Apollo Pipes Ltd

The Company reported an encouraging financial performance in a difficult year. The gross turnover in the financial year 2023-24 increased appreciably by 7% from B 91,452.34 Lakh to B97713.80Lakh. The EBITDA scaled by 42% from B 6,999.44 Lakh to B 9925.43 Lakh for the year under review. The Net Profit increased by 77% from B 2,391.48 Lakh to B 4243.94 Lakh over the same period. Cost optimisation initiatives and stringent working capital monitoring helped improve cash flow and profitability.

DIVIDEND

The Board of Directors of the Company is pleased to recommend a dividend @10% (B 1 per share) as final dividend on the equity shares for the financial year 2023-24 for the approval of Members of the Company at the ensuing Annual General Meeting. The payment of dividend will be subject to deduction of applicable taxes. The dividend on equity shares, if approved by the Members, will amount to B 3,93,53,206/- ( Three Crores Ninety Three Lacs Fifty Three Thousand and Two Hundred Six Only).

Pursuant to Regulation 43A of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 (as amended), the CompanyhasaDividendDistributionPolicy.Duringtheyear,there have been no changes to the policy and the same is available on our website at https://www.apollopipes.com/media/product/ Microsoft-Word-28-Dividend-Distribution-Policy.pdf

TRANSFER TO RESERVES

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

OVERVIEW

India demonstrated significant resilience in the face of considerable global turmoil to sustain its position as the fastest-growing major economy for another year.

Economic progress was spurred by government spending on infrastructure. The construction and manufacturing sectors also played a crucial role in contributing to the robust growth rate. The government's revenue exceeded expectations, and GST collection has scaled new heights.

While inflation remained elevated throughout the year, RBI's interventions helped scale inflation below the upper tolerance levels towards the close of the fiscal.

The economic growth outlook for FY25 looks positive despite several headwinds, such as hardening crude oil prices, the global supply chain bottleneck, and potential geopolitical tensions. According to the April 2024 estimates of the Reserve Bank of India, the GDP for FY25 is set to grow at 7%.

As the incumbent Government retains power at the Centre, there is considerable promise that favourable policies and schemes will be continued, and new initiatives will be curated to sustain India's economic progress.

BUSINESS PERFORMANCE

Your Company reported a stellar performance in a year that was challenging. Sales volumes scaled appreciably, resulting in a healthy topline. Significant cost optimisation measures and economies of scale shored business profitability considerably.

The marketing team did a commendable job of creating a market for the additional volumes and collapsing the working capital cycle, which increased the organisation's liquidity.

The Company continued to expand its product offerings with value-added variants. Alongside product development, branding initiatives continued throughout the year through social media campaigns and other electronic media to enhance product and brand visibility.

The fiscal was an important milestone as the Company expanded its capacity and widened its reach.

1) We acquired Kisan Mouldings, a leading pipe company in West India, which gave us a footprint in West India with a capacity of 60,000 tons.

2) We kick-started our greenfield Varanasi expansion with a total capex outlay of B120 Crore, which added 30,000 tons to our overall capacity. With this plant, we will have a pan-India presence.

PROSPECTS

The real estate sector reported a strong performance in FY24, with every segment reporting considerable progress. This trend is expected to gain momentum with the growing earnings and aspirations of the average Indian. Moreover, real estate development, earlier concentrated in urban India, has progressively spread to Tier 2, 3 and 4 towns, significantly widening the opportunity landscape for the building products sector.

PROJECTS

Considering the burgeoning opportunities, we will sustain our investment in augmenting capacities. We will invest B 200 Crore in FY25 and B 60 Crore in FY26 towards strengthening our manufacturing infrastructure. Despite these sizeable financial commitments, our prudent capital allocation strategy will ensure that we remain debt-free.

INTERNAL FINANCIAL CONTROL

The Company has in place adequate Internal Financial Controls within the meaning of Section 134(5)(e) of the Companies Act, 2013 (the "Act"). For the financial year ended March 31, 2024, the Board is of the opinion that the Company had sound Internal Financial Controls commensurate with the size and nature of its operations and are operating effectively and no reportable material weakness was observed in the system during the year. Based on the annual Internal Audit programme as approved by Audit Committee of the Board, regular Internal Audits are conducted covering all offices, factories and key areas of the business. Findings are placed before the Audit Committee, which reviews and discusses the actions taken with the management. The Audit Committee also reviews the effectiveness of the Company's internal controls and regularly monitors implementation of audit recommendations.

There are existing internal policies and procedures for ensuring the orderly and efficient conduct of business, including adherence to the Company's policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records and timely preparation of reliable financial disclosures.

ANNUAL RETURN

In accordance with the provisions of Section 134(3)(a) of the Act, the Annual Return as required under Section 92 of the Act for the financial year 2023-24, is available on the Company's website at https://www.apollopipes.com/extract-of-annual-return#investor.

SUBSIDIARY COMPANIES, JOINT VENTURES AND ASSOCIATES

During the year under review, the Company had one subsidiary as on March 31, 2024, namely Kisan Mouldings Limited (‘KML') and one step down unlisted subsidiary, KML Tradelinks Private Limited (a wholly owned subsidiary of KML).Apollo Pipes Limited had acquired KML as on March 26, 2024 through Strategic Investment by subscribing to 6,40,00,000 Equity Shares i.e. acquisition of 53.57% equity share capital, of the said company by way of preferential issue. The cost of acquisition comes to an aggregate amount of up to B 1,18,40,00,000 /- (Rupees One Hundred Eighteen Crore Forty Lakhs Only) against issuance of 6,40,00,000 Equity Shares of face value of B 10/- each fully paid up, for cash, at an issue price of B 18.50 (including premium of B8.50) /- per Equity Share, determined in accordance with the provisions of Chapter V of SEBI ICDR Regulations, 2018 .The said investment was approved by the Board of Directors of Apollo Pipes Limited in its meeting held on February 13, 2024.

A report on the performance and financial position of the subsidiary in form AOC-1 is annexed hereto as Annexure ‘A' and forms an integral part of this report.

In accordance with the provisions of Section 136 of the Companies Act, 2013, the audited financial statements and related information of the subsidiary, where applicable, are available for inspection during regular business hours at the company's corporate office at A- 140, Sector 136, Noida, Uttar Pradesh-201301 and the same are also available at our website i.e https://www.apollopipes.com/ The Company has no associates or joint ventures.

CONSOLIDATION OF FINANCIAL STATEMENTS

In the beginning of FY 2023-24, the company does not have any subsidiary company however as informed hereabove, the company has acquired 53.57% equity shares of Kisan Mouldings Limited on March 26, 2024 and consequently it has become subsidiary of the Company at the end of FY 2023-24. As part of requirement, the company has consolidated the Financial Statements of Kisan Mouldings Limited.

The consolidated financial statements prepared as per the provisions of Section 129 of the Companies Act, 2013 (The Act) and Schedule III of the Act, are annexed and forms an integral part of this report.

DEPOSITS

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

The Company had no unpaid /unclaimed deposit(s) as on March 31, 2024.

SHARE CAPITAL

As on March 31, 2024, the Authorized Share Capital of the Company stood at B 45,00,00,000/- (Rupees Forty Five Crore only) divided into 4,50,00,000 (Four Crore Fifty Lakh) equity shares of B 10/- (Rupees Ten only) each.

The Paid up Equity Share capital of the Company as on March 31, 2024 was B 39,35,32,060 /- (Rupees Thirty Nine Crore Thirty Five Lakh Thirty Two Thousand and Sixty only) divided into 3,93,53,206 (Three Crore Ninety Three Lakh Fifty Three Thousand Two Hundred and Six) equity shares of B 10/- (Rupees Ten only) each. During the year under review, the Company had allotted 25,000 Equity Shares of face value of B 10/- each on January 23, 2024, pursuant to conversion of 25,000 Warrants out of 47,20,000 Fully Convertible Warrants ("Warrants"), issued and allotted on May 10, 2023, at an issue price of B 550/- each, by way of preferential allotment to the persons belonging to ‘‘Promoter and Promoter group' and ‘Non-Promoter category' and the aforesaid equity shares are under lock-in for such period as prescribed under SEBI (ICDR) Regulations, 2018.

Consequent to the said allotment, the Paid-up Equity Share Capital of the Company stands increased from B 39,32,82,060 (Rupees Thirty Nine Crore Thirty Two Lakh Eighty Two Thousand and Sixty only) divided into 3,93,28,206 (Three Crore Ninety Three Lakh Twenty Eight Thousand Two Hundred and Six only) to B39,35,32,060 (Rupees Thirty Nine Crore Thirty Five Lakh Thirty Two Thousand and Sixty only) divided into 3,93,53,206 (Three Crore Ninety Three Lakh Fifty Three Thousand Two Hundred and

Six) Equity Shares of B 10/- (Rupees Ten Only) each.

The Company has neither issued shares with differential voting rights nor has issued any sweat equity shares.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

In accordance with the provisions of Section 152 of the Act and in terms of Articles of Association of the Company, Mr. Ashok Kumar Gupta will retire at the ensuing Annual General Meeting (AGM) and being eligible, offers himself for reappointment. AllIndependentDirectorsoftheCompanyhavegivendeclarations that they meet the criteria of independence as provided in Section 149(6) read with schedule IV of the Companies Act, 2013 and also Regulation 16(I)(b) of the Listing Regulations. Further, pursuant to the Regulation 25(8) of the Listing Regulations, Independent Directors of the Company declared that they are not aware of any circumstances or situation that exists or can be anticipated which could render them incapable of performing their duties with reasonable independent judgement and without any external influence. The Board took the same on record after undertaking assessment of its veracity.

Further, in pursuance of Rule 6 of the Companies (Appointment and Qualifications of Directors) Rules, 2014, all Independent Directors of the Company have duly confirmed renewal of their respective registration with the Indian Institute of Corporate Affairs (IICA) database.

In the opinion of the Board all the Independent Directors are person of integrity and having requisite expertise, skills and experience (including the proficiency) required for their role and are independent of the management.

PARTICULARS OF REMUNERATION

Disclosure of ratio of the remuneration of each Executive Director to the median remuneration of the employees of the Company and other requisite details pursuant to Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended, is annexed to this report as Annexure -B and forms an integral part of this report. Further, particulars of employees pursuant to Rule 5(2) & 5(3) of the above Rules form part of this report. However, in terms of the provisions of Section 136 of the said Act, the report and accounts are being sent to all the members of the Company and others entitled thereto, excluding the statements of Particulars of employees as required under Rule 5(2) of the Company's (Appointment and Remuneration of Managerial Personnel) Rules 2014 as amended. The said information is available for inspection at the Corporate Office of the Company during working days of the Company up to the date of the ensuing Annual General Meeting.

A. Statutory Auditors

In terms of Section 139 of Companies Act, 2013 ("the Act"), M/s. VAPS & Company, Chartered Accountants, (Firm Registration No. 003612N) had been appointed as Statutory Auditors of the Company in the 34^th Annual General Meeting held on September 29, 2020 to hold the office from the conclusion of the said Annual General Meeting till the conclusion of the 39^th Annual General Meeting to be held in year 2025.

The report of Statutory Auditor on the Standalone Financial Statements for the financial year ended on March 31, 2024, does not contain any qualification, reservation or adverse remark or disclaimer requiring any comments by the Board of Directors.

The Company's standalone and the consolidated financial statements have been prepared in accordance with Ind AS notified under Section 133 of the Act and in terms of Regulation 33 of the SEBI (Listing Obligation & Disclosure Requirement) Regulations, 2015.

There are no frauds reported by the Auditors under section 143(12) of the Act.

B. Cost Auditors

In terms of Section 148 of the Act, the Company is required to get the audit of its cost records conducted by a Cost Accountant. In this connection, the Board of Directors of the Company in its meeting held on July 29, 2024 had, upon the recommendation of the Audit Committee, approved the appointment of M/s HMVN & Associates,

Cost Accountants (FRN: 000290) as the Cost Auditors of the Company for the year ended March 31, 2025.

In accordance with the provisions of Section 148(3) of the Act read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditors as recommended by the Audit Committee and approved by the Board has to be ratified by the Members of the Company. Accordingly, appropriate resolution will form part of the Notice convening the Annual General Meeting (AGM). The approval of the members is sought for the proposed remuneration payable to the Cost Auditors for the Financial Year ended March 31, 2025. .

M/s HMVN & Associates, Cost Accountants (FRN: 000290), have vast experience in the field of cost audit and have been conducting the audit of the cost records of various big Companies for many years. The Cost Audit Report of the Company for the financial year ended March 31, 2024 will be filed with the Ministry of Corporate Affairs (MCA). The Company has maintained accounts and records as specified under sub-section (1) of 148 of the Act.

C. Secretarial Auditors

Pursuant to the provisions of Section 204 of the Act, the Board of Directors had appointed M/s Anjali Yadav & Associates, Company Secretaries in practice as Secretarial Auditor to carry out the Secretarial Audit of the Company for the financial year 2023-24. The report given by them for the said financial year in the prescribed format is annexed to this report as Annexure – C and forms an integral part of this report. The Secretarial Audit Report is self-explanatory and does not contain any qualification, reservation or adverse remark etc.

RELATED PARTY TRANSACTIONS

During the financial year ended March 31, 2024, all the contracts or arrangements or transactions entered into by the Company with the related parties were in the ordinary course of business and on ‘arm's length' basis and were in compliance with the applicable provisions of the Act read with Regulation 23 of SEBI (Listing Obligation and Disclosure Requirement) Regulations, 2015 (Listing Regulations).

Further, the Company has not entered into any contract or arrangement or transaction with the related parties which were not on ‘arm's length' basis or which could be considered material in accordance with the policy of the Company on materiality of related party transactions. In view of the above, it is not required to provide the specific disclosure of related party transactions in form AOC-2.

Your Directors draw the attention of the Members to note no. 37 of the Financial Statement which sets out related party disclosures.

EMPLOYEE STOCK OPTION SCHEME (ESOS)

Note: Total amount realized by exercise of options is B 65,48,700 (excluding TDS amount of B 62,18,792) Note: All figures are mentioned after taking impact of Bonus Issue of shares.

The Certificate from the Secretarial Auditors of the Company certifying that the scheme is being implemented in accordance with the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 and the resolution passed by the Members, would be placed at the Annual General Meeting for inspection by Members.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to provisions of Section 134 sub-section 3(c) and subsection 5 of the Act, your Directors to the best of their knowledge hereby state and confirm that: a. In the preparation of the annual accounts for the year ended March 31, 2024, the applicable accounting standards have been followed along with proper explanations relating to material departures. b. Such accounting policies have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent to give a true and fair view of the Company's state of affairs as at March 31, 2024 and of the Company's profit for the year ended on that date.

c. Proper and sufficient care has been taken for the maintenance of adequate accounting records, in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. d. The annual financial statements have been prepared on a going concern basis. e. The internal financial controls were laid down to be followed that and such internal financial controls were adequate and were operating effectively. f. Proper systems were devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

In line with the provisions of Section 135, Schedule VII of the Act, the Company has framed its Corporate Social Responsibility (CSR) policy for development of programmes and projects for the benefit of weaker sections of the society and the same has been approved by Corporate Social Responsibility Committee

(CSR Committee) and the Board of Directors of the Company. The Corporate Social Responsibility (CSR) policy of the Company provides a road map for its CSR activities.

During the year under review, the Company has made contribution of B 5,00,000 (Rupees Five Lakh) as against the mandatory CSR expenditure of B 1,07,00,000/- (Rupees One Crore Seven Lakh) for various CSR purposes in compliance to the provisions of the act relating to Corporate Social Responsibility and has transferred B 1,02,00,000/- (Rupees One Crore Two Lakh) to the unspent CSR account of the Company on 06.04.2024 pertaining to ongoing projects.

The Annual Report on CSR activities containing all the requisite details (including brief of CSR Policy, CSR Committee as well as expenditure details) is annexed herewith as Annexure – D and forms an integral part of this report.

The CSR Policy has been uploaded on the Company's website and may be accessed at the link: https://www.apollopipes. com/media/product/244084920_CSR_Policy_of_Apollo_Pipes_ Limited.pdf .

During the year under review, no change has been made in the CSR Policy.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186

In terms of Section 186 of the Act and rules framed thereunder, details of Loans (including purpose thereof ), Guarantees given, and Investments made have been disclosed in the Notes to the financial statements for the year ended March 31, 2024.

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

The company is committed to achieve the highest standards of environmental excellence by adopting environmentally sustainable and effective operating systems and processes. Information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo as required under Section 134 (3)(m) of the Act read with the Rule 8 (3) of the Companies (Accounts) Rules, 2014, is furnished as Annexure – E and forms an integral part of this report.

CORPORATE GOVERNANCE

Your Company reaffirms its commitment to the highest standards of corporate governance practices as specified in Regulations 17 to 27 and clauses (b) to (i) and (t) of sub-regulation (2) of Regulation 46 and para C, D and E of Schedule V and Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Corporate Governance Report (Annexure – F) along with compliance certificate dated July 29, 2024 obtained from M/s. Anjali Yadav & Associates, Practicing Company Secretaries which are annexed herewith and forms an integral part of this report.

The Corporate Governance Report which forms part of this report, inter-alia, also covers the following: a) Particulars of the Board Meetings held during the financial year under review. b) Policy on Nomination and Remuneration of Directors, Key Managerial Personnel and Senior Management including, inter alia, the criteria for performance evaluation of Directors. c) The manner in which a formal annual evaluation has been made by the Board of its own performance and that of its Committees and individual Directors. d) The details with respect to composition of Audit Committee and establishment of Vigil Mechanism. e) Details regarding Risk Management including details development and implementation of a risk management policy for the Company including identification therein of elements of risk, if any, which in the opinion of the Board may threaten the existence of the company.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

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

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

Business Responsibility and Sustainability Report for the year under review, as stipulated under Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 and as per SEBI Circulars, is presented in a separate section forming an integral part of the Annual Report.

COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND ANNUAL GENERAL MEETINGS

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

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

The Company has complied with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and has zero tolerance for sexual harassment at the workplace and has adopted policy on Prevention of Sexual Harassment at the Workplace in line with the provisions of the said Act with the objective of providing a safe working environment, where employees feel secure. An Internal Complaints Committee has also been set up to redress complaints received regarding Sexual Harassment.

No complaint of sexual harassment was received during the financial year 2023-24.

Disclosures in relation to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 have been provided in the Report on Corporate Governance.

OTHER DISCLOSURES AND REPORTING

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

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

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

3. Any remuneration or commission received by Chairman & Managing Director of the Company, from its subsidiary.

4. Significant or material orders passed by the regulators or courts or tribunal which impacts the going concern status and company's operations in future.

5. Material changes and commitments, if any, affecting the financial position of the company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of the report.

6. The details of application made or any proceeding pending under Insolvency and Bankruptcy Code, 2016 during the year along with their status as at the end of the financial year.

7. The details of difference between amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof.

During the reporting year, all the recommendations of the Audit Committee were accepted by the Board of Directors.

APPRECIATION