000/- - Rs 10,00,000/- Implementing
Age And Health Society Guntur Agency(iii)

56
 Corporate Overview Statutory Reports Financial Statements

(Figures in H)
Sr. CSR Project or activity Sector in Project or Amount Amount Spent (2) Cumulative Amount spent
No identified which the programme outlay on the Overheads expenditure Direct or
project is (1) Local area or (budget) projects or up to the through
covered other (2) project programmes reporting implementing
Specify the or programme sub heads period agency
state and wise (1) Direct
district where expenditure on
projects or projects
programmes and
was undertaken programmes

4. Donation to Zion Promoting education, Andhra Pradesh, Rs 5,00,000/- Rs 5,00,000/- - Rs 5,00,000/- Implementing
Educational Society including special Rajahmundry Agency (iv)
education and
employment
enhancing vocation
skills especially
among children,
women, elderly,
and the differently
abled and livelihood
enhancement projects

(i) All India Social Education Charitable Trust, Gujarat based not qualified as CSR expenditure as per the Schedule VII of the
NGO (Trust Registration No: E-17166/Ahmedabad) is Companies Act 2013, it is not included in the CSR spent.
engaged in providing education to needy and poor people
of the society, women & child social development and 5. In case the company has failed to spend the two percent of
also runs education centre, human right and counseling the average of the net profit of the last three financial years
centre, skill development training centre etc. or any part thereof, the company shall provide the reasons
for not spending the amount in its Board report.
(ii) Women Development Society (Society registered under
the Societies Registration Act having Registered No: CSR Committee of the company has framed the CSR policy and
3264/91 and registered u/s 80G(5)(vi) & u/s 12AA of the the same has been adopted by the Board. The CSR Committee
Income Tax Act, 1961) engaged in the social activities has spent substantial portion towards CSR Expenditure which
concerning women, empowerment of rural women, fulfills the unspent obligation in full for the FY 2018-1 9 and
widows etc. their up-liftment and also doing extensive partly for the FY 2019-20. The Company is identifying the
agriculture related activities, Health, Environment projects and avenues for making further CSR expenditure
and imparting vocational training to youth destitute , within the policy framework of the Company, pertaining to the
downtrodden communities etc. unspent amount for the FY 2019-20.

(iii) Suraksha Old Age and Health Society (Society No 6. A responsibility statement of the CSR Committee that
464/2002 under Societies Act XXI- 1860 and registered the implementation and monitoring of CSR Policy, is in
u/s 80G & 12A of the Income Tax Act, 1961) is engaged in compliance with CSR objectives and Policy of the Company:
running old age homes and orphanage for down trodden
The CSR Committee Confirms that the implementation and
people of the Society. The society also conducts free
monitoring of the CSR Policy is in compliance with the CSR
medical camps in its surrounding areas.
objectives and policy of the Company.
(iv) Zion Educational Society (Society No 252 of 1989 under
Societies Act XXI- 1860 and registered u/s 80G(5)(v) &
(vi) & u/s 12A of the Income Tax Act, 1961) engaged in
providing financial assistance to provide free education to
Sd/-
Blind, Disabled and Orphan Children through Zion School
KARUNAKAR REDDY BADDAM
& Technical Institute for the Visually, Deaf and Dumb,
Chairman of the CSR Committee cum Managing Director of the Company
Orphan, Physically challenged.
DIN: 00790139
Further in addition to the above, the Company has donated to
Chief Minister’s Relief fund of Telangana on 30th March, 2020 Place: Hyderabad
an amount of Rs. 5,00,000/-(Rupees Five lakh only). This being Date: June 26, 2020

57
 APOLLO MICRO SYSTEMS LIMITED Annual Report 2019-20

ANNEXURE-C
FORM NO. AOC -2
(Pursuant to clause (h) of sub-section (3) of Section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014

Form for Disclosure of particulars of contracts/arrangements entered into by the company with related parties referred to in sub section (1)
of Section 188 of the Companies Act, 2013 including certain arms length transaction under third proviso thereto.

1. Details of contracts or arrangements or transactions not at Arm’s length basis: There were no contracts or arrangements or
transactions entered into during the year ended March 31, 2020, which were not at arm’s length basis.

2. Details of contracts or arrangements or transactions at Arm’s length basis: The details of contracts or arrangements or transactions
at arm’s length basis entered into during the year ended March 31, 2020 are as follows:

Name of the Related Party and Nature of Duration of the Salient terms of Date(s) of Amount paid
Nature of Relationship contracts/ contracts/ the contracts or approval as advances,
arrangements/ arrangements/ arrangements by the Board/ if any
transactions transactions or transactions Shareholders,
including the if any
value (in J)

Mr. Karunakar Reddy Baddam Remuneration Continuous Remuneration paid Continuous -

Managing Director transaction Rs 1,33,60,310 transaction
Mr. Chandrapati Venkata Siva Prasad Remuneration Continuous Remuneration paid Continuous -
Whole Time Director (Technical) transaction Rs 23,89,342 transaction
Mr. Krishna Sai Kumar Addepalli Remuneration Continuous Remuneration paid Continuous -
Whole Time Director(Operations) transaction Rs 23,89,342 transaction
Mr. Karunakar Reddy Baddam Unsecured Loan Continuous Unsecured Loan Continuous -
Managing Director obtained & repaid transaction Obtained - Rs transaction
49,00,000
Repaid - Rs
49,00,000
Mr. Karunakar Reddy Baddam Rent Paid Continuous Rent Paid Continuous -
Managing Director transaction Rs 8,40,000 transaction

For and on behalf of the Board

APOLLO MICRO SYSTEMS LIMITED

Sd/- Sd/-
Place: Hyderabad Karunakar Reddy Baddam Krishna Sai Kumar Addepalli
Date: June 26, 2020 Managing Director Whole Time Director (Operations)
DIN: 00790139 DIN: 03601692

58
 Corporate Overview Statutory Reports Financial Statements

ANNEXURE-D
DIVIDEND DISTRIBUTION POLICY

1. INTRODUCTION with the provisions of Sections 123 to 128 of the Act. Pursuant
to the provisions of Section 123 of the Act, the Board shall
The Securities Exchange Board of India (SEBI) on July 8, 2016 recommend dividend for any financial year subject to the
has notified the SEBI (Listing Obligations and Disclosure following:
Requirements) (Second Amendment) Regulations, 2016
(Regulations).The Securities and Exchange Board of India (a) out of the profits of the Company for that year arrived after
vide SEBI (Listing Obligations and Disclosure Requirements) providing for depreciation; or
(Second Amendment) Regulations, 2016, introduced
(b) out of the profits of the Company for any previous
Regulation 43A in the Securities and Exchange Board of India
financial year(s) arrived at after providing for depreciation
(Listing Obligations and Disclosure Requirements) Regulations,
and remaining undistributed; or
2015, which requires top five hundred listed entities based
on market capitalisation (calculated as on March 31 of every (c) out of both (a) and (b).
financial year) to formulate a dividend distribution policy, which
shall be disclosed in their annual reports and on their websites. A. PARAMETERS AND FACTORS FOR DECLARATION OF
DIVIDEND
As per Regulation 43A of SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015, APOLLO The Board shall consider the following various
MICRO SYSTEMS LIMITED has voluntarily adopted Dividend circumstances like current year’s profit, future outlook,
Distribution policy at its Board of Directors Meeting held on reinvestment opportunities of the Company, tax
24th November 2017 being the effective date of policy. benefits, Company’s present and future performance
for declaration and payment of dividend. The dividend
Objective payout decision of the Board depends upon the following
financial parameters, internal and external factors:
The intent of the Policy is to broadly specify the external and
internal factors including financial parameters that shall be Financial parameters and Internal Factors:
considered while declaring dividend and the circumstances
under which the shareholders of the Company may or may i. Operating cash flow of the Company;
not expect dividend and how the retained earnings shall be
ii. Profit earned during the year;
utilized, etc.
iii. Profit available for distribution;
The Board of Directors (Board) may consider declaration of
interim dividend depending upon the cash flow situation of iv. Accumulated Profits;
the Company. The dividend distribution shall be as per the v. R & D Expenditure
recommendations of the Board and shall always be decided
at an annual general meeting of shareholders in case of final vi. Free Reserves;
dividend. Depending on the long term growth strategy of the vii. Earnings Per Share (EPS);
Company and the prevailing circumstances, the Board may
viii. Working capital requirements;
consider a higher dividend payout ratio, while trying to ensure
that sufficient funds are retained for growth of the Company. ix. Capital expenditure requirement;

x. Business expansion and growth;

2. POLICY
xi. Likelihood of crystalization of contingent liabilities, if any;
Declaration and payment of Dividend In compliance with
xii. Up gradation of technology and physical infrastructure;
Section 51 of the Act, the Company shall pay dividend
proportionately, i.e., in proportion to the amount paid-up on xiii. Creation of contingency fund;
each share. Dividend for a financial year shall be paid after xiv. Acquisition of business;
the annual financial statements of the Company are finalised
and the amount of distributable profits is available. The xv. Cost of Borrowing; and
declaration and payment of dividend shall be in accordance xvi. Past dividend payout ratio / trends.

59
 APOLLO MICRO SYSTEMS LIMITED Annual Report 2019-20

External Factors: D. UTILIZATION OF THE RETAINED EARNINGS

i. Economic environment; The Board may retain its earnings in order to make better
use of the available funds and increase the value of the
ii. Capital markets;
stakeholders in the long run. The decision of utilization of
iii. Global conditions; the retained earnings of the Company shall be based on
the following factors:
iv. Statutory provisions and guidelines; and

v. Dividend payout ratio of competitors. • Market expansion plan;

• Infrastructure enhancement;
B. CIRCUMSTANCES UNDER WHICH THE SHAREHOLDERS
• Modernization plan;
OF THE COMPANY MAY EXPECT DIVIDEND
• Diversification of business;
The decision regarding dividend pay-out is a crucial • Long term strategic plans;
decision as it determines the amount of profit to be
• Replacement of capital assets;
distributed among shareholders of the Company and the
amount of profit to be retained in business. The decision • Where the cost of debt is expensive;
seeks to balance the dual objectives of appropriately • Dividend payment; and
rewarding shareholders through dividends and retaining • Such other criteria as the Board may deem fit from
profits in order to maintain a healthy capital adequacy time to time.
ratio to support future growth. The Board of Directors
of the Company will assess the Company’s financial E. MANNER OF DIVIDEND PAYOUT
requirements, including present and future organic and
inorganic growth opportunities and other relevant factors In case of final dividend: i. Recommendation, if any, shall
and declare Dividend in any financial year. The Dividend be done by the Board, usually in the Board meeting that
including Interim Dividend for any financial year shall considers and approves the annual financial statements,
normally be paid out of the Company profits for that year. subject to approval of the shareholders of the Company.
This will be arrived at after providing for depreciation in ii. The dividend as recommended by the Board shall be
accordance with the provisions of the Companies Act, approved/declared at the Annual General Meeting of the
2013. If circumstances require, the Board may also declare Company. iii. The payment of dividends shall be made
dividend out of accumulated profits and free reserves within the statutorily prescribed period from the date of
of any previous financial year(s) in accordance with declaration, to those shareholders who are entitled to
provisions of the Companies Act, 2013 and Regulations, receive the dividend on the record date/book closure
as applicable. period, as per the applicable law. In case of interim
dividend: i. Interim dividend, if any, shall be declared by
C. CIRCUMSTANCES UNDER WHICH THE the Board. ii. Before declaring interim dividend, the Board
SHAREHOLDERS MAY NOT EXPECT DIVIDEND shall consider the financial position of the Company that
allows the payment of such dividend. iii. The payment of
The shareholders of the Company may not expect dividends shall be made within the statutorily prescribed
dividend in the following circumstances, subject to period from the date of declaration to the shareholders
discretion of the Board of Directors: entitled to receive the dividend on the record date, as
per the applicable laws. iv. In case no final dividend is
i. Proposed expansion plans requiring higher capital
declared, interim dividend paid during the year, if any,
allocation;
will be regarded as final dividend in the Annual General
ii. Decision to undertake any acquisitions, amalgamation, Meeting.
merger, joint ventures, new product launches etc.
which requires significant capital outflow; F. PARAMETERS TO BE ADOPTED WITH REGARD TO
VARIOUS CLASSES OF SHARES
iii. Requirement of higher working capital for the
purpose of business of the Company; and Since the Company has issued only one class of equity
shares with equal voting rights, all the members of the
iv. In the event of loss or inadequacy of profit.
Company are entitled to receive the same amount of

60
 Corporate Overview Statutory Reports Financial Statements

dividend per share. The Policy shall be suitably modified which makes any of the provisions of this Policy inconsistent
at the time of issue of any new class of shares depending with the Act or such other regulations, then the provisions of
upon the nature and guidelines thereof. the Act or such other regulations would prevail over this Policy
and the relevant provisions contained in this Policy would be
modified accordingly in due course to make it consistent with
3. NON APPLICABILITY OF POLICY
applicable laws. Any such amendments shall be disclosed
The Policy shall not apply to: along with the rationale for the same in the Annual Report and
on the website of the Company.
• Determination and declaration of dividend on preference
shares, as and when issued by the Company, as the same will
5. DISCLOSURES
be as per the terms of issue approved by the shareholders;

• Issue of Bonus Shares by the Company; and The Dividend Distribution Policy shall be disclosed in the
Annual Report and on the website of the Company i.e. at
• Buyback of Securities. [Link] under section “Investors”. The website
link is [Link]
The Policy is not an alternative to the decision of the Board for
[Link]
recommending dividend, which is made every year after taking
into consideration all the relevant circumstances enumerated
hereunder or other factors as may be decided as relevant by 6. DISCLAIMER
the Board.
This document does not solicit investments in the Company’s
securities and further is not an assurance of guaranteed
4. POLICY REVIEW AND AMENDMENTS returns (in any form), for investments in the Company’s equity
shares.
In case of any subsequent changes in the provisions of the Act
or Regulations or Income Tax Act, 1961 or any other regulations

61
 APOLLO MICRO SYSTEMS LIMITED Annual Report 2019-20

ANNEXURE-E
DISCLOSURE WITH RESPECT TO APOLLO EMPLOYEES STOCK OPTIONS SCHEME – 2018 (“ESOS – 2018”) OF
THE COMPANY AS AT MARCH 31, 2020

Sr. Particulars ESOS-2018

No

A. Disclosures in terms of the relevant Indian No disclosure for the year under review
Accounting Standards, as prescribed from time to time
B. Diluted Earnings Per Share (EPS) on issue of Shares pursuant to all the N.A
schemes covered under the regulations shall be disclosed in accordance
with Indian Accounting Standard 33, as prescribed from time to time
C. (i) Description and general terms and conditions of ESOS
(a) Date of shareholder’s approval December 26, 2018
Shareholders’ approval was obtained through Postal
Ballot Process.
(b) Total number of options approved under ESOS 10,00,000 (Ten Lakh Only)
(c) Vesting requirements Options granted under ESOS – 2018 would vest not
less than 1 year and may spread over a period of 4 years
from the Grant Date of such Options. The Nomination
and Remuneration committee is empowered to
implement and decide the vesting schedule to suit the
needs of the organization from time to time.
(d) Exercise price or pricing formula To be decided upfront at the time of Grant of Options
subject to a minimum price of par value.
(e) Maximum term of options granted 5 years from the respective date of vesting of Options
(f) Source of shares (primary, secondary or combination) Secondary Market Acquisition
(g) Variation in terms of options None
(ii) Method used to account for ESOS - Intrinsic or fair value Fair Value
(iii) Where the company opts for expensing of the options using the N.A
intrinsic value of the options, the difference between the employee
compensation cost so computed and the employee compensation
cost that shall have been recognized if it had used the fair value of the
options shall be disclosed. The impact of this difference on profits and
on EPS of the company shall also be disclosed.
(iv) Option movement during the financial year ended on March 31, 2020
Number of options outstanding at the beginning of the period 5,000 (Five Thousand Only)
Number of options granted during the year Nil
Number of options forfeited / lapsed during the year Nil
Number of options vested during the year Nil
Number of options exercised during the year Nil
Number of shares arising as a result of exercise of options Nil
(v) Weighted-average exercise prices and weighted-average fair values of
options shall be disclosed separately for options whose exercise price
either equals or exceeds or is less than the market price of the stock.

62
 Corporate Overview Statutory Reports Financial Statements

Sr. Particulars ESOS-2018

No

(vi) Employee wise details (name of employee, designation, number of

}
options granted during the year, exercise price) of options granted to -
(a) senior managerial personnel;
(b) any other employee who receives a grant in any one year of option
amounting to 5% or more of option granted during that year; and
During the Year under review
c) identified employees who were granted option, during any one no Grant of options were made
year, equal to or exceeding 1% of the issued capital (excluding
outstanding warrants and conversions) of the company at the time
of grant.
(vii) A description of the method and significant assumptions used during During the year under review no grant of options
the year to estimate the fair value of options including the following were made, hence no value of options determined.
information:
(a) the weighted-average values of share price, exercise price, N.A
expected volatility, expected option life, expected dividends, the
risk-free interest rate and any other inputs to the model;
(b) the method used and the assumptions made to incorporate the N.A
effects of expected early exercise;
(c) how expected volatility was determined, including an explanation N.A
of the extent to which expected volatility was based on historical
volatility; and
(d) whether and how any other features of the option grant were N.A
incorporated into the measurement of fair value, such as a market
condition.

Details of the Company’s Employee’s Trust: Apollo Employees Foundation (“Trust”)

The details inter-alia, in connection with transactions made by the Trust meant for the purpose of administering the ESOS - 2018 are
as under:

(i) General information

Sr. Particulars Details

No

1 Name of the Trust Apollo Employees Foundation

2 Details of the Trustee(s) 1. Srisailam Aerpula, Managing Trustee
2. Shiva Shankar Rampally, Trustee
3. Varsha Jain, Trustee
3 Amount of loan disbursed by company, during the year Nil
4 Amount of loan outstanding (repayable to company) as at the end of Rs 6,05,000 (Rupees Six Lakh Five Thousand only)
the year
5 Amount of loan, if any, taken from any other source for which company Nil
/ any company in the group has provided any security or guarantee
6 Any other contribution made to the Trust during the year Nil

63
 APOLLO MICRO SYSTEMS LIMITED Annual Report 2019-20

(ii) Brief details of transactions in shares by the Trust

Sr. Particulars Details

No

1 Number of shares held at the beginning of the year 5,000 Equity shares (Five Thousand Only)
2 Number of shares acquired during the year through (i) primary Nil
issuance (ii) secondary acquisition, also as a percentage of paid up
equity capital as at the end of the previous financial year, along with
information on weighted average cost of acquisition per share
3 Number of shares transferred to the employees / sold along with the Nil
purpose thereof;
4 Number of shares held at the end of the year. 5,000 Equity shares (Five Thousand Only)

iii) In case of secondary acquisition of shares by the Trust

Sr. Number of shares As a percentage of paid-up equity capital as at the end of the year immediately
No preceding the year in which shareholders’ approval was obtained

1 Held at the beginning of the year 5,000 (Five Thousand Only) & 0.02%
2 Acquired during the year Nil
3 Sold during the year Nil
4 Transferred to the employees during the year Nil
5 Held at the end of the year 5,000 (Five Thousand Only) & 0.02%

64
 Corporate Overview Statutory Reports Financial Statements

ANNEXURE-F
PARTICULARS OF REMUNERATION AND OTHER DISCLOSURES

A. Details pertaining to remuneration as required under section 197(12) of the Companies Act, 2013 read with rule 5(1) of the
Companies (Appointment and Remuneration of managerial personnel) Rules, 2014.

The ratio of the remuneration of each Director to the Median Remuneration of the Employees (MRE) of the Company and the percentage
increase in remuneration of each Director and Key Managerial Personnel (KMP), for the financial year 2019-20 are as under:

Sl. Name Designation Increase/ Ratio of

No. (Decrease) % remuneration of
each Director to MRE

1. Karunakar Reddy Baddam Managing Director 100 79.67

2. Venkata Siva Prasad Chandrapati Whole Time Director (Technical) Nil 14.25
3. Krishna Sai Kumar Addepalli Whole Time Director (Operations) 33.33 14.25
4. Raghupathy Goud Theegala Independent Director Nil N.A
5. Sri Lakshmi Reddy Vangeti# Non- Executive Director Nil N.A
6. Karunasree Samudrala Independent Director Nil N.A
7. Sudarshan Chiluveru Chief Financial Officer 22.72 N.A
8. Chaitanya Siva Shankar Vitta Company Secretary & Compliance 80 N.A
Officer
# Voluntarily waived to receive the sitting fees and commission.

1. The ratio of the remuneration of each director to the median remuneration of the employees of the company for the period
under review in provided in the above table. Independent Directors were paid only sitting fees for attending meeting on Board/
Committees during the financial year under review. Hence, their ratio to MRE has been shown as Not Applicable.

2. The Median Remuneration of Employees was Rs 1,67,700/- per annum for the FY 2019-20. As compared to the financial year 2018-
19 MRE has been reduced by 3.35%

3. The Number of Permanent employees on the Rolls of the company as on March 31, 2020 were 285.

4. average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial
year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there
are any exceptional circumstances for increase in the managerial remuneration:

Average increase in remuneration of employees excluding KMPs: 16.42%

Average increase in remuneration of KMPs: 59.01%

KMP salary increases are decided based on the Company’s performance, individual performance, inflation, prevailing industry
trends and benchmarks.

5. The Company affirms that remuneration is as per the Remuneration Policy of the Company.

65
 APOLLO MICRO SYSTEMS LIMITED Annual Report 2019-20

ANNEXURE-G
SECRETARIAL AUDIT REPORT

To
The Members
APOLLO MICRO SYSTEMS LIMITED
CIN L72200TG1997PLC026556
Registered office:
Plot No 128/A, Road No. 12, BEL Road,
IDA Mallapur, Uppal Mandal,
Hyderabad, Rangareddi, Telangana, India – 500076

My report of even date, for the financial year 2019-20 is to be read along with this letter.

Management’s Responsibility:-

1. It is the responsibility of the management of the Company to maintain Secretarial records, devise proper systems to ensure compliance
with the provisions of all applicable laws and regulations and to ensure that the systems are adequate and operate effectively.

Auditor’s Responsibility:-

2. My responsibility is to express an opinion on these secretarial records, standards and procedures followed by the Company with
respect to secretarial compliances.

3. I believe that audit evidence and information obtained from the Company’s management is adequate and appropriate for us to provide
a basis of our opinion.

4. Wherever required, I have obtained the Management representation about the Compliance of laws, rules and regulations and
happening of events, etc.

Disclaimer:

5. The Secretarial Audit Report is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with
which the management has conducted the affairs of the Company.

6. I have not verified the correctness and appropriateness of financial records and Books of Accounts of the Company

Sd/-
Datla Venkatesh
Place: Hyderabad CP. No.: 14074
Date: June 26, 2020 UDIN: A036504B000388493

66
 Corporate Overview Statutory Reports Financial Statements

FORM NO MR-3
SECRETARIAL AUDIT REPORT
For the Financial Year Ended 31 March, 2020
[Pursuant to Section 204 (1) of the Companies Act, 2013 and Rule No. 9 of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014]

To
The Members
APOLLO MICRO SYSTEMS LIMITED
CIN L72200TG1997PLC026556
Registered office:
Plot No 128/A, Road No. 12, BEL Road,
IDA Mallapur, Uppal Mandal,
Hyderabad, Rangareddi, Telangana, India – 500076.

I have conducted the secretarial audit of the compliance of Commercial Borrowings; [Applicable only to the extent of
applicable statutory provisions and the adherence to good Foreign Direct Investment]
corporate practices by APOLLO MICRO SYSTEMS LIMITED
(hereinafter called “the Company”). Secretarial Audit was conducted v. The following Regulations and Guidelines prescribed under
in a manner that provided us a reasonable basis for evaluating the the Securities and Exchange Board of India Act, 1992 (SEBI
corporate conducts/statutory compliances and expressing our Act) and as amended from time to time:-
opinion thereon.
a) The Securities and Exchange Board of India (Substantial
Based on my verification of the Company’s books, papers, minute Acquisition of Shares and Takeovers) Regulations, 2011;
books, forms and returns filed and other records maintained by the
b) The Securities and Exchange Board of India (Prohibition of
Company and also the information provided by the Company, its
Insider Trading) Regulations, 2015;
officers, agents and authorized representatives during the conduct
of secretarial audit, I, hereby report that in my opinion, the Company c) The Securities and Exchange Board of India (Issue of
has, during the audit period covering the financial year ended 31st Capital and Disclosure Requirements) Regulations, 2018;
March, 2020 complied with the statutory provisions listed here
under and also that the Company has proper Board processes and d) The Securities and Exchange Board of India (Listing
compliance mechanism in place to the extent, in the manner and Obligations and Disclosure Requirements) Regulations,
subject to the reporting made hereinafter: 2015;

I have examined the books, papers, minute books, forms and returns e) The Securities and Exchange Board of India (Registrars
filed and other records made available to me and maintained by the to an Issue and Share Transfer Agents)Regulations, 1993
Company for the financial year ended 31st March, 2020 according regarding the Companies Act and dealing with client;
to the provisions of:
f) The Securities and Exchange Board of India (Share Based
i. The Companies Act, 2013 (the Act) and the rules made Employee Benefits) Regulations, 2014;
thereunder;
g) The other regulations of the Securities and Exchange
ii. The Securities Contract (Regulation) Act, 1956 (SCRA) and the Board of India as may be applicable to the Company.
rules made thereunder;
vi. The Management of the Company has identified and confirmed
iii. The Depositories Act, 1996 and the Regulations and Byelaws the following laws as applicable to the Company:-
framed thereunder;
i. The Payment of Wages Act, 1936
iv. Foreign Exchange Management Act, 1999 and the rules ii. The Minimum Wages Act, 1948
and regulations made thereunder to the extent of Foreign iii. The Employees Provident Fund and Misc. Provisions Act,
Direct Investment, Overseas Direct Investment and External 1952

67
 APOLLO MICRO SYSTEMS LIMITED Annual Report 2019-20

iv. The Employees State Insurance Act,1948 I Further report:-

v. The Income Tax Act, 1961
• The Board of Directors of the Company is duly constituted with
vi. The Payment of Gratuity Act,1972 proper balance of Executive Directors, Non-Executive Directors,
vii. The Finance Act , 1944 Independent Directors and a Woman Director. The Board’s
viii. The Insurance Act, 1938 [As Amended By Insurance composition is in compliance with the provisions of the Act.
(Amendment) Act, 2002]
• Adequate notice is given to all directors to schedule the
ix. The Payment of Bonus Act, 1965 Board Meetings, agenda and detailed notes on agenda were
x. The Negotiable Instruments Act 1881 sent seven days in advance and/or obtained/ratified in the
xi. The Water (Prevention & Control of Pollution) Act 1974 and subsequent meetings for shorter notices, if any, and a system
rules there under exists for seeking and obtaining further information and
clarifications on the agenda items before the meeting and for
xii. The Air (Prevention & Control of Pollution) Act 1981 and
meaningful participation at the meeting.
rules there under
xiii. The Environment (Protection) Act, 1986 • All the decisions of the Board and Committees thereof were
xiv. The Customs Act, 1962 carried out with requisite majority.

xv. The Factories Act, 1948 I Further report that based on the review of compliance mechanism
xvi. The Workmen’s Compensation Act, 1923 established by the company and on the basis of the compliance
xvii. The Telangana Shops And Establishments Act, 1988 certificates issued by the Managing Director and taken on record
by the Board of Directors at their meeting(s), I am of the opinion
xviii. The Goods and Services Tax Act, 2016
that there are adequate systems and processes in place in the
xix. The Trade Marks Act, 1999 company which is commensurate with size and operations of the
xx. The Sexual Harassment Of Women At Workplace Company to monitor and ensure compliance with applicable laws,
(Prevention, Prohibition And Redressal) Act, 2013 rules, regulations and guidelines:-
xxi. The Foreign Trade Policy 2009-14
• As informed, the company has responded appropriately to
I have also examined compliance with the applicable clauses of notices received from the statutory/regulatory authorities
the following:- including initiating actions for corrective measures, wherever
found necessary.
I. Secretarial Standards with respect to Board Meetings (SS-
1) and General Meetings (SS-2) issued by The Institute of I further report that during the audit period there were no specific
Company Secretaries of India events/actions having a major bearing on Company’s affairs in
pursuance of the above referred laws, rules, regulations, standards, etc.
II. The Listing Agreements entered into by the Company with the
BSE Limited and National Stock Exchange of India Limited; Sd/-
Datla Venkatesh
During the period under review, the Company has complied with the Place: Hyderabad CP. No.: 14074
provisions of Act, Rules, Regulations, Guidelines, Standards, etc. Date: June 26, 2020 UDIN: A036504B000388493

68
 Corporate Overview Statutory Reports Financial Statements

ANNEXURE-H

Report on Corporate GOVERNANCE

CORPORATE GOVERNANCE PHILOSOPHY The Company is in compliance with the conditions of corporate
governance as required under the SEBI (Listing Obligations and
Transparency and accountability are the two basic tenets of Disclosures Requirements) Regulations, 2015 & amendment
Corporate Governance which are integral part of our business and thereof (“SEBI (LODR) Regulations, 2015”), as applicable.
endeavour to ensure fairness for every stakeholder- our customers,
investors, vendors and the communities wherever we operate. At
APOLLO, we feel proud to belong to a Company whose visionary
BOARD OF DIRECTORS
founders laid the foundation stone for good governance long back a) Composition of Board
and made it an integral principle of the business. We always seek to
ensure that our performance is driven by integrity, value and ethics. The Board of Directors of the Company is the highest
Responsible corporate conduct is integral to the way we do our governance authority within the management structure of the
business. Company. Further, the Board of Directors of the Company is
totally committed to the best practices within the Company for
We, at APOLLO, ensure that we evolve and follow the corporate effective corporate governance practices. The Board regularly
governance guidelines and best practices. The norms and reviews and updates corporate governance practices to
processes of Corporate Governance reflect our commitment to accommodate developments within the market place in
disclose timely and accurate information regarding our financial general and the business in particular.
and operational performance, as well as the Company’s leadership
and governance structure. The Company has an active, experienced and a well-informed
Board. The Board along with its Committees undertakes
Our Board is responsible for shaping the long-term vision and its fiduciary duties keeping in mind the interests of all its
policy approach to steadily elevate the quality of governance in stakeholders and the Company’s Corporate Governance
our organisation. At APOLLO, we firmly believe that an active, philosophy.
well-informed and independent Board is necessary to ensure the
highest standards of Corporate Governance to bring objectivity The Company has a balanced Board with optimum
and transparency in the Management. This belief is reflected combination of Executive and Non-Executive Directors,
in our governance practices, under which we strive to maintain including independent professionals. The Board currently
an effective, informed and independent Board. We keep our comprises of 6 (six) Directors. The Chairman of the Company is
governance practices under continuous review and benchmark Non Executive Independent Director. Out of the total strength,
ourselves to best practices across the globe. 2 (two) (i.e. 1/3rd) are Non Executive Independent Directors
(including one woman Independent Director). The composition
The Company believes that sustainable and long term growth of the Board of Directors of the Company is in conformity with
of every stakeholder depends upon the judicious and effective the SEBI (LODR) Regulations, 2015 and the Companies Act,
use of available resources and consistent endeavour to achieve 2013 (‘the Act’).
excellence in business along with active participation in the growth
of society and contribution in economic growth.

69
 APOLLO MICRO SYSTEMS LIMITED Annual Report 2019-20

The composition and category of Directors on Board of the Company and directorships or committee memberships across other
Companies are as follows:
I. Composition of Board of Directors
Sl. Name of the Director and DIN Designation Date of Date of No of Number of
No. appointment cessation Directorship Chairperson /
in the in other memberships in
current term Public Limited Audit/ Stakeholder
Companies Committee(s)
(Name of the in other Public
Company)# Limited Companies
(Name of the
Company) ##

1 Karunakar Reddy Baddam Managing Director 01-04-2017 - - -

(DIN: 00790139)
2 Venkata Siva Prasad Chandrapati Executive Director 21-08-2017 - - -
(DIN: 03601703)
3 Krishna Sai Kumar Addepalli Executive Director 21-08-2017 - - -
(DIN: 03601692)
4 Sri Lakshmi Reddy Vangeti Non-Executive - 01-04-1999 - - -
(DIN: 02757567) Non Independent
Director
5 Raghupathy Goud Theegala Non-Executive 21-08-2017 - - -
(DIN: 07785738) - Independent
Director CUM
Chairman
6 Karunasree Samudrala Non-Executive 29-05-2018 - 1 (Independent 1 (Roopa Industries
(DIN: 06960974) - Independent Director- Roopa Limited)
Director Industries Limited)

# excludes directorships in associations, private limited companies, LLP, foreign seeks re-appointment at the AGM of shareholders. Mrs. Sri
companies, companies registered under Section 8 of the Act, Government Bodies
Lakshmi Reddy Vangeti (DIN: 02757567) will retire at the
and Alternate Directorships
ensuing AGM and being eligible, seeks re-appointment.
## Represents Chairpersonships/Memberships of Audit and Stakeholders
Relationship Committees in listed/debt-listed/unlisted public limited companies The Board has recommended her re-appointment.

None of the Directors on the Board is a Director in more than 8 listed c) Board Meetings, Procedure & Attendance
entities. None of the Directors held directorship in more than 20
The Board meets at regular intervals to discuss and decide
Indian companies, with not more than 10 public limited companies.
on Company / business policy and strategy apart from other
None of the Directors on the Board is a Member of more than 10
Board businesses. The Board / Committee Meetings notices
Committees and Chairperson of more than 5 Committees across all
is circulated to the Board and the Committee members well in
the public companies in which he/she is a Director. All the Directors
advance, in accordance with the statutory provisions. Agenda
have made the requisite disclosures regarding committee positions
papers are sent to the Directors generally one week before the
held by them in other companies.
meeting to facilitate meaningful and focused discussions at the
b) Appointment/Re-appointment of Director(s) meeting. Where it is not practicable to attach any document
to the Agenda, the same is tabled before the meeting with
• During the financial year 2019-20 (“year under review”), specific reference to this effect in the Agenda.
there has been no new appointment on the Board of the
Company. In order to transact some urgent business, which may come up
after circulation agenda papers, the same is placed before the
• As per the provisions of the Companies Act, 2013, one- Board by way of Special Agenda item.
third of the Directors retires by rotation and, if eligible,

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 Corporate Overview Statutory Reports Financial Statements

During the year under review, the Board met 5 (five) times. Details of Board meetings held along with directors attendance is provided
in the table below. Further the maximum interval between any two meetings was well within the maximum allowed gap of 120 days.
Directors attending the meeting actively participated in the deliberations at these meetings. The 22nd (Twenty Second) Annual General
Meeting (AGM) of the Company was held on Monday, September 30, 2019.

Sl. Name of the Director and DIN Designation Attendance at the Meeting held on No. of Attendance at
No May 17, Aug 14, Oct 18, Nov 14, Feb 01, meetings the 22nd AGM
2019 2019 2019 2019 2020 attended (Sep,30, 2019)

1 Karunakar Reddy Baddam Managing Director √ √ √ Leave of √ 4 √

(DIN: 00790139) Absence
2 Venkata Siva Prasad Chandrapati Executive Director √ √ √ √ √ 5 √
(DIN: 03601703)
3 Krishna Sai Kumar Addepalli Executive Director √ √ √ √ √ 5 √
(DIN: 03601692)
4 Sri Lakshmi Reddy Vangeti Non-Executive - Non √ √ √ √ Leave of 4 Leave of
(DIN: 02757567) Independent Director Absence Absence
5 Raghupathy Goud Theegala Non-Executive √ √ √ √ √ 5 √
(DIN: 07785738) -Independent Director
CUM Chairman
6 Karunasree Samudrala Non-Executive - √ √ √ √ √ 5 √
(DIN: 06960974) Independent Director

In case of business exigencies or urgency of matters, resolutions Directors have confirmed that they are not aware of any
are also passed by way of circulation. The resolutions passed circumstances or situations which exist or may be reasonably
by the Circulation are ratified by the Board in the immediately anticipated that could impair or impact their ability to discharge
succeeding meeting of the Board, held after the passing of their duties. In the opinion of the Board, the Independent
resolution by circulation. Directors fulfill the conditions of independence specified
in the Act and the SEBI (LODR) Regulations, 2015 and are
d) Independent Directors Meeting independent of the management. The Board has expressed its
satisfaction to the performance of the Independent Directors
During the year under review, the meeting of Independent
and appreciated the level of participation of Independent
Directors of the Company was held on January 30, 2020
Directors. The maximum tenure of the Independent Directors
where at the following items as enumerated under Schedule
is in compliance with the Companies Act, 2013 (“Act”).
IV to the Companies Act, 2013 and Regulation 25 of the SEBI
(LODR) Regulations, 2015 were discussed: f) Disclosure of relationships between directors inter-se;

a) Review of performance of the Board and Committees as a Except Mr. Karunakar Reddy Baddam, Managing Director and
whole; Mrs. Sri Lakshmi Reddy Vangeti inter se relationship none of
the other Directors are related.
b) Review of performance of the Chairperson of the Company
taking into account the views of Executive Directors and g) Matrix setting out Skills/ Expertise/ Competence as Identified
Non-Executive Directors; Non-Independent Directors by the Board
(Executive & Non- Executive)
The composition of the Board comprises of Directors who
c) Assessment of the quality, quantity and timeliness of flow collectively have the skills, knowledge and experience to
of information between the Company management and effectively govern and direct the organisation. The Members of
the Board that is necessary for the Board to effectively the Board are eminent persons with the considerable professional
and reasonably perform their duties. expertise and experience. Detailed profile of the Directors is
available on the Company’s website [Link].
e) Board Independence
The core skills/ competencies identified by the Board, as
All the Independent Directors have confirmed that they meet
required in the context of the Company’s business are Corporate
the criteria of independence as prescribed under Section 149(6)
governance & management, business leadership, financial
of the Act, rules made there under read with Regulation 16(1)
expertise & Banking, marketing & business development,
(b) of the SEBI (LODR) Regulations, 2015. In terms of Regulation
understanding & experience in relation to company’s business
25(8) of the SEBI (LODR) Regulations, 2015, the Independent
and technology development& innovations.

71
 APOLLO MICRO SYSTEMS LIMITED Annual Report 2019-20

In the table below, the areas of expertise/ competencies of individual Director’s are highlighted:

Name of Director Area of skills/ expertise

Corporate Business Financial Marketing Understanding Technology
Governance & Leadership Expertise/ & Business & Experience Development &
Management Banking Development in Relation to Innovations
Company’s Business

Mr. Karunakar Reddy Baddam √ √ √ √ √ √

Mr. Venkata Siva Prasad √ - - - √ √
Chandrapati
Mr. Krishna Sai Kumar Addepalli √ √ √ √ √ √
Mrs. Sri Lakshmi Reddy Vangeti √ √ - - √ -
Mr. Raghupathy Goud Theegala √ √ √ - √ -
Mrs. Karunasree Samudrala √ √ √ - √ -

Note - Each Director may possess varied combinations of operates, business model etc. The details of familiarization
skills/ expertise within the described set of parameters and it programmes arranged for the Independent Directors have
is not necessary that all Directors possess all skills/ expertise been disclosed on the website of the company [Link]-
listed therein. [Link]

h) Information provided to the Board j) Detailed reasons for the resignation of the Independent
Director before the expiry of his tenure and confirmation
The Board has unrestricted access to all Company related
information including that of our employees. Directors have During the year under review, none of the Independent
separate and independent access to the officers of the Directors tendered their resignation from the Board of the
Company. The Board was presented with the information Company.
broadly on all suggested matters in terms of Regulation 17 of
the SEBI (LODR) Regulations, 2015.
BOARD COMMITTEES
The Company has an effective post Board meeting follow
The Board Committees play a crucial and vital role in ensuring
up procedure. Action taken report on the decisions taken in
sound Corporate Governance practices and have been constituted
a meeting is placed at the immediately succeeding meeting
as per the requirement of the Companies Act 2013 and SEBI (LODR)
for information of the Board. The Board has established
Regulations, 2015. The Board Committees are set up under the
procedures to periodically review Compliance pertaining to
formal approval of the Board to carry out clearly defined roles. The
all laws applicable to the Company as well as steps taken
minutes of the meetings of all Committees are placed before the
by the Company to rectify instances of non-compliance, if
Board for noting. The Board Committees request special invitees to
any. The Board takes note of the quarterly/ half yearly/ yearly
join the meeting, as and when considered appropriate.
compliances made under the SEBI (LODR) Regulations, 2015,
from time to time. Apart from the constitution of mandatory Committees, the Board
also formed the non- mandatory committees to handle and take
i) Familiarization Programme
decisions, with respect to the routine nature business activities at
The Company has a familiarisation programme for its appropriate times and effectively, in the ambit of their scope.
Independent Directors. The objective of the programme
The Committees of the Board are as follows:
is to familiarise the Independent Directors to enable them
to understand the Company, its operations, business, a) Audit Committee
industry and environment in which it functions and the
b) Nomination and Remuneration Committee
regulatory environment applicable to it. In compliance with
c) Stakeholders Relationship Committee
the requirements of the SEBI (LODR) Regulations, 2015,
the Company has put in place a familiarization programme d) Corporate Social Responsibility Committee
for the Independent Directors to familiarize them with their e) Risk Management Committee
roles, rights and responsibility as Directors, the working of f) Executive Committee of Board of Directors and CFO
the Company, nature of the industry in which the Company

72
 Corporate Overview Statutory Reports Financial Statements

a) Audit Committee vi. disclosure of any related party transactions;

The Company has adequately qualified and independent Audit vii. modified opinion(s) in the draft audit report;
Committee. The Audit Committee acts as a link among the
Management, the Statutory Auditors, Internal Auditors and the 5. Reviewing, with the management, the quarterly financial
Board of Directors to oversee the financial reporting process statements before submission to the board for approval;
of the Company. The Audit Committee of the Company was
6. Reviewing, with the management, the statement of uses
constituted on August 26, 2017 and subsequently reconstituted
/ application of funds raised through an issue (public
from time to time to comply with statutory requirement.
issue, rights issue, preferential issue, etc.), the statement
The composition Audit Committee is as follows: of funds utilized for purposes other than those stated in
the offer document / prospectus / notice and the report
Sl. Name Category submitted by the monitoring agency monitoring the
No. utilization of proceeds of a public or rights issue, and
making appropriate recommendations to the board to
1. Karunasree Samudrala, Non-Executive -
take up steps in this matter;
Chairman Independent Director
2. Raghupathy Goud Non-Executive - 7. Reviewing and monitoring the auditor’s independence
Theegala, Member Independent Director and performance, and effectiveness of audit process;
3. Addepalli Krishna Sai Executive Director 8. Approval or any subsequent modification of transactions
Kumar, Member of the Company with related parties;
The Company Secretary & Compliance Officer of the Company 9. Scrutiny of inter-corporate loans and investments;
acts as the Secretary of the Committee.
10. Valuation of undertakings or assets of the Company,
The role of the audit committee shall include the following: wherever it is necessary;
1. Oversight of the Company’s financial reporting process and 11. Evaluation of internal financial controls and risk
the disclosure of its financial information to ensure that the management systems;
financial statement is correct, sufficient and credible;
12. Reviewing, with the management, performance of
2. Recommendation for appointment, remuneration and statutory and internal auditors, adequacy of the internal
terms of appointment of auditors of the Company; control systems;
3. Approval of payment to statutory auditors for any other 13. Reviewing the adequacy of internal audit function, if any,
services rendered by the statutory auditors; including the structure of the internal audit department,
staffing and seniority of the official heading the
4. Reviewing, with the management, the annual financial
department, reporting structure coverage and frequency
statements and auditor’s report thereon before submission
of internal audit;
to the board for approval, with particular reference to:
14. Discussion with internal auditors of any significant findings
i. matters required to be included in the director’s
and follow up there on;
responsibility statement to be included in the board’s
report in terms of clause (c) of sub-section (3) of 15. Reviewing the findings of any internal investigations by
Section 134 of the Companies Act, 2013; the internal auditors into matters where there is suspected
fraud or irregularity or a failure of internal control systems
ii. changes, if any, in accounting policies and practices
of a material nature and reporting the matter to the board;
and reasons for the same;
16. Discussion with statutory auditors before the audit
iii. major accounting entries involving estimates based
commences, about the nature and scope of audit as well
on the exercise of judgment by management;
as post-audit discussion to ascertain any area of concern;
iv. significant adjustments made in the financial
17. To look into the reasons for substantial defaults in
statements arising out of audit findings;
the payment to the depositors, debenture holders,
v. compliance with listing and other legal requirements shareholders (in case of non-payment of declared
relating to financial statements; dividends) and creditors;

73
 APOLLO MICRO SYSTEMS LIMITED Annual Report 2019-20

18. To review the functioning of the whistle blower mechanism; The Company Secretary & Compliance Officer of the Company
acts as the Secretary of the Committee.
19. Approval of appointment of chief financial officer after
assessing the qualifications, experience and background, The Committee meets periodically as and when required.
etc. of the candidate; Except executive directors, no other director draws
remuneration from the Company.
20. To review the compliance of the provisions of SEBI
(Prohibition of Insider Trading) Regulations, 2015 by the The terms of reference of the Nomination & Remuneration
Company and verifying that the systems for internal Committee, inter alia, includes the following:
control are adequate and are operating effectively, at
least once in a Financial Year.” 1. Formulation of the criteria for determining qualifications,
positive attributes and independence of a director and
21. Carrying out any other function as is mentioned in the recommend to the board of directors a policy relating
terms of reference of the audit committee. to, the remuneration of the directors, Key Managerial
Personnel and other employees;
Audit Committee’s composition and terms of reference are in
compliance with the provisions of Companies Act, 2013 and SEBI 2. The level and composition of remuneration is reasonable
(LODR) Regulations, 2015. During the year under review, the and sufficient to attract, retain and motivate directors of
Audit Committee met 5(five) times on May 15, 2019; May 17, 2019; the quality required to run the company successfully;
August 14, 2019; November 14, 2019; and February 01, 2020. The
details of member’s attendance at the Audit Committee Meetings 3. Formulation of criteria for evaluation of performance of
during the financial year 2019-20 are as under: independent directors and the board of directors;

4. Devising a policy on diversity of board of directors;

Name & Designation No of Meetings
attended 5. Identifying persons who are qualified to become directors
Karunasree Samudrala, Chairman 5 and who may be appointed in senior management in
accordance with the criteria laid down and recommend to
Raghupathy Goud Theegala, Member 5
the board of directors their appointment and removal;
Addepalli Krishna Sai Kumar, Member 5
6. To extend or continue the term of appointment of the
The meetings of Audit Committee are also attended by the Chief independent director, on the basis of the report of
Financial Officer, Company Secretary& Compliance Officer, performance evaluation of independent directors.
Statutory Auditors and Internal Auditor as special invitees. The
Board of Directors review and take note of the minutes of the The Nomination and Remuneration Committee’s composition
Audit Committee Meetings at its subsequent Board Meetings. and terms of reference are in compliance with the provisions
of Companies Act, 2013 and SEBI (LODR) Regulations, 2015.
b) Nomination and Remuneration Committee
During the year under review, the Nomination and
The Nomination and Remuneration committee of the Company Remuneration Committee met 2 (two) times on May 17, 2019;
was constituted on August 26, 2017 and subsequently and August 14, 2019
reconstituted from time to time to comply with statutory
requirement. The details of member’s attendance at the Nomination &
Remuneration Committee Meetings during the financial year
The Committee comprises of three Non- Executive Directors. 2019-20 are as follows:
The composition of Nomination & Remuneration Committee is
as follows: Name & Designation No of Meetings
attended
Sl. Name & Designation Category
No. Karunasree Samudrala, Chairman 2
Sri Lakshmi Reddy Vangeti, Member 2
1. Karunsree Samudrala, Non-Executive -
Chairman Independent Director Raghupathy Goud Theegala, Member 2

2. Sri Lakshmi Reddy Non-Executive – Non The meetings of Nomination and Remuneration Committee
Vangeti, Member Independent Director are also attended by the Company Secretary & Compliance
3. Raghupathy Goud Non-Executive - Officer.
Theegala, Member Independent Director

74
 Corporate Overview Statutory Reports Financial Statements

The Board of Directors review and take note of the minutes During the year under review, the Stakeholders Relationship
of the Nomination & Remuneration Committee Meetings at its Committee met once on May 02, 2019 to take note of the
subsequent Board Meetings. dematerialization request received from the shareholder.

Performance evaluation criteria for Independent Directors The details of member’s attendance at the Stakeholders
Relationship Committee Meetings during the financial year
The Nomination and Remuneration Committee have 2019-20 are as follows:
developed parameterized feedback forms as per Company’s
policy for evaluation of directors and key managerial personnel Name & Designation No of Meetings
and other employees, for the evaluation of the Independent attended
Directors of the Company.
Raghupathy Goud Theegala, Chairman 1
c) Stakeholders Grievance/ Relationship Committee Karunakar Reddy Baddam, Member 1

The Stakeholders Relationship Committee of the Company Venkata Siva Prasad Chandrapati, 1
was constituted on August 26, 2017. The composition of the Member
Stakeholders Relationship Committee is as follows:
The meetings of Stakeholders Relationship Committee are also
attended by the Company Secretary & Compliance Officer.
Sl. Name & Designation Category
No. The Board of Directors review and take note of the minutes
1. Raghupathy Goud Non-Executive - of the Stakeholders Relationship Committee Meetings at its
Theegala, Chairman Independent Director subsequent Board Meetings.

2. Karunakar Reddy Executive Director (a) Name of non-executive director heading the committee:
Baddam, Member Mr. Raghupathy Theegala- Non executive Director
3. Venkata Siva Prasad Executive Director
Chandrapati, Member (b) Name and designation of compliance officer: Mr. Chaitanya
Siva Shankar Vitta, Company Secretary acts as the Secretary
The Company Secretary & Compliance Officer of the Company for the Committee who is designated as Compliance Officer
act as the Secretary of the Committee. pursuant to SEBI (LODR) Regulations, 2015.

The terms of reference, powers and scope of the Stakeholders’ (c) The details of complaints received and resolved during
Relationship Committee of our Company include: the Financial Year ended March 31, 2020 are given in the
table below:
1. To look into the redressal of grievances of shareholders,
debenture holders and other security holders;
Complaints outstanding as on April 1, 2019 Nil
2. To investigate complaints relating to allotment of shares, Complaints received during the year Nil
approval of transfer or transmission of shares; ended March 31, 2020
Complaints resolved during the year Nil
3. To consider and resolve the grievances of the security
ended March 31, 2020
holders of the company including complaints related to
transfer of shares, non-receipt of balance sheet, non- Complaints pending as on March 31, 2020 Nil
receipt of declared dividends; and
Further, the other requests received from the shareholders
4. To carry out any other function as prescribed under the during the year under review were duly addressed.
SEBI (LODR) Regulations, 2015 as and when amended
d) Corporate Social Responsibility Committee
from time to time.
The Corporate Social Responsibility Committee of the
The Stakeholders Relationship Committee’s composition and
Company was constituted on February 24, 2017 and
terms of reference are in compliance with the provisions of
subsequently reconstituted from time to time to comply with
Companies Act, 2013 and SEBI (LODR) Regulations, 2015.
statutory requirement.

75
 APOLLO MICRO SYSTEMS LIMITED Annual Report 2019-20

The composition of the Corporate Social Responsibility The meetings of Corporate Social Responsibility Committee
Committee is as follows: are also attended by the Company Secretary & Compliance
Officer.
Sl. Name & Designation Category
No. The Board of Directors review and take note of the minutes of
the Corporate Social Responsibility Committee Meetings at its
1. Karunakar Reddy Executive Director
subsequent Board Meetings.
Baddam, Chairman
2. Raghupathy Goud Non-Executive- e) Risk Management Committee
Theegala, Member Independent Director
The Risk Management Committee of the Company was
3. Sri Lakshmi Reddy Non-Executive - Non constituted on February 24, 2017 and subsequently
Vangeti, Member Independent Director reconstituted from time to time to comply with statutory
requirement.
The Company Secretary & Compliance Officer of the Company
act as the Secretary of the Committee. The Composition of the Risk Management Committee of the
Company is as follows:
Terms of reference of the Committee includes the following:

1. To formulate and recommend to the Board, a Corporate Sl. Name & Designation Category
Social Responsibility Policy which shall indicate the No.
activities to be undertaken by the Company as specified 1. Venkata Siva Prasad Executive Director
in Schedule VII as amended from time to time; Chandrapati, Chairman

2. To recommend the amount of expenditure to be incurred 2. Karunakar Reddy Baddam Executive Director
on the activities referred to in clause (a) subject to the limit ,Member
provided under Section 135 of the Companies Act; 3. Karunasree Samudrala, Non- Executive-
Member Independent Director
3. To monitor the corporate Social Responsibility Policy of
our Company from time to time; The Company Secretary and Compliance Officer of the
Company act as the secretary of the Committee.
4. To institute a transparent monitoring mechanism for
implementation of the CSR projects or programs or The terms of reference and role of the Risk Management
activities undertaken by the company; Committee of our Company include the following:

5. Any other matter as the Corporate Social Responsibility 1. To recommend risk management plan to the Board for
Committee may deem appropriate after approval of the implementation;
Board of Directors or as may be directed by the Board of
Directors from time to time. 2. To monitor and review the risk management plan;

During the year under review, the Corporate Social 3. To lay down procedures to inform Board members about
Responsibility Committee met 2 (two) times on November 26, the risk assessment and minimization procedures;
2019; and March 18, 2020
4. To develop and implement the risk management policy
The details of member’s attendance at the Corporate Social for the company, identification therein of elements of risk,
Responsibility Committee Meetings during the financial year if any, which in the opinion of the Board may threaten the
2019-20 are as follows: existence of the company; and

5. To perform such other functions which are appropriate

Name & Designation No of Meetings
and necessary to manage the risk.
attended

Karunakar Reddy Baddam, Chairman 2 During the year under review, the Risk Management Committee
met once on February 01, 2020
Raghupathy Goud Theegala, Member 2
Sri Lakshmi Reddy Vangeti, Member 1

76
 Corporate Overview Statutory Reports Financial Statements

The details of member’s attendance at the Risk Management 179(3)(d) of the Companies Act 2013 be delegated to
Committee Meetings during the financial year 2019-20 are as this Committee subject to the following conditions:
follows:
a. The Subjected facility must be an existing facility.
Name & Designation No of Meetings
b. Only modifications in the facility can be done.
attended

Venkata Siva Prasad Chandrapati, 1 c. Aggregate Limits of such facilities can be

Chairman increased not more than the double of the
existing limits in one financial year. If the limit
Karunakar Reddy Baddam, Member 1
going to be increased is more than the double of
Karunasree Samudrala, Member 1 the existing then approval of Board is required.
The meeting of Risk Management Committee is also attended d. In respect of dealings between company and
by the Company Secretary & Compliance Officer. its bankers, the exercise by the Committee
the power specified herein shall mean the
The Board of Directors review and take note of the minutes of
arrangement made by the company with its
the Risk Management Committee Meeting at its subsequent
bankers for the borrowing of money by way of
Board Meeting.
overdraft or cash credit or otherwise and not the
f) Executive Committee of Directors& CFO actual day-to-day operation on overdraft, cash
credit or other accounts by means of which the
The Executive Committee of Directors and CFO (“Executive arrangement so made is actually availed of.
Committee”) has been constituted by the Board for routine
financial matters on November 01, 2018. The Committee e. The decision of the Chairman of the committee
functions within the ambit of the delegated authority by the is final irrespective of opposition raised by the
Board. The delegation of authority to the committee is in members of the committee.
accordance with the provisions of Section 179(3) (d) and
f. To open the new bank account and close the
proviso’s, explanations made there under read with the
non- operating bank accounts or the accounts
Companies (Meetings of Board and its Powers) Rules, 2014.
opened for specific purpose of the company
The Composition of the Executive Committee of the Company from time to time.(inserted w.e.f 14th August,
is as follows: 2019)

Sl. Name & Designation Directorship/Other B. Responsibilities of Executive Committee

No.
a. To act within the scope of delegated authority.
1. Karunakar Reddy Managing Director
Baddam, Chairman b. To place all such decisions, resolutions passed and
discussions including the minutes of the meetings
2. Venkata Siva Prasad Whole Time Director
before the Board of Directors in its very next board
Chandrapati, Member (Technical)
meeting that is to be held post the Committee meeting.
3. Addepalli Krishna Sai Whole Time Director
Kumar, Member (Operations) During the year under review, the Executive Committee met
4. Sudarshan Chiluveru , Chief Financial Officer 2 (two) times i.e. on May 14, 2019 and December 23, 2019.
Member (CFO)
Sl. Name & Designation No of Meeting
The Company Secretary and Compliance Officer of the No. attended
Company act as the secretary of the Executive Committee. 1. Karunakar Reddy Baddam, 2
Chairman
The terms of reference of the Executive Committee of the
Company includes the following: 2. Venkata Siva Prasad 2
Chandrapati, Member
A. Powers of Executive Committee 3. Krishna Sai Kumar Addepalli, 2
Member
The Executive Committee shall have the following powers:
4. Sudarshan Chiluveru , 2
1. The power of Board under the provisions of Section Member

77
 APOLLO MICRO SYSTEMS LIMITED Annual Report 2019-20

The meetings of the Executive Committee are also attended c) Disclosure with respect to Remuneration
by the Company Secretary& Compliance Officer.
The Remuneration of Executive Directors is decided by the
The Board of Directors review and take note of the minutes Board of Directors, subject to the approval of shareholders,
of the Executive Committee Meetings at its subsequent Board based on recommendation of Nomination and Remuneration
Meetings. Committee.

During the year under review:-

DIRECTORS REMUNERATION
1. The remuneration of Mr. Karunakar Reddy Baddam,
a) All pecuniary relationship or transactions of the Non- Managing Director of the Company has been revised
Executive Directors from Rs 5,00,000/-per month (Rupee Five Lakh only) to
Rs 10,00,000/- per month (Rupee Ten Lakh only) w.e.f 1st
Non Executive Directors including Independent Directors do
April, 2019 which was approved by the Board based on
not have any pecuniary relationships or transactions with the
recommendation of the Nomination and Remuneration
Company except the sitting fees they are getting for attending
Committee of the Company on May 17, 2019 and
the board/committee meeting and dividend on shares held by
subsequently by the shareholders of the Company in the
him/her, if any. The compensation payable to the Independent
22nd annual general meeting held on September 30,
Directors is limited to sitting fees and reimbursement of actual
2019.
conveyance, travelling and other expenses for attending the
Board & Committee meeting(s). The independent directors 2. The remuneration of Mr. Krishna Sai Kumar Addepalli,
were paid sitting fees of Rs. 20,000/- on per day basis Whole Time Director (Operations)of the Company has
for attending the meetings of the Board of Directors or been revised from Rs 1,50,000/-per month (Rupee One
Committees, during the financial year 2019-20. Lakh Fifty Thousand only) to Rs 2,00,000/- per month
(Rupee two Lakh only) w.e.f 1st April, 2019 which was
b) Criteria of making payments to Non-Executive Directors
approved by the Board based on recommendation of
The Non-executive Independent Directors of the Company the Nomination and Remuneration Committee of the
only getting the sitting fees for attending Board/Committee Company on May 17, 2019 and subsequently by the
meeting and the reimbursement of expenses for attending for shareholders of the Company in the 22nd annual general
Board and Committee meetings. meeting held on September 30, 2019.

Details of remuneration paid to Directors of the Company for the financial year ended March 31, 2020 are as follows-
(Figures in H)
Sl. Name of Director Salary and Commission/ Retrials Others: PF Sitting Fees Total
No. Benefits Performance
Bonus

1. Karunakar Reddy Baddam 1,18,38,710 15,00,000 - 21,600 - 1,33,60,310

(Managing Director)
2. Krishna Sai Kumar Addepalli 23,67,742 - - 21,600 - 23,89,342
Whole Time Director (Operations)
3. Chandrapati Venkata Siva Prasad 23,67,742 - - 21,600 - 23,89,342
Whole Time Director (Technical)
4. Sri Lakshmi Reddy Vangeti - - - - -
Non-Executive Director
5. Raghupathy Goud Theegala - - - 1,80,000 1,80,000
Independent Director
6. Karunasree Samudrala - - - 1,20,000 1,20,000
Independent Director
Total 1,84,38,994

78
 Corporate Overview Statutory Reports Financial Statements

The Company has entered service agreement with executive management personnel and has put the same on the company’s
directors and there is no severance fees involved for any of website [Link] under the section “Investors”. The
its directors of the Company. The Company also has issued Code has been circulated to all members of the Board and Senior
appointment letter to Non-Executive independent director as Management and they have affirmed the compliance of the same.
prescribed by the companies Act and applicable regulations. The A declaration signed by the Managing Director of the Company
Company has not granted any stock option to any of its directors regarding affirmation of the compliance with the code of conduct
during the year under review. by Board Members and Senior Management for the financial
year ended March 31, 2020, is annexed herein below. Senior
Management of the Company have made disclosures to the Board
CODE OF CONDUCT
confirming that there are no material, financial and/or commercial
In compliance with Regulation 17 of the SEBI (LODR) Regulations, transactions between them and the Company which could have
2015 and the Companies Act, 2013, the Company has formulated potential conflict of interest with the Company at large.
and adopted a Code of Conduct for its Board of Directors and senior

Declaration as to adherence to the Code of Conduct

All the directors and senior management of the Company have affirmed compliance with the Company’s code of conduct for
the financial year ended March 31, 2020.

Sd/-
Date: June 26, 2020 Karunakar Reddy Baddam
Place: Hyderabad Managing Director

GENERAL BODY MEETINGS

a) Annual General Meetings

The date, time and location of the Annual General Meetings held during the preceding 3 years and special resolutions passed thereat
are as follows:

Date Category Venue Time No of Special Resolution

30th September, Members Manjeera Hall, 2nd Floor, The Plaza Hotel, 11:00 A.M -
2019 6-3-870, (IST)
Balayogi Paryatak Bhavan,
Greenlands,Begumpet, Hyderabad-
500016 Telangana, India
20th September, Members KLN Prasad Auditorium, The Federation of 09:00 A.M -
2018 Telangana and Andhra Pradesh Chambers (IST)
of Commerce and Industry, Federation
House, Red Hills, Hyderabad - 500 004,
Telangana, India
26th August, 2017 Members Plot No 128/A, Road No. 12, BEL Road 03:00 P.M Four(4)
IDA Mallapur, Uppal Mandal, Rangareddy (IST)
Hyderabad-500076, Telangana, India
* Annual General Meeting for the F.Y 2016-17 originally held on August 21, 2017 and thereafter adjourned to August 26, 2017

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 APOLLO MICRO SYSTEMS LIMITED Annual Report 2019-20

b) Whether special resolutions were put through postal ballot [Link] containing information about the Company viz.,
last year, details of voting pattern details of its business, financial information, shareholding pattern,
compliance with corporate governance, contact information of
During the year under review, no postal ballot has been the designated officials of the Company who are responsible for
conducted for passing any of the resolution. assisting and handling investor grievances, details of conference
calls/presentations to institutional investors or analysts etc. The
c) Whether any resolutions are proposed to be conducted
contents of the said website are updated within 2 working days
through postal ballot
from the date of such change.
No Special Resolution requiring a postal ballot is being
The quarterly and annual results are generally published in
proposed at the ensuing Annual General Meeting of the
Business Standard (English edition) & Nava Telangana (In Telugu).
Company.
Further, the Company disseminates to the Stock Exchange (i.e.
d) Procedure for Postal Ballot
BSE Ltd (BSE) and National Stock Exchange of India Limited (NSE)),
Prescribed procedure for postal ballot as per the provisions wherein its equity shares are listed, all mandatory information and
contained in this behalf in the Act read with rules made there price sensitive/ such other information, which in its opinion, are
under as amended from time to time shall be complied with material and/or have a bearing on its performance/ operations and
whenever necessary. for the information of the public at large.

MEANS OF COMMUNICATION

In accordance with Regulation 46 of the SEBI (LODR) Regulations,

2015, the Company has maintained a functional website at www.

GENERAL SHAREHOLDER INFORMATION

a) AGM: Day, Date, time and 25th September 2020

venue Time: 11:00 A.M.
Venue: Through Video Conferencing (“VC”) / Other Audio Visual Means (“OAVM”)
b) Financial Year April 1, 2019- March 31, 2020
c) Book closure Date 19th September 2020 to 25th September 2020
d) Dividend payment date The dividend, if declared, shall be paid/credited to the respective bank account of shareholders /
dividend demand draft shall be dispatched within a period 30 days from the date of declaration i.e. on
or before 25th October 2020
e) Listing of shares on Stock The Company’s equity shares are Listed at:
Exchanges 1. BSE Limited
Phiroze Jeejeebhoy Towers
Dalal Street
Mumbai-400001
Stock Code: 540879
2. National Stock Exchange of India Limited
Exchange Plaza, C-1, Block G,
Bandra Kurla Complex,
Bandra (E)
Mumbai – 400 051
Symbol: APOLLO
Series: EQ
f) Registered Office The Company is registered in the state of Telangana, India
The Registered office of the Company is situated at # Plot No 128/A, Road No. 12, BEL Road IDA
Mallapur, Uppal Mandal Hyderabad, Rangareddy Telangana 500 076, India

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 Corporate Overview Statutory Reports Financial Statements

g) Corporate Identification The Corporate Identity Number allotted by the Ministry of Corporate Affairs (MCA) is
Number L72200TG1997PLC026556
h) Listing Fees The Listing fee for the year 2019-20 has been paid to the above stock exchanges.
i) Registrar & Share Transfer Bigshare Services Private Limited
Agents of the Company (Unit: Apollo Micro Systems Limited)
for both physical and 306, Right Wing, 3 rd Floor, Amrutha Ville,
electronic mode of share Opp: Yashoda Hospital, Rajbhavan Road,
transfers. Hyderabad – 500 082 (India)
Tel : 040 4014 4582,
Email: bsshyd@[Link]
Website: [Link]
Investor Grievance Email: investor@[Link];
SEBI Registration No.: INR000001385
j) Outstanding Global The Company has not issued any Global Depository Receipts / American Depository Receipts /
Depository Receipts / Warrants or any convertible instruments during the year under review. There were no outstanding
American Depository GDRs/ADRs/Warrants or any convertible instruments as on March 31, 2020.
Receipts / Warrants or any
convertible instruments,
conversion date and likely
impact on equity.
k) Share Transfer System In terms of the SEBI (LODR) Regulations, 2015, securities of listed companies can only be transferred
in dematerialised form with effect from April 01, 2019, except in case of transmission or transposition of
securities. Members holding shares in physical form are requested to dematerialise their holdings at the
earliest. Transfers of equity shares in dematerialised form are effected through the depositories with no
involvement of the Company.
In case of other matters relating to Shares, Stakeholder’s Relationship Committee meet as and when required
to consider and attend Investors grievances and request for transmission of shares, split, consolidation, issue
of duplicate share certificate, dematerialization and rematerialization of shares, etc.
During the year under review, the company hasn’t received any request for transfer of shares held in
physical form.
l) Stock Code The stock code of the Company at BSE Ltd. 540879 and symbol at National Stock Exchange of India
Limited is APOLLO.
ISIN allotted by National Securities Depository Limited and Central Depository Services (India) Limited
for Equity Shares INE713T01010
The Company’s shares are covered under the compulsory dematerialization list and are transferable through
the depository system. Shares received for physical transfers are registered within a maximum period of two
weeks from the date of receipt, if the documents are clear in all respects.
m) Dematerialisation of Members are requested to convert their physical holdings to demat/electronic form through the
Shares registered Depository Participants (DPs) to avoid the hassles involved in dealing in physical shares such
as possibility of loss, mutilation, etc. and also to ensure safe and speedy transaction in respect of the
shares held. Shares received for dematerialization are generally confirmed within a maximum period of
twenty one days from the date of receipt, if the documents are clear in all respects. The demat security
(ISIN) code for the equity share is INE713T01010.
The Company’s shares are regularly traded on the ‘BSE Limited’ and ‘National Stock Exchange of India
Limited’.
During the year under review, 1 (one) request for dematerialization of equity shares has been received
from the shareholder of the Company, which has been duly processed by the Company through its
Registrar & Share Transfer Agent and the Stakeholder’s Relationship Committee of the Company took
note the same in its subsequent meeting.
There are 28375* no. of shareholders as on March 31, 2020 out of which shareholding of 28373
shareholders is held dematerialized form, which represent 99.95% of the paid up capital of the Company,
leaving only 2 shareholders who hold the equity shares in physical form.
*Shareholders with same Permanent Account Number (PAN) are considered as one.

81
 APOLLO MICRO SYSTEMS LIMITED Annual Report 2019-20

n) Stock Performance Market price data: The monthly high and low stock performance at the Stock Exchanges BSE and NSE
during the year 2019-20 is as follows:
Months BSE (in J) NSE (in J)
High Low High Low

Apr-19 148.3 105.9 148.90 104.95

May-19 151.6 115.9 151.85 116.05
Jun-19 133.15 113.2 135 111.1
Jul-19 126.5 86.25 127 85.95
Aug-19 92.75 70.3 94 70.25
Sep-19 98.25 69.95 98.25 70
Oct-19 77.35 65.15 78.55 65
Nov-19 99.8 66.9 97.95 65
Dec-19 80 65 79.6 66
Jan-20 83 72.75 82.75 71.55
Feb-20 91 72.5 90.75 72.15
Mar-20 77.75 40 78.6 39.5

Source: This information is compiled from the historical data available on the websites of BSE and NSE]
o) Shareholding as on March a) Distribution of shareholding as on March 31, 2020
31, 2020 No of shares No of % of total Share amount % of total
shareholders (in J)

1 5000 27,607 96.34 1,93,78,410 9.3327

5001 10000 555 1.94 43,93,370 2.1159
10001 20000 253 0.88 36,89,450 1.7769
20001 30000 80 0.27 20,14,890 0.9704
30001 40000 35 0.12 12,17,850 0.5865
40001 50000 29 0.10 13,58770 0.6544
50001 100000 53 0.18 39,95,010 1.9240
100001 9999999999 45 0.15 17,15,91,110 82.6392
Total 28,657 20,76,38,860 100.00

b) Category wise shareholding pattern as on March 31, 2020

Category Total No. of Shares % of holding

Promoter & Promoter Group 1,32,71,700 63.92
Foreign Portfolio Investor 8,09,642 3.90
Clearing Member 87,266 0.42
Financial Institutions 10,909 0.05
Corporate Bodies 2,92,669 1.41
Mutual Fund 8,98,000 4.32
Non Nationalised Banks 60,248 0.29
Non Resident Indian (NRI) 3,37,580 1.63
Employee 1,02,824 0.50
Public 48,86,848 23.54
Trust 1,200 0.00
Employee Trust 5,000 0.02
(Non-Promoter- Non Public)
Total 2,07,63,886 100.00

82
 Corporate Overview Statutory Reports Financial Statements

p) Price Performance
Compared to SENSEX and BSE vs AMS
NIFTY 50
BSE
AMS

45000 140
43000 130
41000 120
39000 110
37000 100
35000 90
33000 80
31000 70
29000 60
27000 50
25000 40

-19

-19

-19

19

19

20

20
19

0
19
r-1

l-1

-2
v-

c-
p-
n-
ay

n-

b-
g

ct
Ju
Ap

ar
No

De
Au

Se

O
Ju

Ja

Fe
M

M
NSE vs AMS
NSE
AMS

12600 160
12400 140
12200
12000 120
11800 100
11600
80
11400
11200 60
11000 40
10800
10600 20
10400 0
9

-19

-19

-19

19

19

20

20
19

0
19
r-1

l-1

-2
v-

c-
p-
n-
ay

ct

n-

b-
Ju
Ap

ar
No

De
Au

Se

O
Ju

Ja

Fe
M

q) Foreign currency risk and The Company is exposed to foreign currency risk due to imports of components and circuits and
hedging activities export of mother boards. The Company had not indulged in currency hedging activities during the year
under review
r) Commodity price risk The Company is exposed to commodity price risk as per nature of its business. The Company had not
and commodity hedging indulged into commodity hedging activities during the year under review.
activities
s) Plant Locations Apollo Micro Systems Limited
#Plot No 128/A, Road No. 12, Bel Road Ida Mallapur, Uppal Mandal, Hyderabad – 500 076 Telangana,
India

83
 APOLLO MICRO SYSTEMS LIMITED Annual Report 2019-20

t) Credit Rating a) Domestic Rating:

During the year under review your Company has obtained the Credit Rating from ICRA Limited to
Rs 142 Crores Line of Credit of the Company which is as follows:

Long-Term Rating [ICRA] BBB- (pronounced ICRA triple B MINUS)

Short-Term Rating ICRA] A3 (pronounced ICRA A three)

The outlook on the long term rating has been revised to “Negative”.

b) International Rating: Nil

Pursuant to Regulation 30 of SEBI (LODR) Regulations, 2015 your Company has intimated to the
stock exchanges where the share are listed.
u) Address for Registered Office of the Company:
Correspondence The Company Secretary
APOLLO MICRO SYSTEMS LIMITED
Plot No 128/A, Road No. 12, BEL Road
IDA Mallapur, Uppal Mandal, Rangareddy
Hyderabad – 500 076, Telangana, India
Tel No.: +91 – 44 – 27167000
Fax No.: +91 – 44 – 21750820
Email: cs@[Link]
Website: [Link]

Registrar and Transfer Agents:

BIGSHARE SERVICES PRIVATE LIMITED
(Unit: Apollo Micro Systems Limited)
306, Right Wing, 3rd Floor, Amrutha Ville,
Opp: Yashoda Hospital, Rajbhavan Road,
Hyderabad – 500 082, Telangana, India.
Tel : 040 4014 4582
Email: bsshyd@[Link]
Website: [Link]
For securities held in Demat form
The investors may write to their concerned Depository Participant(s) or the Registrar and Transfer
Agents of the Company.

84
 Corporate Overview Statutory Reports Financial Statements

OTHER DISCLOSURES adopted against Whistleblowers. The Company affirms that no

personnel have been denied access to the audit committee.
a) Related party transactions The Whistle Blower Policy is uploaded on the website
of the Company at [Link]
There were no materially significant Related Party Transactions
uploads/2017/09/[Link]
and pecuniary transactions that may have potential conflict
with the interest of the Company at large. The Audit Committee d) Details of compliance with mandatory requirements and
of the Company reviews the Related Party Transactions (“RPT”) adoption of the discretionary requirements
periodically. All transactions entered into with related parties
as defined under the Companies Act, 2013 and the SEBI The Company has fully complied with the mandatory
(LODR) Regulations 2015 during the financial year were in requirements of the Code of Corporate Governance as
ordinary course of business and on arm’s length basis. specified in Regulation 17 to 27 and clauses (b) to (i) of sub
regulation (2) of Regulation 46 of SEBI (LODR) Regulations,
None of the transactions with any of the related parties was 2015. In addition, the Company has also adopted the following
in conflict with the Company’s interest. Attention of members non mandatory requirements to the extent mentioned below:
is drawn to the disclosure of transactions with related parties
set out in Note no 30 of Financial Statements, forming part • Separate posts of Chairman and Managing Director: The
of the Annual Report. Company has formulated a “Related Company has maintained separate posts for Chairperson
Party Transaction Policy” to ensure the proper approval and Managing Director of the Company.
and reporting of transactions between the Company and its
• Reporting of Internal Auditor: The Internal Auditor of the
Related Parties. This Policy as considered and approved by
Company directly reports to the Audit Committee on
the Board has been uploaded on the website of the Company
functional matters.
at [Link]. The Audit Committee/ Board
review’s and amend this policy from time to time. The policy • The Company has voluntary constituted the Risk
is uploaded on the website of the Company at [Link] Management Committee of the Company and adopted
[Link]/wp-content/uploads/2017/09/policy_on_related_ the Risk Management Policy which is uploaded on the
party_transactions.pdf. website of the Company [Link] under the
section “Investors”.
b) Details of Non-compliance
e) Accounting treatment in preparation of financial statement
The Company has complied with the requirements of the Stock
exchanges (NSE& BSE), SEBI and other statutory authorities on In the preparation of the financial statements, the Company has
all matters relating to capital markets during the year under followed the accounting policies and practices as prescribed
review. A report on the compliances on the applicable laws for in the Accounting Standards.
the Company is placed before the Board on a quarterly basis
for its review and consideration. There has been no instance f) The Company has adopted Material Events Policy which is
of non-compliance with any legal requirements, nor have uploaded on the website of the Company at [Link]
there been any penalties or strictures imposed by any stock com/wp-content/uploads/2017/09/policy_on_disclosure_of_
exchange or SEBI or any statutory authority on any matter material_events.pdf
related to capital markets during the last three years.
g) Details of the familiarisation programmes imparted to the
c) Whistle Blower Policy and Vigil Mechanism Independent Directors are available on the website of the
Company [Link] under the sections “Investors”.
The Company is committed to adopt the best Corporate
Governance Practices and to follow the highest possible moral, h) The Company has put in place succession plan for appointment
legal and ethical standards in the conduct of its business. In to the Board and to senior management.
line with this commitment, Whistle blower Policy was designed
to provide a mechanism for employees / Board Members and i) The Company has devised proper systems to ensure compliance
others to raise good faith concerns about unethical behaviour, with the provisions of all applicable Secretarial Standards issued
actual or suspected fraud or violation of Company’s Code of by the Institute of Company Secretaries of India (ICSI).
Conduct and to protect the individuals who take such actions
j) Certificate for transfer of Shares and Reconciliation of Share
from retaliation or any threat of retaliation.
Capital
The Whistleblower Policy and Vigil Mechanism ensure that
Pursuant to Regulation 40(9) of the SEBI (LODR) Regulations,
strict confidentiality is maintained in such cases and no unfair
2015, certificates on half-yearly basis, has been issued by the
treatment is meted out to a Whistleblower. The Company, as
Company Secretary-in-Practice with respect to due compliance
a Policy, condemns any kind of discrimination, harassment,
of share transfer formalities by the Company.
victimisation or any other unfair employment practice being

85
 APOLLO MICRO SYSTEMS LIMITED Annual Report 2019-20

Pursuant to SEBI (Depositories and Participants) Regulations, with Regulation 17(8) of SEBI Listing Regulations, which is
1996, certificates have also been received from a Company annexed to Annual Report.
Secretary-in-Practice reconciling the total shares held in both
the depositories, viz. NSDL and CDSL and in physical form with m) The Company has complied with the requirements of Schedule
the total issued / paid-up capital of the Company and submitted V of Corporate Governance Report sub-para (2) to (10) of the
the same to the BSE and NSE where the securities of the Securities Exchange Board of India (Listing obligation and
Company are listed within 30 days of the end of each quarter. Disclosure Requirements) Regulations, 2015,

k) Risk management n) Corporate Governance Compliance Certificate

The Company has established a risk management framework The Company has complied with all the mandatory
where in a Committee comprising of the senior executives requirements specified in Regulations 17 to 27 and clauses
of the Company has been established which periodically (b) to (i) of Regulation 46(2) of the SEBI Listing Regulations.
indentify potential risks to the strategy of the Company and It has obtained a Corporate Governance Certificate affirming
take effective measures to mitigate the same in the best the compliances from Practising Company Secretary, CS Datla
possible manner. The Board is also periodically updated on Venkatesh and the same is annexed to Annual Report.
the key risks, steps and processes initiated for reducing and, if
feasible, eliminating various risks. The Disclosure of the compliance with corporate governance
requirements specified in regulation 17 to 27 and clauses (b) to
l) CEO/CFO certification
(i) of sub-regulation (2) of Regulation 46 are as follows:
The Chief Financial Officer (CFO) has furnished a Certificate to
the Board for the year ended on March 31, 2020 in compliance

Sl. Particulars Regulation Compliance Status

No. Yes/No/NA
1. Board of Directors 17 Yes
2. Audit Committee 18 Yes
3. Nomination and Remuneration Committee 19 Yes
4. Stakeholders Relationship Committee 20 Yes
5. Risk Management Committee 21 Yes
6. Vigil Mechanism 22 Yes
7. Related Party Transaction 23 Yes
8. Subsidiaries of the Company 24 NA
9. Obligations with respect to Independent Directors 25 Yes
10. Obligations with respect to employees including Senior Management, Key 26 Yes
Managerial Personnel, Directors and Promoters
11. Other Corporate Governance requirements 27 Yes
12. Website 46(2)(b) to (i) Yes

o) Certificate on Non-disqualification of Directors q) Total fees paid to Statutory Auditors

The Company has received a certificate from CS Datla The details of total fees for all services paid by the Company to
Venkatesh, Company Secretary in Practice, confirming the Statutory Auditors of the Company, is given below:
that none of the Directors of the Company is debarred or
disqualified by the Securities and Exchange Board of India Particulars Amount in J
/ Ministry of Corporate Affairs or any such authority from Statutory audit fee 4,00,000/-
being appointed or continuing as Director of the Company.
Tax audit fee (including other services) 1,00,000/-
The Certificate is uploaded on the website of the Company
Total 5,00,000/-
at [Link]
[Link] r) Code of Conduct for Prevention of Insider Trading

p) Recommendations of the Committees of the Board The Company has adopted the CODE OF INTERNAL
PROCEDURES AND CONDUCT TO REGULATE, MONITOR AND
During the year, the Board of Directors accepted all REPORT OF TRADING BY INSIDERS under the SEBI (Prohibition
recommendations of the Committees of the Board, which were of Insider Trading) Regulations, 2015. The Code lays down
statutory in nature and required to be recommended by the guidelines for procedures to be followed and disclosures to be
Committee and approved by the Board of Directors. made while trading in securities of the Company.
86
 Corporate Overview Statutory Reports Financial Statements

This Code has been revised in line with the SEBI (Prohibition Mr. Chaitanya Siva Shankar Vitta, Company Secretary, has
of Insider Trading) (Amendment) Regulations, 2018. As per been appointed as the ‘Compliance Officer’ for ensuring the
the revised Code, the Company also adopted Policy on compliance with and for the effective implementation of the
Enquiry in case of leak or suspected leak of UPSI and Policy Regulations and the Code across the Company.
for Determination of Legitimate Purposes. The code is also
available on the website of the company [Link]-micro. s) Equity shares in the suspense account
com under the Section “Investors” and the web link is http://
In accordance with the requirement of Regulation 34(3) and
[Link]/wp-content/uploads/2019/04/CODE-OF-
Part F of Schedule V to the SEBI Listing Regulations, details of
INTERNAL-PROCEDURES-AND-CONDUCT-TO-REGULATE-
equity shares in the suspense account are as follows:
[Link]

Particulars Number of Shareholders Number of equity shares

Aggregate number of shareholders and the outstanding shares in the 1 50

suspense account lying as on April 1, 2019
Shareholders who approached the Company for transfer of shares - -
from suspense account during the year
Shareholders to whom shares were transferred from the suspense - -
account during the year
Shareholders whose shares are transferred to the demat account of - -
the IEPF Authority as per Section 124 of the Act
Aggregate number of shareholders and the outstanding shares in the 1 50
suspense account lying as on March 31, 2020

The voting rights on the shares outstanding in the suspense account as on March 31, 2020 shall remain frozen till the rightful owner of
such shares claims the shares.

t) Disclosures in relation to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has zero tolerance towards sexual harassment at the workplace. The Company has in place a policy for prevention of
sexual harassment in accordance with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition,
& Redressal) Act, 2013 and rules made there under. Internal Complaints Committee has been set up to redress complaints received
regarding sexual harassment. All employees (permanent, contractual, trainees, temporary) are covered under this policy. During the
year under review, there were no complaints pertaining to sexual harassment.

Number of complaints filed during the Number of complaints disposed of Number of complaints pending as at end of
financial year during the financial year the financial year

Nil Nil Nil

The Workplace Sexual Harassment Policy of the Company is uploaded on the Company website at [Link]
uploads/2019/09/[Link]

87
 APOLLO MICRO SYSTEMS LIMITED Annual Report 2019-20

Annexure-I

CERTIFICATE ON CORPORATE GOVERNANCE

To
The Members of
APOLLO MICRO SYSTEMS LIMITED
CIN L72200TG1997PLC026556

I have examined the compliance of the conditions of Corporate Governance by APOLLO MICRO SYSTEMS LIMITED (“the Company”) for
the financial year ended 31st March 2020, as stipulated in the Securities and Exchange Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015 (‘the Listing Regulations).

The compliance of the conditions of Corporate Governance is the responsibility of the management and my examination was limited to a
review of procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of Corporate
Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.

In my opinion and to the best of my information and according to the explanations given to me, I, certify that the Company has complied with
the conditions of Corporate Governance as stipulated in the Listing Regulations during the financial year ended 31st March 2020.

I further state that such compliance is neither an assurance as to the future viability of the Company nor of the efficiency or effectiveness
with which the management has conducted the affairs of the Company.

This certificate is issued solely for the purposes of complying with aforesaid Regulations and may not be suitable for any other purpose.

Sd/-
Datla Venkatesh
Place: Hyderabad CP. No.: 14074
Date: June 24, 2020 UDIN: A036504B000372611

88
 Corporate Overview Statutory Reports Financial Statements

Annexure-J

CFO CERTIFICATION

I the undersigned, in my capacity as Chief Financial Officer of Apollo Micro Systems Limited (“the Company”) to the best of my knowledge
and belief certify that:

A. I have reviewed financial statements and the cash flow statement for the year ended March 31, 2020 and that to the best of my
knowledge and belief, I state that:

i. these statements do not contain any materially untrue statement or omit any material fact or contain statements that might be
misleading;

ii. these statements together present a true and fair view of the listed entity’s affairs and are in compliance with existing accounting
standards, applicable laws and regulations.

B. I further state that to the best of my knowledge and belief, no transactions entered into by the listed entity during the year which are
fraudulent, illegal or violative of the listed entity’s code of conduct.

C. I am responsible for establishing and maintaining internal controls for financial reporting and that they have evaluated the effectiveness
of internal control systems of the listed entity pertaining to financial reporting and they have disclosed to the auditors and the audit
committee, deficiencies in the design or operation of such internal controls, if any, of which they are aware and the steps they have
taken or propose to take to rectify these deficiencies.

D. I have indicated to the auditors and the Audit committee:

i. significant changes in internal control over financial reporting during the year;

ii. significant changes in accounting policies during the year and that the same have been disclosed in the notes to the financial
statements; and

Instances of significant fraud of which I have become aware and the involvement therein, if any, of the management or an employee having
a significant role in the listed entity’s internal control system over financial reporting.

For Apollo Micro Systems Limited

Sd/-
Date: June 26, 2020 Sudarshan Chiluveru
Place: Hyderabad Chief Financial Officer

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 APOLLO MICRO SYSTEMS LIMITED Annual Report 2019-20

Management Discussion and Analysis

Global Economy review Indian Economy review

The global economy witnessed a decline with a registered growth of The GDP growth of the Indian economy settled at 4.2% for FY 19-
2.9% in 20191. Global uncertainties arising from trade wars between 20, marked by slowdowns across all economic sectors. Weak rural
US and China as well as BREXIT caused significant disruptions to demand and stress on the financial sector mainly contributed to the
international supply chains. sluggish growth. A sudden spike in the inflation rate during Dec-
2019 caused food prices to rise phenomenally, resulting in lower
The slowing industrial production caused a sharp decline in world demand for agricultural goods and products. The Index of Industrial
trade growth, while higher tariffs and prolonged weak sentiments Production too contracted in FY19-20, due to weak demand for
dampened domestic demand growth in the major economies of the goods and services.
world. The current wave of debt levels, which started in 2010, is
increasing sharply and is causing panic around the world. Emerging To revive the economy, the government introduced a plethora
Markets and Developing Economies (EMDE) are also confronted of reforms like corporate tax rate cut, phased manufacturing for 5
by weak growth prospects, mounting vulnerabilities and elevated years to support the production of EV components, slashed interest
global risks. rates to boost demand across sectors and enumerated 7 early
signs for economic revival. It also helped India to rise to the 63rd
The global economy is projected to contract by 4.9% in 2020 due position in World Bank’s Ease of doing business report in 2019.
to disruption caused by outbreak of Covid-19 impacting global Due to continuous FDI liberalization, FDI inflows to the country also
supply chains and international trade. Global manufacturing increased, fuelling growth of the foreign exchange reserves of India.
production could contract significantly, and the plummeting
number of travellers is likely to hurt the tourism sector in emerging The growth outlook for the Indian economy appears to be weak due to
economies and developing countries, which employs millions of the recent Covid-19 outbreak and it is anticipated to contract by 4.5% in
workers. Supportive macroeconomic policies can help to restore FY 2020-21. The pandemic is expected to have far-reaching economic
confidence and aid demand recovery as the effects of the virus and social consequences for the region, with strong cross-border spill
fades. However, it is not likely to offset the immediate disruptions over effects anticipated through trade, tourism and financial linkages.
that have resulted due to the shut downs and travel restrictions In FY 2020-21, disruptions in the supply-chain are also likely to
imposed around the world due to the pandemic. Going forward, continue along with lower demand for goods and services. Gradually,
growth is expected to bounce back and is anticipated to grow at as the pandemic fades, economic activity is expected to rebound
5.4% for 2021 with most of the economic indicators displaying an on the back of strong demand for products and services. Resting
upward trajectory. on favourable reforms to alleviate financial sector stress, economic
growth rate is expected to reach at 6% for FY 2021-22.1

World Economic GDP Growth (in %) India GDP Growth rate (%)

5.9
3.7 5.4
2.9 4.8
4.2

1.7
6

2019 2020P 2021P FY 20-21E

-3 FY 19-20 FY 21-22E
-4.5

-4.9

-8

World Advanced Econmies EMDEs

(Source: IMF World Outlook Report June 2020) (Source: IMF World Outlook Report June 2020)

IMF
1

90
 Corporate Overview Statutory Reports Financial Statements

Electronic Sector – Overview consumption patterns in the Middle East and emerging countries
are driving global demand, thereby contributing to the growth of
The global electronic sector is expected to reach US $ 2000.1 the Electronics Sector in India.
billion in 2019, a decrease of 2% Y-o-Y2. The decline was mainly
on account of economic uncertainty caused due to trade frictions
between the US and China and slowdown in manufacturing sector.
Electronic Systems Design and Manufacturing (ESDM)
The industry is anticipated to grow by 4% Y-o-Y to stand at US The ESDM sector is a significant contributor to the country’s
$2081.5 billion in 20203. The growth in Electronic components economy. According to the India Electronics & Semiconductor
and devices sector will be mostly on account of growing use of Association, demand for Indian ESDM is expected to reach US$
electrical equipment in automobiles, the emergence of advanced 400 billion by 2020 and the supply side is anticipated to be
smartphones and a rising demand for smart speakers. worth US $ 104 billion by 2020. This will create a huge demand
and supply gap, resulting in the growing need for imports in the
The Indian electronics market is one of the largest in the world
future. The domestic demand for electronic goods is constantly
and is expected to be valued at $400 Bn by 2025, employing over
rising and increasing disposable income opens up a huge market
10 million people directly3. India accounts for approx.3.3% of the
for electronic goods. With strong support from the government,
global electronic production in FY 2018-19 and the industry is worth
the sector continues to attract foreign investment and owing to
H 4.58 lakh crores (US $70 billion)4. Increasing domestic demand,
consistent demand, the Indian ESDM industry will only continue to
rising disposable incomes, the Digital India initiative, growing
grow in the days ahead.
manufacturing costs in other developing economies and escalated

Global Electronics Production (US $ billion)

Future Trends

• Mobile Devices are one of the key segments where India

is expected to see more growth in terms of local value
addition. The Make in India initiative and various schemes
and policies will make the country a preferred destination
for electronics manufacturing.
2081.15
2039.8

• Internet of Things (IoT) is a unique domain that brings the

2000.1
1961.4

ESDM industry and the IT industry together. Studies indicate

that by 2020, over 25 billion connected devices will be
FY 2017 FY 2018 FY 2019E FY 2020E generating data, globally, with abundant opportunities for
data mining and data analytics. The total revenue generated
(Source: JEITA – Global electronics and IT production Forecast)
from IoT industry is expected to be US $ 300 billion and
India would have a share of 5-6% of the global IoT industry,
Expected Market Size for Major Electronics Sub-Sectors in India
amounting to around US $15-18 billion by 20205.
by 2020
• Smart Living is another opportunity for the ESDM Sector.
Telecom Equipment Today homes, vehicles and cities are embedded with
6% 5%
sensors for personal and professional use. This requires
6% 21% LED
extensive collaboration between various players spread
Laptops, Desktops, Tablets across the ESDM-IT segments.
18% Consumer Electronics
21% • The mobile-gaming industry in India is one of the top five in
Set-top boxes
the world and is already worth US $890 Mn in 2017 and it is
22% Automotive Electronics
expected to be worth US $1.1 Bn by 2020, with the number
Medical Electronics of users projected to reach 628 Mn by 20206.

(Source: Make in India – Electronic Systems sector)

2
JEITA – Global Electronics and IT Production Forecast
3
[Link]
4
Meity
5
Make in India – Electronic System sector
6
Strategic Electronics Report 2019 - IESA
91
 APOLLO MICRO SYSTEMS LIMITED Annual Report 2019-20

Strategic Electronics

The global market for strategic electronics is expected to be The Strategic Electronics market
US $256 bn in 2018 and estimated to grow at a CAGR of 4% to
reach US $422bn by 2032, with the US occupying the largest
in India is expected to be worth
market share6. The growth is expected to be driven by a set of between US $135-137 bn by 2032
factors including technology, integration, industrial aggregation
and Industry 4.0. Global players in strategic electronics market
are focusing on innovation and technology based solutions, thus automation and analytical instruments. These technologies
improving platform efficiency and design. are significantly gaining ground as modernization, automation
and robotics continue to design the future of operations and
The electronics system design community in India is one of the
processes. The industrial electronics sector is witnessing growth
largest communities working on cutting edge technologies which
due to enhanced digitization and robotics applications in advanced
have a direct impact on Strategic Electronics needs of our country,
industrial processes. Further, the impetus on Smart Cities and IoT
be it design of Nano satellites, robots that can roam in moon & Mars
will bring the focus and demand back to smart and automation
or swarm robots for defence applications, AI enabled intelligent
electronics.
electronics systems for intrusion detection or software defined
radios for building secured communication network and wearable
devices for soldiers. The Strategic Electronics market in India is Government Reforms and Polices to support ESDM
expected to be worth between US $135-137 bn by 20327. The Indian
Aviation &Defence segment also drives demand for electronics • Skill Development in ESDM for Digital India: Under the aegis
with growing requirements for modernization of weapon platforms of ‘Digital India’ programme, the department has approved
and introduction of state-of-the-art weapons. a Scheme for ‘Skill Development in ESDM for Digital India’
in 2014, covering all the States/UTs of the country. The main
In order to become a part of the global supply chain for Aviation objective of the scheme is to provide financial assistance
and Defence, Strategic Electronics players in India need to invest for encouraging skill development of 4,18,000 people in the
in capacity as well as capability development, across platforms. ESDM sector, by involving all the states/Union Territories, to
Therefore, 100% Foreign Direct Investment (FDI) is allowed in the enhance employability levels of students/unemployed youth
ESDM industry and for defence electronics, FDI is 100% under in the electronics space till FY19-20 .
approval route, subject to industrial licensing terms.
• Production Linked Incentive (PLI) Scheme: The GoI in
association with MeitY launched three schemes to boost
Industrial Electronics electronics manufacturing with incentives worth more than
H48,000 crore. The largest scheme, with an outlay of H40,000
Industrial electronics is mostly used in process control equipment,
crore will give incentives of 4-6% on incremental sales on
test and measuring equipment, power electronics equipment,
mobile phones and specified electronic components such
Expected Market Size for Strategic Electronics by 2032 as Printed Circuit Boards, photopolymer films and Assembly,
(US $ billion) Testing, Marking and Packaging units, among others. The
industry has immense potential for job creation. India needs to
boost its domestic manufacturing to attract large investments
10 in the electronics value chain and the PLI scheme is likely to
18 boost manufacturing activities in the country.
Ministry of Defence
Ministry of Home Affairs • Electronic Manufacturing Cluster 2.0 (EMC): The GoI has
68
Intelligence approved the Modified Electronics Manufacturing Clusters
40 Civil Aviation (EMC 2.0) Scheme for development of world class infrastructure
along with common facilities. It will provide amenities through
EMCs to help India emerge as a mobile manufacturing
hub. EMCs are expected to aid growth of the ESDM sector,
help development of the entrepreneurial ecosystem, drive
(Source: Strategic Electronics Report 2019 – IESA)
innovation and catalyse the economic growth of the region by
attracting investments in the sector, increasing employment

ESDM Skill Initiatives by deity

7

92
 Corporate Overview Statutory Reports Financial Statements

opportunities and tax revenues. The government has proposed befit of Industry in DPP 2020, new initiatives by DRDO by
a total outlay of H3762.25 crore for EMC 2.0 Scheme, over an introducing DCPP (Development Cum Production Partner)
eight year period. which is again a key initiative to encourage any industry to
become a permanent partner who have participated in the
• Make in India Initiatives: The government is driving reforms in development of the system. Indigenisation of various import
the IT and Electronics Manufacturing sector through initiatives systems has taken a significant pace which is helping industry
like ‘Make in India’ and is creating favourable policies to to upgrade the legacy platforms and also cater for new
enable an investor-friendly environment. Electronic System platforms which is once again a long term plan and revenue
Design and Manufacturing comprises one of the major sectors booster for industry for next few decade.
for the ‘Make in India’ initiative. The growth of this industry
is likely to provide the necessary impetus for the electronics
and communication equipment market, as changing policies
and regulatory norms will create a conducive business $5 Billion Worth of export of
environment.
defence equipment target set by
Public Procurement (preference to Make in India) order was
passed in 2017 by MeitY to promote manufacturing of goods
the government in DPP 2020
and services in India. Under the public procurement order, the
government targeted 10 domestically manufactured electronic
• National Policy on Electronics (NPE) 2019: NPE 2019 aims
products for providing preference on the basis of prescribed
to encourage inland manufacturing and export in the ESDM
domestic value addition, ranging from 40% to 70%. The
value-chain to achieve economic development. With the key
category comprises of products including Desktop, laptops,
objective of :
tablets, Dot matrix printer, LED products, Contact & Contactless
Smart Cards, Biometric Access Control, Biometric Iris sensors 1. Promotion of increased R&D and innovation across all
& servers, Biometric fingerprint scanners, and cellular mobile sub-sectors of electronics, such as 5G, loT/Sensors,
phones. Artificial Intelligence (Al), Machine Learning, Virtual Reality
(VR), Drones, Robotics, Nano-based devices, etc.
• Defence Procurement Procedure (DPP) 2020: The GoI
announced DPP 2020, which aims at increasing indigenous 2. Development of Fabless Chip Design Industry, Medical
manufacturing and reducing timelines for procurement of Electronic Devices Industry, Automotive Electronics
defence equipment. The government is constantly striving to Industry, and Power Electronics for Mobility and Strategic
formulate policies to empower the private industry, including Electronics Industry.
MSMEs, to develop the eco-system for indigenous defence
production. The defence industry of India is a strategically 3. Incentives and support to increase the availability of a
important sector having huge potential for growth. Various skilled workforce, including provisions for re-skilling.
polices like procurement of raw material from single vendor,
4. Special incentive packages for technologically advanced
category buy to boost the Make in India campaign and leasing
mega projects that entail huge investments, such as in
of equipment have been introduced under this initiative. The
semiconductor fabrication.
Government has brought Embargo on 101 Items for a period of
four years which is a huge boost for Indian Defence Industry.
This embargo will not only increase the production rate within Company Overview
the country but would also enable industry to upgrade their
capabilities. It is also a noteable point that Government has set Apollo Micro Systems Limited (AMS), has a rich experience of over 3
a target of $5 Billion towards export of defence equipment; decades in the industry and it is a pioneer in design, development,
this is once again a huge boost for Indian Defence Industry. assembly and testing of Custom Built Electronics and Electro-
Government has brought various policy amendments for mechanical solutions. AMS designs, develops and sells high
performance, mission and time critical solutions to Defence, Space
and Home Land Security for Ministry of Defence, government

A total outlay of J 3762.25 controlled public sector undertakings and private sectors.

crore has been proposed by the AMS also provides custom built COTS (Commercially off-the shelf)
solutions to the Defence and Space sector, based on specific
government for EMC 2.0 scheme requirements. The systems undergo various stages of approval, from
over an eight year period. design and prototyping to functional acceptance, manufacturing
and qualification testing. As the systems are exclusively developed

93
 APOLLO MICRO SYSTEMS LIMITED Annual Report 2019-20

for a programme, the systems enjoy proprietary status and have a Review of Operations
significant competitive edge in the industry.
During the year under review 2019-20, your company reported
the revenue from operations of H2,45,90,41,260 against
Core Competencies H2,62,97,53,243 in the previous year. The Earnings Before Interest,
Proven track record in developing new technological Tax, Depreciation & Amortization (“EBITDA”) has been reduced by
systems and order execution. H2.70% to H50,26,08,398/- against H51,65,52,977/- in the previous
year. The Profit before Tax (“PBT”) for the year under review is
Strong R&D team with unique domain expertise on different H25,26,09,201/- as against H32,69,97,926/- in the previous year.
verticals like Aerospace, Avionics, Space, Naval, Automotive The Net profit of the Company for the year under review has been
for On-Board Systems and Ground Support Equipment. reduced by 51.88% to H14,01,12,777/- against H29,11,85,266/- in the
With robust quality control policies and strategies, AMS previous year. The Earning per Share (“EPS”) of the Company for
adheres to all quality checks and manufactures ISO certified the year under review is H6.75/- per share basic & diluted.
products to assure the highest standards of quality.

Solid performance in existing business verticals have

enabled the Company to increase market share and tap into
new opportunities.

A dedicated and qualified workforce and senior management

team, with exceptional domain knowledge allows AMS to
focus on evolving technologies.

Continuously engaged to leverage in-house technological and

R&D capabilities to effectively manage operations, maintain
strict operational controls and enhance customer service.

Financial Performance

(Figures in J) FY 2019-20 FY 2018-19 (%) Change

Revenue from Operation 2,45,90,41,260 2,62,97,53,243 -6.5%
EBITDA 50,26,08,398 51,65,52,977 -2.70%
Finance Cost 15,10,44,733 12,76,04,212 18.37%
Depreciation 9,89,54,464 6,19,50,838 59.73%
PBT 25,26,09,201 32,69,97,926 -22.75%
PAT 14,01,12,777 29,11,85,266 -51.88%

Financial Ratios

The key financial ratios compared to the last financial year are as under:

Ratios FY 2019-20 FY 2018-19 YoY Change(%)

Debtors Turnover (No. of Days) 201 days 235 days -
Inventory Turnover (No. of Days) 385 days 316 days -
Interest Coverage Ratio 2.67 3.56 -25%
Current Ratio 2.44 2.40 1.7%
Debt Equity Ratio(in times) 0.57 0.60 -5%
EBITDA Margin (%) 20.44 19.64 1%
Return on Capital Employed (%) 13.03 15.55 -2.52%
Return on Net Worth (%) 4.73 10.36 -5.63%
Net Profit Margin (%) 11.18 12.25 -1.07%

94
 Corporate Overview Statutory Reports Financial Statements

Ratios

Debtors Turnover Inventory Turnover Interest Coverage Current Ratio Debt Equity Ratio(in
(No. of Days) (No. of Days) Ratio times)
-25% 1.7% -5%
YoY Change YoY Change YoY Change
235 days

385 days
201 days

316 days

2.40

0.60
3.56

2.44

0.57
2.67
FY 18-19 FY 19-20 FY 18-19 FY 19-20 FY 18-19 FY 19-20 FY 18-19 FY 19-20 FY 18-19 FY 19-20

EBITDA Margin (%) Return on Capital Return on Net Worth* Net Profit Margin (%)
Employed (%) (%)

1% -2.52% -5.63% -1.07%

YoY Change YoY Change YoY Change YoY Change
20.44

15.55

12.25
10.36
13.03
19.64

4.73

11.18
FY 18-19 FY 19-20 FY 18-19 FY 19-20 FY 18-19 FY 19-20 FY 18-19 FY 19-20

*Return on Net Worth reduced due to decrease in profitability.

Human Resource

Employees are the foremost priority for AMS. The Company is committed to promote a work environment that is conducive for professional
growth of its employees and encourages equal opportunities for every employee. The company regularly conducts technical and managerial
skill development programmes for its employees, to ensure adequate training and skill development.

95
 APOLLO MICRO SYSTEMS LIMITED Annual Report 2019-20

Risk Management

Risk Definition Mitigation Strategy Outcome

Technological
Risk
The technological landscape is
constantly evolving and the failure
The Company’s R&D team constantly monitors
changes in the technological landscape,
H19,67,17,430
invested in R&D activities
to adopt new technology can enabling the Company to efficiently adopt new
have a severe impact on business technologies and upgrade existing ones to
sustainability and profitability. meet customer requirements. Moreover, the
state-of-the-art technologies available with the
Company is one of the key USPs distinguishing
it from its peers.
Liquidity Risk Liquidity crunch may occur due to
the lack of cash and inadequacy to
The company has a healthy inflow of orders
from new and existing customers on account of
H8,80,071
Cash and cash equivalent
meet working capital requirement. It its strong R&D facilities.
as on 31st March 2020
may lead to a temporary slowdown
of the Company’s operations
Employee
Risk
The inability to hire and retain
competent personnel may adversely
AMS has developed a strong HR team with a
focus on retaining top talent. To improve the
4 %
Growth of employees over
affect the Company’s operations. productivity and skills of the employees, the
previous year
Company regularly conducts technical and
managerial skill development programmes.
Quality Risk Inability to meet quality standards To ensure the quality of products, the Company AS 9100D Certificate
might have an adverse impact on regularly conducts stringent quality checks (based on and including
the Company’s reputation and may and follows a Quality Assurance Plan for every ISO 9001: 2015)
lead to loss of revenue. product. The company’s operations are ISO
9001:2015 and CEMILAC certified, validating
its credibility as a trusted manufacturer. The
Company has obtained AS 9100D Certification
(based on and including ISO 9001:2015) for
implementation of Quality Management System
at the organization based on global standards
which is applied in the Design, Development
and Manufacturing of Electronics, Mechanical &
Electromechanical systems/ sub- systems for
Defense, Space, Naval, Aerospace,
Aviation applications.
Intense The Defence ESDM sector consists AMS is an established player in its industry and is Over 3 decades of
Competition of small as well as established backed by strong technological competencies, experience in the industry
players. This could affect pricing superior service offerings, experienced and a strong management
and have an adverse effect on leadership team and top management, enabling team with an average
business, financial condition and the company to retain an edge over its peers experience of 30
results of operations. years .

96
 Corporate Overview Statutory Reports Financial Statements

Internal Control and its adequacy Cautionary Statement

To monitor and manage the risks, the company needs to have a Certain statements in the MDA section concerning future prospects
system based approach which is already inherent in the company’s may be forward-looking statements which involve a number of
operation backed by a stringent internal control system. The underlying identified / non identified risks and uncertainties that
Company has an Internal Control System commensurate with could cause actual results to differ materially. In addition to the
the size, scale and complexity of its operations. To maintain its foregoing changes in the macro-environment, global pandemic
objectivity and independence, the Internal Audit Functions reports like COVID-19 may pose an unforeseen, unprecedented,
to the Audit Committee and the Board. The Internal Audit’s main unascertainable and constantly evolving risk(s), inter-alia, to the
objective is to provide an independent, objective and reasonable Company and the environment in which it operates. The results
assurance of the adequacy and effectiveness of the organization’s of these assumptions are made, relying on available internal and
risk management, control and governance [Link] on external information, which are the basis for determining certain
the report of internal audit function, process owners undertake facts and figures stated in the report. Since the factors underlying
corrective action in their respective areas and thereby strengthen these assumptions are subject to change over time, the estimates
the controls. The detailed Internal Audit Report of Internal Auditor on which they are based, are also subject to change accordingly.
is placed before the Audit Committee for its review and advice. These forward-looking statements represent only the Company’s
current intentions, beliefs or expectations, and any forward-looking
statement speaks only as of the date on which it was made. The
Company assumes no obligation to revise or update any forward-
looking statements, whether as a result of new information, future
events, or otherwise.

97
 APOLLO MICRO SYSTEMS LIMITED Annual Report 2019-20

Independent AUDITOR’S REPORT

To
The Members of Apollo Micro Systems Limited

Report on the Audit of the Financial Statements

Opinion

We have audited the accompanying financial statements of Apollo 143(10) of the Act. Our responsibilities under those Standards are
Micro Systems Limited (‘the Company’), which comprise the further described in the Auditor’s Responsibilities for the Audit of
Balance Sheet as at March 31, 2020, the Statement of Profit and the Financial Statements section of our report. We are independent
Loss (including Other Comprehensive Income), the Statement of of the Company in accordance with the Code of Ethics issued by
Changes in Equity and the Statement of Cash Flows for the year the Institute of Chartered Accountants of India (ICAI) together with
ended on that date, and a summary of the significant accounting the independence requirements that are relevant to our audit of
policies and other explanatory information (hereinafter referred to the financial statements under the provisions of the Act and the
as ‘the financial statements’). Rules made thereunder, and we have fulfilled our other ethical
responsibilities in accordance with these requirements and the
In our opinion and to the best of our information and according to ICAI’s Code of Ethics. We believe that the audit evidence we have
the explanations given to us, the aforesaid financial statements give obtained is sufficient and appropriate to provide a basis for our
the information required by the Companies Act, 2013 (‘the Act’) in audit opinion on the financial statements.
the manner so required and give a true and fair view in conformity
with the Indian Accounting Standards prescribed under section 133
of the Act read with the Companies (Indian Accounting Standards) Key audit matters
Rules, 2015 as amended (‘Ind AS’) and other accounting principles
Key audit matters are those matters that, in our professional
generally accepted in India, of the state of affairs of the Company
judgment, were of most significance in our audit of the financial
as at March 31, 2020, the profit and total comprehensive income,
statements of the current period. These matters were addressed in
changes in equity and its cash flows for the year ended on that date.
the context of our audit of the financial statements as a whole, and
Basis for opinion in forming our opinion thereon, and we do not provide a separate
opinion on these matters. We have determined the matters
We conducted our audit of the financial statements in accordance described below to be the key audit matters to be communicated
with the Standards on Auditing (SAs) specified under section in our report.

Sl.
Key Audit Matter Auditor’s Response
No.
1 Contingent liabilities and provisions Principal Audit Procedures

Probable Liability for Import Duty for Non fulfilment of Export We evaluated and tested key controls in respect of this
Obligation under Zero Duty EPCG Scheme contingent liability and regulatory procedures which are
found to be satisfactory for audit
The Company had availed import duty exemption of Rs.1.61
crores in financial year 2014-15 underZero Duty EPCG Our procedure included the following:
Scheme(the Scheme). As per this scheme the company has
• We have perused the terms of Export Obligation under
export obligation equal to Six times of the duty exemption
Zero Duty EPCG Scheme
availed. The Company has obtained approval from the
Concern Authorities for fulfilling the export obligations. This • We have verified the amount of duty exemption availed
is a Contingent Liability which depends on performance of under the scheme
the export obligation by the company with in the time period
• We have also verified the value and the period with in
permitted.
which export obligation to be fulfilled and extension of
period approved by the Regulatory Authority

98
 Corporate Overview Statutory Reports Financial statements

Sl.
Key Audit Matter Auditor’s Response
No.
The probability or provision for the contingent liability involves • We have also evaluated the significant judgment made
high degree of judgment and estimates by the management by the management in its ability to perform the export
and hence the contingent liability is considered as a key audit obligations with in the period permitted for making
matter provision as per requirement.

Refer Note-29(ii)(b)to the Financial Statements • The management expressed their proposals to have a
quarterly review from next financial year for any likelihood
and magnitude of any liability to be provided.

Information Other than the Financial Statements and accuracy and completeness of the accounting records, relevant to
Auditor’s Report Thereon the preparation and presentation of the financial statements that
give a true and fair view and are free from material misstatement,
The Company’s Board of Directors is responsible for the preparation whether due to fraud or error.
of the other information. The other information comprises the
information included in the Management Discussion and Analysis, In preparing the financial statements, management is responsible
Board’s Report including Annexures to Board’s Report, Business for assessing the Company’s ability to continue as a going concern,
Responsibility Report, Corporate Governance and Shareholder’s disclosing, as applicable, matters related to going concern and
Information, but does not include the financial statements and our using the going concern basis of accounting unless management
auditor’s report thereon. either intends to liquidate the Company or to cease operations, or
has no realistic alternative but to do so.
Our opinion on the financial statements does not cover the
other information and we do not express any form of assurance The Board of Directors are responsible for overseeing the
conclusion thereon. Company’s financial reporting process.

In connection with our audit of the financial statements, our

responsibility is to read the other information and, in doing so,
Auditor’s Responsibilities for the Audit of the Financial
consider whether the other information is materially inconsistent
Statements
with the financial statements or our knowledge obtained during the Our objectives are to obtain reasonable assurance about whether
course of our audit or otherwise appears to be materially misstated. the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s
If, based on the work we have performed, we conclude that there is
report that includes our opinion. Reasonable assurance is a high
a material misstatement of this other information, we are required
level of assurance, but is not a guarantee that an audit conducted
to report that fact. We have nothing to report in this regard.
in accordance with SAs will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are
Management’s Responsibility for the Financial considered material if, individually or in the aggregate, they could
Statements reasonably be expected to influence the economic decisions of
users taken on the basis of these financial statements.
The Company’s Board of Directors is responsible for the matters
stated in section 134(5) of the Act with respect to the preparation As part of an audit in accordance with SAs, we exercise professional
of these financial statements that give a true and fair view of the judgment and maintain professional skepticism throughout the
financial position, financial performance, total comprehensive audit. We also:
income, changes in equity and cash flows of the Company in
accordance with the Ind AS and other accounting principles • Identify and assess the risks of material misstatement of the
generally accepted in India. This responsibility also includes financial statements, whether due to fraud or error, design and
maintenance of adequate accounting records in accordance with perform audit procedures responsive to those risks, and obtain
the provisions of the Act for safeguarding the assets of the Company audit evidence that is sufficient and appropriate to provide
and for preventing and detecting frauds and other irregularities; a basis for our opinion. The risk of not detecting a material
selection and application of appropriate accounting policies; misstatement resulting from fraud is higher than for one
making judgments and estimates that are reasonable and prudent; resulting from error, as fraud may involve collusion, forgery,
and design, implementation and maintenance of adequate internal intentional omissions, misrepresentations, or the override of
financial controls, that were operating effectively for ensuring the internal controls.

99
 APOLLO MICRO SYSTEMS LIMITED Annual Report 2019-20

• Obtain an understanding of internal financial controls relevant communicated in our report because the adverse consequences
to the audit in order to design audit procedures that are of doing so would reasonably be expected to outweigh the public
appropriate in the circumstances. Under section 143(3)(i) of interest benefits of such communication.
the Act, we are also responsible for expressing our opinion
on whether the Company has adequate internal financial
Report on Other Legal and Regulatory Requirements
controls system in place and the operating effectiveness of
such controls. 1. As required by the Companies (Auditor’s Report) Order, 2016
(‘the Order’) issued by the Central Government in terms of
• Conclude on the appropriateness of management’s use of
Section 143 (11) of the Act, we give in Annexure-A, a statement
the going concern basis of accounting and, based on the
on the matters specified in paragraphs 3 and 4 of the Order.
audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt 2. As required by Section 143(3) of the Act, based on our audit we
on the Company’s ability to continue as a going concern. report that :
If we conclude that a material uncertainty exists, we are
required to draw attention in our auditor’s report to the related a) We have sought and obtained all the information and
disclosures in the financial statements or, if such disclosures explanations which to the best of our knowledge and
are inadequate, to modify our opinion. Our conclusions are belief were necessary for the purposes of our audit.
based on the audit evidence obtained up to the date of our
b) In our opinion, proper books of account as required by
auditor’s Report. However, future events or conditions may
law have been kept by the Company so far as it appears
cause the Company to cease to continue as a going concern.
from our examination of those books.
• Evaluate the overall presentation, structure and content of the
c) the Balance Sheet, the Statement of Profit and Loss
financial statements, including the disclosures, and whether
including Other Comprehensive Income, Statement of
the financial statements represent the underlying transactions
Changes in Equity and the Statement of Cash Flow dealt
and events in a manner that achieves fair presentation.
with by this Report are in agreement with the relevant
• Materiality is the magnitude of misstatements in the financial books of account.
statements that, individually or in aggregate, makes it probable
d) In our opinion, the aforesaid financial statements comply
that the economic decisions of a reasonably knowledgeable
with the Ind AS specified under Section 133 of the Act,
user of the financial statements may be influenced. We
read with Rule 7 of the Companies (Accounts) Rules, 2014.
consider quantitative materiality and qualitative factors in
(i) planning the scope of our audit work and in evaluating e) On the basis of the written representations received from
the results of our work; and (ii) to evaluate the effect of any the directors as on March 31, 2020 taken on record by the
identified misstatements in the financial statements. Board of Directors, none of the directors is disqualified as
on March 31, 2020 from being appointed as a director in
We communicate with those charged with governance regarding,
terms of Section 164 (2) of the Act.
among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies f) With respect to the adequacy of the internal financial
in internal control that we identify during our audit. controls over financial reporting of the Company and
the operating effectiveness of such controls, refer to our
We also provide those charged with governance with a statement
separate Report in ‘Annexure-B’. Our report expresses
that we have complied with relevant ethical requirements regarding
an unmodified opinion on the adequacy and operating
independence, and to communicate with them all relationships
effectiveness of the Company’s internal financial controls
and other matters that may reasonably be thought to bear on our
over financial
independence, and where applicable, related safeguards.
3. With respect to the other matters to be included in the Auditor’s
From the matters communicated with those charged with
Report in accordance with Rule 11 of the Companies (Audit and
governance, we determine those matters that were of most
Auditors) Rules, 2014, as amended in our opinion and to the
significance in the audit of the financial statements of the current
best of our information and according to the explanations
period and are therefore the key audit matters. We describe
given to us :
these matters in our auditor’s report unless law or regulation
precludes public disclosure about the matter or when, in extremely i. The Company has disclosed the impact of pending
rare circumstances, we determine that a matter should not be litigations on its financial position in its financial

100
 Corporate Overview Statutory Reports Financial statements

ii. The Company has made provision, as required under In our opinion and to the best of our information and according
the applicable law or accounting standards, for material to the explanations given to us, the remuneration paid by the
foreseeable losses, if any, on long-term contracts including Company to its directors during the year is in accordance with
derivative contracts. the provisions of section 197 of the Act. The remuneration paid
to any director is not in excess of the limit laid down under
iii. There has been no delay in transferring amounts, required Section 197 of the Act. The Ministry of Corporate Affairs has
to be transferred, to the Investor Education and Protection not prescribed other details under Section 197(16) of the Act
Fund by the company. which are required to be commented upon by us.
iv. The disclosures in the financial statements regarding
holdings as well as dealings in specified bank notes
during the period from 8 November 2016 to 30 December
2016 have not been made in these financial statements For S.T Mohite & Co.
since they do not pertain to the financial year ended 31 Chartered Accountants (Regd No: 011410S)
March 2020.
Sd/-
4. With respect to the other matters to be included in the Auditor’s Sreenivasa Rao T. Mohite
Report in accordance with the requirements of amendments to Place: Hyderabad Partner (Membership No. 015635)
section 197(16) of the Act: Date: June 26th, 2020 ICAI UDIN: 20015635AAAACK7259

101
 APOLLO MICRO SYSTEMS LIMITED Annual Report 2019-20

Annexure A to the INDEPENDENT AUDITORS’ REPORT

With reference to Annexure A as referred to in paragraph 1 under ‘Report on Other Legal and Regulatory Requirements’ section of our
report to the Members of the company on the standalone financial statement for the year ended 31 March 2020, we report the following:

Sl.
Ref to CARO Report by Independent Auditors
No.
1 3(i) Fixed Assets
3(i)(a) The Company has maintained proper records showing full particulars including quantitative details and
situation of fixed assets on the basis of available information.
3(i)(b) The Company has a regular program of physical verification of its fixed assets, by which all fixed assets are verified
on annual basis. In our opinion, the periodicity of physical verification is reasonable having regard to the size of
the Company and the nature of its assets. Pursuant to the program, all fixed assets were physically verified during
the year. According to the information and explanation given to us, no material discrepancies were noticed on
such verification.
3(i)(c) According to the information and explanations given to us and the records examined by us and based on the
examination of sale deeds, conveyance deeds, encumbrance certificates verified by us, we report that the title
deeds comprising all the immovable properties of lands, buildings which are free hold, are in the name of the
company as at the balance sheet date.,
2 3(ii) Inventories
As explained to us, the inventories has been physically verified by the management during the year. In our opinion,
the frequency of such verification is reasonable. The Company has maintained proper records of inventory. There
were no material discrepancies noticed on verification between the physical stock and the book records.
3 3(iii) Loans to parties covered by Sec.189 of the Companies Act,2013 (‘the Act’ )
According to the information and explanation given to us, the Company has not granted any loans, secured or
unsecured to body corporate, firms, Limited Liability Firms or other parties covered in the register required to
be maintained under section 189 of the Act. Accordingly the provisions of the clause 3 (iii) of the Order are not
applicable to the Company for the year under review.
4 3(iv) Loans ,guarantees, securities to and investments in other companies
In our opinion and according to the information and explanation given to us, the company has no transactions for
compliance as per the provisions of Sections 185 and 186 of the Act.
5 3(v) Acceptance of deposits
In our opinion and according to the information and explanations given to us, the Company has not accepted any
deposits during the year as per provisions of Section 73 or 76 of the Act and the relevant Rules framed thereunder.
Accordingly the provisions of the Para 3 (v) of the Order are not applicable to the Company for the year under
review.
6 3(vi) Maintenance of cost records
According to the information and explanations given us, the maintenance of cost records prescribed by the
Central Government under section 148(1) of the Act applicability of cost audit as per Rule 3 of the Cost Audit Rules
is not applicable to the company. Accordingly Para 3(vi) of the Order is not applicable to the Company for the year
under review.
7 3(vii) Statutory Dues
3(vii)(a) According to the information and explanations given to us and on the basis of our examination of the records
of the Company, amounts deducted / accrued in the books of account in respect of undisputed statutory dues
including Provident Fund, Employee’s State Insurance, Goods and Service Tax, Customs Duty, Cess and other
material statutory dues have been generally deposited, barring small aberrations, during the year by the Company
with the appropriate authorities. There are delays in remitting Tax deducted from payees and also in respect of tax
liability arised during year for earlier years.

According to the information and explanations given to us, no undisputed amounts payable in respect of Provident
Fund, Employees’ State Insurance, Goods and Service Tax, Customs Duty, Cess, income Tax (except fresh liability
for earlier years) and other material statutory dues in arrears as at March 31, 2020 for a period of more than six
months from the date they became payable.

102
 Corporate Overview Statutory Reports Financial statements

Sl.
Ref to CARO Report by Independent Auditors
No.
3(vii)(b) According to the information and explanation given to us, there are no dues of statutory dues of Income tax, sales
tax, Service tax, Goods and Service tax, Customs duty, Excise duty, Value added tax, cess and other dues that
have not been deposited by the Company on account of any disputes.
8 3(viii) Defaults in repayments to Financial Institutions/Banks/Debenture holders
In our opinion and according to the information and explanation given to us, the Company has not defaulted in the
payment/repayments of loans or borrowings to the banks.
9 3(ix) Initial public offer/further offer
In our opinion and according to the information and explanation given to us, the company has not made, during
the year under review, any initial public offer or further public offer of securities (including debt instruments) or the
term loans during the year and hence reporting under Para 3(ix) of the Order is not applicable to the company.
10 3(x) Frauds by or on the company
In our opinion and according to the information and explanation given to us, no material fraud by the Company or
on the Company by its officers or employees has been noticed or reported during the course of our audit.
11 3(xi) Managerial Remuneration
In our opinion and according to the information and explanation given to us based on the examination of the
records of the Company, the company has paid/provided managerial remuneration in accordance with the
requisite approvals and compliances mandated by the provisions of section 197 read with Schedule V to the Act.
12 3(xii) Nidhi company
In our opinion and according to the information and explanation given to us, the company is not a Nidhi Company
as prescribed under Section 406 of the Act and hence paragraph 3(xii) of the Order is not applicable to the
company.
13 3(xiii) Transactions with Related parties
In our opinion and according to the information and explanation given to us and based on our examination of the
records of the Company, all transactions with related parties are in compliance with provisions of section 177 and
section 188 of the Act where applicable, and the details of such transactions have been disclosed in the financial
statements as required by the applicable Indian Accounting Standards.
14 3(xiv) Preferential allotment u/s 62 or private placement u/s 42 of the Act
In our opinion and according to the information and explanation given to us and based on our examination of the
records, the Company has not made any preferential allotment of equity shares during the year.

There is no private placement of shares by the company under section 42 of the Act during the year.
15 3(xv) Non-cash transactions with directors u/s 192 of the Act
In our opinion and according to the information and explanation given to us and based on our examination of the
records of the Company, the company has not entered during the year into any non cash transactions with its
Directors or persons connected to its Directors and hence provisions of Sec 192 of the Act and paragraph 3(xv) of
the Order are not applicable to the company.
16 3(xvi) Registration u/s 45-1A of Reserve Bank of India Act,1934
According to the information and explanation given to us, the company is not required to be registered under
section 45-1A of the Reserve bank of India Act, 1934 and hence paragraph 3(xvi) of the Order is not applicable to
the company.

For S.T Mohite & Co.

Chartered Accountants (Regd No: 011410S)

Sd/-
Sreenivasa Rao T. Mohite
Place: Hyderabad Partner (Membership No. 015635)
Date: June 26th, 2020 ICAI UDIN: 20015635AAAACK7259

103
 APOLLO MICRO SYSTEMS LIMITED Annual Report 2019-20

Annexure B to the INDEPENDENT AUDITORS’ REPORT

(Referred to in paragraph 1(f) under ‘Report on Other Legal and Regulatory Requirements’ section of our report to the Members of Apollo
Micro Systems Limited of even date)
Report on the Internal Financial Controls Over Financial Reporting under Para (i) of Sub-section 3 of Section 143 of the Companies Act,
2013 (‘the Act’)

We have audited the internal financial controls over financial of internal financial controls over financial reporting included
reporting of Apollo Micro Systems Limited (“the Company”) as obtaining an understanding of internal financial controls over
of March 31, 2020 in conjunction with our audit of the financial financial reporting, assessing the risk that a material weakness
statements of the Company for the year ended on that date. exists, and testing and evaluating the design and operating
effectiveness of internal control based on the assessed risk. The
procedures selected depend on the auditor’s judgement, including
Management’s Responsibility for Internal Financial
the assessment of the risks of material misstatement of the financial
Controls
statements, whether due to fraud or error.
The Board of Directors of the Company is responsible for
We believe that the audit evidence we have obtained, is sufficient
establishing and maintaining internal financial controls based on the
and appropriate to provide a basis for our audit opinion on the
internal control over financial reporting criteria established by the
internal financial controls system over financial reporting of the
Company considering the essential components of internal control
Company.
stated in the Guidance Note on Audit of Internal Financial Controls
over Financial Reporting issued by the Institute of Chartered
Accountants of India. These responsibilities include the design, Meaning of Internal Financial Controls over Financial
implementation and maintenance of adequate internal financial Reporting
controls that were operating effectively for ensuring the orderly and
efficient conduct of its business, including adherence to respective A company’s internal financial control over financial reporting is
company’s policies, the safeguarding of its assets, the prevention a process designed to provide reasonable assurance regarding
and detection of frauds and errors, the accuracy and completeness the reliability of financial reporting and the preparation of financial
of the accounting records, and the timely preparation of reliable statements for external purposes in accordance with generally
financial information, as required under the Companies Act, 2013. accepted accounting principles. A company’s internal financial
control over financial reporting includes those policies and
procedures that (1) pertain to the maintenance of records that, in
Auditor’s Responsibility reasonable detail, accurately and fairly reflect the transactions
and dispositions of the assets of the company; (2) provide
Our responsibility is to express an opinion on the internal financial
reasonable assurance that transactions are recorded as necessary
controls over financial reporting of the Company based on our audit.
to permit preparation of financial statements in accordance with
We conducted our audit in accordance with the Guidance Note on
generally accepted accounting principles, and that receipts and
Audit of Internal Financial Controls Over Financial Reporting (the
expenditures of the company are being made only in accordance
“Guidance Note”) issued by the Institute of Chartered Accountants
with authorisations of management and directors of the company;
of India and the Standards on Auditing prescribed under Section
and (3) provide reasonable assurance regarding prevention or
143(10) of the Companies Act, 2013, to the extent applicable to
timely detection of unauthorised acquisition, use, or disposition
an audit of internal financial controls. Those Standards and the
of the company’s assets that could have a material effect on the
Guidance Note require that we comply with ethical requirements
financial statements.
and plan and perform the audit to obtain reasonable assurance
about whether adequate internal financial controls over financial
reporting was established and maintained and if such controls Limitations of Internal Financial Controls Over Financial
operated effectively in all material respects. Reporting

Our audit involves performing procedures to obtain audit evidence Because of the inherent limitations of internal financial controls over
about the adequacy of the internal financial controls system over financial reporting, including the possibility of collusion or improper
financial reporting and their operating effectiveness. Our audit management override of controls, material misstatements due to

104
 Corporate Overview Statutory Reports Financial statements

error or fraud may occur and not be detected. Also, projections on the internal control over financial reporting criteria established
of any evaluation of the internal financial controls over financial by the Company considering the essential components of internal
reporting to future periods are subject to the risk that the internal control stated in the Guidance Note on Audit of Internal Financial
financial control over financial reporting may become inadequate Controls Over Financial Reporting issued by the Institute of
because of changes in conditions, or that the degree of compliance Chartered Accountants of India.
with the policies or procedures may deteriorate.

Opinion For S.T Mohite & Co.

Chartered Accountants (Regd No: 011410S)
In our opinion, to the best of our information and according to
the explanations given to us, the Company has, in all material Sd/-
respects, an adequate internal financial controls system over Sreenivasa Rao T. Mohite
financial reporting and such internal financial controls over financial Place: Hyderabad Partner (Membership No. 015635)
reporting were operating effectively as at March 31, 2020, based Date: June 26th, 2020 ICAI UDIN: 20015635AAAACK7259

105
 APOLLO MICRO SYSTEMS LIMITED Annual Report 2019-20

Balance SHEET
as at 31 March, 2020

(All amounts in Indian Rupees, except share data and where otherwise stated)
As at As at
Particulars Notes
March 31, 2020 March 31, 2019
Assets
Non-current assets
Property, plant and equipment 4 50,26,14,313 41,80,52,260
Capital work-in-progress 4 36,52,31,912 28,34,79,718
Other intangible assets 4 8,02,780 -
86,86,49,005 70,15,31,978
Current assets
Inventories 5 2,07,94,61,676 1,72,88,06,744
Financial assets
Trade receivables 6 1,35,47,91,601 1,69,31,53,261
Cash and cash equivalents 7 8,80,071 7,89,42,976
Other bank balances 8 12,38,83,795 18,71,31,478
Loans 9 19,47,946 92,60,469
Other current assets 10 22,15,53,755 10,76,43,653
3,78,25,18,844 3,80,49,38,581
Total assets 4,65,11,67,848 4,50,64,70,559
Equity and Liabilities
Equity
Equity share capital 11 20,75,88,860 20,75,88,860
Other equity 12 2,75,15,63,221 2,61,16,78,763
Total equity 2,95,91,52,081 2,81,92,67,623
Non-current liabilities
Financial Liabilities
Borrowings 13 88,591 35,51,595
Deferred tax liabilities, net 14 13,19,71,561 9,44,39,404
Provisions 15 73,65,699 58,94,786
13,94,25,851 10,38,85,785
Current liabilities
Financial Liabilities
Borrowings 13 82,82,42,375 1,03,40,38,305
Trade payables:- 16
- total outstanding dues of micro enterprises and small enterprises - -
- total outstanding dues of creditors other than micro enterprises and small enterprises 56,93,62,672 37,03,08,025
Other financial liabilities 17 7,82,94,980 11,77,81,833
Other current liabilities 18 1,43,74,796 1,65,98,622
Current tax liabilities, net 19 5,98,70,466 4,29,58,384
Provisions 15 24,44,626 16,31,981
Total liabilities 1,55,25,89,916 1,58,33,17,151
Total equity and liabilities 4,65,11,67,848 4,50,64,70,559
Summary of significant accounting policies 3

The accompanying notes are an integral part of the financial statements.

As per our report of even date
for [Link] & Co for and on behalf of the Board of Directors of
Chartered Accountants Apollo Micro Systems Limited
ICAI Firm Registration Number: 011410S CIN: L72200TG1997PLC026556

Sd/- Sd/- Sd/-

Sreenivasa Rao T Mohite Karunakar Reddy Badam Krishna Sai Kumar Addepalli
Partner Managing Director Director
Membership No.: 015635 DIN: 00790139 DIN: 03601692
ICAI UDIN: 20015635AAAACK7259

Sd/- Sd/-
Sudarshan Chiluveru Chaitanya Siva Shankar Vitta
Place: Hyderabad Chief Financial Officer Company Secretary
Date: 26 June, 2020 Membership No: ACS49765
106
 Corporate Overview Statutory Reports Financial statements

Statement of PROFIT AND LOSS

for the year ended 31 March, 2020

(All amounts in Indian Rupees, except share data and where otherwise stated)
For the year ended For the year ended
Particulars Notes
31 March 2020 31 March 2019
Revenue from operations 20 2,45,90,41,260 2,62,97,53,243
Other income 21 1,59,57,933 3,22,63,837
Total income 2,47,49,99,193 2,66,20,17,081
Expenses
Cost of materials consumed 22 1,92,18,00,418 1,95,17,50,782
Changes in inventories and work in progress 23 (12,06,94,406) 3,58,00,179
Employee benefits expense 24 7,62,44,152 7,02,16,057
Depreciation expense 25 9,89,54,464 6,19,50,838
Finance costs 26 15,10,44,733 12,76,04,212
Other expenses 27 9,50,40,631 8,76,97,087
Total expense 2,22,23,89,991 2,33,50,19,154
Profit before tax and exceptional items 25,26,09,201 32,69,97,926
Exceptional items - -
Profit before tax 25,26,09,201 32,69,97,926
Tax expense:
Current tax 28 3,80,14,414 6,29,58,384
Earlier tax adjustments 3,68,56,052 -
Deferred tax 28 3,76,25,958 (2,71,45,724)
Total tax expense 11,24,96,424 3,58,12,660
Profit for the year 14,01,12,777 29,11,85,266
Other comprehensive income
Items that will not be reclassified to profit or loss:
Re-measurement gains/ (losses) on defined benefit plan (3,22,119) 12,80,981
Income-tax effect 28 93,800 (3,73,022)
Other comprehensive income for the year, net of tax (2,28,319) 9,07,959
Total comprehensive income for the year 13,98,84,459 29,20,93,226
Earnings per equity share (nominal value of INR 10) in INR 37
Basic 6.75 14.03
Diluted 6.75 14.02
Summary of significant accounting policies 3

The accompanying notes are an integral part of the financial statements.

As per our report of even date
for [Link] & Co for and on behalf of the Board of Directors of
Chartered Accountants Apollo Micro Systems Limited
ICAI Firm Registration Number: 011410S CIN: L72200TG1997PLC026556

Sd/- Sd/- Sd/-

Sreenivasa Rao T Mohite Karunakar Reddy Badam Krishna Sai Kumar Addepalli
Partner Managing Director Director
Membership No.: 015635 DIN: 00790139 DIN: 03601692
ICAI UDIN: 20015635AAAACK7259

Sd/- Sd/-
Sudarshan Chiluveru Chaitanya Siva Shankar Vitta
Place: Hyderabad Chief Financial Officer Company Secretary
Date: 26 June, 2020 Membership No: ACS49765

107
 APOLLO MICRO SYSTEMS LIMITED Annual Report 2019-20

Statement of CASH FLOWS

for the year ended 31 March, 2020

(All amounts in Indian Rupees, except share data and where otherwise stated)
For the year ended For the year ended
Particulars
31 March 2020 31 March 2019
I. Cash flows from operating activities
Profit before tax 25,26,09,201 32,69,97,926
Adjustments to reconcile profit before tax to net cash flows:
Depreciation of tangible assets 9,89,54,464 6,19,50,838
Finance income (including fair value change in financial instruments) (1,59,57,933) (2,38,59,597)
Finance costs (including fair value change in financial instruments) 15,10,44,733 12,76,04,212
Re-measurement gains on defined benefit plans (3,22,119) 12,80,981
Operating profit before working capital changes 48,63,28,347 49,39,74,360
Changes in working capital:
Adjustment for (increase)/decrease in operating assets
Trade receivables 33,83,61,660 (54,60,51,357)
Inventories (35,06,54,932) (1,08,27,920)
Loans - current 73,12,523 (4,51,312)
Other assets - current (11,39,10,102) (58,71,670)
Other assets - non current - 2,59,15,382
Adjustment for (increase)/decrease in operating liabilities
Trade payables 19,90,54,647 (56,19,91,195)
Other financial liabilities - current (3,94,86,853) 61,15,407
Other current liabilities (22,23,825) (4,62,01,536)
Provisions 22,83,558 1,99,823
Cash generated from operations 52,70,65,022 (64,51,90,018)
Income taxes paid (5,79,58,385) (8,41,22,270)
Net cash generated from/(used in) operating activities 46,91,06,638 (72,93,12,288)
II. Cash flows from investing activities
Purchase of property, plant and equipment (including capital work in progress) (26,60,71,491) (18,61,19,644)
(Investments in)/ redemption of bank deposits (having original 6,32,47,683 79,83,72,763
maturity of more than three months) - net
Interest received (finance income) 1,59,57,933 2,38,59,597
Net cash used in investing activities (18,68,65,875) 63,61,12,716
III. Cash flows from financing activities
Share issue proceeds - -
Share issue expenses - (36,24,628)
Dividend Paid - (2,50,31,968)
(Repayment) /Proceeds from borrowings, net (20,92,58,934) 26,04,31,226
Interest paid (15,10,44,733) (13,21,72,583)
Net cash provided by financing activities (36,03,03,668) 9,96,02,046

108
 Corporate Overview Statutory Reports Financial statements

Statement of CASH FLOWS

for the year ended 31 March, 2020

(All amounts in Indian Rupees, except share data and where otherwise stated)
For the year ended For the year ended
Particulars
31 March 2020 31 March 2019
Net increase in cash and cash equivalents (I+II+III) (7,80,62,905) 64,02,475
Cash and cash equivalents at the beginning of the year 7,89,42,976 7,25,40,502
Cash and cash equivalents at the end of the year (refer note below) 8,80,071 7,89,42,976
Note:
Cash and cash equivalents comprise:
Cash on hand 5,55,806 5,63,169
Balances with banks:
- in current accounts 3,24,265 7,83,79,808
8,80,071 7,89,42,976
Summary of significant accounting policies

The accompanying notes are an integral part of the financial statements.

As per our report of even date
for [Link] & Co for and on behalf of the Board of Directors of
Chartered Accountants Apollo Micro Systems Limited
ICAI Firm Registration Number: 011410S CIN: L72200TG1997PLC026556

Sd/- Sd/- Sd/-

Sreenivasa Rao T Mohite Karunakar Reddy Badam Krishna Sai Kumar Addepalli
Partner Managing Director Director
Membership No.: 015635 DIN: 00790139 DIN: 03601692
ICAI UDIN: 20015635AAAACK7259

Sd/- Sd/-
Sudarshan Chiluveru Chaitanya Siva Shankar Vitta
Place: Hyderabad Chief Financial Officer Company Secretary
Date: 26 June, 2020 Membership No: ACS49765

109
 APOLLO MICRO SYSTEMS LIMITED Annual Report 2019-20

Statement of CHANGES IN EQUITY

for the year ended March 31, 2020

a. Equity Share Capital

(All amounts in Indian Rupees, except share data and where otherwise stated)
Particulars No. of shares Amount
Balance as at April 1, 2018 2,07,63,886 20,76,38,860
Add: Issued during the year - -
Less : Fully paid up shares purchsed by ESOP Trust but not allotted to employees (5,000) (50,000)
Balance as at March 31, 2019 2,07,58,886 20,75,88,860
Add: Issued during the year - -
Less : Fully paid up shares purchsed by ESOP Trust but not allotted to employees - -
Balance as at March 31, 2020 2,07,58,886 20,75,88,860

b. Other equity
(All amounts in Indian Rupees, except share data and where otherwise stated)
Reserves and Surplus
Particulars Amount
No. of shares Amount
At April 1, 2018 1,65,73,81,291 69,08,60,842 2,34,82,42,133
Profit for the year - 29,11,85,266 29,11,85,266
Additions duirng the year - - -
Share issue expenses (36,24,628) - (36,24,628)
Dividend Paid (2,50,31,968) (2,50,31,968)
Other comprehensive income -
Re-measurement gains/ (losses) on defined benefit plans 12,80,982 12,80,982
Income-tax effect (3,73,023) (3,73,023)
At March 31, 2019 1,65,37,56,663 95,79,22,100 2,61,16,78,763
Profit for the year 14,01,12,777 14,01,12,777
Additions duirng the year - - -
Share issue expenses - - -
Dividend Paid - - -
Other comprehensive income
Re-measurement gains/ (losses) on defined benefit plans, net of tax - (3,22,119) (3,22,119)
Income-tax effect - 93,800 93,800
Balance as of 31 March 2020 1,65,37,56,663 1,09,78,06,558 2,75,15,63,221

The accompanying notes are an integral part of the financial statements.

As per our report of even date
for [Link] & Co for and on behalf of the Board of Directors of
Chartered Accountants Apollo Micro Systems Limited
ICAI Firm Registration Number: 011410S CIN: L72200TG1997PLC026556

Sd/- Sd/- Sd/-

Sreenivasa Rao T Mohite Karunakar Reddy Badam Krishna Sai Kumar Addepalli
Partner Managing Director Director
Membership No.: 015635 DIN: 00790139 DIN: 03601692
ICAI UDIN: 20015635AAAACK7259

Sd/- Sd/-
Sudarshan Chiluveru Chaitanya Siva Shankar Vitta
Place: Hyderabad Chief Financial Officer Company Secretary
Date: 26 June, 2020 Membership No: ACS49765

110
 Corporate Overview Statutory Reports Financial statements

Notes forming part of THE FINANCIAL STATEMENTS

(All amounts in Indian Rupees, except share data and where otherwise stated)

1 General Information • employee defined benefit assets/(liability) are

recognized as the net total of the fair value of plan
Apollo Micro Systems Private Limited (“AMS”) was incorporated assets, plus actuarial losses, less actuarial gains and
on March 03, 1997. It got converted in to public limited the present value of the defined benefit obligation;
company with effect from April 01, 2017. The Register office
of the company is situated at Plot No. No.128/A, Road No-12, • long term borrowings are measured at amortized
BEL Road, IDA Mallapur, Uppal Mandal, Rangareddy Dist- cost using the effective interest rate method.
500076. AMS is in to the supply of Electronics and Electro-
2.3 Functional currency
mechanical systems and components including Design,
Research & Development of systems which are used in Missile The financial statements are presented in Indian rupees,
Programmes(weapon Systems Electronics), Underwater which is the functional currency of the Company. Functional
Missile programmes(weapon Systems Electronics), Avionic currency of an entity is the currency of the primary economic
Systems, Ship Borne Systems, Submarine Systems, etc. The environment in which the entity operates.
Company is listed on the National Stock Exchange (NSE) and
the Bombay Stock Exchange (BSE). All amounts are in Indian Rupees except share data,
unless otherwise stated.
2 Basis of preparation of financial statements 2.4 Operating cycle
2.1 Statement of Compliance All the assets and liabilities have been classified as current
or non-current as per the Company’s normal operating
These financial statements are prepared under the
cycle and other criteria set out in the Schedule III to the
historical cost convention on the accrual basis except for
Companies Act, 2013.
certain financial instruments which are measured at fair
values. These financial statements comply with Indian Assets:
Accounting Standard (Ind AS), the provisions of the
Companies Act, 2013 (“the Act”) (to the extent notified). An asset is classified as current when it satisfies any of the
The Ind AS are prescribed under Section 133 of the Act following criteria:
read with Rule 3 of the Companies (Indian Accounting
Standards) Rules, 2015 and relevant amendment rules a) it is expected to be realized in, or is intended for sale
issued there after. Accounting policies have been or consumption in, the Company’s normal operating
consistently applied except where a newly issued cycle;
accounting standard is initially adopted or a revision to b) it is held primarily for the purpose of being traded;
an existing accounting standard requires a change in the
accounting policy hitherto in use. c) it is expected to be realized within twelve months
after the reporting date; or
The financial statements were authorised for issue by the
d) it is cash or cash equivalent unless it is restricted
Company’s Board of Directors on June 26, 2020.
from being exchanged or used to settle a liability for
Details of the accounting policies are included in Note 3. at least twelve months after the reporting date.

2.2 Basis of measurement Liabilities:

These financial statements have been prepared on A liability is classified as current when it satisfies any of
the historical cost convention and on an accrual basis, the following criteria:
except for the following material items in the statement of
a) it is expected to be settled in the Company’s normal
financial position:
operating cycle;
• certain financial assets and liabilities are measured at b) it is held primarily for the purpose of being traded;
fair value;
c) it is due to be settled within twelve months after the
reporting date; or

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Notes forming part of THE FINANCIAL STATEMENTS

(All amounts in Indian Rupees, except share data and where otherwise stated)

d) the Company does not have an unconditional right Useful lives of depreciable assets
to defer settlement of the liability for at least twelve
months after the reporting date. Terms of a liability Management reviews the useful lives of depreciable assets
that could, at the option of the counterparty, result in at each reporting. As at March 31, 2020 management
its settlement by the issue of equity instruments do assessed that the useful lives represent the expected
not affect its classification. utility of the assets to the Company. Further, there is no
significant change in the useful lives as compared to
Current assets/ liabilities include the current portion previous year.
of non-current assets/ liabilities respectively. All other
assets/ liabilities are classified as non-current. 2.6 Measurement of fair values

2.5 Critical accounting judgements and key sources of A number of the Company’s accounting policies and
estimation disclosures require the measurement of fair values, for
both financial and non-financial assets and liabilities.
In the application of the Company’s accounting policies,
which are described in note 3, the management of the Fair values are categorised into different levels in a fair
Company are required to make judgements, estimates value hierarchy based on the inputs used in the valuation
and assumptions about the carrying amounts of assets and techniques as follows:
liabilities that are not readily apparent from other sources.
`– Level 1: quoted prices (unadjusted) in active markets
The estimates and associated assumptions are based on
for identical assets or liabilities.
historical experience and other factors that are considered
to be relevant. Actual results may differ from these estimates. – Level 2: inputs other than quoted prices included in
The estimates and underlying assumptions are reviewed Level 1 that are observable for the asset or liability,
on an ongoing basis. Revisions to accounting estimates either directly (i.e. as prices) or indirectly (i.e. derived
are recognised in the period in which the estimate is from prices).
revised if the revision affects only that period, or in the
period of the revision and future periods if the revision – Level 3: inputs for the asset or liability that are not based
affects both current and future periods. on observable market data (unobservable inputs).
When measuring the fair value of an asset or a
The following are the areas of estimation uncertainty and liability, the Company uses observable market data
critical judgements that the management has made in the as far as possible. If the inputs used to measure the
process of applying the Company’s accounting policies fair value of an asset or a liability fall into different
and that have the most significant effect on the amounts levels of the fair value hierarchy, then the fair value
recognised in the financial statements: measurement is categorised in its entirety in the same
level of the fair value hierarchy as the lowest level
Provision and contingent liability
input that is significant to the entire measurement.
On an ongoing basis, Company reviews pending cases, The Company recognises transfers between levels
claims by third parties and other contingencies. For of the fair value hierarchy at the end of the reporting
contingent losses that are considered probable, an period during which the change has occurred.
estimated loss is recorded as an accrual in financial
statements. Loss Contingencies that are considered 3 Significant accounting policies
possible are not provided for but disclosed as Contingent
liabilities in the financial statements. Contingencies 3.1 Revenue recognition
the likelihood of which is remote are not disclosed in
Revenue is recognised upon transfer of control of promised
the financial statements. Gain contingencies are not
products or services to customers in an amount that reflects
recognized until the contingency has been resolved and
the consideration which the Company expects to receive in
amounts are received or receivable.
exchange for those products or services.

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Notes forming part of THE FINANCIAL STATEMENTS

(All amounts in Indian Rupees, except share data and where otherwise stated)

The Company's revenues are derived from sale of goods adjusted for any lease payments made at or before the
and services. commencement date less any lease incentives received,
plus any initial direct costs incurred and an estimate of
• Revenue from sale of goods is recognized where costs to be incurred by the lessee in dismantling and
control is transferred to the Company’s customers removing the underlying asset or restoring the underlying
at the time of shipment to or receipt of goods by asset or site on which it is located. The right-of-use assets
the customers. There was no change in the point of is subsequently measured at cost less any accumulated
recognition of revenue upon adoption of Ind AS 115. depreciation, accumulated impairment losses, if any and
adjusted for any remeasurement of the lease liability. The
• Service income, is recognized as and when the
right-of-use assets is depreciated using the straight-line
underlying services are performed. There was no
method from the commencement date over the shorter of
change in the point of recognition of revenue upon
lease term or useful life of right-of-use asset. The estimated
adoption of Ind AS 115. Upfront non-refundable
useful lives of right-of-use assets are determined on the
payments received under these arrangements
same basis as those of property, plant and equipment.
continue to be deferred and are recognized over
Right of-use assets are tested for impairment whenever
the expected period that related services are to be
there is any indication that their carrying amounts may not
performed.
be recoverable. Impairment loss, if any, is recognised in
• Dividend income is accounted for when the right to the statement of profit and loss.
receive the income is established.
The Company measures the lease liability at the present
• Difference between the sale price and carrying value of the lease payments that are not paid at the
value of investment is recognised as profit or loss commencement date of the lease. The lease payments
on sale / redemption on investment on trade date of are discounted using the interest rate implicit in the lease
transaction. if that rate can be readily determined. If that rate cannot
be readily determined, the Company uses incremental
• Interest income is accrued on, time basis, by borrowing rate. For leases with reasonably similar
reference to the principal outstanding and at the characteristics, the Company, on a lease by lease basis,
effective interest rate applicable, which is the rate may adopt either the incremental borrowing rate specific
that exactly discounts estimated future cash receipts to the lease or the incremental borrowing rate for the
through the expected life of the financial asset to that portfolio as a whole. The lease payments shall include
asset’s net carrying amount on initial recognition. fixed payments, variable lease payments, residual value
guarantees, exercise price of a purchase option where
3.2 Leases
the Company is reasonably certain to exercise that option
A contract is, or contains, a lease if the contract conveys and payments of penalties for terminating the lease, if
the right to control the use of an identified asset for a the lease term reflects the lessee exercising an option
period of time in exchange for consideration. to terminate the lease. The lease liability is subsequently
remeasured by increasing the carrying amount to reflect
Company as a lessee interest on the lease liability, reducing the carrying amount
to reflect the lease payments made and remeasuring the
The Company accounts for each lease component carrying amount to reflect any reassessment or lease
within the contract as a lease separately from non-lease modifications or to reflect revised in-substance fixed lease
components of the contract and allocates the consideration payments. The Company recognises the amount of the
in the contract to each lease component on the basis of the re-measurement of lease liability due to modification as
relative stand-alone price of the lease component and the an adjustment to the right-of-use asset and statement of
aggregate stand-alone price of the non-lease components. profit and loss depending upon the nature of modification.
Where the carrying amount of the right-of-use asset
The Company recognises right-of-use asset representing is reduced to zero and there is a further reduction in
its right to use the underlying asset for the lease term at the measurement of the lease liability, the Company
the lease commencement date. The cost of the right of- recognises any remaining amount of the re-measurement
use asset measured at inception shall comprise of the in statement of profit and loss.
amount of the initial measurement of the lease liability
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Notes forming part of THE FINANCIAL STATEMENTS

(All amounts in Indian Rupees, except share data and where otherwise stated)

The Company has elected not to apply the requirements Deferred tax
of Ind AS 116 Leases to short term leases of all assets
that have a lease term of 12 months or less and leases Deferred tax is recognized using the balance sheet
for which the underlying asset is of low value. The lease method, providing for temporary differences between
payments associated with these leases are recognised as the carrying amounts of assets and liabilities for financial
an expense on a straight-line basis over the lease term. reporting purposes and the amounts used for taxation
purposes. Deferred tax is not recognized for the following
3.3 Foreign currencies temporary differences: the initial recognition of assets or
liabilities in a transaction that is not a business combination
In preparing the financial statements of the Company, and that affects neither accounting nor taxable profit;
transactions in currencies other than the company’s differences relating to investments in subsidiaries and
functional currency (foreign currencies) are recognised jointly controlled entities to the extent that it is probable
at the rates of exchange prevailing at the dates of that they will not reverse in the foreseeable future; and
the transactions. At the end of each reporting period, taxable temporary differences arising upon the initial
monetary items denominated in foreign currencies are recognition of goodwill. Deferred tax is measured at
retranslated at the rates prevailing at that date. Non- the tax rates that are expected to be applied to the
monetary items that are measured in terms of historical temporary differences when they reverse, based on the
cost in a foreign currency are not retranslated. Exchange laws that have been enacted or substantively enacted
differences on monetary items are recognised in profit or by the reporting date. Deferred tax assets and liabilities
loss in the period in which they arise. are offset if there is a legally enforceable right to offset
current tax liabilities and assets, and they relate to income
3.4 Borrowing costs
taxes levied by the same tax authority on the same taxable
Specific borrowing costs that are attributable to the entity, or on different tax entities, but they intend to settle
acquisition, construction or production of a qualifying asset current tax liabilities and assets on a net basis or their tax
are capitalized as part of the cost of such asset till such assets and liabilities will be realized simultaneously.
time the asset is ready for its intended use and borrowing
A deferred tax asset is recognized to the extent that it
costs are being incurred. A qualifying asset is an asset that
is probable that future taxable profits will be available
necessarily takes a substantial period of time to get ready for
against which the temporary difference can be utilized.
its intended use. All other borrowing costs are recognised
Deferred tax assets are reviewed at each reporting date
as an expense in the period in which they are incurred.
and are reduced to the extent that it is no longer probable
Borrowing cost includes interest expense, amortization
that the related tax benefit will be realized.
of discounts, ancillary costs incurred in connection with
borrowing of funds and exchange difference arising 3.6 Earnings per share
from foreign currency borrowings to the extent they are
regarded as an adjustment to the Interest cost. The Company presents basic and diluted earnings per share
(“EPS”) data for its ordinary shares. The basic earnings per
3.5 Taxation share is computed by dividing the net profit attributable to
equity shareholders for the period by the weighted average
Income tax expense consists of current and deferred tax.
number of equity shares outstanding during the year.
Income tax expense is recognized in the income statement
Diluted earnings per share is computed by dividing the
except to the extent that it relates to items recognized
net profit attributable to equity shareholders for the year
directly in equity, in which case it is recognized in equity.
relating to the dilutive potential equity shares, by the
Current tax weighted average number of equity shares considered
for deriving basic earnings per share and the weighted
Current tax is the expected tax payable on the taxable average number of equity shares which could have been
income for the year, using tax rates enacted or issued on the conversion of all dilutive potential equity
substantively enacted at the reporting date, and any shares. Potential equity shares are deemed to be dilutive
adjustment to tax payable in respect of previous years. only if their conversion to equity shares would decrease
the net profit per share.

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Notes forming part of THE FINANCIAL STATEMENTS

(All amounts in Indian Rupees, except share data and where otherwise stated)

3.7 Treasury Shares 3.10 Depreciation

The Company has created an Employee Stock Option Plan Depreciation is the systematic allocation of the depreciable
Trust (ESOP Trust) for providing share-based payment to amount of PPE over its useful life and is provided on a
its employees. The Company uses the trust as a vehicle straight-line basis over the useful lives as prescribed in
for distributing shares to employees under the employee Schedule II to the Act or as per technical assessment.
remuneration schemes. The Company allots shares to
the ESOP Trust or acquires shares from the open market. Depreciable amount for PPE is the cost of PPE less its
The Company treats the ESOP trust as its extension and estimated residual value. The useful life of PPE is the period
shares held by ESOP Trust are treated as treasury shares. over which PPE is expected to be available for use by the
Share options exercised during the reporting period are Company, or the number of production or similar units
satisfied with treasury shares. The consideration paid expected to be obtained from the asset by the Company.
for treasury shares including any directly attributable
The Company has componentised its PPE and has
incremental cost is presented as a deduction from total
separately assessed the life of major components. In case
equity, until they are cancelled, sold or reissued. When
of certain classes of PPE, the Company uses different
treasury shares are sold or reissued subsequently, the
useful lives than those prescribed in Schedule II to the
amount received is recognized as an increase in equity,
Act. The useful lives have been assessed based on
and the resulting surplus or deficit on the transaction is
technical advice, taking into account the nature of the
transferred to/ from retained earnings.
PPE and the estimated usage of the asset on the basis
3.8 Property, plant and equipment of management’s best estimation of obtaining economic
benefits from those classes of assets.
The initial cost of PPE comprises its purchase price,
including import duties and non-refundable purchase Such classes of assets and their estimated useful lives are
taxes, and any directly attributable costs of bringing an as under:
asset to working condition and location for its intended
Particulars Useful life
use, including relevant borrowing costs and any expected
costs of decommissioning, less accumulated depreciation Buildings 30 years
and accumulated impairment losses, if any. Expenditure Plant and Machinery 15 years
incurred after the PPE have been put into operation, such as
Electrical Equipment 10 years
repairs and maintenance, are charged to the Statement of
Profit and Loss in the period in which the costs are incurred. Office Equipment 5 years
If significant parts of an item of PPE have different Computers 3 years
useful lives, then they are accounted for as Furniture and Fixtures 10 years
separate items (major components) of PPE.
Vehicles 8 years
Material items such as spare parts, stand-by equipment
Tools and Spares 15 years
and service equipment are classified as PPE when they
meet the definition of PPE as specified in Ind AS 16 –
Property, Plant and Equipment.
Depreciation on additions is provided on a pro-rata basis
from the month of installation or acquisition and in case of
3.9 Expenditure during construction period Projects from the date of commencement of commercial
production. Depreciation on deductions/disposals is
Expenditure during construction period (including provided on a pro-rata basis up to the date of deduction/
financing cost related to borrowed funds for construction disposal.
or acquisition of qualifying PPE) is included under Capital
Work-in-Progress, and the same is allocated to the 3.11 Inventories
respective PPE on the completion of their construction.
Inventories are valued as follows:
Advances given towards acquisition or construction of
PPE outstanding at each reporting date are disclosed as • Raw materials, fuel, stores & spare parts and packing
Capital Advances under “Other non-current Assets”. materials:

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Notes forming part of THE FINANCIAL STATEMENTS

(All amounts in Indian Rupees, except share data and where otherwise stated)

Valued at lower of cost and net realisable value (NRV). The recoverable amount of an asset or cash-generating
However, these items are considered to be realisable unit (as defined below) is the greater of its value in use
at cost, if the finished products, in which they will be and its fair value less costs to sell. In assessing value
used, are expected to be sold at or above cost. Cost in use, the estimated future cash flows are discounted
is determined on weighted average basis. to their present value using a pre-tax discount rate that
reflects current market assessments of the time value
• Work-in- progress (WIP), finished goods and stock-in- of money and the risks specific to the asset or the cash-
trade: generating unit. For the purpose of impairment testing,
assets are grouped together into the smallest group of
Valued at lower of cost and NRV. Cost of Finished
assets that generates cash inflows from continuing use
goods and WIP includes cost of raw materials, cost of
that are largely independent of the cash inflows of other
conversion and other costs incurred in bringing the
assets or groups of assets (the “cash-generating unit”).
inventories to their present location and condition. Cost
of inventories is computed on weighted average basis. An impairment loss is recognized in the income statement
if the estimated recoverable amount of an asset or its
3.12 Cash and cash equivalents
cash-generating unit is lower than its carrying amount.
Cash and cash equivalents in the Balance Sheet comprise Impairment losses recognized in prior periods are
cash at bank and in hand and short-term deposits with assessed at each reporting date for any indications
banks that are readily convertible into cash which are that the loss has decreased or no longer exists. An
subject to insignificant risk of changes in value and are held impairment loss is reversed if there has been a change
for the purpose of meeting short-term cash commitments. in the estimates used to determine the recoverable
amount. An impairment loss is reversed only to the extent
3.13 Cash flow statement that the asset’s carrying amount does not exceed the
carrying amount that would have been determined, net
Cash flows are reported using the indirect method,
of depreciation or amortization, if no impairment loss had
whereby net profit before tax is adjusted for the effects
been recognized.
of transactions of a non-cash nature and any deferrals or
accruals of past or future cash receipts or payments. The 3.16 Employee benefits
cash flows from operating, investing and financing activities
of the Company are segregated. Bank overdrafts are Short-term employee benefits
classified as part of cash and cash equivalent, as they form
Short-term employee benefits are expensed as the
an integral part of an entity’s cash management.
related service is provided. A liability is recognized for the
3.14 Government grants amount expected to be paid if the Company has a present
legal or constructive obligation to pay this amount as a
Government grants are recognised where there is result of past service provided by the employee and the
reasonable assurance that the grant will be received and obligation can be estimated reliably.
all attached conditions will be complied with.
Defined contribution plans
Where the Company receives non-monetary grants,
the asset and the grant are accounted at fair value and The Company’s contributions to defined contribution
recognised in the statement of profit and loss over the plans are charged to the income statement as and when
expected useful life of the asset. the services are received from the employees.

3.15 Impairment of non financial assets Defined benefit plans

The carrying amounts of the Company’s non-financial The liability in respect of defined benefit plans and
assets, inventories and deferred tax assets are reviewed other post-employment benefits is calculated using the
at each reporting date to determine whether there is any projected unit credit method consistent with the advice
indication of impairment. If any such indication exists, then of qualified actuaries. The present value of the defined
the asset’s recoverable amount is estimated. benefit obligation is determined by discounting the
estimated future cash outflows using interest rates of

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Notes forming part of THE FINANCIAL STATEMENTS

(All amounts in Indian Rupees, except share data and where otherwise stated)

high-quality corporate bonds that are denominated in 3.18 Contingent liabilities & contingent assets
the currency in which the benefits will be paid, and that
have terms to maturity approximating to the terms of the A disclosure for a contingent liability is made when there is
related defined benefit obligation. In countries where a possible obligation or a present obligation that may, but
there is no deep market in such bonds, the market rates probably will not, require an outflow of resources. Where
on government bonds are used. The current service cost there is a possible obligation or a present obligation in
of the defined benefit plan, recognized in the income respect of which the likelihood of outflow of resources is
statement in employee benefit expense, reflects the remote, no provision or disclosure is made.
increase in the defined benefit obligation resulting from
Contingent assets are not recognised in the financial
employee service in the current year, benefit changes,
statements. However, contingent assets are assessed
curtailments and settlements. Past service costs are
continually and if it is virtually certain that an inflow of
recognized immediately in income. The net interest cost
economic benefits will arise, the asset and related income
is calculated by applying the discount rate to the net
are recognised in the period in which the change occurs.
balance of the defined benefit obligation and the fair
value of plan assets. This cost is included in employee 3.19 Financial instruments
benefit expense in the income statement. Actuarial gains
and losses arising from experience adjustments and a. Recognition and Initial recognition
changes in actuarial assumptions are charged or credited
The Company recognizes financial assets and
to equity in other comprehensive income in the period in
financial liabilities when it becomes a party to the
which they arise.
contractual provisions of the instrument. All financial
Termination benefits assets and liabilities are recognized at fair value on
initial recognition, except for trade receivables which
Termination benefits are recognized as an expense when are initially measured at transaction price. Transaction
the Company is demonstrably committed, without realistic costs that are directly attributable to the acquisition or
possibility of withdrawal, to a formal detailed plan to either issues of financial assets and financial liabilities that
terminate employment before the normal retirement date, are not at fair value through profit or loss, are added to
or to provide termination benefits as a result of an offer the fair value on initial recognition.
made to encourage voluntary redundancy. Termination
benefits for voluntary redundancies are recognized as an A financial asset or financial liability is initially measured
expense if the Company has made an offer encouraging at fair value plus, for an item not at fair value through
voluntary redundancy, it is probable that the offer will profit and loss (FVTPL), transaction costs that are
be accepted, and the number of acceptances can be directly attributable to its acquisition or issue.
estimated reliably.
b. Classification and Subsequent measurement
3.17 Provisions Financial assets
On initial recognition, a financial asset is classified as
A provision is recognized if, as a result of a past event, the
measured at
Company has a present legal or constructive obligation
that can be estimated reliably, and it is probable that an – amortised cost;
outflow of economic benefits will be required to settle
– FVTPL
the obligation. If the effect of the time value of money is
material, provisions are determined by discounting the Financial assets are not reclassified subsequent
expected future cash flows at a pre-tax rate that reflects to their initial recognition, except if and in the
current market assessments of the time value of money period the Company changes its business
and the risks specific to the liability. Where discounting is model for managing financial assets.
used, the increase in the provision due to the passage of A financial asset is measured at amortised cost if it
time is recognized as a finance cost. meets both of the following conditions and is not
designated as at FVTPL:

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Notes forming part of THE FINANCIAL STATEMENTS

(All amounts in Indian Rupees, except share data and where otherwise stated)

– the asset is held within a business model whose ` – the frequency, volume and timing of sales of
objective is to hold assets to collect contractual financial assets in prior periods, the reasons for
cash flows; and such sales and expectations about future sales
activity.
– the contractual terms of the financial asset give
rise on specified dates to cash flows that are Transfers of financial assets to third parties in
solely payments of principal and interest on the transactions that do not qualify for derecognition are
principal amount outstanding. not considered sales for this purpose, consistent with
the Company’s continuing recognition of the assets.
All financial assets not classified as measured at
amortised cost as described above are measured Financial assets that are held for trading or are
at FVTPL. On initial recognition, the Company may managed and whose performance is evaluated on a
irrevocably designate a financial asset that otherwise fair value basis are measured at FVTPL.
meets the requirements to be measured at amortised
cost at FVTPL if doing so eliminates or significantly Financial assets: Assessment whether contractual cash
reduces an accounting mismatch that would flows are solely payments of principal and interest
otherwise arise.
For the purposes of this assessment, ‘principal’ is
Financial assets: Business model assessment defined as the fair value of the financial asset on initial
recognition. Interest’ is defined as consideration
The Company makes an assessment of the objective for the time value of money and for the credit risk
of the business model in which a financial asset is associated with the principal amount outstanding
held at a portfolio level because this best reflects during a particular period of time and for other
the way the business is managed and information basic lending risks and costs (e.g. liquidity risk and
is provided to management. The information administrative costs), as well as a profit margin.
considered includes:
In assessing whether the contractual cash flows
– the stated policies and objectives for the are solely payments of principal and interest, the
portfolio and the operation of those policies in Company considers the contractual terms of the
practice. These include whether management’s instrument. This includes assessing whether the
strategy focuses on earning contractual interest financial asset contains a contractual term that could
income, maintaining a particular interest rate change the timing or amount of contractual cash
profile, matching the duration of the financial flows such that it would not meet this condition. In
assets to the duration of any related liabilities or making this assessment, the Company considers:
expected cash outflows or realising cash flows
through the sale of the assets; – contingent events that would change the amount
or timing of cash flows;
– `how the performance of the portfolio is evaluated
and reported to the Company’s management; – terms that may adjust the contractual coupon
rate, including variable interest rate features;
– the risks that affect the performance of the
business model (and the financial assets held – prepayment and extension features; and
within that business model) and how those risks
– terms that limit the Company’s claim to cash
are managed;
flows from specified assets (e.g. non‑ recourse
– how managers of the business are compensated features).

– e.g. whether compensation is based on the fair A prepayment feature is consistent with the solely
value of the assets managed or the contractual payments of principal and interest criterion if the
cash flows collected; and prepayment amount substantially represents unpaid
amounts of principal and interest on the principal

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Notes forming part of THE FINANCIAL STATEMENTS

(All amounts in Indian Rupees, except share data and where otherwise stated)

amount outstanding, which may include reasonable c. Derecognition

additional compensation for early termination Financial assets
of the contract. Additionally, for a financial asset
The Company derecognises a financial asset
acquired at a significant discount or premium to its
when the contractual rights to the cash flows
contractual par amount, a feature that permits or
from the financial asset expire, or it transfers the
requires prepayment at an amount that substantially
rights to receive the contractual cash flows in a
represents the contractual par amount plus accrued
transaction in which substantially all of the risks
(but unpaid) contractual interest (which may also
and rewards of ownership of the financial asset
include reasonable additional compensation for
are transferred or in which the Company neither
early termination) is treated as consistent with this
transfers nor retains substantially all of the risks
criterion if the fair value of the prepayment feature is
and rewards of ownership and does not retain
insignificant at initial recognition.
control of the financial asset
Financial assets: Subsequent measurement and
If the Company enters into transactions whereby
gains and losses
it transfers assets recognised on its balance
` Financial assets at FVTPL: These assets are sheet, but retains either all or substantially all of
subsequently measured at fair value. Net gains and the risks and rewards of the transferred assets,
losses, including any interest or dividend income, are the transferred assets are not derecognised.
recognised in profit or loss.
Financial liabilities
Financial assets at amortised cost: These assets
The Company derecognises a financial liability
are subsequently measured at amortised cost using
when its contractual obligations are discharged
the effective interest method. The amortised cost
or cancelled, or expire.
is reduced by impairment losses. Interest income,
foreign exchange gains and losses and impairment The Company also derecognises a financial
are recognised in profit or loss. Any gain or loss on liability when its terms are modified and the cash
derecognition is recognised in profit or loss. flows under the modified terms are substantially
different. In this case, a new financial liability
` Financial liabilities: Classification, Subsequent
based on the modified terms is recognised at
measurement and gains and losses
fair value. The difference between the carrying
Financial liabilities are classified as measured at amount of the financial liability extinguished and
amortised cost or FVTPL. A financial liability is the new financial liability with modified terms is
classified as at FVTPL if it is classified as held‑ for‑ recognised in profit and loss statement.
trading, or it is a derivative or it is designated as
d. Offsetting
such on initial recognition. Financial liabilities at
FVTPL are measured at fair value and net gains Financial assets and financial liabilities are offset and
and losses, including any interest expense, are the net amount presented in the balance sheet when
recognised in profit or loss. Other financial liabilities and only when, the Company currently has a legally
are subsequently measured at amortised cost using enforceable right to set off the amounts and it intends
the effective interest method. Interest expense and either to settle them on a net basis or to realise the
foreign exchange gains and losses are recognised asset and settle the liability simultaneously.
in profit or loss. Any gain or loss on derecognition is
also recognised in profit or loss.

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 APOLLO MICRO SYSTEMS LIMITED Annual Report 2019-20

Notes forming part of THE FINANCIAL STATEMENTS

(All amounts in Indian Rupees, except share data and where otherwise stated)

e. Impairment
12-month expected credit losses are the portion
The Company recognises loss allowances for
of expected credit losses that result from default
expected credit losses on financial assets measured
events that are possible within 12 months after the
at amortised cost;
reporting date (or a shorter period if the expected
At each reporting date, the Company assesses life of the instrument is less than 12 months).
whether financial assets carried at amortised cost In all cases, the maximum period considered when
and debt securities at fair value through other estimating expected credit losses is the maximum
comprehensive income (FVOCI) are credit impaired. contractual period over which the Company is
exposed to credit risk.
A financial asset is ‘credit‑ impaired’ when one or more
events that have a detrimental impact on the estimated When determining whether the credit risk of a
future cash flows of the financial asset have occurred. financial asset has increased significantly since initial
Evidence that a financial asset is credit‑ impaired recognition and when estimating expected credit
includes the following observable data: losses, the Company considers reasonable and
supportable information that is relevant and available
` – significant financial difficulty of the borrower or without undue cost or effort. This includes both
issuer; quantitative and qualitative information and analysis,
based on the Company’s historical experience and
– the restructuring of a loan or advance by the
informed credit assessment and including forward‑
Company on terms that the Company would not
looking information.
consider otherwise;
Measurement of expected credit losses
– it is probable that the borrower will enter
bankruptcy or other financial reorganisation; or Expected credit losses are a probability‑weighted
estimate of credit losses. Credit losses are measured
– the disappearance of an active market for a
as the present value of all cash shortfalls (i.e. the
security because of financial difficulties.
difference between the cash flows due to the
The Company measures loss allowances at an Company in accordance with the contract and the
amount equal to lifetime expected credit losses, cash flows that the Company expects to receive).
except for the following, which are measured as 12
Presentation of allowance for expected credit losses
month expected credit losses:
in the balance sheet
– debt securities that are determined to have low
Loss allowances for financial assets measured at
credit risk at the reporting date; and
amortised cost are deducted from the gross carrying
– other debt securities and bank balances for amount of the assets.
which credit risk (i.e. the risk of default occurring
Write-off
over the expected life of the financial instrument)
has not increased significantly since initial The gross carrying amount of a financial asset is written
recognition. off (either partially or in full) to the extent that there is
no realistic prospect of recovery. This is generally the
Loss allowances for trade receivables are always
case when the Company determines that the trade
measured at an amount equal to lifetime expected
receivable does not have assets or sources of income
credit losses.
that could generate sufficient cash flows to repay the
Lifetime expected credit losses are the expected amounts subject to the write‑ off. However, financial
credit losses that result from all possible default assets that are written off could still be subject to
events over the expected life of a financial instrument. enforcement activities in order to comply with the
Company’s procedures for recovery of amounts due.

120
 Notes forming part of THE FINANCIAL STATEMENTS
(All amounts in Indian Rupees, except share data and where otherwise stated)

4 Property, plant and equipment

(All amounts in Indian Rupees, except share data and where otherwise stated)
Capital work in progress
Free hold Plant & Testing Tools Furniture & Computers Office Electrical Intangeble
Particulars Vehicles Building Total Testing Tools Civil work in
Land Machinery & Instruments Fixtures & Software Equipments Fittings Assets
& Instruments progress

Cost
At April 1, 2018 1,50,85,175 3,05,94,278 62,30,834 17,52,98,194 44,34,320 4,46,42,633 40,04,049 10,83,80,042 60,21,232 33,90,79,647 - 28,64,82,412 4,34,245
Additions - 21,53,790 17,91,77,012 29,73,356 43,04,913 9,47,513 - - 18,95,56,583 - 10,33,58,300 2,18,50,611
Deletions - - 12,86,45,850 -
At March 31, 2019 1,50,85,175 3,05,94,278 83,84,624 35,44,75,206 74,07,676 4,89,47,546 49,51,562 10,83,80,042 60,21,232 58,42,47,340 - 26,11,94,862 2,22,84,856
Additions - 8,12,459 14,56,06,319 46,56,623 24,94,206 4,31,005 2,93,15,210 - 18,33,15,822 10,03,475 24,19,85,980 70,30,354
Deletions - 13,79,48,930 2,93,15,210
At March 31, 2020 1,50,85,175 3,05,94,278 91,97,083 50,00,81,525 1,20,64,299 5,14,41,752 53,82,567 13,76,95,252 60,21,232 76,75,63,162 10,03,475 36,52,31,912 0
Accumulated
depreciation
At April 1, 2018 - 1,00,72,829 19,11,486 3,93,11,119 16,15,465 2,73,16,063 22,60,662 1,90,42,423 27,14,196 10,42,44,243 - -
Charge for the year - 37,14,382 12,64,193 3,25,68,268 10,25,633 1,30,07,363 10,27,733 84,87,074 8,56,192 6,19,50,838 - -
Less: Adjustments - -
At March 31, 2019 - 1,37,87,211 31,75,679 7,18,79,387 26,41,098 4,03,23,426 32,88,395 2,75,29,497 35,70,388 16,61,95,081 - - -
Charge for the year - 30,42,079 15,36,521 7,69,87,668 19,31,687 60,95,134 8,45,354 76,80,802 6,34,524 9,87,53,769 2,00,695 -
Less: Adjustments -
At March 31, 2020 - 1,68,29,290 47,12,200 14,88,67,055 45,72,785 4,64,18,560 41,33,749 3,52,10,299 42,04,911 26,49,48,850 2,00,695 - -
Carrying amount
Corporate Overview

At April 1, 2018 1,50,85,175 2,05,21,449 43,19,348 13,59,87,075 28,18,855 1,73,26,570 17,43,387 8,93,37,619 33,07,036 29,04,46,514 - 28,64,82,412 4,34,245
At March 31, 2019 1,50,85,175 1,68,07,067 52,08,945 28,25,95,818 47,66,578 86,24,120 16,63,168 8,08,50,545 24,50,844 41,80,52,260 - 26,11,94,862 2,22,84,856
At March 31, 2020 1,50,85,175 1,37,64,988 44,84,883 35,12,14,470 74,91,514 50,23,191 12,48,818 10,24,84,953 18,16,321 50,26,14,313 8,02,780 36,52,31,912 0

Notes
a) Depreciation is Calculated as per Straight Line Method based on useful life of assets as indicated in Schedule-II of The Companies Act, 2013 and Note.3.9
b) All Properties Plant and Equipments are under Charge Created by the company for the term loans availed.
Statutory Reports

121
Financial statements
 APOLLO MICRO SYSTEMS LIMITED Annual Report 2019-20

Notes forming part of THE FINANCIAL STATEMENTS

(All amounts in Indian Rupees, except share data and where otherwise stated)

5 Inventories
(All amounts in Indian Rupees, except share data and where otherwise stated)
Particulars 31 March 2020 31 March 2019
Raw material and stores 68,92,00,014 45,92,39,488
Work in progress 98,81,52,070 93,39,01,889
Finished goods 40,21,09,592 33,56,65,367
2,07,94,61,676 1,72,88,06,744

6 Trade receivables
(All amounts in Indian Rupees, except share data and where otherwise stated)
Particulars 31 March 2020 31 March 2019
Unsecured,considered good 1,35,47,91,601 1,69,31,53,261
1,35,47,91,601 1,69,31,53,261
Less: Allowance for doubtful receivables - -
1,35,47,91,601 1,69,31,53,261

7 Cash and cash equivalents

(All amounts in Indian Rupees, except share data and where otherwise stated)
Particulars 31 March 2020 31 March 2019
Balances with banks:
- in current accounts 3,24,265 7,83,79,808
Cash on hand 5,55,806 5,63,169
8,80,071 7,89,42,976

8 Other Bank balances

(All amounts in Indian Rupees, except share data and where otherwise stated)
Particulars 31 March 2020 31 March 2019
Term deposits with Banks with original maturities of more than 3 months and less than 1 year* 12,38,83,795 18,71,31,478
12,38,83,795 18,71,31,478
*Represents margin money deposits against bank guarantees and letter of credits.

9 Loans (Unsecured, considered good unless otherwise stated)

(All amounts in Indian Rupees, except share data and where otherwise stated)
Particulars 31 March 2020 31 March 2019
Current
Security deposits with regulatory authorities and others 19,47,946 92,60,469
19,47,946 92,60,469

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 Corporate Overview Statutory Reports Financial statements

Notes forming part of THE FINANCIAL STATEMENTS

(All amounts in Indian Rupees, except share data and where otherwise stated)

10 Other current assets

(All amounts in Indian Rupees, except share data and where otherwise stated)
Particulars 31 March 2020 31 March 2019
Unsecured, considered good
Advances other than capital advances
Advances for materials 16,88,04,544 9,25,45,517
Advances for expenses 9,11,600 14,98,901
Salary advances 7,99,234 7,89,036
Prepaid expenses 39,20,602 18,79,520
Balances with Government Departments 4,71,17,775 1,09,30,679
22,15,53,755 10,76,43,653

11 Share Capital
(All amounts in Indian Rupees, except share data and where otherwise stated)
Particulars 31 March 2020 31 March 2019
Authorised
27,000,000 (March 31, 2019: 27,000,000) equity shares of H 10/- each 27,00,00,000 27,00,00,000
Issued, subscribed and fully paid-up
20,758,886 (March 31, 2019: 20,763,886) equity shares of H10/- each fully paid-up 20,76,38,860 20,76,38,860
Less: Equity Shares of H10/- each fully paid up issued to ESOP Trust but not allotted to (50,000) (50,000)
employees
Adjusted : Issued, Subscribed and Paid up Share Capital 20,75,88,860 20,75,88,860

(a) Reconciliation of shares outstanding at the beginning and end of the reporting year
(All amounts in Indian Rupees, except share data and where otherwise stated)
31 March 2020 31 March 2019
Particulars No. of equity No. of equity
Amount Amount
shares shares
Outstanding at the beginning of the year 2,07,63,886 20,76,38,860 2,07,63,886 20,76,38,860
Issued during the year - - - -
Outstanding at the end of the year 2,07,63,886 20,76,38,860 2,07,63,886 20,76,38,860
Less: Equity shares of H 10/- each fully paid- (5,000) (50,000) (5,000) (50,000)
up issued to ESOP Trust but not alloted to
employees.
Outstanding at the end of the year 2,07,58,886 20,75,88,860 2,07,58,886 20,75,88,860

(b) Terms / rights attached to the equity shares

Equity shares of the Company have a par value of H 10 per share. Each holder of equity shares is entitled to one vote per share. The
Company declares and pays dividend in Indian rupees. In the event of liquidation of the Company, the holders of equity shares will be
entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion
to the number of equity shares held by the shareholders.

123
 APOLLO MICRO SYSTEMS LIMITED Annual Report 2019-20

Notes forming part of THE FINANCIAL STATEMENTS

(All amounts in Indian Rupees, except share data and where otherwise stated)

(c) Details of shareholders holding more than 5% shares in the Company

(All amounts in Indian Rupees, except share data and where otherwise stated)
31 March 2020 31 March 2019
Particulars No. of equity % holding in the No. of equity % holding in the
shares held class shares held class
Baddam Karunakar Reddy 1,32,71,690 63.92% 1,32,71,690 63.92%

12 Other equity
(All amounts in Indian Rupees, except share data and where otherwise stated)
Particulars 31 March 2020 31 March 2019
Securities premium
Balance at the beginning of the year 1,65,37,56,663 1,65,73,81,291
Add: Premium on fresh issue - -
Less; Share issue expenses - (36,24,628)
Balance at the end of the year 1,65,37,56,663 1,65,37,56,663
Retained earnings
Opening balance 95,79,22,100 69,08,60,842
Profit/(loss) for the year 14,01,12,777 29,11,85,266
Other comprehensive income (2,28,319) 9,07,959
Less: Dividend Paid - (2,50,31,968)
Less: Transfers to general reserve - -
Closing balance 1,09,78,06,558 95,79,22,100
Total other equity 2,75,15,63,221 2,61,16,78,763

Securities premium consists of the difference between the face value of the equity shares and the consideration received in respect of
shares issued.

13 Borrowings
(All amounts in Indian Rupees, except share data and where otherwise stated)
Particulars 31 March 2020 31 March 2019
Non-current Borrowings
Secured Borrowings:
From othes - 27,91,119
Vehicle loans (Refer note B) 88,591 4,01,773
Unsecured loans
From others - Companies (Refer Note C) - 3,58,703
88,591 35,51,595
Current Borrowings
Secured Borrowings:
Repayable on demand (Refer Note D below)
- Overdraft from State Bank of India 34,82,68,453 42,50,54,015
- Overdraft from ICICI Bank 25,32,63,014 21,66,51,043
- Overdraft from RBL Bank - 4,15,56,489
- Overdraft from Axis Bank 17,67,28,231 30,13,06,605
- Line of credit from National Small Industries Corporation against raw material purchases 4,99,82,677 4,94,70,154
Total current borrowings 82,82,42,375 1,03,40,38,305

124
 Corporate Overview Statutory Reports Financial statements

Notes forming part of THE FINANCIAL STATEMENTS

(All amounts in Indian Rupees, except share data and where otherwise stated)

A. Term loans from Others:

During the year the Company has repaid all the term loans.

B. Vehicle loans :

The Company has a Vehicle loan from HDFC Limited taken inn July, 2017. The loan is repayable in 48 installments from Aug, 2017 to
July, 2021. The loan carries an interest rate of 12.05%. This loan is secured by hypothecation of the vehicle for which the loan was taken.

C. Unsecured loans :

The Company has repaid all the unsecured loans during the year.

D. Loans repayable on demand:

Overdraft from State Bank of India is repayable on demand and the loan carries an interest rate of 11.90%.

Overdraft from ICICI Bank is repayable on demand and the loan carries an interest rate of 11.75%.

Overdraft from Axis Bank is repayable on demand and the loan carries an interest rate of 10.50%.

Raw Material Assistance from National Small Industries Corporation is extended against Bank Guarantee.

The above loans including Letter of Credit and Bank Guarantees repayable on demand and Secured by hypothecation of Inventories,
Assignment of Book Debts ranking pari passu with loans from SBI, ICICI and AXIS Bank Equitable Mortgage of Land & Building. The
Loans are further recoverd by personal guarantee of a director in his individual capacity.

14 Deferred tax liabilities, net

(All amounts in Indian Rupees, except share data and where otherwise stated)
Particulars 31 March 2020 31 March 2019
Deferred tax liability
- Tangible and Intangible assets 13,48,28,327 9,62,93,649
- Research and development - -
Total 13,48,28,327 9,62,93,649
Deferred tax asset
- Tangible and Intangible assets - -
- Provision allowed under tax on payment basis 28,56,767 18,54,245
Total 28,56,767 18,54,245
Deferred tax liability, net 13,19,71,561 9,44,39,404

15 Provisions
(All amounts in Indian Rupees, except share data and where otherwise stated)
Particulars 31 March 2020 31 March 2019
Non-Current
Provision for employee benefits
- Gratuity (refer note 34) 73,65,699 58,94,786
73,65,699 58,94,786
Current
Provision for employee benefits
- Gratuity (refer note 34) 3,02,862 4,72,813
- Leave Encashment 21,41,764 11,59,168
24,44,626 16,31,981

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 APOLLO MICRO SYSTEMS LIMITED Annual Report 2019-20

Notes forming part of THE FINANCIAL STATEMENTS

(All amounts in Indian Rupees, except share data and where otherwise stated)

16 Trade payables
(All amounts in Indian Rupees, except share data and where otherwise stated)
Particulars 31 March 2020 31 March 2019
Trade payables
- Total outstanding dues of micro enterprises and small enterprises (refer note 35) - -
- Total outstanding dues of creditors other than micro enterprises and small enterprises 56,93,62,672 37,03,08,025
56,93,62,672 37,03,08,025

17 Other financial liabilities

(All amounts in Indian Rupees, except share data and where otherwise stated)
Particulars 31 March 2020 31 March 2019
Current maturities of long-term debts 47,16,610 4,32,10,264
Creditors for capital goods 1,35,74,681 2,40,91,671
Employee salaries & Leave encashment payable 54,02,897 49,10,782
Directors remuneration payable 10,36,084 70,28,660
Expenses payable 5,35,64,708 3,85,40,456
7,82,94,980 11,77,81,833

18 Other liabilities
(All amounts in Indian Rupees, except share data and where otherwise stated)
Particulars 31 March 2020 31 March 2019
Current
Advance received from customers 47,76,450 20,39,958
Statutory liabilities 95,98,347 1,45,58,664
1,43,74,796 1,65,98,622

19 Current tax liabilities

(All amounts in Indian Rupees, except share data and where otherwise stated)
Particulars 31 March 2020 31 March 2019
Current
Provision for Income tax 3,80,14,414 6,29,58,384
Earlier Tax payable 2,43,56,052 -
Less: Advance tax (25,00,000) (2,00,00,000)
5,98,70,466 4,29,58,384

20 Revenue from operations

(All amounts in Indian Rupees, except share data and where otherwise stated)
Particulars 31 March 2020 31 March 2019
Sale of products 2,36,69,45,887 2,55,86,08,454
Sale of services 9,20,95,373 7,11,44,790
2,45,90,41,260 2,62,97,53,243

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 Corporate Overview Statutory Reports Financial statements

Notes forming part of THE FINANCIAL STATEMENTS

(All amounts in Indian Rupees, except share data and where otherwise stated)

21 Other income
(All amounts in Indian Rupees, except share data and where otherwise stated)
Particulars 31 March 2020 31 March 2019
Interest income 1,59,57,933 2,38,59,597
Gain on Mutual fund Investments - 84,04,240
1,59,57,933 3,22,63,837

22 Cost of materials consumed

(All amounts in Indian Rupees, except share data and where otherwise stated)
Particulars 31 March 2020 31 March 2019
Opening stock of raw materials and stores 45,92,39,488 41,26,11,389
Add: Purchases 2,06,01,69,796 1,96,52,70,172
Add: other Incidental Cost 9,15,91,148 3,31,08,709
2,61,10,00,432 2,41,09,90,270
Less : Closing Stock of Raw Materials and Consumables 68,92,00,014 45,92,39,488
1,92,18,00,418 1,95,17,50,782

23 Changes in inventories and Work in progress

(All amounts in Indian Rupees, except share data and where otherwise stated)
Particulars 31 March 2020 31 March 2019
Closing stock
Finished goods 40,21,09,592 33,56,65,367
Work in process 98,81,52,070 93,39,01,889
Total (A) 1,39,02,61,662 1,26,95,67,256
Opening stock
Finished goods 33,56,65,367 44,12,42,312
Work in process 93,39,01,889 86,41,25,123
Total (B) 1,26,95,67,256 1,30,53,67,435
(Increase) / Decrease in Inventories and work in progress (B-A) (12,06,94,406) 3,58,00,179

24 Employee benefits expense

(All amounts in Indian Rupees, except share data and where otherwise stated)
Particulars 31 March 2020 31 March 2019
Salaries, wages and bonus 6,80,54,461 6,28,78,518
Contribution to provident and other funds 35,36,294 27,02,869
Gratuity Expense 18,27,425 19,80,804
Staff welfare expenses 28,25,972 26,53,866
7,62,44,152 7,02,16,057

25 Depreciation expense
(All amounts in Indian Rupees, except share data and where otherwise stated)
Particulars 31 March 2020 31 March 2019
Depreciation of tangible assets 9,89,54,464 6,19,50,838
9,89,54,464 6,19,50,838

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 APOLLO MICRO SYSTEMS LIMITED Annual Report 2019-20

Notes forming part of THE FINANCIAL STATEMENTS

(All amounts in Indian Rupees, except share data and where otherwise stated)

26 Finance costs
(All amounts in Indian Rupees, except share data and where otherwise stated)
Particulars 31 March 2020 31 March 2019
Interest on term loans 10,31,003 58,13,864
Interest on working capital loans 9,72,17,319 8,80,17,137
Bank charges and commissions 3,92,73,108 3,65,26,263
Foreign Exchange Loss 42,60,610 18,15,319
Interest on Income Tax paid 92,62,693 (45,68,371)
15,10,44,733 12,76,04,212

27 Other expenses
(All amounts in Indian Rupees, except share data and where otherwise stated)
Particulars 31 March 2020 31 March 2019
Managerial remuneration 1,80,74,193 1,97,00,000
Business development expenses 1,00,99,090 45,92,797
Consultancy charges 84,22,174 82,53,416
Tour and travelling 1,25,83,347 98,70,199
Power and fuel 36,58,282 42,74,050
Rent 17,55,000 15,96,000
Insurance 23,34,679 10,94,281
Filing Fee 12,100 20,012
Conveyance 29,43,087 11,02,218
Office maintenance 34,47,987 29,71,471
Repairs and maintenance 39,96,577 23,73,088
Printing and stationery 22,47,453 27,75,892
Comminication expenses 15,40,536 16,71,704
Advertisement 10,24,967 1,13,38,999
Late Delivery Charges 1,25,61,469 56,55,477
Audit fees 5,00,000 5,00,000
Rates and taxes 4,27,773 1,17,624
Corporate social responsbilty (See Note.33) 51,50,000 74,00,000
Security charges 3,52,171 3,07,658
Vehicle maintenance 15,69,718 8,07,749
Donations 11,95,121 2,29,000
Computer maintenance 8,44,909 5,85,451
Director Sitting fee 3,00,000 4,60,000
9,50,40,631 8,76,97,087

28 Tax expenses
(All amounts in Indian Rupees, except share data and where otherwise stated)
Particulars 31 March 2020 31 March 2019
Current income tax:
Current income tax charge 3,80,14,414 6,29,58,384
Earlier tax adjustments 3,68,56,052 (45,68,371)
Deferred tax:
Relating to originating and reversal of temporary differences 3,76,25,958 (2,71,45,724)
Income tax expense recognised in the statement of profit or loss 11,24,96,424 3,12,44,289

128
 Corporate Overview Statutory Reports Financial statements

Notes forming part of THE FINANCIAL STATEMENTS

(All amounts in Indian Rupees, except share data and where otherwise stated)

Deferred tax related to items considered in OCI during the year

(All amounts in Indian Rupees, except share data and where otherwise stated)
Particulars 31 March 2020 31 March 2019
Re-measurement gains/ (losses) on defined benefit plan 93,801 (3,73,022)
Income tax charge to OCI 93,801 (3,73,022)

29 Contingent liabilities and commitments (to the extent not provided)

(All amounts in Indian Rupees, except share data and where otherwise stated)
Particulars As at 31-Mar-20 As at 31-Mar-19
i) Contingent liabilities:
(a) Claims against the Company not acknowledged as debts (See Note:1 below) 1,14,09,747 1,61,23,349
(b) Outstanding Guarantees and Counter Guarantees to various Banks, in respect of the 15,42,47,334 28,60,38,802
guarantees given by those banks in favour of various Govt Authorities and Others
ii) Commitments:
(a) Estimated amount of contracts remaining to be executed and not provided for; 66,44,610 -
(b) Liability for Import Duty for Non fulfilment of Export Obligation under Zero Duty 1,61,11,184 1,61,11,184
EPCG Scheme (See Note:2 below)

Note:

1) The Income Tax Department has raised demands on the Company in respect of past years inspite of payments already made by
the company. The Company has submitted/submiting proof of payments made for removal of claims against the company. Pending
removal of demands, the company has not ackowledged as amount payable.

2) The Company had availed import duty exemption of H1.61 crores in financial year 2014-15 underZero Duty EPCG Scheme. As per this
scheme the company has export obligation equal to Six times of the duty exemption availed. The Company has obtained approval
from the Concern Authorities for fullfiling the export obligations. The Company has recognized a contingent liability as this depends on
performance of the export obligation by the company with in the time period permitted.

30 Related party disclosures

a) The following table provides the name of the related party and the nature of its relationship with the Company:

Name of the parties Relationship

Sri [Link] Reddy Managing Director/KMP
Sri Addepalli Krishna Sai Kumar Wholetime Director/KMP
Sri Chiluveru Sudarshan Chief Financial Officer/KMP
Sri Chandrapati Venkata Siva Prasad Wholetime Director/KMP
Sri Vitta Chaitanya Siva Shankar Company Secretary/KMP
Apollo Food & Beverages Private Limited Enterprises controlled by KMP

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 APOLLO MICRO SYSTEMS LIMITED Annual Report 2019-20

Notes forming part of THE FINANCIAL STATEMENTS

(All amounts in Indian Rupees, except share data and where otherwise stated)

b) Details of all transactions with related parties during the year:

(All amounts in Indian Rupees, except share data and where otherwise stated)
Particulars 31-Mar-20 31-Mar-19
i) Managerial remuneration to Key Managerial Personnel* 1,99,41,386 2,13,20,000
ii) Rent paid to Karunakar Reddy Baddam 8,40,000 8,40,000
iii) Loan repaid to Karunakar Reddy Baddam, net 49,00,000 3,38,01,903
*Does not include insurance, which is paid for the Company as a whole and gratuity as this is provided in the books of accounts on the basis of actuarial valuation
for the Company as a whole and hence individual amount cannot be determined.

c) Details of balances receivable from and payable to related parties are as follows:
(All amounts in Indian Rupees, except share data and where otherwise stated)
Particulars 31 March 2020 31 March 2019
i) Financial liabilities - Others:
Managerial Remuneration to Key Managerial Personnel 10,36,084 71,25,249

d) Terms and conditions of transactions with related parties:

The transactions with related parties are made on terms equivalent to those that prevail in arm’s length transactions. Outstanding
balances at the year-end are unsecured and interest free.

31 Segment information

Ind AS 108 “Operating Segment” (“Ind AS 108”) establishes standards for the way that public business enterprises report information about
operating and geographical segments and related disclosures about products and services, geographic areas, and major customers.
Based on the “management approach” as defined in Ind AS 108, Operating segments and geographical segments are to be reported in a
manner consistent with the internal reporting provided to the Chief Operating Decision Maker (CODM).The CODM evaluates the Company’s
performance and allocates resources on overall basis. The Company’s sole operating segment is therefore ‘Electromechanical components
and systems and allied components and services’ and the sole geographical segment is ‘India”. Accordingly, there are no additional
disclosure to be provided under Ind AS 108, other than those already provided in the financial statements.

32 Payment to auditors include

(All amounts in Indian Rupees, except share data and where otherwise stated)
Particulars 31 March 2020 31 March 2019
Statutory audit fee 4,00,000 4,00,000
Tax Audit fee 1,00,000 1,00,000
Other Sevices - 12,000
Total 5,00,000 5,12,000

33 Disclosure related to Corporate Social Responsibility (CSR)

(All amounts in Indian Rupees, except share data and where otherwise stated)
Particulars 31 March 2020 31 March 2019
Unspent amount Carried forward from previous years 48,16,433 73,55,241
Amount Spent during the year (51,50,000) (74,00,000)
Liability for the year @ 2% of Average Net Profits 60,16,522 48,61,192
Amount unspent 56,82,955 48,16,433

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 Corporate Overview Statutory Reports Financial statements

Notes forming part of THE FINANCIAL STATEMENTS

(All amounts in Indian Rupees, except share data and where otherwise stated)

Heads of Expenses consisting CSR expenses

(All amounts in Indian Rupees, except share data and where otherwise stated)
Particulars 31 March 2020 31 March 2019
i) Eradicating hunger, poverty and malnutrition,promoting health care including preventive 10,00,000 31,00,000
health care and sanitation including contribution to the Swach Bharat Kosh set-up by the
Central Government for the promotion of sanitation and making available safe drinking
water {Sch VII (i)}
ii) promoting education, including special education and employment enhancing vocation 41,50,000 10,00,000
skills especially among children, women, elderly and the differently abled and livelihood
enhancement projects. {Sch VII (ii)}
iii) Rural development projects {Sch VII (x)} 33,00,000
Total 51,50,000 74,00,000

As per Section 135 read with Section 198 of Companies Act,2013, the amount required to be spent towards CSR works out to H60,16,522/- for
financial year 2019-20 (based on 2% of average net profits of preceding three financial years). The Board of Directors had allocated budget of
H48,16,433 for the year 2018-19 and H3,33,562/- for the financial year 2019-20, out of which an amount of H60,16,522 remained unspent

34 Gratuity

The Company provides its employees with benefits under a defined benefit plan, referred to as the “Gratuity Plan”. The Gratuity Plan entitles
an employee, who has rendered at least five years of continuous service, to receive 15 days salary for each year of completed service
(service of six months and above is rounded off as one year) at the time of retirement/exit, restricted to a sum of H 2,000,000.

The following tables summarize the components of net benefit expense recognised in the statement of profit or loss and the amounts
recognised in the balance sheet for the plan:

Reconciliation of opening and closing balances of the present value of the defined benefit obligations:
(All amounts in Indian Rupees, except share data and where otherwise stated)
Particulars 31 March 2020 31 March 2019
Opening balance 70,67,031 61,67,777
Service cost 13,02,054 17,24,655
Interest cost 5,40,628 4,79,236
Benefits paid (1,10,769) (19,385)
Actuarial loss/(gain) (6,12,199) (12,85,252)
Closing balance 81,86,745 70,67,031
Present value of projected benefit obligation at the end of the year 81,86,745 70,67,031
Fair value of plan assets at the end of the year 5,18,184 6,99,432
Net liability recognised in the balance sheet 76,68,561 63,67,599
Long term provision 73,65,699 58,94,786
Short term provision 3,02,862 4,72,813

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 APOLLO MICRO SYSTEMS LIMITED Annual Report 2019-20

Notes forming part of THE FINANCIAL STATEMENTS

(All amounts in Indian Rupees, except share data and where otherwise stated)

Expenses recognised in statement of profit and loss

(All amounts in Indian Rupees, except share data and where otherwise stated)
Particulars 31 March 2020 31 March 2019
Service cost 13,02,054 17,24,655
Interest cost 5,25,371 4,63,152
Gratuity cost 18,27,425 21,87,807
Re-measurement gains/ (losses) in OCI
Actuarial gain / (loss) due to demographic assumption changes - (4,92,191) (12,80,900)
Return on plan assets greater (less) than discount rate (38,256) (82)
Total expenses routed through OCI (5,30,447) (12,80,982)

Assumptions
(All amounts in Indian Rupees, except share data and where otherwise stated)
Particulars 31 March 2020 31 March 2019
Discount rate 6.80% p.a. 7.65% p.a.
Future salary increases 6.00% p.a. 4.00% p.a.
Employee turnover

A quantitative sensitivity analysis for significant assumption and its impact on projected benefit obligation are as follows:
(All amounts in Indian Rupees, except share data and where otherwise stated)
Particulars 31 March 2020 31 March 2019
Effect of + 1% change in rate of discounting 10.51 8.4
Effect of - 1% change in rate of discounting -8.74 -7.19
Effect of + 1% change in rate of salary increase 15.85 19.08
Effect of - 1% change in rate of salary increase -12.2 -14.82
The sensitivity analyses above have been determined based on a method that extrapolates the impact on projected benefit obligation as
a result of reasonable changes in key assumptions occurring at the end of the reporting period.

35 Dues to Micro, small and medium enterprises

The Company is required to furnish required detailes under section 22(i) to clause (v) of Micro, Small and Medium Enterprises Development
Act, 2006 (MSMED ACT) readwith Para FV of General Instructions for balancehseet in Division II of Schedule III to the Companies Act, 2013
(the Act). As per the said regulations required information inrespect of MSMED entities are, as per information submitted by the suppliers
to the company, furnished below:
(All amounts in Indian Rupees, except share data and where otherwise stated)
Particulars 31 March 2020 31 March 2019
a) Principal amount due to suppliers registered under the MSMED Act and remaining Nil Nil
unpaid as at year end. (all dues were paid before year end)
b) Interest due to suppliers registered under the MSMED Act and remaining unpaid as at Nil Nil
year end;
c) Interest paid, under Section 16 of MSMED Act, to suppliers registered under the Nil Nil
MSMED Act, beyond the appointed day during the year
d) Principal payment made to suppliers registered under the MSMED Act, beyond the Nil 9673224
appointed day during the year;

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 Corporate Overview Statutory Reports Financial statements

Notes forming part of THE FINANCIAL STATEMENTS

(All amounts in Indian Rupees, except share data and where otherwise stated)

35 Dues to Micro, small and medium enterprises (Contd..

(All amounts in Indian Rupees, except share data and where otherwise stated)
Particulars 31 March 2020 31 March 2019
e) Interest paid, other than under section 16 of MSMED Act, to suppliers registered under Nil Nil
the MSMED Act, beyond the appointed day during the year
f) Interest due and payable for the year amount of interest accrued and remaining unpaid Nil 195488
at the end of each year towards suppliers registered under MSMED Act, for payments
already made; and
g) Further interest remaining due and payable for even in succeeding years. Nil 195488

The above information is complied based on information available with the comapny and relied upon by the auditors.

36 Leases

Effective 1st April 2019, the Company adopted Ind AS 116, Leases. This standard brings most leases on-balance sheet for lessees under
a single model, eliminating the distinction between operating and finance leases. There is no significant impact of the standard on the
financial results of the Company. The Company has not recognized any right to use asset nor lease liability on account of this standard.

The Company has elected not to apply the requirements of Ind AS 116 Leases to short term leases of all assets that have a lease term of 12
months or less and leases for which the underlying asset is of low value. The lease payments associated with these leases amounting to
INR 17,55,000 (INR 15,96,000 Previous Year) are recognised as an expense on a straight-line basis over the lease term.

37 Earnings per share

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders by the weighted average number of equity
shares outstanding during the year.

Diluted EPS amounts are calculated by dividing the profit attributable to equity holders by the weighted average number of equity shares
outstanding during the year plus the weighted average number of equity shares that would be issued on conversion of all the dilutive
potential equity shares into equity Shares.

The following table sets out the computation of basic and diluted earnings per share:
(All amounts in Indian Rupees, except share data and where otherwise stated)
Particulars 31 March 2020 31 March 2019
Profit for the year attributable to equity share holders 14,01,12,777 29,11,85,266
Shares
Weighted average number of equity shares outstanding during the year – basic 2,07,63,886 2,07,58,886
Weighted average number of equity shares outstanding during the year – diluted 2,07,63,886 2,07,63,270
Earnings per share
Earnings per share of par value H 10 – basic (H) 6.75 14.03
Earnings per share of par value H 10 – diluted (H) 6.75 14.02

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 APOLLO MICRO SYSTEMS LIMITED Annual Report 2019-20

Notes forming part of THE FINANCIAL STATEMENTS

(All amounts in Indian Rupees, except share data and where otherwise stated)

38 Financial risk management objectives and policies

The Company’s principal financial liabilities comprise loans and borrowings, trade and other payables. The main purpose of these financial
liabilities is to finance and support Company's operations. The Company’s principal financial assets include inventory, trade and other
receivables, cash and cash equivalents and refundable deposits that derive directly from its operations.

The Company is exposed to market risk, credit risk and liquidity risk. The Company’s senior management oversees the management of
these risks. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarized below.

a) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices.
Market risk comprises two types of risk: interest rate risk and other price risk, such as equity price risk and commodity/ real estate risk.
Financial instruments affected by market risk include loans and borrowings and refundable deposits. The sensitivity analysis in the
following sections relate to the position as at March 31, 2020 and March 31, 2019. The sensitivity analyses have been prepared on the
basis that the amount of net debt and the ratio of fixed to floating interest rates of the debt.

The analysis excludes the impact of movements in market variables on: the carrying values of gratuity and other post retirement
obligations; provisions.

The below assumption has been made in calculating the sensitivity analysis:

The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is based on the
financial assets and financial liabilities held at March 31, 2020 and March 31, 2019.

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's exposure to the risk of changes in market interest rates relates primarily to the Company's long-term
debt obligations with floating interest rates.

The Company manages its interest rate risk by having a balanced portfolio of fixed and variable rate loans and borrowings. The
Company does not enter into any interest rate swaps.

Interest rate sensitivity:

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of loans and
borrowings affected. With all other variables held constant, the Company’s profit before tax is affected through the impact on floating
rate borrowings, as follows:

Increase/decrease Effect on profit

Particulars
in interest rate before tax
March 31, 2020
INR +1% (83,30,476)
INR -1% 83,30,476
March 31, 2019
INR +1% (1,08,08,002)
INR -1% 1,08,08,002

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Notes forming part of THE FINANCIAL STATEMENTS

(All amounts in Indian Rupees, except share data and where otherwise stated)

b) Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a
financial loss. The credit risk arises principally from its operating activities (primarily trade receivables) and from its investing activities,
including deposits with banks and financial institutions and other financial instruments.

Credit risk is controlled by analysing credit limits and creditworthiness of customers on a continuous basis to whom credit has been
granted after obtaining necessary approvals for credit. The collection from the trade receivables are monitored on a continuous basis
by the receivables team.

The Company establishes an allowance for credit loss that represents its estimate of expected losses in respect of trade and other
receivables based on the past and the recent collection trend and based on the analysis has not provided any provision for expected
credit losses on trade receivables.

Credit risk on cash and cash equivalent is limited as the Company generally transacts with banks and financial institutions with high
credit ratings assigned by international and domestic credit rating agencies.

c) Liquidity risk

The Company's objective is to maintain a balance between continuity of funding and flexibility through the use of bank deposits and loans.

The table below summarises the maturity profile of the Company’s financial liabilities based on contractual undiscounted payments:

Less than 3 3 to 12
Particulars On demand 1 to 5 years >5 years Total
months months
Year ended March 31, 2020
Borrowings 82,82,42,375 11,79,153 35,37,458 88,591 - 83,30,47,576
Trade payables 56,93,62,672 - - - - 56,93,62,672
Year ended March 31, 2019
Borrowings 1,03,40,38,305 1,08,02,566 3,24,07,698 35,51,595 - 1,08,08,00,164
Trade payables 37,03,08,025 - - - - 37,03,08,025

39 Capital management

The Company’s policy is to maintain a stable capital base so as to maintain investor, creditor and market confidence and to sustain future
development of the business. Management monitors capital on the basis of return on capital employed as well as the debt to total equity ratio.
For the purpose of debt to total equity ratio, debt considered is long-term and short-term borrowings. Total equity comprise of issued share
capital and all other equity reserves.

The capital structure as of March 31, 2020 and March 31, 2019 was as follows:

(All amounts in Indian Rupees, except share data and where otherwise stated)
Particulars 31 March 2020 31 March 2019
Total equity attributable to the equity shareholders of the Company 2,95,91,52,081 2,81,92,67,623
As a percentage of total capital 78.0% 72.3%
Long term borrowings including current maturities 48,05,201 4,67,61,859
Short term borrowings 82,82,42,375 1,03,40,38,305
Total borrowings 83,30,47,576 1,08,08,00,164
As a percentage of total capital 22.0% 27.7%
Total capital (equity and borrowings) 3,79,21,99,657 3,90,00,67,787

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 APOLLO MICRO SYSTEMS LIMITED Annual Report 2019-20

Notes forming part of THE FINANCIAL STATEMENTS

(All amounts in Indian Rupees, except share data and where otherwise stated)

40 Recent Indian Accounting Standards

Ministry of Corporate Affairs ("MCA") notifies new standard or amendments to the existing standards. There is no such notification which
would have been applicable from April 1, 2020.

41 Confirmations were sent to parties from whom amounts are due/receivables by balance as on 31st March, 2020. Due to COVID-19
lockdown situation responses from most of the parties were not received till date of approval of financial statements.

42 Prior year comparitives

The figures of the previous year have been regrouped/rearranged, where necessary, to conform with the current year’s classification.

43 The figures have been rounded off to nearest rupee.

The accompanying notes are an integral part of the financial statements.

As per our report of even date
for [Link] & Co for and on behalf of the Board of Directors of
Chartered Accountants Apollo Micro Systems Limited
ICAI Firm Registration Number: 011410S CIN: L72200TG1997PLC026556

Sd/- Sd/- Sd/-

Sreenivasa Rao T Mohite Karunakar Reddy Badam Krishna Sai Kumar Addepalli
Partner Managing Director Director
Membership No.: 015635 DIN: 00790139 DIN: 03601692
ICAI UDIN: 20015635AAAACK7259

Sd/- Sd/-
Sudarshan Chiluveru Chaitanya Siva Shankar Vitta
Place: Hyderabad Chief Financial Officer Company Secretary
Date: 26 June, 2020 Membership No: ACS49765

136
Notes
 a K&A creation | [Link]

Apollo Micro Systems Limited

CIN No: L72200TG1997PLC026556
Plot No 128/A, Road No 12, BEL Road
IDA Mallapur,Uppal Mandal
Hyderabad- 500 076, Telangana, India.
Phone: +91-40-27167000 – 99
Fax: 91-40-27150820
Email: cs@[Link]
Website: [Link]