Apollo Micro Systems Ltd. के निदेशक की रिपोर्ट

Mar 31, 2025

Your Directors are pleased to present you the 28^th Annual Report of Apollo Micro Systems Limited ("the Company” or
"AMS”) along with the audited financial statements, for the financial year ended 31^st March, 2025.

1. FINANCIAL RESULTS

The audited financial statements of the Company as on 31^st March, 2025 are prepared in accordance with the relevant
applicable Ind AS and Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
("SEBI Listing Regulations") and provisions of the Companies Act, 2013 ("Act").

The summary of financial performance (standalone & consolidated) for the Financial Year ended
31^st March, 2025 and the corresponding figures for the Financial Year ended 31^st March, 2024 are as under:

	Standalone		Standalone
Particulars	Current year (2024-25)	Previous year (2023-24)	Current year (2024-25)	Previous year (2023-24)
Revenue from Operations	56,206.92	37,163.42	56,206.92	37,163.42
Other Income	404.83	263.38	288.54	182.57
Total Revenue	56,611.75	37,426.80	56,495.46	37,345.99
Cost of materials Consumed	43,567.13	28,319.37	43,545.09	28,316.02
Changes in inventories of finished goods, WIP, stock- in -trade	(3,870.53)	(2,474.78)	(3,870.53)	(2,474.78)
Employee Benefit Expenses	2,183.45	1,688.53	2,198.58	1,688.53
Other Expenses	1,404.97	1,244.05	1,412.81	1,247.09
Financial charges	3,414.35	3,030.15	3,421.58	3,030.17
Depreciation	1,531.94	1,129.56	1,533.29	1,129.56
Profit or Loss Before exceptional and extraordinary items and tax	8,380.43	4,489.91	8,254.64	4,409.40
Exceptional Items	-	-	-	-
Profit or Loss Before tax (PBT)	8,380.43	4,489.91	8,254.64	4,409.40
Tax Expenses: a) Current Tax	1,891.01	642.97	1,852.37	618.70
b) Earlier Tax Adjustments	53.13	(26.27)	53.13	(26.27)
c) Deferred Tax	712.13	706.31	713.37	706.31
Total Tax Expense	2,656.27	1,323.01	2,618.88	1,298.74
Net Profit or Loss After Tax (NP)	5,724.16	3,166.90	5,635.77	3,110.66
Earnings Per Share (Basic)	1.89	1.27	1.86	1.24
Earnings Per Share (Diluted)	1.89	1.19	1.86	1.16

(Previous year figures have been regrouped wherever necessary to confirm to the current year''s presentation)

The financial statements for the year ended 31^st March,
2025 and 31^st March, 2024 have been prepared as per
the Ind AS (Indian Accounting Standards). There are
no material changes and commitments affecting the
financial position of the Company between the end of
the financial year and the date of this report.

2. COMPANY''S PERFORMANCE

During the year under review FY 2024-25, the
standalone performance of your company was
reported as under:

The revenue from operations is ?56,206.92 lakhs
against ? 37,163.42 lakhs in the previous year.

The Earnings Before Interest, Tax, Depreciation
& Amortization ("EBITDA”) has been increased by
54.07% to ? 13,326.72 lakhs against ? 8,649.63 lakhs
in the previous year. The Profit before Tax ("PBT”) for
the year under review is ? 8,380.43 lakhs as against
? 4,489.91 lakhs in the previous year. The Net profit
after tax of the Company for the year under review has
been increased by 80.75% to ? 5,724.16 lakhs against
? 3,166.90 lakhs in the previous year. The Earning
per Share ("EPS”) of the Company for the year under
review is ?1.89 (basic) and ?1.89/- (diluted) per share.

The key aspect of your Company''s consolidated
performance during the FY 2024-25 are as follows:

The revenue from operations is ?56,206.92 against
? 37,163.42 lakhs in the previous year. The Earnings
Before Interest, Tax, Depreciation & Amortization
("EBITDA”) has been increased by ? 54.15% to
? 13,209.51 lakhs against ? 8,569.16 lakhs in the
previous year. The Profit before Tax ("PBT”) for the
year under review is ? 8,254.64 as against ? 4,409.40
lakhs in the previous year. The Net profit after tax
of the Company for the year under review has been
increased by 66.01% to ? 5,635.77 against ? 3,110.66
lakhs in the previous year. The Earning per Share
("EPS”) of the Company for the year under review is
? 1.86/- (basic) and ?1.86 /- (diluted) per share.

3. BUSINESS OUTLOOK

India''s defence sector is entering a transformative
era, driven by increasing strategic autonomy, regional
security imperatives, and a global recalibration of
defence supply chains. As international conflicts
intensify and the unpredictability of geopolitical
alliances becomes more evident, countries around
the world are accelerating their military preparedness
and local production capabilities. Amidst this global
churn, India has emerged as a resilient, neutral
and technology-capable partner, well-positioned
to lead the defence industrial evolution across
the Global South.

India''s push for defence self-reliance is now deeply
institutionalised through major policy initiatives such
as Aatmanirbhar Bharat, the Defence Acquisition
Procedure (DAP 2020), positive indigenisation lists,
and robust financial incentives through schemes like
iDEX, TDF, and Make-I/II. This has translated into
unprecedented opportunities for Indian private sector
firms to play a decisive role not only in catering to

domestic defence forces, but also in becoming part
of global defence supply chains.

The surge in defence capital procurement budget
and the Government''s target to achieve over ?1.75
lakh crore in defence production with ?35,000 crore
in exports by 2030 has created a highly enabling
environment for companies like Apollo Micro
Systems Limited.

At the same time, India''s strategic positioning
balancing regional security interests while maintaining
positive relationships with both the West and the East
has amplified its credibility as a reliable partner in the
global defence landscape. Partner nations are now
actively exploring co-development and co-production
opportunities with Indian firms, particularly in
advanced systems such as missile guidance, C4ISR,
UAVs, and smart munitions.

Within this dynamic landscape, Apollo Micro Systems
Limited (AMS) is strategically aligning itself to
leverage the shift from prototype and development¬
centric work to full-scale platform production. With
strong legacy capabilities, focused R&D investments,
recent backward-integrated acquisitions (e.g., IDL
Explosives), and new infrastructure capacity in the
pipeline, AMS is well positioned to become a system-
of-systems integrator and a strategic partner for both
Indian and global defence needs.

The current fiscal and the next few years offer a
compelling opportunity to transition from niche
subsystem supplier to a prime contractor role in
select verticals like precision munitions, embedded
guidance, and smart explosives. Moreover, the
increasing digitization of battlefield systems and the
convergence of electronics, AI, and edge computing
in military applications further reinforces AMS''s
technological advantage.

In summary, the global environment has made
self-reliant defence capability not just an option
but a strategic necessity. With strong execution,
partnerships, and policy alignment, AMS is well
positioned to lead the next wave of India''s defence
industrial growth.

4. CREDIT RATING

During the year under review, your Company has
obtained the Credit Rating from Acuite Rating &
Research Limited ("credit rating agency") to its

? 393.50 Crores Line of Credit (short term 85.00
Crores & long term 308.50 Crores) of the Company
which is as follows:

Long-Term Rating	ACUITE BBB (pronounced ACUITE triple B)
Short-Term Rating	ACUITE A3 (pronounced ACUITE A three plus)

The outlook on the long-term rating has been
assigned as "Stable” by the credit rating agency.

5. SHARE CAPITAL

(a) Capital structure of the Company:

• Authorised Share Capital of the Company

As on 1^st April, 2024, the Authorised Share Capital
of the Company stood at ? 36,00,00,000/-
(Rupees Thirty-Six Crores Only) comprising of
36,00,00,000 (Thirty-Six Crores Only) Equity
Shares of ? 1/- (Rupee One Only).

During the year, the members of the company
in their Extra-ordinary General Meeting held
on 04^th February, 2025 approved the increase
of authorised Share Capital from the existing
? 36,00,00,000/- (Rupees Thirty-Six Crores Only)
divided into 36,00,00,000 (Thirty Six Crores
Only) Equity Shares of ? 1 /- (Rupees One Only)
each to ? 45,00,00,000/- (Rupees Forty Five
Crores Only) divided into 45,00,00,000 (Forty
Five Crores Only) Equity Shares of ? 1/- (Rupee
One Only) each by the addition there to a sum
of ? 9,00,00,000/- (Rupees Nine Crores Only)
divided into 9,00,00,000 (Nine Crores) Equity
Shares of ? 1/- (Rupee One Only) each ranking
pari-passu in all respects with the existing shares
of the Company.

Consequently, the Authorised Share Capital
of the company as on 31^st March, 2025 stood
at ? 45,00,00,000/- (Rupees Forty Five Crores
Only) comprising of 45,00,00,000 (Forty Five
Crores Only) Equity Shares of ? 1/- (Rupee
One Only) each.

• Issued, Subscribed, and Paid-Up
Capital of the Company

During the year under review, the Company
allotted 2,41,30,700 equity shares of Re. 1/-
(Rupee one) each pursuant to the conversion
of warrants into equity. Consequently, as on

31^st March 2025, the issued, subscribed, and
paid-up capital of the Company stood at Rs.

30.64.89.560 /- comprising 30,64,89,560 equity
shares of Re. 1/- each.

(b) Status of Shares:

As the members are aware, the Company''s
shares are compulsorily tradable in electronic
form. Out of the total paid up capital representing

30.64.89.560 equity shares, the following equity
shares of the Company are in dematerialized as
on 31^st March, 2025:

Sr. No	Capital Details	No. of Shares	% of Total issued Capital
1.	Held in dematerialised form in CDSL	8,40,89,339	27.44
2.	Held in dematerialised form in NSDL	22,24,00,221	72.56
	Total	30,64,89,560	100.00

(c) Preferential issue of Share Warrants:

The company had allotted 98,85,070 convertible
warrants on a preferential basis to promoters and
non-promoters, with an option to convert the
same into an equal number of equity shares at a
price of ? 186/- per warrant, including a premium
of ? 176/- per share on the face value of ? 10/-
per share, within a period of 18 months from the
date of allotment of warrants, i.e., 5^th December
2022, as per the terms and conditions approved
in the Extraordinary General Meeting held on
12^th November 2022. The Company had also
received in-principle approval from BSE Limited
and National Stock Exchange of India Limited on
22^nd November 2022 for this matter.

Subsequently, due to the stock split, where one
equity share of ? 10/- each was sub-divided into
10 equity shares of ? 1/- each, each warrant was
convertible into 10 equity shares of ? 1/- each.

As on 31^st March, 2024, 74,72,000 warrants were
converted into 7,47,20,000 equity shares and
the balance 24,13,070 warrants were converted
into 2,41,30,700 equity shares during the year
2024-25. Hence as on 31^st March, 2025, the total
98,85,070 warrants, were converted into equity
shares of ? 1/- each.

(d) Allotment of Equity Shares upon exercise of warrants:

During the year under review, the following allotments of equity shares took place upon the exercise of warrants:

Sr. No	Date of Allotment	No. of Warrants converted	No. of Equity Shares allotted	Paid- up Share Capital post allotment
1.	03.05.2024	16,50,600	1,65,06,000	Rs. 29,88,64,860
2.	03.06.2024	2,16,000	21,60,000	Rs. 30,64,89,560

Note: The paid-up share capital of the company prior to the aforesaid allotments i.e., as on 01^st April, 2024 was
? 28,23,58,860 comprising 28,23,58,860 Equity Shares of ? 1 /- each.

6. ANNUAL RETURN [SECTION 134 (3) (a) &
SECTION 92(3)]

Pursuant to Section 92(3) read with Section 134(3)(a)
of the Act, the Annual Return as on March 31, 2025 is
available on the Company''s website at https://apollo-
micro.com/wp-content/uploads/2025/08/ANNUAL-
RETURN-2024-25.pdf

7. NUMBER OF MEETINGS OF THE BOARD OF
DIRECTORS [SECTION 134 (3) (b)]:

During the year under review, Nine (9) meetings of
the Board of Directors of the Company were held on
20^th May, 2024, 14^th June, 2024, 23^rd July, 2024, 09^th
August, 2024, 25^th October, 2024, 21^st November,
2024, 09^th January, 2025, 04^th February, 2025 and
21^st March, 2025. The attendance of Directors for the
above meetings is given in the Corporate Governance
Report that forms part of this annual report. The
maximum interval between any two meetings did not
exceed 120 days.

The Detailed information of meetings of board of
directors is given in the Corporate Governance Report
annexed to this annual report.

In terms of requirements of Schedule IV of the Act,
a separate meeting of Independent Directors held on
25^th March, 2025 to review the performance of the
Non-Independent Directors; the Chairperson; the
entire Board and its Committees thereof and; assess
the quality, quantity and timelines of the flow of
information between the Management and the Board.

8. DIRECTOR''S RESPONSIBILITY STATEMENT
[SECTION 134 (3) (c) & 134(5)]

Pursuant to Section 134(5) of the Companies Act,
2013 (the "Act”), the Board of Directors, to the best of
its knowledge and ability, confirm that:

(a) in the preparation of the annual accounts
for the period ended 31^st March, 2025, the

applicable accounting standards had been
followed along with proper explanation relating
to material departures;

(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 a true and fair view of the
state of affairs of the company at the end of the
financial year and of the profit of the company
for that period;

(c) the directors have taken proper and sufficient
care for the maintenance of adequate accounting
records in accordance with the provisions of this
Act for safeguarding the assets of the company
and for preventing and detecting fraud and other
irregularities;

(d) the directors have prepared the annual accounts
on a going concern basis;

(e) the directors have laid down internal financial
controls to be followed by the company and that
such internal financial controls are adequate and
were operating effectively;

(f) the directors have devised proper systems to
ensure compliance with the provisions of all
applicable laws and that such systems were
adequate and operating effectively.

9. DETAILS OF FRAUDS REPORTED BY
AUDITORS UNDER SECTION 143(12) OTHER
THAN THOSE WHICH ARE REPORTABLE TO
THE CENTRAL GOVERNMENT [SECTION 134
(3) (ca)]:

During the year under review, Statutory Auditor,
Secretarial Auditor and the Cost Auditor have
not reported any incident of fraud under section
143(12) of the Act.

10. STATEMENT ON DECLARATION GIVEN BY
INDEPENDENT DIRECTORS SECTION 134 (3)
(d)]

The Board took on record the declaration and
confirmation submitted by the independent directors
regarding their meeting the prescribed criteria of
independence, after undertaking due assessment of
the veracity of the same as required under Regulation
25 of the SEBI Listing Regulations.

The Company has received and taken on record the
declarations received from the Independent Directors
of the Company as required pursuant to section
149(7) of the Act stating that meet the criteria of
independence as provided in section 149 (6) of the
Act, as amended and Regulation 16(1)(b) of the SEBI
Listing Regulations as amended. There has been no
change in the circumstances affecting their status as
independent directors of the Company.

11. FAMILIARISATION PROGRAMME

The Members of the Board of the Company have been
provided opportunities to familiarise themselves with
the Company, its Management, and its operations.
The Directors are provided with all the documents to
enable them to have a better understanding of the
Company, its various operations, and the industry in
which it operates.

All the Independent Directors of the Company are
made aware of their roles and responsibilities at the
time of their appointment through a formal letter of
appointment, which also stipulates various terms and
conditions of their engagement.

Key management personnel of the Company presents
to the Audit Committee on a periodical basis,
briefing them on the operations of the Company,
plans, strategy, risks involved, new initiatives, etc.,
and seek their opinions and suggestions on the
same. In addition, the Directors are briefed on their
specific responsibilities and duties that may arise
from time to time.

The Statutory Auditors and Internal Auditors of
the Company presents to the Audit Committee and
Board of Directors on Financial Statements and
Internal Controls including presentation on regulatory
changes from time to time. The detail policy on the
familiarisation programme is available on the website
at www.//apollo-micro.com/investors under the
Section "Investors”.

12. COMMITTEES OF THE BOARD

The Board of Directors has constituted various
mandatory and non-mandatory Committees to deal
with specific areas and activities which concern the
Company and requires a closer review. The Committees
are formed with approval of the Board and function
under their respective Charters. These Committees
play an important role in the overall management of
day-to-day affairs and governance of the Company.
The Board Committees meet at regular intervals and
take necessary steps to perform its duties entrusted
by the Board. The Minutes of the Committee Meetings
are placed before the Board for noting. The Board
currently has the following Committees:

(a) Audit Committee

The Audit Committee was constituted by our
Board in accordance with Section 177 of the
Companies Act, 2013 and Regulation 18 of the
SEBI Listing Regulations. The composition,
quorum, terms of reference, function, powers,
roles and scope are in accordance with Section
177 of the Act and the provisions of Regulation
18 of the SEBI Listing Regulations. All the
members of the committee are financially literate
and Mrs. Karunasree Samudrala, Chartered
Accountant the Chairman of the Committee is an
Independent Director and possesses the relevant
financial expertise.

The details regarding composition, terms of
references, powers, functions, scope, meetings
and attendance of members are included in
Corporate Governance Report which forms part
of the Annual Report.

(b) Corporate Social Responsibility (CSR)
Committee

The Company believes in undertaking business
in such a way that it leads to overall development
of all stake holders and society. The Company
considers social responsibility as an integral part
of its business activities and endeavours to utilize
allocable CSR budget for the benefit of society.

The CSR Committee has been constituted as
required under the provisions of section 135
of the Act. The details regarding composition,
objectives, powers, functions, scope, meetings
and attendance of members are included in
Corporate Governance Report which forms part
of the Annual Report.

The Committee formulated and recommended to
theBoardthe CSRPolicy.Onthe recommendations
of the CSR Committee, the Board approved and
adopted the CSR Policy of the Company. The
Corporate Social Responsibility Policy is posted
under the Investors section of the Company''s
website at: https://apollo-micro.com/wp-

content/uploads/2017/12/CSR-POLICY.pdf

As per Rule 8 of the Companies (Corporate Social
Responsibility Policy) Rules, 2014, annual report
on CSR is prepared and the same is enclosed as
Annexure-A to this Report.

(c) Stakeholder''s Relationship Committee

Stakeholder''s Relationship Committee has been
constituted by the Board in accordance with
Section 178 (5) of the Act.

The details regarding composition, terms of
references, powers, functions, scope, meetings,
attendance of members and the status of
complaints received during the year are included
in Corporate Governance Report which forms
part of the Annual Report.

(d) Nomination and Remuneration Committee

The Nomination and Remuneration Committee
has been constituted by the Board in accordance
with section 178 of the Act and Regulation 19 of
SEBI Listing Regulations.

The details regarding composition, terms of
references, powers, functions, scope, meetings
and attendance of members are included in
Corporate Governance Report which forms part
of the Annual Report.

Policy on Remuneration of Directors, KMPs and
other employees

The Policy of the Company on remuneration
of Directors, KMPs, Senior Management
and other employees including criteria for
determining qualifications, positive attributes,
independence of a Director and other matters
provided under sub-section (3) of section 178
is made available on the Company''s website
https://apollo-micro.com/investors/ under the
section "Investors”. The website link is http://
apollo-micro.com/wp-content/uploads/2017/09/
REMUNERATION_POLICY.pdf

(e) Risk Management Committee

The Risk Management Committee was
constituted pursuant to resolution of the

Board, which has been entrusted with the
responsibility to assist the Board in overseeing
and approving the Company''s enterprise-wide
risk management framework.

The details regarding composition, terms of
references, powers, functions, scope, meetings
and attendance of members are included in
Corporate Governance Report which forms part
of the Annual Report.

(f) Executive Committee of Directors & CFO

The Executive Committee of Directors and Chief
Financial Officer (CFO) ("Executive Committee”)
has been formed by the Board, under the
provisions of Section 179(3) of the Act and rules
made there under in order to have the timely and
expeditious execution of routine financial matters.

The details regarding composition, terms of
references, powers, responsibilities, scope,
meetings and attendance of members are
included in Corporate Governance Report which
forms part of the Annual Report.

(g) Securities Allotment Committee

Securities Allotment Committee was constituted
pursuant to resolution of the Board, which has
been entrusted with the responsibility to assist
the Board in overseeing and considering the
allotment of securities.

The details regarding composition, terms of
references, powers, functions, scope, meetings
and attendance of members are included in
Corporate Governance Report which forms part
of the Annual Report.

13. EXPLANATIONS OR COMMENTS BY
THE BOARD ON EVERY QUALIFICATION,
RESERVATION OR ADVERSE REMARK OR
DISCLAIMER MADE [SECTION 134 (3) (f)]:

By the Statutory Auditor in their Report: has no
qualification or adverse remarks: NIL

By Company Secretary in Practice in Secretarial Audit
Report: has below mentioned observations.

• The Registrar of Companies, Hyderabad
(ROC) had issued a show-cause notice dated
04/06/2024 for non-filing of Cost Audit report in
Form CRA-4 for FY 2022-23. In this connection,
the Company has responded to the show cause
notice on 12/07/2024 stating the non-filing the

said form was due to oversight. The Company
filed the said form on 12/07/2024 and reported
the same in its response to show cause notice.
Further the Company also filed a compounding
application dated 13th September, 2024 before
Regional Director, South East Region, Hyderabad.

• The Registrar of Companies, Hyderabad
(ROC) had issued a show-cause notice dated
26/03/2025 for delayed filing of Cost Audit
report in Form CRA-4 for FY 2023-24. In this
connection, the Company has responded to the
show cause notice on 24/04/2025 stating the
delayed filing the said form was due to oversight.

The Board took note of the above observations of the
auditors at their meeting held on 28^th July, 2025 and
resolved to ensure due compliance henceforth and
make sure that the reporting''s are filed on time.

Secretarial Audit Report is attached to this
report as Annexure-B

14. PARTICULARS OF LOANS, GUARANTEES
OR INVESTMENTS UNDER SECTION 186
[SECTION 134 (3) (g)]

During the financial year 2024-25, the Company has
given loans to Ananya SIP RF Technologies Private
Limited and Apollo Defence Industries Private Limited,
subsidiaries of the Company (details provided below).
Further, the Company has provided a corporate
guarantee in favour of Axis Trustee Services Limited,
on behalf of the Debenture Holders, for the issuance
of debentures by Apollo Defence Industries Private
Limited, a subsidiary company. Except for the
above, the Company has not given any other loans
or guarantees, nor has it provided any security or
made any acquisition of securities of any other
body corporate, as referred to in Section 186 of the
Companies Act, 2013 and the Companies (Meetings
of Board and its Powers) Rules, 2014.

Further, during the period under review, the Company''s
subsidiary, Apollo Defence Industries Private Limited
invested in M/s. Apollo Strategic Technologies
Private Limited, to the extent of 51% by subscribing
to 5,100 equity shares of Rs. 10 each, amounting to
a total investment of Rs.51,000. Thereby, M/s. Apollo
Strategic Technologies Private Limited became the
Step-down Subsidiary of the Company with effect
from 10th December, 2024.

The details of the Loans, Guarantees and Investments
or security made during the year under review under

section 186 of the Companies Act, 2013 are given in
the Notes forming part of the financial Statements.

SUBSIDIARIES, JOINT VENTURES AND
ASSOCIATES [RULE 8(5)(iv) OF COMPANIES
(ACCOUNTS) RULES, 2014]

"Your Company has two subsidiary companies:
M/s. Ananya SIP RF Technologies Private Limited
(CIN: U74990TG2015PTC097610) and M/s.

Apollo Defence Industries Private Limited (CIN:
U26109TS2023PTC177370) and one step down
subsidiary: M/s.Apollo Strategic Technologies

Private Limited (CIN: U26109TS2024PTC191803).
The Company holds a 51% stake in M/s. Ananya SIP RF
Technologies Private Limited and a 76% stake in M/s.
Apollo Defence Industries Private Limited. Apart from
these, the Company does not have any joint ventures
or associate companies during the year under review.”

Pursuant to the provisions of Section 129, 134 and
136 of the Act read with rules made thereunder
and Regulation 33 of the SEBI Listing Regulations
the Company has prepared consolidated financial
statements of the Company and a separate statement
containing the salient features of financial statement
of subsidiaries in Form AOC-1 forms part of this
Annual Report as Annexure-C.

The annual financial statements and related detailed
information of the subsidiary companies shall be
made available to the members of the holding and
subsidiary company seeking such information on all
working days during business hours. The financial
statements of the subsidiary company shall also be
kept for inspection by any members during working
hours at the Company''s registered office and that of
the subsidiary companies concerned.

In accordance with Section 136 of the Act, the audited
financial statements, including consolidated financial
statements and related information of the Company
and audited accounts of its subsidiaries, are available
on website, https://apollo-micro.com/investors/.

Pursuant to Section 134 of the Act read with rules
made thereunder, the details of developments of
subsidiaries of the Company are covered in the
Management Discussion and Analysis Report which
forms part of this Report.

Further, during the period under review, the Company''s
subsidiary, Apollo Defence Industries Private Limited
invested in M/s. Apollo Strategic Technologies
Private Limited, to the extent of 51% by subscribing
to 5,100 equity shares of Rs. 10 each, amounting to

a total investment of Rs.51,000. Thereby, M/s. Apollo
Strategic Technologies Private Limited became the
Step-down Subsidiary of the Company with effect
from 10th December, 2024.

15. PARTICULARS OF CONTRACTS OR
ARRANGEMENTS WITH RELATED PARTIES
[SECTION 134 (3) (h)]

All related party transactions entered into by the
Company during the financial year 2024-25 were in
the ordinary course of business and on arm''s length
basis and in compliance with the applicable provisions
of the Act and the SEBI Listing Regulations. During the
financial year under review, none of the transactions
entered into with related parties were material as
defined under the Act and SEBI Listing Regulations.

The particulars of contract or arrangements
entered into by the Company, during the financial
year 2024-25, with related parties referred to in
sub-section (1) of section 188 of the Companies
Act, 2013 including certain arm''s length transactions
under third proviso thereto has been disclosed in
Form No. AOC -2, attached to the Board''s report
as Annexure-D. The Policy on Related Party
Transactions as approved by the Board is uploaded
on the Company''s website https://apollo-micro.com/
wp-content/uploads/2017/09/policy_on_related_
party_transactions.pdf under the Section "Investors”.

16. RESERVES [SECTION 134 (3) (j)]

During the financial year 2024-25, 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 under review has been
carried forward to the Statement of Profit and Loss.

17. DIVIDEND [SECTION 134 (3) (k)]

Your Directors have pleasure in recommending a
dividend of 25% (? 0.25/- per Equity Share of face
value of ?1/- each) on the fully paid up Equity Shares
out of the profits of the Company for the financial
year 2024-25. The said dividend, if approved by the
shareholders, would result into a cash outflow of
approximately ? 8,33,83,113.50/- (The amount may
increase in view of the conversions of Convertible
Equity Warrants).

The dividend pay-out for the year under review
has been finalized in accordance with the dividend
distribution policy of the company.

18. DIVIDEND DISTRIBUTION POLICY

Regulation 43A of the SEBI Listing Regulations
mandates the top 1000 listed companies based on
their market capitalization to formulate a Dividend
Distribution Policy. We are pleased to inform you that
as on 31^st March, 2025, your Company is among the
top 1000 listed entities. The Company has a Dividend
Distribution Policy in place prior to the applicability
under Regulation 43A of the SEBI Listing Regulations
and the same is displayed on the company''s website
under the web link https://apollo-micro.com/wp-
content/uploads/2017/12/DIVIDNED-DECLARATION-
POLICY.pdf. The Policy is also annexed herewith as
Annexure-E to the Board''s Report.

19. MATERIAL CHANGES AND COMMITMENTS,
IF ANY [SECTION 134 (3) (l)]

There were no material changes and commitments
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 this report.

20. CONSERVATION OF ENERGY, TECHNICAL
ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO [SECTION 134 (3)
(m)]:

The Company continues its efforts to reduce
and optimize the energy consumption at its
manufacturing facility.

A. Conservation of Energy

The operations of the company are not energy
intensive. Adequate measures are taken to
conserve and reduce the energy consumption
like usage of LED Lights and power saving
centralized air conditioners.

Research & Development

During the year under review, Apollo Micro
Systems Limited has made substantial strides
in strengthening its indigenous technology
capabilities through focused investments in
strategic R&D initiatives. Our R&D efforts were
directed toward the development of critical
defence subsystems that are aligned with
current and emerging requirements of the
Indian Armed Forces.

Key advancements were made in the

following areas:

• Homing Systems for Lightweight Torpedoes:
Our team has achieved significant progress
in the algorithmic and hardware integration
of next-generation acoustic homing systems
for underwater platforms.

• Electromechanical Actuators: We have
completed critical design and validation
phases for actuator systems tailored for
SWARM platforms and missile fin control
applications, reinforcing our precision
guidance portfolio.

• Signal Processing Modules for Moored
Mines: Cutting-edge underwater processing
systems were prototyped and tested for
naval mine warfare applications.

• Avionics Systems: We have furthered our
expertise in ruggedized electronics for
mission-critical avionics packages, with
new designs entering the prototype stage.

• Anti-Submarine Warfare Systems: We have
successfully started our first ASW weapon
design and have made significant progress
in its development right from scratch by
Indigenizing fully and not just any reverse
engineering. This is a classic example of
our abilities build up in developing complete
weapon system platforms.

• Short Range Rockets: We have designed
Rocket Motor and warhead for short Range
Ground to air application and this Rocket
system shall undergo its trials in FY26.

In parallel, our R&D division has actively
contributed to multiple "Make” and "Make-
II” proposals under the Ministry of Defence''s
innovation and indigenization frameworks. We
are proud to share that AMS was awarded a
Make-II project by the Indian Army, reflecting
the trust and confidence in our engineering and
product realization capabilities.

Additionally, recognizing the importance of
building modular and scalable technology blocks
for future tri-services requirements, we have
expanded our internal technology roadmap.
Several development initiatives have been

undertaken proactively to align with anticipated
procurement programmes from the Army,
Navy, and Air Force.

Consistent with our philosophy of long-term
investment in indigenous capabilities, AMS
has invested ?3,352.30 Lakhs in R&D during
FY 2024-25. These investments are expected
to start yielding commercial value and order
conversions beginning FY 2025-26 and
FY 2026-27 onwards, positioning AMS as a
key player in next-generation weapon systems,
sub-systems, and electronics for the Indian
defence ecosystem.

B. Technical Absorption

The Company works on in house Technology.

C. Foreign Exchange Earnings and Outgo:

Foreign Exchange outgo and earnings

	Year ended	Year ended
Particulars	31st March,	31st March,
	2025 (Amount	2024 (Amount
	in Lakhs)	in Lakhs)
Value of imported raw- materials on CIF basis	3,160.69	? 4,018.48
Other Expenses: Foreign Travel Expenses	64.74	? 48.12
Earnings in foreign currency: FOB Value of
Exports For Services Rendered	--	--

21. ANNUAL EVALUATION ON PERFORMANCE
[SECTION 134(3) (p)]:

Pursuant to the provisions of the Act and SEBI Listing
Regulations, the Board has carried out an annual
evaluation of performance of its own, the Committees
thereof and the Director

The Board is pleased to report that the result thereof
show that the Company is well-equipped in the
management as well as the governance aspects.

The Independent Directors at their separate meeting
held on 25^th March, 2025 reviewed the performance
of Non-Independent Directors (Executive & Non¬
Executive), Chairperson, performance of the Board
as a whole and its various committees and also
assessed the quality, quantity and timelines of flow
of information between the Company Management
and the Board.

The Independent Directors expressed their satisfaction
on the overall functioning and effectiveness of the
Board, Committees and performance of individual
Non-Independent Board members and the Chairman.

The Board (excluding the Independent Directors
being evaluated) has evaluated the performance of
the Independent Directors on parameters such as
Knowledge, Experience, Integrity, Independence of
judgment, adherence to Code of Conduct, Corporate
Governance, Contribution, attendance & level of
participation and fulfilment of Independence Criteria
etc. in accordance with the Company''s "Policy https://
apollo-micro.com/wpcontent/uploads/2017/09/
POLICY_FOR_EVALUATION_OF_DIRECTORS_AND_
KEY_MANAGERIAL_PERSONNEL_AND_OTHER_
EMPLOYEES.pdf for evaluation of Directors and Key
Managerial Personnel and other employees”.

The Board has expressed its satisfaction to
the performance of the Independent Directors
and appreciated the level of participation of
Independent Director

22. EMPLOYEE STOCK OPTIONS SCHEME [RULE
12(9) OF COMPANIES (SHARE CAPITAL AND
DEBENTURES) RULES, 2014]:

The Company has in place the Employee Stock Option
Scheme 2018 (ESOS-2018) to attract, reward, motivate
and retain its employees, who have shown high
levels of individual performance and for the unusual
efforts, put in by them to improve the operational
and financial performance of the Company, which
ultimately contributes to the success of the Company.

During the financial year 2024-25, no grant of options
was made to the employees of the company, under
the ESOS scheme. The disclosures according to the
provisions of the Act and SEBI (Share Based Employee
Benefits and Sweat Equity) Regulations, 2021 as on
31^st March, 2025 with regard to the Apollo Employee
Stock Option Scheme 2018 (ESOS-2018) are annexed
to this Report as Annexure-F.

23. CHANGE IN THE NATURE OF BUSINESS
[RULE 8(5)(ii) OF COMPANIES (ACCOUNTS)
RULES, 2014]

There is no change in the nature of the business of
the Company during the financial year 2024-25.

24. CHANGE IN THE DIRECTORS OR KEY
MANAGERIAL PERSONNEL [RULE 8(5)(iii)&
8(5)(iii)(a) OF COMPANIES (ACCOUNTS)
RULES, 2014]

The composition of the Board is in conformity with
Regulation 17 of the SEBI Listing Regulations and
Section 149 of the Companies Act, 2013 mentioned
in Corporate Governance report attached hereto
as Annexure G. There is an optimum combination
of Executive and Non-Executive Directors. The
Company has 8 (Eight) Directors as on 31^st March,
2025. Out of the 8 (Eight) Directors 3 (Three) are
Executive Directors, 3(Three) Non-Executive-
Independent Directors and 2 (Two) Non- Executive
Non-Independent Director. The Chairman of the
Company is a non-executive independent director.

Pursuant to the provisions of the Section 149 of
the Act, the Independent Directors have submitted
declarations that each of them meets the criteria
of independence as provided in Section 149(6) of
the Act along with the rules framed under the SEBI
Listing Regulations. There has been no change in the
circumstances affecting their status as Independent
Directors of the Company.

Ministry of Corporate Affairs vide its Notification
number G.S.R. 804(E) dated October 22^nd, 2019
had amended the Companies (Appointment and
Qualification of Directors) Rules, 2014 and its
amendment thereof requiring the registration of
Independent Directors in the databank maintained by
the Indian Institute of Corporate Affairs ("IICA”) and
passing the online proficiency self-assessment test
conducted by the IICA within two(2) year from the
date of inclusion of his/her name in the data bank.

• Mr. Raghupathy Goud Theegala, Independent
Director has duly registered his name in the
data bank of IICA w.e.f. 25^th February, 2020 and
passed the online proficiency self-assessment
test on 22^nd February 2022.

• Mrs. Karunasree Samudrala, Independent Director
has duly registered her name in the data bank
of IICA w.e.f. 25^th February, 2020 and passed
the online proficiency self-assessment test on
10^th April, 2020.

• Mr. Chandrashekar Matham, Independent
Director has duly registered his name in the
data bank of IICA w.e.f. 06^th August, 2024 and is
exempted from taking the online proficiency self¬
assessment test.

In opinion of the Board, they fulfill the conditions
specified in the Act and the Rules made there under
for the appointment as Independent Directors and are
independent of the management.

The Independent Director''s possess the relevant
integrity, expertise, experience and proficiency.

During the year under review, the non-executive
directors of the Company had no pecuniary
relationship or transactions with the Company other
than sitting fees, commission, if any.

During the financial year 2024-25, no changes took
place in the Directors or Key Managerial Persons
(KMP''s) of the Company.

Mrs. Kavya Gorla (DIN:06407238) retires by rotation
at the ensuing 28^th Annual General Meeting and being
eligible, offers herself for reappointment.

Additional information on reappointment of Mrs.
Kavya Gorla (DIN:06407238 ) as director and as
required under regulation 36(3) of the SEBI Listing
Regulations is given in the Notice convening the
forthcoming AGM.

25. DEPOSITS [RULE 8(5) (v) OF COMPANIES
(ACCOUNTS) RULES, 2014]

The Company has not accepted any deposits within
the meaning of Section 73 of the Act read with the
Companies (Acceptance of Deposits) Rules, 2014.
There are no unpaid or unclaimed deposits as the
Company has never accepted deposits within the
meaning of the Act and the rules made thereunder.

26. DETAILS OF SIGNIFICANT AND MATERIAL
ORDERS PASSED BY THE REGULATORS OR
COURTS OR TRIBUNAL [RULE 8(5) (vii) OF
COMPANIES (ACCOUNTS) RULES, 2014]

During the financial year 2024-25, the Company
hasn''t received any significant and material orders
that impact the going concern status and company''s
operations in future.

27. INTERNAL FINANCIAL CONTROLS [RULE
8(5)(viii) OF COMPANIES (ACCOUNTS)
RULES, 2014]

The Company has kept in place adequate financial
controls to check and control any defects and frauds
in the Company. Adequate internal control systems
commensurate with the nature of the Company''s
business, its size, and complexity of its operations are
in place and have been operating satisfactorily. Internal
control systems comprising policies and procedures
are designed to ensure reliability of financial reporting,
timely feedback on achievement of operational and
strategic goals, compliance with policies, procedure,
applicable laws and regulations and that all assets and
resources are acquired economically, used efficiently
and adequately protected.

The Board of Directors of the Company have adopted
various policies like Related Party Transactions Policy,
Vigil Mechanism Policy and such other procedures
for ensuring the orderly and efficient conduct of its
business for safeguarding of its assets, the prevention
and detection of frauds and errors, the accuracy and
completeness of the accounting records, and the
timely preparation of reliable financial information.

28. PARTICULARS OF EMPLOYEES

The information required under section 197(12) of the
Act read with Rule 5(1) of the Companies (Appointment
and Remuneration of Managerial Personnel) Rules,
2014 respectively, are given in Annexure-H, which
forms partof this Report.

The statement containing names of top ten employees
in terms of remuneration drawn and the particulars of
employees as required under Section 197(12) of the
Act read with Rule 5(2) and 5(3) of the Companies
(Appointment and Remuneration of Managerial
Personnel) Rules, 2014, is provided in a separate
annexure (Annexure H) forming part of this report .
Further, the report and the accounts are being sent
to the Members excluding the aforesaid annexure. In
terms of Section 136 of the Act, the said annexure
is open for inspection and any Member interested
in obtaining a copy of the same may write to the
Company Secretary.

29. AUDITORS AND AUDIT REPORT

(a) Statutory Auditors & their Reports

M/s. S T Mohite & Co. (FRN 011410S), Hyderabad

were appointed as Statutory Auditors of the

Company in the Annual General Meeting held
on August 25, 2022 for a period of 5 Years
and holds office until the conclusion of the
30^th Annual General Meeting to be held in the
calendar year 2027.

Further, the remuneration to be paid to Statutory
Auditors for FY 2024-25 is ? 13.00 Lakhs plus
out of pocket expenses and applicable taxes
and the remuneration for the remaining tenure of
their second term as Statutory Auditors shall be
mutually agreed between the Board of Directors
and M/s. S T Mohite & Co, from time to time.

The report of the Statutory Auditor forms part
of this Annual Report and Annual Accounts
2024-25. The said report does not contain
any qualification, reservation, adverse remark
or disclaimer. During the year under review,
the Auditors did not report any matter under
Section 143(12) of the Act, therefore no detail
is required to be disclosed under Section 134(3)
(ca) of the Act.

Further, M/s. S T Mohite & Co. have confirmed
their eligibility for their appointment as Statutory
Auditors and the same are within the limits as
specified in section 141 of the Companies Act,
2013 and have also confirmed that they are
not disqualified from continuing as Auditors
of the Company.

The Notes on financial statement referred to in
the Auditors'' Report are self-explanatory and do
not call for any further comments.

(b) Internal Auditors

As per the provisions of Section 138 of the
Companies Act, 2013 and the rules made
thereunder, the Board of Directors in its
meeting held on 23^rd May, 2025 had appointed
M/s. E Sateesh Reddy & Associates , Chartered
Accountants, Hyderabad (ICAI Firm Registration
No. 014888S), as Internal Auditor to conduct
the internal audit of the Company for the
Financial Year 2025-26 on a remuneration of
Rs.6,00,000/- per annum

The Internal Audit Report for the Financial Year
2024-25 issued by M/s Surya Pavan & Co,
Chartered Accountants, Vijayawada is submitted
which is self-explanatory and do not call for any
further explanation of the Board.

(c) Cost Auditors

In terms of Section 148 of the Act, the Company
is required to maintain cost records and have
the audit of its cost records conducted by a
Cost Accountant. Cost records are prepared and
maintained by the Company as required under
Section 148(1) of the Act.

The Board of Directors of the Company in its
meeting held on 23^rd May, 2025 has, on the
recommendation of the Audit Committee,
approved the appointment of M/s G H Reddy &
Associates, Cost Accountants (Firm Registration
Number - 002110) for the year ending March
31, 2026. M/s G H Reddy & Associates have
experience in the field of cost audit.

The Board, also on the recommendations of the
Audit Committee approved the remuneration of
?1.5 lakh (Rupees One lakh Fifty Thousand only)
(excluding applicable taxes and reimbursement
of out-of-pocket expenses) payable to Cost
Auditors for FY 2025-26. The same is placed for
ratification of Members and forms part of the
Notice of the AGM.

(d) Secretarial Auditors

As per the provisions of Section 204 of the
Companies Act, 2013 and the rules made
thereunder, the Board of Directors in its meeting
held on 20^th May, 2024 had appointed M/s. MNM
& Associates, Company Secretaries in Practice
(Firm Registration No: P2017TL059600),
Hyderabad as Secretarial Auditor of the
Company, to conduct the Secretarial audit for
the Financial Year 2024-25.

The Secretarial Audit Report, pursuant to the
provisions of Section 204 read with Section
134(3) of the Companies Act, 2013, issued by
Ms. Sridevi Madati, Practicing Company
Secretary, in Form MR-3 for the financial year
2024-25 is annexed to the Board''s Report
as Annexure-B.

Further, the Board in its meeting held on 23^rd May,
2025, has approved the appointment of M/s. MNM
& Associates, Company Secretaries, Hyderabad
(Firm Registration No: P2017TL059600) as
the Secretarial Auditor of the Company for a
period of five (5) consecutive financial years
commencing from FY 2025-26 to FY 2029-30,
subject to approval of the Shareholders at the
ensuing Annual General Meeting of the Company

30. MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis Report
("MD&A”) for the year under review as stipulated
under the SEBI Listing Regulations is presented in a
separate section forming part of this Annual Report.

31. REPORT ON CORPORATE GOVERNANCE

The Company has complied with the Corporate
Governance requirements under the Companies
Act, 2013 and as stipulated under the SEBI Listing
Regulations. A separate section titled Corporate
Governance Report as Annexure-G under the SEBI
Listing Regulations along with a Corporate Governance
Certificate from the Practicing Company Secretary in
the Annexure-I and CFO Certification in compliance
with Regulation 17(8) of SEBI Listing Regulations in
the Annexure-J forms the part of this report.

32. INTERNAL CONTROL SYSTEMS AND THEIR
ADEQUACY

The Company has an Internal Control System,
commensurate with the size, scale and complexity
of its operations. To maintain its objectivity and
independence, the Internal Audit Functions reports to
the Board including Audit Committee of the Company.
Based on the report of internal audit function, process
owners undertake corrective action in their respective
areas and thereby strengthen the controls.

33. VIGIL MECHANISM

The Company''s Board of Directors, pursuant to the
provisions of Section 177(9) of the Act read with Rule 7
of the Companies (Meetings of Board and its Powers)
Rules, 2014, has framed ''Whistle Blower Policy'' for
Directors and employees of the Company. The policy
is to provide a mechanism, which ensures adequate
safeguards to employees and Directors from any
victimisation on raising of concerns of any violations
of legal or regulatory requirements, incorrect or
misrepresentation of any, financial statements and
reports, and so on. The employees of the Company
have the right/option to report their concern/
grievance to the Chairman of the Audit Committee.
The Company is committed to adhere to the highest
standards of ethical, moral and legal conduct of
business operations. The Whistle Blower Policy is
hosted on the Company''s website https://apollo-
micro.com/wp-content/uploads/2017/09/WHISTLE-
BLOWER-POLICY.pdf under the section "Investors”.

34. INVESTORS EDUCATION AND PROTECTION
FUND (IEPF)

Pursuant to section 124 of the Act, Dividends that are
unclaimed for a period of seven years are required
to be transferred to the IEPF, established by the
Government of India. During the year under review,
there was no outstanding amount of unclaimed
dividends which was liable to be transfer to the IEPF.

35. HUMAN RELATIONS

The Company continues to have cordial and
harmonious relationship with its employees and
thank all employees for their cooperation and the
contribution towards harmonious relationship and
progress of the company.

36. DISCLOSURE UNDER THE SEXUAL
HARASSMENT OF WOMEN AT WORK
PLACE (PREVENTION, PROHIBITION AND
REDRESSAL) ACT, 2013

Your Company is committed to provide work
environment that ensures every employee is treated
with dignity and respect and afforded equitable
treatment. The Company is also committed to
promoting a work environment that is conducive to the
professional growth of its employees and encourages
equality of opportunity and will not tolerate any form
of sexual harassment and to take all necessary steps
to ensure that its employees are not subjected to any
form of harassment.

Thus, in order to create a safe and conducive work
environment 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.

Further, the Company has complied with provisions
relating to constitution of Internal Complaints
Committee ("ICC”) under Sexual Harassment of
women at workplace (Prevention, Prohibition, &
Redressal) Act, 2013. The Committee has been set
up to redress complaints received regarding sexual
harassment. The detail of the committee members
is available on the website of the Company https://
apollo-micro.com/wp-content/uploads/2019/09/
REVISED-Workplace-Sexual-Harassment-Policy-
apollo-micro-systems-limited.pdf under the section
"Investors”. All employees (permanent, contractual,
trainees, temporary) are covered under this policy.

During the year under review, there were no cases filed
under the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013.

37. DETAILS OF APPLICATION MADE OR
ANY PROCEEDING PENDING UNDER THE
INSOLVENCY AND BANKRUPTCY CODE,
2016 (31 OF 2016) DURING THE YEAR [RULE
8(5)(xi) OF COMPANIES (ACCOUNTS)
RULES, 2014]

During the year under review, the Company did
not make any applications under the Insolvency
and Bankruptcy Code, 2016. Additionally, there
are no ongoing proceedings against the Company
under the said Code.

38. 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 [RULE
8(5)(xii) OF COMPANIES (ACCOUNTS)
RULES, 2014]

During the financial year under review, there has
been no instance of one-time settlement with any
banks or financial institutions. Therefore, no valuation
differences are reported.

39. APPLICABILITY OF BUSINESS RESPONSIBILITY
AND SUSTAINABILITY REPORT (BRSR)

In accordance with Regulation 34(2)(f) of the Securities
and Exchange Board of India (Listing Obligations
and Disclosure Requirements) Regulations, 2015,
as amended, the top 1,000 listed entities based
on market capitalization as on 31^st March of every
financial year are required to include a Business
Responsibility and Sustainability Report (BRSR) as
part of their Annual Report.

As of March 31, 2024, Apollo Micro Systems
Limited is ranked within the top 1,000 listed entities
based on its market capitalization, thereby making
the BRSR applicable to the Company for the
financial year 2024-25.

The BRSR report outlines the Company''s initiatives and
performance related to sustainability and responsible

--------------—----, ----- - ---------- zj ............. —

ESG principles.

The BRSR report has been prepared in compliance
with the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 and is annexed to
the Board''s Report as Annexure - K.

40. COMPLIANCE WITH SECRETARIAL STANDARDS

The Directors state that the Company has complied
with 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).

41. DIRECTORS AND OFFICERS INSURANCE
(D&O)

As per the requirements of Regulation 25(10) of
the SEBI Listing Regulations, the Company has
taken Directors and Officers Insurance (''D&O'') for
all its directors.

42. BOARD OPINION ON THE INDEPENDENT
DIRECTOR APPOINTED:

The Board declares that in their opinion, all the
independent directors are persons of integrity and
possess all the relevant expertise and experience
(including the proficiency).

43. UNCLAIMED DIVIDENDS:

In accordance with the provisions of Sections 124
and 125 of Act and Investor Education and Protection
Fund (Accounting, Audit, Transfer and Refund) Rules,
2016 (IEPF Rules) Unpaid / Unclaimed Dividends and
dividends not encashed / claimed within seven years
from the date of declaration are to be transferred
to the Investor Education and Protection Fund
(IEPF) Authority.

The IEPF Rules mandate companies to transfer
shares of Members whose dividends remain unpaid
/ unclaimed for a continuous period of seven years to
the demat account of IEPF Authority.

The Members whose dividend / shares are transferred
to the IEPF Authority can claim their shares / dividend
from the Authority.

Due dates for transfer of dividend unclaimed to IEPF are as follows:

Financial Year	Rate of Dividend	Date of Declaration of Dividend	Last date for claiming un-paid dividends by Investors	Due date for transfer to IEPF
2018-2019	10% Interim Dividend (i.e. ? 1 per equity share of face value of ?10 each)	01.11.2018	03.12.2025	04.12.2025
2019-2020	5% Final Dividend (i.e., ? 0.5 per equity share of face value of ?10 each)	25.09.2020	29.10.2027	30.10.2027
2020-2021	2.5% Final Dividend (i.e., ? 0.25 per equity share of face value of ?10 each)	28.09.2021	29.10.2028	30.10.2028
2021-2022	2.5% Final Dividend (i.e., ? 0.25 per equity share of face value of ?10 each)	20.09.2022	14.10.2029	15.10.2029
2022-2023	2.5% Final Dividend (i.e., ? 0.025 per equity share of face value of ?1 each*)	29.09.2022	30.10.2030	31.10.2030

* The company had sub divided (stock split) equity share from face value of ?10/- to ?!/- per share, pursuant to the shareholders'' approval for Sub -
division of every 1 (One) equity share of face value of ?10/- (Rupees Ten only) each into 10 (Ten) equity shares of the face value of ?!/- (Rupee One

only) each with effect from the record date Thursday 4^th May 2023

Members are requested to claim dividend(s) which
have remained unclaimed, by sending a request to the
Company at e-mail ID [email protected] or to the
Company''s Registrar and Share Transfer Agent (RTA) at
e-mail [email protected] or to their postal
address 306, Right Wing, 3^rd Floor, Amrutha Ville, Opp:
Yashoda Hospital, Rajbhavan Road, Hyderabad - 500
082 (India), Telangana, India. During the financial year
2024-25, the Company declared and paid a dividend,
and the list of shareholders with unclaimed dividends
has been updated on the Company''s website at:
https://apollomicro.com/investor-corner/unpaid-
andunclaimed-dividend-and-shares/

During the financial year, the Company did not
transfer any unclaimed or unpaid amounts or shares
to the Investor Education and Protection Fund (IEPF).

44. STATEMENT THAT THAT COMPANY HAS
COMPLIED WITH MATERNITY BENEFIT ACT:

The Company has complied with the provisions of
Maternity Benefit Act.

45. NUMBER OF EMPLOYEES AS ON CLOSE OF
FINANCIAL YEAR

Particulars	No. of Employees
Male	332
Female	73
Transgender	-
Total	405

46. ACKNOWLEDGEMENTS

The Directors thank all customers, bankers, investors,
shareholders, vendors and other stakeholders
for their continued support and patronage during
the year under review. The Board appreciates its
employees for their efforts, hard work and dedication,
which enabled the Company to achieve the targets
and recognitions.

For and on benau ot the Board
APOLLO MICRO SYSTEMS LIMITED

Sd/- Sd/-

Place: Hyderabad Karunakar Reddy Baddam Krishna Sai Kumar Addepalli

Date: 28^th July, 2025 Managing Director Whole Time Director (Operations)

DIN:00790139 DIN: 03601692

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Mar 31, 2024

Your Directors are pleased to present you the 27^th Annual Report of Apollo Micro Systems Limited ("the Company” or "AMS”) along with the audited financial statements, for the financial year ended 31^st March, 2024.

1. FINANCIAL RESULTS

The audited financial statements of the Company as on 31^st March, 2024 are prepared in accordance with the relevant applicable Ind AS and Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations”) and provisions of the Companies Act, 2013 ("Act”).

The summary of financial performance (standalone & consolidated) for the Financial Year ended 31st March, 2024 and the corresponding figures for the Financial Year ended 31st March, 2023 are as under:

(All amounts in ? Lakhs, except share data and where otherwise stated)

Particulars		Standalone		Consolidated
	Current year (2023-24)	Previous year (2022-23)	Current year (2023-24)	Previous year (2022-23)
Revenue from Operations	37,163.42	29,752.60	37,163.42	29,752.60
Other Income	263.38	127.94	182.57	82.37
Total Revenue	37,426.80	29,880.54	37,345.99	29,834.97
Cost of materials Consumed	28,319.37	24,375.19	28,316.02	24,375.18
Changes in inventories of finished goods, WIP, stock-in -trade	(2,474.78)	(3,397.22)	(2,474.78)	(3,397.21)
Employee Benefit Expenses	1,688.53	1,246.38	1,688.53	1,246.38
Other Expenses	1,244.05	1,116.45	1,247.09	1,119.12
Financial charges	3,030.15	2,236.85	3,030.17	2,236.89
Depreciation	1,129.56	1,036.63	1,129.56	1,036.63
Profit or Loss Before exceptional and extraordinary items and tax	4,489.91	3,266.26	4,409.40	3,217.98
Exceptional Items	-	322.22	-	322.22
Profit or Loss Before tax (PBT)	4,489.91	2,944.04	4,409.40	2,895.76
Tax Expenses: a) Current Tax	642.97	363.03	618.70	347.79
b) Earlier Tax Adjustments	(26.27)	-	(26.27)	-
c)Deferred Tax	706.31	674.19	706.31	674.19
Total Tax Expense	1,323.01	1,037.22	1,298.74	1,021.98
Net Profit or Loss After Tax (NP)	3,166.90	1,906.82	3,110.66	1,873.78
Earnings Per Share (Basic)	1.27	*9.18	1.24	*9.02
Earnings Per Share (Diluted)	1.19	*6.22	1.16	*6.11

(Previous year figures have been regrouped wherever necessary to confirm to the current year''s presentation)

*Effective 4 May 2023, the Company received approval from its equity shareholders for the subdivision of its equity shares with a face value of ?10 each into 10 equity shares with a face value of ?1 each

The financial statements for the year ended 31^st March, 2024 and 31^st March, 2023 have been prepared as per the Ind AS (Indian Accounting Standards). There are no material changes and commitments affecting the financial position of the Company between the end of the financial year and the date of this report.

2. COMPANY''S PERFORMANCE

During the year under review FY 2023-24, the standalone performance of your company was reported as under:

The revenue from operations is ? 37,163.42 lakhs against ? 29,752.60 lakhs in the previous year. The Earnings Before Interest, Tax, Depreciation & Amortization ("EBITDA") has been increased by ? 39.12% to ? 8,649.66 lakhs against ? 6,217.49 lakhs in the previous year. The Profit before Tax ("PBT") for the year under review is ? 4,489.91 lakhs as against ? 2,944.04 lakhs in the previous year. The Net profit

after tax of the Company for the year under review has been increased by 66.08% to ?3,166.90 lakhs against ?1,906.82 lakhs in the previous year. The Earning per Share (“EPS”) of the Company for the year under review is ?1.27/- (basic) and ?1.19/- (diluted) per share.

The key aspect of your Company''s consolidated performance during the FY 2023-24 are as follows:

The revenue from operations is ? 37,163.42 lakhs against ? 29,752.60 lakhs in the previous year. The Earnings Before Interest, Tax, Depreciation & Amortization (“EBITDA”) has been increased by ? 38.90% to ? 8,569.13 lakhs against ? 6,169.25 lakhs in the previous year. The Profit before Tax (“PBT”) for the year under review is ? 4,409.40 lakhs as against ? 2,895.76 lakhs in the previous year. The Net profit after tax of the Company for the year under review has been increased by 66.01% to ? 3,110.66 lakhs against ? 1,873.78 lakhs in the previous year. The Earning per Share (“EPS”) of the Company for the year under review is ? 1.24/- (basic) and ?1.16/- (diluted) per share.

3. BUSINESS OUTLOOK

India is emerging as a leader of the Global South, balancing its trade, and continuing to maintain geopolitical harmony among several nations. The consistent increase in our revenue share from exporting products, particularly defense products, is clearly setting the stage for the country to take the next big leap toward becoming a world leader, both economically and as a predominantly friendly nation. However, there is serious concern due to the growing perennial conflicts across different parts of the world and the unpredictable nature of international alliances, which keeps the defense sector in an extremely vulnerable position. These scenarios have emphasized the need for self-reliance, as disruptions in the global supply chain can severely affect a country''s ability to sustain itself in the event of war. The Indian Government''s focus on “Make in India” and “Make for Global” has given a significant boost to the Indian industry.

4. CREDIT RATING

During the year under review, your Company has obtained the Credit Rating from Acuite Rating & Research Limited (“credit rating agency”) to its ? 393.50 Crores Line of Credit (short term 85.00 Crores

& long term 308.50 Crores) of the Company which is as follows:

Long-Term Rating	ACUITE BBB (pronounced ACUITE triple B)
Short-Term Rating	ACUITE A3 (pronounced ACUITE A three plus)

The outlook on the long-term rating has been assigned as "Stable" by the credit rating agency.

5. SHARE CAPITAL

(a) Capital structure of the Company:

As on 31^st March, 2024, the Authorised Share Capital of the Company stood at ? 36,00,00,000/-(Rupees Thirty-Six Crores Only) comprising of 36,00,00,000/- (Rupees Thirty-Six Crores Only) Equity Shares of ? 1/- (Rupee One Only).

During the year under review, the company had sub divided (stock split) equity share from face value of ''10/- to ''1/- per share, pursuant to the shareholders'' approval for Sub - division of every 1 (One) equity share of face value of ''10/- (Rupees Ten only) each into 10 (Ten) equity shares of the face value of Re 1/- (Rupee One only) each, with effect from the record date Thursday, 4^th May, 2023.

During the year under review, the Company allotted 7,47,20,000 equity shares of ''1/- (Rupee one each) pursuant to the conversion of warrants into equity. Consequently, as on 31^st March 2024, the issued, subscribed, and paid-up capital of the Company stood at ''28,23,58,860/- comprising 28,23,58,860 equity shares of ''1/- each.

(b) Status of Shares:

As the members are aware, the Company''s shares are compulsorily tradable in electronic form. Out of the total paid up capital representing 28,23,58,860 equity shares, the following equity shares of the Company are in dematerialized and physical form as on 31^st March, 2024:

Sr. No	Capital Details	No. of Shares	% of Total issued Capital
1.	Held in dema-terialised form in CDSL	5,15,82,937	18.27
2.	Held in dema-terialised form in NSDL	23,07,75,843	81.73
3.	Physical	80	negligible
	Total	28,23,58,860	100.00

Note: Pursuant to the amendment in Regulation 40 of the SEBI Listing Regulations, dated June 8, 2018 & SEBI date extension circular dated Dec 03, 2018, has mandated that transfer of securities would be carried out in dematerialized form only effective April 01, 2019. So, it is requested to all the Members holding the shares in physical form to dematerialize the same for giving effect to any transfer of company''s securities.

(c) Preferential issue of Share Warrants:

The company had allotted 98,85,070 convertible warrants on a preferential basis to promoters and non-promoters, with an option to convert the same into an equal number of equity shares at a price of ''186/- per warrant, including a premium of ''176/- per share on the face value of ''10/-per share, within a period of 18 months from the date of allotment of warrants, i.e., 5th December 2022, as per the terms and conditions approved in the Extraordinary General Meeting held on 12th

November 2022. The Company had also received in-principle approval from BSE Limited and National Stock Exchange of India Limited on 22nd November 2022 for this matter.

Subsequently, due to the stock split, where one equity share of ''10/- each was subdivided into 10 equity shares of ''1/- each, each warrant was convertible into 10 equity shares of ''1/-each. During the year under review, 74,72,000 warrants were converted into 7,47,20,000 equity shares. As of 31^st March, 2024, out of the total 98,85,070 warrants, 24,13,070 warrants remained outstanding for conversion into equity shares of ''1/- each.

(d) Allotment of Equity Shares upon exercise of warrants:

During the year under review, the following allotments of equity shares took place upon the exercise of warrants:

S. No.	Date of Allotment	No. of Warrants converted	No. of Equity Shares allotted	Paid- up Share capital post allotment
1.	23.05.2023	4,99,999	49,99,990	''21,26,38,850
2.	29.05.2023	18,00,000	1,80,00,000	''23,06,38,850
3.	12.07.2023	1,33,334	13,33,340	''23,19,72,190
4.	16.08.2023	66,667	6,66,670	''23,26,38,860
5.	12.09.2023	33,333	3,33,330	''23,29,72,190
6.	04.10.2023	29,02,000	2,90,20,000	''26,19,92,190
7.	27.10.2023	66,667	6,66,670	''26,26,58,860
8.	23.11.2023	16,74,564	1,67,45,640	''27,94,04,500
9.	08.12.2023	2,95,436	29,54,360	''28,23,58,860

Note: The paid-up share capital of the company prior to the aforesaid allotments i.e., as on 01^st April, 2023 was ''20,76,38,860 comprising 2,07,63,886 Equity Shares of ''10 each.

6. EXTRACT OF THE ANNUAL RETURN [SECTION 134 (3) (a) & SECTION 92(3)]

Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return as on March 31, 2024 is available on the Company''s website at https://apollo-micro.com/wp-content/uploads/2024/08/ANNUAL-RETURN-2023-24.pdf

7. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS [SECTION 134 (3) (b)]:

During the year under review, Six (6) meetings of the Board of Directors of the Company were held on 29^th May, 2023, 10^th August, 2023, 04^th September, 2023, 10^th November, 2023, 03^rd February, 2024 and 21^st March, 2024. The attendance of Directors for the above

meetings is given in the Corporate Governance Report that forms part of this annual report. The maximum interval between any two meetings did not exceed 120 days.

The Detailed information of meetings of board of directors is given in the Corporate Governance Report annexed to this annual report.

In terms of requirements of Schedule IV of the Act, a separate meeting of Independent Directors held on 27^th March, 2024 to review the performance of the Non-Independent Directors; the Chairperson; the entire Board and its Committees thereof and; assess the quality, quantity and timelines of the flow of information between the Management and the Board.

8. DIRECTOR''S RESPONSIBILITY STATEMENT [SECTION 134 (3) (c) & 134(5)]

Pursuant to Section 134(5) of the Companies Act, 2013 (the "Act"), the Board of Directors, to the best of its knowledge and ability, confirm that:

(a) in the preparation of the annual accounts for the period ended 31st March, 2024, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(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 a true and fair view of the state of affairs of the company at the end of the financial year and of the profit of the company for that period;

(c) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) the directors have prepared the annual accounts on a going concern basis;

(e) the directors have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively;

(f) the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

9. DETAILS OF FRAUDS REPORTED BY AUDITORS UNDER SECTION 143(12) OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT [SECTION 134 (3) (ca)]:

During the year under review, Statutory Auditor, Secretarial Auditor and the Cost Auditor have not reported any incident of fraud under section 143(12) of the Act.

STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS SECTION 134 (3)(d)]

The Board took on record the declaration and confirmation submitted by the independent directors

regarding their meeting the prescribed criteria of independence, after undertaking due assessment of the veracity of the same as required under Regulation 25 of the SEBI Listing Regulations.

The Company has received and taken on record the declarations received from the Independent Directors of the Company as required pursuant to section 149(7) of the Act stating that meet the criteria of independence as provided in section 149 (6) of the Act, as amended and Regulation 16(1)(b) of the SEBI Listing Regulations as amended. There has been no change in the circumstances affecting their status as independent directors of the Company.

10. FAMILIARISATION PROGRAMME

In compliance with the requirements of the SEBI Listing Regulations, the Company has put in place a familiarisation programme for the Independent Directors to familiarise them with their roles, rights and responsibilities as Independent Directors, the working of the Company, nature of the industry in which the Company operates, business model and so on. The same is also available on the Company website https://apollo-micro.com/investors/ under the Section “Investors”.

11. COMMITTEES OF THE BOARD

The Board of Directors has constituted various mandatory and non-mandatory Committees to deal with specific areas and activities which concern the Company and requires a closer review. The Committees are formed with approval of the Board and function under their respective Charters. These Committees play an important role in the overall management of day-to-day affairs and governance of the Company. The Board Committees meet at regular intervals and take necessary steps to perform its duties entrusted by the Board. The Minutes of the Committee Meetings are placed before the Board for noting. The Board currently has the following Committees:

(a) Audit Committee

The Audit Committee was constituted by our Board in accordance with Section 177 of the Companies Act, 2013 and Regulation 18 of the SEBI Listing Regulations. The composition, quorum, terms of reference, function, powers, roles and scope are in accordance with Section 177 of the Act and the provisions of Regulation 18 of the SEBI Listing Regulations. All the members of the committee are financially literate and Mrs. Karunasree

Samudrala, Chartered Accountant the Chairman of the Committee is an Independent Director and possesses the relevant financial expertise.

The details regarding composition, terms of references, powers, functions, scope, meetings and attendance of members are included in Corporate Governance Report which forms part of the Annual Report.

(b) Corporate Social Responsibility (CSR) Committee

The Company believes in undertaking business in such a way that it leads to overall development of all stake holders and society. The Company considers social responsibility as an integral part of its business activities and endeavours to utilize allocable CSR budget for the benefit of society.

The CSR Committee has been constituted as required under the provisions of section 135 of the Act. The details regarding composition, objectives, powers, functions, scope, meetings and attendance of members are included in Corporate Governance Report which forms part of the Annual Report.

The Committee formulated and recommended to the Board the CSR Policy. On the recommendations of the CSR Committee, the Board approved and adopted the CSR Policy of the Company. The Corporate Social Responsibility Policy is posted under the Investors section of the Company''s website at: https://apollo-micro.com/wp-content/ uploads/2017/12/CSR-POLICY.pdf

As per Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014, annual report on CSR is prepared and the same is enclosed as Annexure-A to this Report.

(c) Stakeholder''s Relationship Committee

Stakeholder''s Relationship Committee has been constituted by the Board in accordance with Section 178 (5) of the Act.

The details regarding composition, terms of references, powers, functions, scope, meetings, attendance of members and the status of complaints received during the year are included in Corporate Governance Report which forms part of the Annual Report.

(d) Nomination and Remuneration Committee

The Nomination and Remuneration Committee has been constituted by the Board in accordance with section 178 of the Act and Regulation 19 of SEBI Listing Regulations.

The details regarding composition, terms of references, powers, functions, scope, meetings and attendance of members are included in Corporate Governance Report which forms part of the Annual Report.

Policy on Remuneration of Directors, KMPs and other employees

The Policy of the Company on remuneration of Directors, KMPs, Senior Management and other employees including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided under sub-section (3) of section 178 is made available on the Company''s website https://apollo-micro. com/investors/ under the section “Investors”. The website link is http://apollo-micro.com/ wp-content/uploads/2017/09/REMUNERATION_ POLICY.pdf

(e) Risk Management Committee

The Risk Management Committee was constituted pursuant to resolution of the Board, which has been entrusted with the responsibility to assist the Board in overseeing and approving the Company''s enterprise-wide risk management framework.

The details regarding composition, terms of references, powers, functions, scope, meetings and attendance of members are included in Corporate Governance Report which forms part of the Annual Report.

(f) Executive Committee of Directors & CFO

The Executive Committee of Directors and Chief Financial Officer (CFO) (“Executive Committee”) has been formed by the Board, under the provisions of Section 179(3) of the Act and rules made there under in order to have the timely and expeditious execution of routine financial matters.

The details regarding composition, terms of references, powers, responsibilities, scope, meetings and attendance of members are included in Corporate Governance Report which forms part of the Annual Report.

(g) Securities Allotment Committee

Securities Allotment Committee was constituted pursuant to resolution of the Board, which has been entrusted with the responsibility to assist the Board in overseeing and considering the allotment of securities.

The details regarding composition, terms of references, powers, functions, scope, meetings and attendance of members are included in Corporate Governance Report which forms part of the Annual Report.

12. EXPLANATIONS OR COMMENTS BY THE BOARD ON EVERY QUALIFICATION, RESERVATION OR ADVERSE REMARK OR DISCLAIMER MADE [SECTION 134 (3) (f)]:

By the Statutory Auditor in their Report: has no qualification or adverse remarks: NIL

By Company Secretary in Practice in Secretarial Audit Report: has below mentioned observations.

◊ The Registrar of Companies, Hyderabad (ROC) had issued a show-cause notice dated 04/06/2024 for nonfiling of Cost Audit report in Form CRA-4 for FY 202223. In this connection, the Company has responded to the show cause notice on 12/07/2024 stating the nonfiling the said form was due to oversight. The Company filed the said form on 12/07/2024 and reported the same in its response to show cause notice. There is no action taken by the ROC till the date of this Report.

◊ BSE Limited levied a fine of ''20,000/- plus applicable taxes w.r.t non-compliance pursuant to SEBI (Issue of Capital and Disclosure Requirements) Regulations,

2018 read with point 4, sub-point 4 of SEBI circular no. SEBI/HO/CFD/DIL2/CIR/P/2019/94 dated 19th August

2019 wherein there was a delay of one (1) day in filing the trading application for 2,29,99,990 equity shares allotted upon conversion of share warrants. The company paid the fine amount on 19th July 2023."

The Board took note of the above observations of the auditors at their meeting held on 09^th August, 2024 and resolved to ensure due compliance henceforth and make sure that the reporting''s are filed on time.

Secretarial Audit Report is attached to this report as Annexure-B

13. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 [SECTION 134

(3) (g)]

During the financial year 2023-24, the Company has given loan to Ananya SIP RF Technologies Private Limited, subsidiary Company (details mentioned below) and has not given any guarantees to any person or other bodies corporate or acquired securities of any other body corporate as referred to in Section 186 of the Act and the Companies (Meetings of Board and its Powers) Rules, 2014.

Further, during the period under review, the Company invested in its Subsidiary, M/s. Apollo Defence Industries Private Limited, which was incorporated during the financial year, by subscribing to 7,600 equity shares of ''10 each, amounting to a total investment of ''76,000.

During the year under review, the Company has given a loan of ? 391.70 lakhs to its subsidiary M/s. Ananya SIP RF Technologies Private Limited and amount outstanding as on 31^st March, 2024 is ? 976.26 lakhs. The loan to the said subsidiary is repayable on demand with interest at 10.50% p.a.

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES [RULE 8(5)(iv) OF COMPANIES (ACCOUNTS) RULES, 2014]

"Your Company has two subsidiary companies: M/s. Ananya SIP RF Technologies Private Limited (CIN: U74990TG2015PTC097610) and M/s.

Apollo Defence Industries Private Limited (CIN: U26109TS2023PTC177370). The Company holds a 51% stake in M/s. Ananya SIP RF Technologies Private Limited and a 76% stake in M/s. Apollo Defence Industries Private Limited. Apart from these, the Company does not have any joint ventures or associate companies during the year under review"

Pursuant to the provisions of Section 129, 134 and 136 of the Act read with rules made thereunder and Regulation 33 of the SEBI Listing Regulations the Company has prepared consolidated financial statements of the Company and a separate statement containing the salient features of financial statement of subsidiaries in Form AOC-1 forms part of this Annual Report as Annexure-C.

The annual financial statements and related detailed information of the subsidiary companies shall be made available to the members of the holding and subsidiary company seeking such information on all working days during business hours. The financial statements of the subsidiary company shall also be kept for inspection by

any members during working hours at the Company''s registered office and that of the subsidiary companies concerned.

In accordance with Section 136 of the Act, the audited financial statements, including consolidated financial statements and related information of the Company and audited accounts of its subsidiaries, are available on website, https://apollo-micro.com/investors/. Pursuant to Section 134 of the Act read with rules made thereunder, the details of developments of subsidiaries of the Company are covered in the Management Discussion and Analysis Report which forms part of this Report.

14. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES [SECTION 134 (3) (h)]

All related party transactions entered into by the Company during the financial year 2023-24 were in the ordinary course of business and on arm''s length basis and in compliance with the applicable provisions of the Act and the SEBI Listing Regulations. During the financial year under review, none of the transactions entered into with related parties were material as defined under the Act and SEBI Listing Regulations.

The particulars of contract or arrangements entered into by the Company, during the financial year 202324, with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arm''s length transactions under third proviso thereto has been disclosed in Form No. AOC -2, attached to the Board''s report as Annexure-D. The Policy on Related Party Transactions as approved by the Board is uploaded on the Company''s website https://apollo-micro.com/wp-content/uploads/2017/09/policy_on_ related_party_transactions.pdf under the Section “Investors”.

15. RESERVES [SECTION 134 (3) (j)]

During the financial year 2023-24, 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 under review has been carried forward to the Statement of Profit and Loss.

16. DIVIDEND [SECTION 134 (3) (k)]

Your Directors have pleasure in recommending a dividend of 5% (? 0.05/- per Equity Share of face value of ?1/- each) on the fully paid up Equity Shares out of the profits of the Company for the financial year 202324. The said dividend, if approved by the shareholders,

would result into a cash outflow of approximately ? 1,53,24,478/-.

The dividend pay-out for the year under review has been finalized in accordance with the dividend distribution policy of the company.

17. DIVIDEND DISTRIBUTION POLICY

Regulation 43A of the SEBI Listing Regulations mandates the top 1000 listed companies based on their market capitalization to formulate a Dividend Distribution Policy. We are pleased to inform you that as on 31^st March, 2024, your Company is among the top 1000 listed entities. The Company has a Dividend Distribution Policy in place prior to the applicability under Regulation 43A of the SEBI Listing Regulations and the same is displayed on the company''s website under the web link https://apollo-micro.com/wp-content/uploads/2017/12/DIVIDNED-DECLARATION-POLICY.pdf . The Policy is also annexed herewith as Annexure-E to the Board''s Report.

18. MATERIAL CHANGES AND COMMITMENTS, IF ANY [SECTION 134 (3) (l)]

There were no material changes and commitments 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 this report.

19. CONSERVATION OF ENERGY, TECHNICAL ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO [SECTION 134 (3) (m)]:

The Company continues its efforts to reduce and optimize the energy consumption at its manufacturing facility.

A. Conservation of Energy

The operations of the company are not energy intensive. Adequate measures are taken to conserve and reduce the energy consumption like usage of LED Lights and power saving centralized air conditioners.

Research & Development

During the year under review, we have significantly invested in development of Homing System for Light Weight Torpedoes, Actuators for SWARM and Missiles, Seeker Signal Processing Systems, Moored Mine Signal Processing Systems and other Critical Avionic Systems.

Our Research & Design team has started focusing on several Make Proposal of Tri-Services for which technology build blocks needs augmentation. We have participated in Make-II Proposals and has been awarded a Make-II project by Indian Army. The technology development requisite for such Make Proposals was also taken up by our team.

Being a technology company and our future growth is always based on the investments done on R&D from time to time, we foresee the results to hit into business by FY 2025 and FY 2026. We have spent ? 2,978.83 Lakhs/- towards our R&D activities in this Financial Year.

B. Technical Absorption

The Company works on in house Technology.

C. Foreign Exchange Earnings and Outgo:

Foreign Exchange outgo and earnings

Particulars	Year ended	Year ended
	31st March,	31st March,
	2024	2023
	(Amount in	(Amount in
	Lakhs)	Lakhs)
Value of imported	? 4,018.48	? 1,566.84
raw-materials on
CIF basis
Other Expenses:	? 48.12	? 15.22
Foreign Travel
Expenses
Earnings in foreign
currency:	--	--
FOB Value of Ex-	--	--
ports
For Services Ren-
dered

20. ANNUAL EVALUATION ON PERFORMANCE [SECTION 134(3) (p)]:

Pursuant to the provisions of the Act and SEBI Listing Regulations, the Board has carried out an annual evaluation of performance of its own, the Committees thereof and the Director

The Board is pleased to report that the result thereof show that the Company is well-equipped in the management as well as the governance aspects.

The Independent Directors at their separate meeting held on 27^th March, 2024 reviewed the performance of Non-Independent Directors (Executive & NonExecutive), Chairperson, performance of the Board as a whole and its various committees and also assessed the quality, quantity and timelines of flow of information between the Company Management and

the Board.

The Independent Directors expressed their satisfaction on the overall functioning and effectiveness of the Board, Committees and performance of individual Non-Independent Board members and the Chairman.

The Board (excluding the Independent Directors being evaluated) has evaluated the performance of the Independent Directors on parameters such as Knowledge, Experience, Integrity, Independence of judgment, adherence to Code of Conduct, Corporate Governance, Contribution, attendance& level of participation and fulfilment of Independence Criteria etc. in accordance with the Company''s "Policy https:// apollo-micro.com/wp-content/uploads/2017/09/ POLICY_FOR_EVALUATION_OF_DIRECTORS_AND_KEY_ MANAGERIAL_PERSONNEL_AND_OTHER_EMPLOYEES. pdf for evaluation of Directors and Key Managerial Personnel and other employees”.

The Board has expressed its satisfaction to the performance of the Independent Directors and appreciated the level of participation of Independent Director

21. EMPLOYEE STOCK OPTIONS SCHEME [RULE 12(9) OF COMPANIES (SHARE CAPITAL AND DEBENTURES) RULES, 2014]:

The Company has in place the Employee Stock Option Scheme 2018 (ESOS-2018) to attract, reward, motivate and retain its employees, who have shown high levels of individual performance and for the unusual efforts, put in by them to improve the operational and financial performance of the Company, which ultimately contributes to the success of the Company.

During the financial year 2023-24, no grant of options was made to the employees of the company, under the ESOS scheme. The disclosures according to the provisions of the Act and SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 as on 31st March, 2024 with regard to the Apollo Employee Stock Option Scheme 2018 (ESOS-2018) are annexed to this Report as Annexure-F.

22. CHANGE IN THE NATURE OF BUSINESS [RULE 8(5) (ii) OF COMPANIES (ACCOUNTS) RULES, 2014]

There is no change in the nature of the business of the Company during the financial year 2023-24.

23. CHANGE IN THE DIRECTORS OR KEY MANAGERIAL

PERSONNEL [RULE 8(5)(iii)& 8(5)(iii)(a) OF

COMPANIES (ACCOUNTS) RULES, 2014]

The composition of the Board is in conformity with Regulation 17 of the SEBI Listing Regulations and Section 149 of the Companies Act, 2013 mentioned in Corporate Governance report attached hereto as Annexure H. There is an optimum combination of Executive and Non-Executive Directors. The Company has 8 (Eight) Directors as on 31st March, 2024. Out of the 8 (Eight) Directors 3 (Three) are Executive Directors, 3(Three) Non-Executive- Independent Directors and 2 (Two) Non- Executive Non-Independent Director. The Chairman of the Company is a non-executive independent director.

During the financial year 2023-24, the following changes took place in the composition of the Board.

* Re-appointment of Mrs. Karunasree Samudrala as the Independent Director the Company for the Second Term of 5 years from of 29^th May 2023 to 28^th May 2028.

Pursuant to the provisions of the Section 149 of the Act, the Independent Directors have submitted declarations that each of them meets the criteria of independence as provided in Section 149(6) of the Act along with the rules framed under the SEBI Listing Regulations. There has been no change in the circumstances affecting their status as Independent Directors of the Company.

Ministry of Corporate Affairs vide its Notification number G.S.R. 804(E) dated October 22^nd, 2019 had amended the Companies (Appointment and Qualification of Directors) Rules, 2014 and its amendment thereof requiring the registration of Independent Directors in the databank maintained by the Indian Institute of Corporate Affairs (“MCA”) and passing the online proficiency self-assessment test conducted by the IICA within two(2) year from the date of inclusion of his/her name in the data bank.

◊ Mr. Raghupathy Goud Theegala, Independent Director has duly registered his name in the data bank of IICA w.e.f 25th February, 2020 and passed the online proficiency self-assessment test on 22nd February 2022.

◊ Mrs. Karunasree Samudrala, Independent Director has duly registered her name in the data bank of IICA w.e.f 25th February, 2020 and passed the

online proficiency self-assessment test on 10th April, 2020.

◊ Mr. Chandrashekar Matham, Independent Director has duly registered his name in the data bank of IICA w.e.f 06th August, 2024 and is exempted from taking the online proficiency self-assessment test.

In opinion of the Board, they fulfill the conditions specified in the Act and the Rules made there under for the appointment as Independent Directors and are independent of the management.

The Independent Director''s possess the relevant integrity, expertise, experience and proficiency.

During the year under review, the non-executive directors the Company had no pecuniary relationship or transactions with the Company other than sitting fees, commission, if any.

During the financial year 2023-24, the following changes took place in the Key Managerial Persons (KMP''s) of the Company.

1. Resignation of Mr. Vitta Chaitanya as the Company Secretary and Compliance Officer of the Company with effect from of 31^st May, 2023.

2. Appointment of Mr. Sudarshan Chiluveru, CFO as the Compliance Officer of the Company with effect from 31^st May, 2023.

3. Appointment of Mrs. Rukhya Parveen as the Company Secretary and Compliance Officer of the Company with effect from 26^th August, 2023.

Mr. Aditya Kumar Halwasiya (DIN: 08200117) retires by rotation at the ensuing 27^th Annual General Meeting and being eligible, offers himself for reappointment.

Additional information on reappointment of Mr. Aditya Kumar Halwasiya (DIN: 08200117) as director and as required under regulation 36(3) of the SEBI Listing Regulations is given in the Notice convening the forthcoming AGM.

24. DEPOSITS [RULE 8(5) (v) OF COMPANIES

(ACCOUNTS) RULES, 2014]

The Company has not accepted any deposits within the meaning of Section 73 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014. There are no unpaid or unclaimed deposits as the Company has never accepted deposits within the

meaning of the Act and the rules made thereunder.

25. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNAL [RULE 8(5) (vii) OF COMPANIES (ACCOUNTS) RULES, 2014]

During the financial year 2023-24, the Company hasn''t received any significant and material orders that impact the going concern status and company''s operations in future.

26. INTERNAL FINANCIAL CONTROLS [RULE 8(5)(viii) OF COMPANIES (ACCOUNTS) RULES, 2014]

The Company has kept in place adequate financial controls to check and control any defects and frauds in the Company. Adequate internal control systems commensurate with the nature of the Company''s business, its size, and complexity of its operations are in place and have been operating satisfactorily. Internal control systems comprising policies and procedures are designed to ensure reliability of financial reporting, timely feedback on achievement of operational and strategic goals, compliance with policies, procedure, applicable laws and regulations and that all assets and resources are acquired economically, used efficiently and adequately protected.

The Board of Directors of the Company have adopted various policies like Related Party Transactions Policy, Vigil Mechanism Policy and such other procedures for ensuring the orderly and efficient conduct of its business for safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information.

27. PARTICULARS OF EMPLOYEES

The information required under section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 respectively, are given in Annexure-G, which forms partof this Report.

The statement containing names of top ten employees in terms of remuneration drawn and the particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in a separate annexure forming part of this report. Further, the report and the accounts are being sent to the Members excluding the aforesaid annexure. In terms of Section

136 of the Act, the said annexure is open for inspection and any Member interested in obtaining a copy of the same may write to the Company Secretary.

28. AUDITORS AND AUDIT REPORT

(a) Statutory Auditors & their Reports

M/s. S T Mohite & Co. (FRN 011410S), Hyderabad were appointed as Statutory Auditors of the Company in the Annual General Meeting held on August 25, 2022 for a period of 5 Years and holds office until the conclusion of the 30^th Annual General Meeting to be held in the calendar year 2027.

Further, the remuneration to be paid to Statutory Auditors for FY 2024-25 is ? 7.50 Lakhs plus out of pocket expenses and applicable taxes and the remuneration for the remaining tenure of their second term as Statutory Auditors shall be mutually agreed between the Board of Directors and M/s. S T Mohite & Co, from time to time.

The report of the Statutory Auditor forms part of this Annual Report and Annual Accounts 2023-24. The said report does not contain any qualification, reservation, adverse remark or disclaimer. During the year under review, the Auditors did not report any matter under Section 143(12) of the Act, therefore no detail is required to be disclosed under Section 134(3) (ca) of the Act.

Further, M/s. S T Mohite & Co. have confirmed their eligibility for their appointment as Statutory Auditors and the same are within the limits as specified in section 141 of the Companies Act, 2013 and have also confirmed that they are not disqualified from continuing as Auditors of the Company.

The Notes on financial statement referred to in the Auditors'' Report are self-explanatory and do not call for any further comments.

(b) Internal Auditors

As per the provisions of Section 138 of the Companies Act, 2013 and the rules made thereunder, the Board of Directors in its meeting held on 20^th May, 2024 had reappointed M/s Surya Pavan & Co, Chartered Accountants, Vijayawada (ICAI Firm Registration No. 015612S), as Internal Auditor to conduct the internal audit of the

Company for the Financial Year 2024-25 on a remuneration of ''1,50,000/- per annum

The Internal Audit Report for the Financial Year 2023-24 issued by M/s Surya Pavan& Co, Chartered Accountants, Vijayawada is submitted which is self-explanatory and do not call for any further explanation of the Board.

(c) Cost Auditors

In terms of Section 148 of the Act, the Company is required to maintain cost records and have the audit of its cost records conducted by a Cost Accountant. Cost records are prepared and maintained by the Company as required under Section 148(1) of the Act.

The Board of Directors of the Company in its meeting held on 20^th May, 2024 has, on the recommendation of the Audit Committee, approved the appointment of M/s G H Reddy & Associates, Cost Accountants (Firm Registration Number - 002110) for the year ending March 31, 2025. M/s G H Reddy & Associates have experience in the field of cost audit.

The Board, also on the recommendations of the Audit Committee approved the remuneration of ?1.5 lakh (Rupees One lakh Fifty Thousand only) (excluding applicable taxes and reimbursement of out-of-pocket expenses) payable to Cost Auditors for FY 2024-25. The same is placed for ratification of Members and forms part of the Notice of the AGM.

(d) Secretarial Auditors

As per the provisions of Section 204 of the Companies Act, 2013 and the rules made thereunder, the Board of Directors in its meeting held on 10^th August, 2023 had appointed M/s. MNM & Associates, Company Secretaries in Practice (Firm Registration No: P2017TL059600), Hyderabad as Secretarial Auditor of the Company, to conduct the Secretarial audit for the Financial Year 2023-24.

The Secretarial Audit Report, pursuant to the provisions of Section 204 read with Section 134(3) of the Companies Act, 2013, issued by Ms. Sridevi Madati, Practicing Company Secretary, in Form MR-3 for the financial year 2023-24 is annexed to

the Board''s Report as Annexure-B. The secretarial auditors'' report is forming the part of this report and there are no qualifications, observations, adverse remarks or disclaimer in the said Report.

Further, the Board has approved the appointment of M/s. MNM & Associates, Company Secretaries, Hyderabad (Firm Registration No: P2017TL059600) as the Secretarial Auditor of the Company for the Financial Year 2024-25 in the Board Meeting held on 20^th May, 2024.

29. MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis Report ("MD&A") for the year under review as stipulated under the SEBI Listing Regulations is presented in a separate section forming part of this Annual Report.

30. REPORT ON CORPORATE GOVERNANCE

The Company has complied with the Corporate Governance requirements under the Companies Act, 2013 and as stipulated under the SEBI Listing Regulations. A separate section titled Corporate Governance Report as Annexure-H under the SEBI Listing Regulations along with a Corporate Governance Certificate from the Practicing Company Secretary in the Annexure-i and CFO Certification in compliance with Regulation 17(8) of SEBI Listing Regulations in the Annexure-J forms the part of this report.

31. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. To maintain its objectivity and independence, the Internal Audit Functions reports to the Board including Audit Committee of the Company. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls.

32. VIGIL MECHANISM

The Company''s Board of Directors, pursuant to the provisions of Section 177(9) of the Act read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014, has framed ''Whistle Blower Policy'' for Directors and employees of the Company. The policy is to provide a mechanism, which ensures adequate safeguards to employees and Directors from any victimisation on raising of concerns of any violations of legal or regulatory requirements, incorrect or

misrepresentation of any, financial statements and reports, and so on. The employees of the Company have the right/option to report their concern/grievance to the Chairman of the Audit Committee. The Company is committed to adhere to the highest standards of ethical, moral and legal conduct of business operations. The Whistle Blower Policy is hosted on the Company''s website https://apollo-micro.com/wp-content/uploads/2017/09/WHISTLE-BLOWER-POLICY. pdf under the section “Investors”.

33. INVESTORS EDUCATION AND PROTECTION FUND (IEPF)

Pursuant to section 124 of the Act, Dividends that are unclaimed for a period of seven years are required to be transferred to the IEPF, established by the Government of India. During the year under review, there was no outstanding amount of unclaimed dividends which was liable to be transfer to the IEPF.

34. HUMAN RELATIONS

The Company continues to have cordial and harmonious relationship with its employees and thank all employees for their cooperation and the contribution towards harmonious relationship and progress of the company.

35. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Your Company is committed to provide work environment that ensures every employee is treated with dignity and respect and afforded equitable treatment. The Company is also committed to promoting a work environment that is conducive to the professional growth of its employees and encourages equality of opportunity and will not tolerate any form of sexual harassment and to take all necessary steps to ensure that its employees are not subjected to any form of harassment.

Thus, in order to create a safe and conducive work environment 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.

Further, the Company has complied with provisions relating to constitution of Internal Complaints Committee (“ICC”) under Sexual Harassment of women at workplace (Prevention, Prohibition, & Redressal) Act, 2013. The Committee has been set up to redress

complaints received regarding sexual harassment. The detail of the committee members is available on the website of the Company https://apollo-micro.com/ wp-content/uploads/2019/09/REVISED-Workplace-Sexual-Harassment-Policy-apollo-micro-systems-limited.pdf under the section “Investors”. All employees (permanent, contractual, trainees, temporary) are covered under this policy. During the year under review, there were no cases filed under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

36. DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (31 OF 2016) DURING THE YEAR [RULE 8(5)(xi) OF COMPANIES (ACCOUNTS) RULES, 2014]

During the year under review, the Company did not make any applications under the Insolvency and Bankruptcy Code, 2016. Additionally, there are no ongoing proceedings against the Company under the said Code.

37. 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 [RULE 8(5)(xii) OF COMPANIES (ACCOUNTS) RULES, 2014]

During the financial year under review, there has been no instance of one-time settlement with any banks or financial institutions. Therefore, no valuation differences are reported.

38. APPLICABILITY OF BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT (BRSR)

In accordance with Regulation 34(2)(f) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, the top 1,000 listed entities based on market capitalization as on 31^st March of every financial year are required to include a Business Responsibility and Sustainability Report (BRSR) as part of their Annual Report.

As of March 31, 2024, Apollo Micro Systems Limited is ranked within the top 1,000 listed entities based on its market capitalization, thereby making the BRSR applicable to the Company for the financial year 202324.

The BRSR report outlines the Company''s initiatives and

performance related to sustainability and responsible business conduct, demonstrating our commitment to ESG principles.

The BRSR report has been prepared in compliance with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and is annexed to the Board''s Report as Annexure - K.

39. ACKNOWLEDGEMENTS

Sd/-

Place: Hyderabad Karunakar Reddy Baddam

Date: 09^th August, 2024 Managing Director

DIN:00790139

The Directors thank all customers, bankers, investors, shareholders, vendors and other stakeholders for their continued support and patronage during the year under review. The Board appreciates its employees for their efforts, hard work and dedication, which enabled the Company to achieve the targets and recognitions.

For and on behalf of the Board

APOLLO MICRO SYSTEMS LIMITED

Sd/-

Krishna Sai KumarAddepalli

Whole Time Director (Operations)

DIN: 03601692

---

Mar 31, 2023

Board''s Report

To the Members,

The Directors are pleased to present you the 26th Annual
Report of Apollo Micro Systems Limited ("the Company or
AMS") along with the audited financial statements for the
financial year ended 31st March, 2023.

1. FINANCIAL RESULTS

The audited financial statements of the Company as
on 31st March, 2023 are prepared in accordance with

the relevant applicable Ind AS and Regulation 33 of the
SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 ("SEBI Listing Regulations") and
provisions of the Companies Act, 2013 ("Act").

The summary of financial performance (standalone
& consolidated) for the Financial Year ended 31st
March, 2023 and the corresponding figures for the
Financial Year ended 31st March, 2022 are as under:

Particulars	Standalone		Consolidated
	Current year (2022-23)	Previous year (2021-22)	Current year (2022-23)	Previous year (2021-22)
Revenue from Operations	29,752.60	24,319.11	29,752.60	24,319.11
Other Income	127.94	75.90	82.37	75.94
Total Revenue	29,880.54	24,395.01	29,834.97	24,395.05
Cost of materials Consumed	24,375.19	19,988.75	24,375.19	19,988.75
Changes in inventories of finished goods, WIP, stock- in -trade	(3,397.22)	(1,876.06)	(3,397.22)	(1,876.06)
Employee Benefit Expenses	1,243.19	977.04	1,243.19	977.04
Other Expenses	1,119.66	677.08	1,122.33	677.65
Financial charges	2,236.84	1,704.80	2,236.88	1,704.89
Depreciation	1,036.64	897.65	1,036.64	897.65
Profit or Loss Before exceptional and extraordinary items and tax	3,266.24	2,025.75	3,217.96	2,025.13
Exceptional Items	322.22	-	322.22	-
Profit or Loss Before tax (PBT)	2,944.02	2,025.75	2,895.73	2,025.13
Tax Expenses: a) Current Tax	363.03	208.66	347.79	208.46
b) Earlier Tax Adjustments	-	-	-	-
c) Deferred Tax	674.19	355.15	674.19	355.15
Total Tax Expense	1,037.23	563.81	1,021.99	563.61
Net Profit or Loss After Tax (NP)	1,906.79	1,461.94	1,873.75	1,461.52
Earnings Per Share (Basic)	9.18	7.04	9.02	7.04
Earnings Per Share (Diluted)	6.22	7.04	6.11	7.04

(Previous year figures have been regrouped wherever
necessary to confirm to the current year''s presentation)

The financial statements for the year ended 31st March,
2023 and 31st March, 2022 have been prepared as per
the Ind AS (Indian Accounting Standards). There are
no material changes and commitments affecting the
financial position of the Company between the end of
the financial year and the date of this report.

2. COMPANY’S PERFORMANCE

During the year under review FY 2022-23, the standalone
performance of your company was reported as under:

The revenue from operations is T29,752.60 lakhs against
?24,319.11 lakhs in the previous year. The Earnings
Before Interest, Tax, Depreciation & Amortization
("EBITDA") has been increased by 34.34% to T6,217.49

lakhs against ?4,628.20 lakhs in the previous year. The
Profit before Tax ("PBT") for the year under review
is ?2,944.02 lakhs as against ?2,025.76 lakhs in the
previous year. The Net profit after tax of the Company for
the year under review has been increased by 30.43% to
?1,906.79 lakhs against ?1,461.94 lakhs in the previous
year. The Earning per Share ("EPS") of the Company for
the year under review is ?9.18/- (basic) and ?6.22/-
(diluted) per share.

The key aspect of your Company''s consolidated
performance during the FY 2022-23 are as follows:

The revenue from operations is ?29,752.60 lakhs against
?24,319.11 lakhs in the previous year. The Earnings
Before Interest, Tax, Depreciation & Amortization
("EBITDA") has been increased by ?33.31% to ?6,169.25
lakhs against ?4,627.67 lakhs in the previous year. The
Profit before Tax ("PBT") for the year under review
is ?2,895.73 lakhs as against ?2,025.13 lakhs in the
previous year. The Net profit after tax of the Company for
the year under review has been increased by 28.21% to
?1,873.75 lakhs against ?1,461.52 lakhs in the previous
year. The Earning per Share ("EPS") of the Company for
the year under review is ?9.02/- (basic) and ?6.11/-
(diluted) per share.

3. BUSINESS OUTLOOK

As world is witnessing a Military aggression across nations
and an unconventional war practice being followed for
sustenance in the war field and constant thrust to gain
or regain new and old positions in the war-torn lands it
has become very important for every country to keep
themselves equipped under any eventuality. This has
become more important in the present times as the
present war has given some hard lessons of isolation
and alliances by countries. So why are we talking about
this?. Yes, we are talking about this as the present
situation has given an alarm to all countries not only to
equip themselves with Defence equipment but also to
choose a long-term Defence ally for supply of Defence
equipment and technology. This scenario has given an
unprecedented opportunity to India and Defence eco¬
system in India. Although the world is continuing to face
challenges through semiconductor war the growing
demands in Defence equipment across world and more

so in India with a thrust for Make in India and 100% Self
Reliance has kept the Defence Growth story on strong
foot. Although some term this as sunrise industry, we
term this as Industry where now the UV Index is at peak
and convert this energy for better growth of the Defence
companies for a sustained business for the years to
come. The huge encouragement given by Govt of India
is also supporting the local industry to aspire and export
various products and technologies across the world.

4. CREDIT RATING

During the year under review, your Company has
obtained the Credit Rating from Acuite Rating & Research
Limited ("credit rating agency") to its ?260.00 Crores
Line of Credit (short term ?210 Crores & long term ?50
Crores) of the Company which is as follows:

Long-Term Rating	ACUITE BBB (pronounced ACUITE triple B)
Short-Term Rating	ACUITE A3 (pronounced ACUITE A three plus)

The outlook on the long-term & Short-Term rating has
been assigned as "Stable" by the credit rating agency.

5. SHARE CAPITAL(a) Changes in Capital structure of the Company

During the year under review, the Authorised
Share Capital of the Company was increased from
^27,00,00,000/- (Rupees Twenty Seven Crores Only)
divided into 2,70,00,000 (Two Crores Seventy Lakhs
Only) Equity Shares of ?10/- (Rupees Ten Only) each
to ^36,00,00,000/- (Rupees Thirty Six Crores Only)
divided into 3,60,00,000 (Three Crores Sixty Lakhs
Only) Equity Shares of ?10/- (Rupees Ten Only) each
by the addition there to a sum of ?9,00,00,000/-
(Rupees Nine Crores Only) divided into 90,00,000
(Ninety Lakhs) Equity Shares of ?10/- (Rupees Ten
Only) each.

Further, the Company sought approval of members
through postal ballot for sub-division of 1 Equity
Share of the face value of ?10/- per share to 10 Equity
Shares of face value of ?1/- per share. Accordingly
the Authorised share capital of the Company as on
31^st March 2023, stands at ^36,00,00,000/- (Rupees

Thirty Six Crores Only) divided into 36,00,00,000
(Thirty Six Crores Only) Equity Shares of ?1/- (Rupee
One Only) each.

As on 31st March, 2023 Paid-up capital of the
Company stood at ^20,76,38,860/- comprising of
2,07,63,886 equity shares of ?10/- each. This is
subsequent to the sub-division of one equity share
of your Company having face value of ?10/- into
Ten equity shares of face value of ?1/- each and
consequent alteration in the Capital Clause of the
Memorandum of Association of the Company which
was approved by the Share Holders on 28^th Day of
March 2023. The effective date / record date for the
same is 4th May 2023.

(b) Status of Shares

As the members are aware, the Company''s shares
are compulsorily tradable in electronic form. Out of
the total paid up capital representing 2,07,63,886
equity shares, the following equity shares of the
Company are in dematerialized and physical form as
on 31st March, 2023:

Sr. No	Capital Details	No. of Shares	% of Total issued Capital
1.	Held in dematerialised form in CDSL	38,86,859	18.72
2.	Held in dematerialised form in NSDL	1,68,77,019	81.28
3.	Physical	8	negligible
	Total	2,07,63,886	100.00

Note: Pursuant to the amendment in Regulation 40
of the SEBI Listing Regulations, dated June 8, 2018 &
SEBI date extension circular dated Dec 03, 2018, has
mandated that transfer of securities would be carried
out in dematerialized form only effective April 01,
2019. So, it is requested to all the Members holding
the shares in physical form to dematerialize the
same for giving effect to any transfer of company''s
securities.

(c) Preferential issue of Share Warrants

During the year the company has taken approval
from Shareholders to issue 1,01,00,070 warrants to
promoters and non-promoters in accordance with
provisions of SEBI (ICDR) Regulations, 2018. The
Company has applied to BSE Limited and National
Stock Exchange of India Limited for the in-principle
approval and the same is received from both the
Stock Exchanges for 98,85,070 warrants on 22
November 2022.

6. EXTRACT OF THE ANNUAL RETURN [SECTION 134 (3)

(a) & SECTION 92(3)]

Pursuant to Section 92(3) read with Section 134(3)(a)
of the Act, the Annual Return as on March 31, 2023 is
available on the Company''s website at https://apollo-
micro.com/wp-content/uploads/2023/09/Annual-
Return-FY.-2022-2023.pdf

7. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS
[SECTION 134 (3) (b)]:

During the year under review, Seven (7) meetings of
the Board of Directors of the Company were held on
28^th May, 2022, 23^rd July 2022, 12^th August, 2022, 13^th
October, 2022, 12^th November, 2022, 21^st January, 2023
and 10^th February 2023. The attendance of Directors for
the above meetings is given in the Corporate Governance
Report that forms part of this annual report. The
maximum interval between any two meetings did not
exceed 120 days.

The Detailed information of meetings of board of
directors is given in the Corporate Governance Report
annexed to this annual report.

In terms of requirements of Schedule IV of the Act, a
separate meeting of Independent Directors held on
10^th February 2023 to review the performance of the
Non-Independent Directors; the Chairperson; the entire
Board and its Committees thereof and; assess the
quality, quantity and timelines of the flow of information
between the Management and the Board.

8. DIRECTOR’S RESPONSIBILITY STATEMENT [SECTION
134 (3) (c) & 134(5)]

Pursuant to Section 134(5) of the Companies Act, 2013
(the "Act"), the Board of Directors, to the best of its
knowledge and ability, confirm that:

(a) in the preparation of the annual accounts for the
period ended 31st March, 2023, the applicable
accounting standards had been followed along with
proper explanation relating to material departures;

(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 a true and fair view of the state of affairs of
the company at the end of the financial year and of
the profit of the company for that period;

(c) the directors have taken proper and sufficient
care for the maintenance of adequate accounting
records in accordance with the provisions of this
Act for safeguarding the assets of the company
and for preventing and detecting fraud and other
irregularities;

(d) the directors have prepared the annual accounts on
a going concern basis;

(e) the directors have laid down internal financial
controls to be followed by the company and that
such internal financial controls are adequate and
were operating effectively;

(f) the directors have devised proper systems to ensure
compliance with the provisions of all applicable laws
and that such systems were adequate and operating
effectively.

9. DETAILS OF FRAUDS REPORTED BY AUDITORS UNDER
SECTION 143(12) OTHER THAN THOSE WHICH ARE
REPORTABLE TO THE CENTRAL GOVERNMENT[SECTION
134 (3) (ca)]:

During the year under review, Statutory Auditor,
Secretarial Auditor and the Cost Auditor have not
reported any incident of fraud under section 143(12) of
the Act.

STATEMENT ON DECLARATION GIVEN BY INDEPENDENT
DIRECTORS SECTION 134 (3)(d)]

The Board took on record the declaration and confirmation
submitted by the independent directors regarding their
meeting the prescribed criteria of independence, after
undertaking due assessment of the veracity of the same
as required under Regulation 25 of the SEBI Listing
Regulations.

The Company has received and taken on record the
declarations received from the Independent Directors of
the Company as required pursuant to section 149(7) of
the Act stating that meet the criteria of independence as
provided in section 149 (6) of the Act, as amended and
Regulation 16(1)(b) of the SEBI Listing Regulations as
amended. There has been no change in the circumstances
affecting their status as independent directors of the
Company.

10. FAMILIARISATION PROGRAMME

In compliance with the requirements of the SEBI Listing
Regulations, the Company has put in place a familiarisation
programme for the Independent Directors to familiarise
them with their roles, rights and responsibilities as
Independent Directors, the working of the Company,
nature of the industry in which the Company operates,
business model and so on. The same is also available on
the Company website https://apollo-micro.com/investors/
under the Section "Investors".

11. COMMITTEES OF THE BOARD

The Board of Directors has constituted various
mandatory and non-mandatory Committees to deal
with specific areas and activities which concern the
Company and requires a closer review. The Committees
are formed with approval of the Board and function
under their respective Charters. These Committees play
an important role in the overall management of day-to¬
day affairs and governance of the Company. The Board
Committees meet at regular intervals and take necessary
steps to perform its duties entrusted by the Board. The
Minutes of the Committee Meetings are placed before the
Board for noting. The Board currently has the following
Committees:

(a) Audit Committee

The Audit Committee was constituted by our Board
in accordance with Section 177 of the Companies
Act, 2013 and Regulation 18 of the SEBI Listing
Regulations. The composition, quorum, terms of
reference, function, powers, roles and scope are
in accordance with Section 177 of the Act and the
provisions of Regulation 18 of the SEBI Listing
Regulations. All the members of the committee are
financially literate and Mrs Karunasree Samudrala,
Chartered Accountant the Chairman of the
Committee is an Independent Director and possesses
the relevant financial expertise.

The details regarding composition, terms of
references, powers, functions, scope, meetings and
attendance of members are included in Corporate
Governance Report which forms part of the Annual
Report.

(b) Corporate Social Responsibility (CSR) Committee

The Company believes in undertaking business in
such a way that it leads to overall development of all
stake holders and society. The Company considers
social responsibility as an integral part of its business
activities and endeavours to utilize allocable CSR
budget for the benefit of society.

The CSR Committee has been constituted as
required under the provisions of section 135 of the
Act. The details regarding composition, objectives,
powers, functions, scope, meetings and attendance
of members are included in Corporate Governance
Report which forms part of the Annual Report.

The Committee formulated and recommended to the
Board the CSR Policy. On the recommendations of the
CSR Committee, the Board approved and adopted
the CSR Policy of the Company. The Corporate Social
Responsibility Policy is posted under the Investors
section of the Company''s website at: https://apollo-
micro.com/wp-content/uploads/2017/12/CSR-
POLICY.pdf

As per Rule 8 of the Companies (Corporate Social
Responsibility Policy) Rules, 2014, annual report

on CSR is prepared and the same is enclosed
as Annexure-A to this Report.

(c) Stakeholder’s Relationship Committee

Stakeholder''s Relationship Committee has been
constituted by the Board in accordance with Section
178 (5) of the Act.

The details regarding composition, terms of
references, powers, functions, scope, meetings,
attendance of members and the status of complaints
received during the year are included in Corporate
Governance Report which forms part of the Annual
Report.

(d) Nomination and Remuneration Committee

The Nomination and Remuneration Committee has
been constituted by the Board in accordance with
section 178 of the Act and Regulation 19 of SEBI
Listing Regulations.

The details regarding composition, terms of
references, powers, functions, scope, meetings and
attendance of members are included in Corporate
Governance Report which forms part of the Annual
Report.

Policy on Remuneration of Directors, KMPs and
other employees

The Policy of the Company on remuneration of
Directors, KMPs, Senior Management and other
employees including criteria for determining
qualifications, positive attributes, independence
of a Director and other matters provided under
sub-section (3) of section 178 is made available
on the Company''s website https://apollo-micro.
com/investors/ under the section "Investors". The
website link is http://apollo-micro.com/wp-content/
uploads/2017/09/REMUNERATION_POLICY.pdf

(e) Risk Management Committee

The Risk Management Committee was constituted
pursuant to resolution of the Board, which has
been entrusted with the responsibility to assist the
Board in overseeing and approving the Company''s

enterprise-wide risk management framework.

The details regarding composition, terms of
references, powers, functions, scope, meetings and
attendance of members are included in Corporate
Governance Report which forms part of the Annual
Report.

(f) Executive Committee of Directors & CFO

The Executive Committee of Directors and Chief
Financial Officer (CFO) ("Executive Committee") has
been formed by the Board, under the provisions
of Section 179(3) of the Act and rules made there
under in order to have the timely and expeditious
execution of routine financial matters.

The details regarding composition, terms of
references, powers, responsibilities, scope, meetings
and attendance of members are included in
Corporate Governance Report which forms part of
the Annual Report.

(g) Securities Allotment Committee

Securities Allotment Committee was constituted
pursuant to resolution of the Board, which has
been entrusted with the responsibility to assist the
Board in overseeing and considering the allotment of
securities.

The details regarding composition, terms of
references, powers, functions, scope, meetings and
attendance of members are included in Corporate
Governance Report which forms part of the Annual
Report.

12. EXPLANATIONS OR COMMENTS BY THE BOARD ON
EVERY QUALIFICATION, RESERVATION OR ADVERSE
REMARK OR DISCLAIMER MADE [SECTION 134 (3) (f)]:

By the Statutory Auditor in their Report: has no
qualification or adverse remarks: NIL

By Company Secretary in Practice in Secretarial Audit
Report: has below mentioned observations.

• The Company has made delay of 8 days in filing of
disclosures of related party transactions, pertaining
to Quarter ended 31-March-2022, with National

Stock Exchange of India Limited.

• The Company has made delay of 23 days in
appointment of Independent Director between
October 13, 2022 to November 04, 2022, for the
Quarter ended 31/12/2022. The requirement of
an Independent Director is due to appointment of
another Non-Executive Director.

• The Company has appointed M/s. G H Reddy &
Associates, Cost Accountants (Firm Registration
Number - 002110), for carrying out cost audit for
Financial Year 2021-22. However, the cost audit
report has not been filed by the Company with
Registrar of Companies, for the financial year ended
31st March, 2022 as on date of this report.

The Board took note of the above observations of the
auditors at their meeting held on 10^th August 2023 and
resolved to ensure due compliance henceforth and make
sure that all reportings are filed on time.

Secretarial Audit Report is attached to this report as
Annexure-B

13. PARTICULARS OF LOANS, GUARANTEES OR
INVESTMENTS UNDER SECTION 186 [SECTION 134 (3)

(g)]

During the financial year 2022-23, the Company has
given loan to Ananya SIP RF Technologies Private
Limited, subsidiary Company (details mentioned below)
and has not given any guarantees to any person or other
bodies corporate or acquired securities of any other
body corporate as referred to in Section 186 of the Act
and the Companies (Meetings of Board and its Powers)
Rules, 2014. Further, the company has not made any
investment during the period under review.

During the year under review, the Company has given a
loan of T222.95 lakhs and amount outstanding as on 31
March 2023 is T593.00 lakhs. The loan to subsidiary is
repayable on demand with interest at 9.80% p.a.

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES
[RULE 8(5)(iv) OF COMPANIES (ACCOUNTS) RULES,
2014]

Your Company has one (1) subsidiary company. M/s

Ananya SIP RF Technologies Private Limited (CIN:
U74990TG2015PTC097610) is the subsidiary of the
Company with 51% stake in the aforementioned
Company other than that the Company does not have
any joint ventures/Associate Companies during the year
under review.

Pursuant to the provisions of Section 129, 134 and
136 of the Act read with rules made thereunder and
Regulation 33 of the SEBI Listing Regulations the
Company has prepared consolidated financial statements
of the Company and a separate statement containing
the salient features of financial statement of subsidiary
in Form AOC-1 forms part of this Annual Report as
Annexure-C.

The annual financial statements and related detailed
information of the subsidiary companies shall be made
available to the members of the holding and subsidiary
company seeking such information on all working days
during business hours. The financial statements of the
subsidiary company shall also be kept for inspection by
any members during working hours at the Company''s
registered office and that of the subsidiary company
concerned.

In accordance with Section 136 of the Act, the audited
financial statements, including consolidated financial
statements and related information of the Company
and audited accounts of its subsidiary, are available
on website, https://apollo-micro.com/investors/.
Pursuant to Section 134 of the Act read with rules made
thereunder, the details of developments of subsidiary of
the Company are covered in the Management Discussion
and Analysis Report which forms part of this Report.

14. PARTICULARS OF CONTRACTS OR ARRANGEMENTS
WITH RELATED PARTIES [SECTION 134 (3) (h)]

All related party transactions entered into by the
Company during the financial year 2022-23 were in the
ordinary course of business and on arm''s length basis
and in compliance with the applicable provisions of the
Act and the SEBI Listing Regulations. During the financial
year under review, none of the transactions entered into
with related parties were material as defined under the
Act and SEBI Listing Regulations.

The particulars of contract or arrangements entered into
by the Company, during the financial year 2022-23, with
related parties referred to in sub-section (1) of section
188 of the Companies Act, 2013 including certain arm''s
length transactions under third proviso thereto has been
disclosed in Form No. AOC -2, attached to the Board''s
report as Annexure-D. The Policy on Related Party
Transactions as approved by the Board is uploaded on
the Company''s website https://apollo-micro.com/wp-
content/uploads/2017/09/policy_on_related_party_
transactions.pdf under the Section "Investors".

15. RESERVES [SECTION 134 (3) (j)]

During the financial year 2022-23, 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 under review has been carried forward to
the Statement of Profit and Loss.

16. DIVIDEND [SECTION 134 (3) (k)]

Your Directors have pleasure in recommending a dividend
of 2.5% (?0.025/- per Equity Share of face value of ?1/-
each) on the fully paid up Equity Shares out of the profits
of the Company for the financial year 2022-23. The said
dividend, if approved by the shareholders, would result
into a cash outflow of approximately ?76,62,239/-
(assuming the conversion of 98,85,070 warrants issued
and allotted on 5^th December 2022 into equity shares)

The dividend pay-out for the year under review has been
finalized in accordance with the dividend distribution
policy of the company.

17. DIVIDEND DISTRIBUTION POLICY

Pursuant to Regulation 43A of the SEBI Listing
Regulations mandates top 1000 Listed Companies based
on their market capitalization to formulate Dividend
Distribution Policy. As per Regulation 43A of SEBI Listing
Regulations, your company has voluntarily adopted the
Dividend Distribution policy.

Accordingly, the policy was adopted to set out parameters
and circumstances that will be taken into account by
the Board in determining the distribution of dividend
to the shareholders. The Policy is also available on the
Company''s website under the web link https://apollo-

micro.com/wp-content/uploads/2017/12/DMDNED-
DECLARATION-POLICY.pdf. The Policy is also annexed
herewith as Annexure-E to the Board''s Report.

18. MATERIAL CHANGES AND COMMITMENTS, IF ANY
[SECTION 134 (3) (l)]

There were no material changes and commitments
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 this report.

19. CONSERVATION OF ENERGY, TECHNICAL ABSORPTION
AND FOREIGN EXCHANGE EARNINGS AND OUTGO
[SECTION 134 (3) (m)]:

The Company continues its efforts to reduce and optimize
the energy consumption at its manufacturing facility.

A. Conservation of Energy

The operations of the company are not energy
intensive. Adequate measures are taken to conserve
and reduce the energy consumption like usage of LED
Lights and power saving centralized air conditioners.

Research & Development

During the year under review, we have significantly
invested in developing state of the art Naval
technologies, Drones & Jammers, Varied Fuses
for Artillery and Weapons, Actuators for Avionics
Platforms.

Our Research & Design team has done significant
study on futuristic requirements and problem
statements of Armed forces in India and other
countries and has initiated these development
activities to meet their pressing requirements.

We foresee these technologies would give exponential
benefit in future. We have been working closely with
our clients in improvising these technologies and
testing them for their end use and the results are
more than satisfactory and we are confident of they
getting inducted in various projects from time to
time.

Being a technology company and our future growth

is always based on the investments done on R&D
from time to time, we foresee the results to hit into
business by FY 2024 and FY 2025. We have spent
?2,661.22 Lakhs/- towards our R&D activities in this
Financial Year.

B. Technical Absorption

The Company works on in house Technology.

C. Foreign Exchange Earnings and Outgo:

Foreign Exchange outgo and earnings

Particulars	Year ended 31st March, 2023 (Amount in Lakhs)	Year ended 31st March, 2022 (Amount in Lakhs)
Value of imported raw-materials on CIF basis	?1,566.84	T989.70
Other Expenses: Foreign Travel Expenses	T15.22	Nil
Earnings in foreign currency: FOB Value of Exports For Services Rendered	-	-

20. ANNUAL EVALUATION ON PERFORMANCE [SECTION
134(3) (p)]:

Pursuant to the provisions of the Act and SEBI Listing
Regulations, the Board has carried out an annual
evaluation of performance of its own, the Committees
thereof and the Director

The Board is pleased to report that the result thereof
show that the Company is well-equipped in the
management as well as the governance aspects.

The Independent Directors at their separate meeting
held on 10^th February, 2023 reviewed the performance
of Non-Independent Directors (Executive & Non¬
Executive), Chairperson, performance of the Board as
a whole and its various committees and also assessed
the quality, quantity and timelines of flow of information
between the Company Management and the Board.

The Independent Directors expressed their satisfaction
on the overall functioning and effectiveness of the

Board, Committees and performance of individual
Non-Independent Board members and the Chairman.

The Board (excluding the Independent Directors
being evaluated) has evaluated the performance of
the Independent Directors on parameters such as
Knowledge, Experience, Integrity, Independence of
judgment, adherence to Code of Conduct, Corporate
Governance, Contribution, attendance& level of
participation and fulfilment of Independence Criteria etc.
in accordance with the Company''s "Policy as available
on the website of the Company under the web link
https://apollo-micro.com/wp-content/uploads/2017/09/
POLICY_FOR_EVALUATION_OF_DIRECTORS_AND_KEY_
MANAGERIAL_PERSONNEL_AND_OTHER_EMPLOYEES.
pdf for evaluation of Directors and Key Managerial
Personnel and other employees".

The Board has expressed its satisfaction to the
performance of the Independent Directors and
appreciated the level of participation of Independent
Director

21. EMPLOYEE STOCK OPTIONS SCHEME [RULE 12(9) OF
COMPANIES (SHARE CAPITAL AND DEBENTURES)
RULES, 2014]:

The Company has in place the Employee Stock Option
Scheme 2018 (ESOS-2018) to attract, reward, motivate
and retain its employees, who have shown high
levels of individual performance and for the unusual
efforts, put in by them to improve the operational and
financial performance of the Company, which ultimately
contributes to the success of the Company.

During the financial year 2022-23, no grant of options
was made to the employees of the company, under the
ESOS scheme. The disclosures according to the provisions
of the Act and SEBI (Share Based Employee Benefits)
Regulations, 2014 as on 31st March, 2023 with regard to
the Apollo Employee Stock Option Scheme 2018 (ESOS-
2018) are annexed to this Report as Annexure-F.

22. CHANGE IN THE NATURE OF BUSINESS [RULE 8(5)(ii)
OF COMPANIES (ACCOUNTS) RULES, 2014]

There is no change in the nature of the business of the
Company during the financial year 2022-23.

23. CHANGE IN THE DIRECTORS OR KEY MANAGERIAL
PERSONNEL [RULE 8(5)(iii)& 8(5)(iii)(a) OF COMPANIES
(ACCOUNTS) RULES, 2014]

The composition of the Board is in conformity with
Regulation 17 of the SEBI Listing Regulations and Section
149 of the Companies Act, 2013 except to the extent
mentioned in Corporate Governance report attached
hereto as Annexure H. There is an optimum combination
of Executive and Non-Executive Directors. The Company
has 8 (Eight) Directors as on 31st March, 2023. Out of
the 8 (Eight) Directors 3 (Three) are Executive Directors,
3(Three) Non-Executive- Independent Directors and 2
(Two) Non- Executive Non-Independent Director. The
Chairman of the Company is a non-executive independent
director.

During the financial year 2022-23, the following changes
occurred in Board composition.

1. Appointment of Mrs. Kavya Gorla (DIN 06407238)
as the Director of the Company w.e.f 13th October
2022. Shareholders'' approval has been taken in
the Extra ordinary General Meeting held on 12th
November 2022

2. Appointment of Dr. Chandrashekar Matham (DIN:
09844975) as the Director of the Company, in the
capacity of Independent Director, with effect from
21st January 2023. Shareholders'' approval has been
taken through Postal Ballot dated 28th March 2023.

3. Appointment of Mr. Aditya Kumar Halwasiya (DIN:
08200117) as the Director of the Company, in
the capacity of Non-Executive Non-Independent
Director, with effect from 21st January 2023.
Shareholders'' approval has been taken through
Postal Ballot dated 28th March 2023.

4. Re-appointment of Mrs. Karunasree Samudrala
as the Independent Director the Company for the
Second Term of 5 years from of 29th May 2023 to
28th May 2028.

5. Resignation of Sri Lakshmi Reddy Vangeti (DIN:
02757567) from the Board w.e.f. 04th November
2022.

6. Re-appointment of Mr. Karunakar Reddy Baddam

(DIN: 00790139) as Managing Director ("MD") of
the Company, for a further period of 5 (five) years
commencing from April 1, 2022 till March 31,
2027(both days inclusive).

7. Re-appointment of Mr. Venkata Siva Prasad
Chandrapati (DIN: 03601703), as Whole Time
Director (Technical) of the Company, for a further
period of 5 (five)years commencing from August 22,
2022 till August 21, 2027 (both days inclusive)

8. Re-appointment of Mr. Krishna Sai Kumar

Addepalli (DIN: 03601692), as Whole Time Director
(Operations) of the Company, for a further period of
5 (five)years commencing from August 22, 2022 till
August 21, 2027 (both days inclusive)

9. Re-appointment of Mr. Raghupathy Goud Theegala
(DIN: 07785738), who has submitted a declaration
that he meets the criteria of Independence as
provided under the Act and the Listing Regulations,
as an Independent Director, not liable to retire by
rotation, for a further period of 5 (five) years from
August 22, 2022 till August 21, 2027 (both days
inclusive)

Further in compliance with SEBI Listing Regulations,
consent of the shareholders for the appointment/re-
appointment was taken within 3 months of appointment
by the Board through postal ballot.

Pursuant to the provisions of the Section 149 of the Act,
the Independent Directors have submitted declarations
that each of them meets the criteria of independence
as provided in Section 149(6) of the Act along with the
rules framed under the SEBI Listing Regulations. There
has been no change in the circumstances affecting their
status as Independent Directors of the Company.

Ministry of Corporate Affairs vide its Notification
number G.S.R. 804(E) dated October 22^nd, 2019 had
amended the Companies (Appointment and Qualification
of Directors) Rules, 2014 and its amendment
thereof requiring the registration of Independent
Directors in the databank maintained by the Indian
Institute of Corporate Affairs ("MCA") and passing the
online proficiency self-assessment test conducted by the
IICA within two(2) year from the date of inclusion of his/

her name in the data bank.

• Mr. Raghupathy Goud Theegala, Independent
Director has duly registered his name in the data
bank of IICA w.e.f 25^th February, 2020 and passed
the online proficiency self-assessment test on 22^nd
February 2022.

• Mrs. Karunasree Samudrala, Independent Director
has duly registered her name in the data bank of
IICA w.e.f 25^th February, 2020 and passed the online
proficiency self-assessment test on 10^th April, 2020.

In opinion of the Board, they fulfill the conditions
specified in the Act and the Rules made there under
for the appointment as Independent Directors and are
independent of the management.

The Independent Director''s possess the relevant
integrity, expertise, experience and proficiency.

During the year under review, the non-executive
directors the Company had no pecuniary relationship or
transactions with the Company other than sitting fees,
commission, if any.

During the financial year 2022-23, there was no change
in the Key Managerial Persons (KMP''s) of the Company.

Mrs. Kavya Gorla (DIN:06407238) retires by rotation
at the ensuing 26^th Annual General Meeting and being
eligible, offers herself for reappointment.

Additional information on reappointment of Mrs. Kavya
Gorla (DIN:06407238) as director and as required under
regulation 36 of the SEBI Listing Regulations is given in
the Notice convening the forthcoming AGM.

24. DEPOSITS [RULE 8(5) (v) OF COMPANIES (ACCOUNTS)
RULES, 2014]

The Company has not accepted any deposits within
the meaning of Section 73 of the Act read with the
Companies (Acceptance of Deposits) Rules, 2014. There
are no unpaid or unclaimed deposits as the Company has
never accepted deposits within the meaning of the Act
and the rules made thereunder.

25. SIGNIFICANT AND MATERIAL ORDERS [RULE 8(5) (vii)
OF COMPANIES (ACCOUNTS) RULES, 2014]

During the financial year 2022-23, the Company hasn''t
received any significant and material orders that impact
the going concern status and company''s operations in
future.

26. INTERNAL FINANCIAL CONTROLS [RULE 8(5)(viii) OF
COMPANIES (ACCOUNTS) RULES, 2014]

The Company has kept in place adequate financial
controls to check and control any defects and frauds
in the Company. Adequate internal control systems
commensurate with the nature of the Company''s
business, its size, and complexity of its operations are
in place and have been operating satisfactorily. Internal
control systems comprising policies and procedures
are designed to ensure reliability of financial reporting,
timely feedback on achievement of operational and
strategic goals, compliance with policies, procedure,
applicable laws and regulations and that all assets and
resources are acquired economically, used efficiently and
adequately protected.

The Board of Directors of the Company have adopted
various policies like Related Party Transactions Policy,
Vigil Mechanism Policy and such other procedures
for ensuring the orderly and efficient conduct of its
business for safeguarding of its assets, the prevention
and detection of frauds and errors, the accuracy and
completeness of the accounting records, and the timely
preparation of reliable financial information.

27. PARTICULARS OF EMPLOYEES

The information required under section 197(12) of the
Act read with Rule 5(1) of the Companies (Appointment
and Remuneration of Managerial Personnel) Rules, 2014
respectively, are given in Annexure-G, which forms
partof this Report.

The statement containing names of top ten employees
in terms of remuneration drawn and the particulars of
employees as required under Section 197(12) of the
Act read with Rule 5(2) and 5(3) of the Companies
(Appointment and Remuneration of Managerial
Personnel) Rules, 2014, is provided in a separate annexure

forming part of this report. Further, the report and the
accounts are being sent to the Members excluding the
aforesaid annexure. In terms of Section 136 of the Act,
the said annexure is open for inspection and any Member
interested in obtaining a copy of the same may write to
the Company Secretary.

28. AUDITORS AND AUDIT REPORT(a) Statutory Auditors & their Reports

M/s. S T Mohite & Co. (FRN 011410S), Hyderabad were
appointed as Statutory Auditors of the Company
in the Annual General Meeting held on August 25,
2022 for a period of 5 Years and holds office until the
conclusion of the 30^th Annual General Meeting to be
held in the calendar year 2027.

Further, the remuneration to be paid to Statutory
Auditors for FY 2023-24 is ?7.50 Lakhs plus out
of pocket expenses and applicable taxes and the
remuneration for the remaining tenure of their
second term as Statutory Auditors shall be mutually
agreed between the Board of Directors and M/s. S T
Mohite & Co, from time to time.

The above proposal forms part of the Notice of the
AGM for your approval.

The report of the Statutory Auditor forms part of
this Annual Report and Annual Accounts 2022-23.
The said report does not contain any qualification,
reservation, adverse remark or disclaimer. During the
year under review, the Auditors did not report any
matter under Section 143(12) of the Act, therefore
no detail is required to be disclosed under Section
134(3) (ca) of the Act.

Further, M/s. S T Mohite & Co. have confirmed their
eligibility for their appointment as Statutory Auditors
and the same are within the limits as specified in
section 141 of the Companies Act, 2013 and have
also confirmed that they are not disqualified from
continuing as Auditors of the Company.

The Notes on financial statement referred to in the
Auditors'' Report are self-explanatory and do not call
for any further comments.

(b) Internal Auditors

As per the provisions of Section 138 of the Companies
Act, 2013 and the rules made thereunder, the
Board of Directors had appointed M/s Surya Pavan
& Co, Chartered Accountants, Vijayawada (ICAI
Firm Registration No. 015612S), as Internal Auditor
to conduct the internal audit of the Company for
the Financial Year 2023-24 on a remuneration of
?1,50,000/- per annum.

The Internal Audit Report for the Financial Year
2022-23 issued by M/s Surya Pavan& Co, Chartered
Accountants, Vijayawada is submitted which is
self-explanatory and do not call for any further
explanation of the Board.

(c) Cost Auditors

In terms of Section 148 of the Act, the Company is
required to maintain cost records and have the audit
of its cost records conducted by a Cost Accountant.
Cost records are prepared and maintained by the
Company as required under Section 148(1) of the
Act.

The Board of Directors of the Company has, on the
recommendation of the Audit Committee, approved
the appointment of M/s G H Reddy & Associates, Cost
Accountants (Firm Registration Number - 002110)
for the year ending March 31, 2024. M/s G H Reddy &
Associates have experience in the field of cost audit.

The Board, also on the recommendations of the
Audit Committee approved the remuneration of
?1.5 lakh (Rupees One lakh Fifty Thousand only)
(excluding applicable taxes and reimbursement of
out-of-pocket expenses) payable to Cost Auditors
for FY 2023-24. The same is placed for ratification of
Members and forms part of the Notice of the AGM.

(d) Secretarial Auditors

As per the provisions of Section 204 of the Companies
Act, 2013 and the rules made thereunder, the Board
of Directors had appointed Mr. Venkatesh Reddy
Datla, Practicing Company Secretary, Hyderabad
(Membership No: 36504; CP No: 14074), as
Secretarial Auditor to conduct the Secretarial audit

of the Company for the Financial Year 2022-23.

The Secretarial Audit Report, pursuant to the
provisions of Section 204 read with Section 134(3)
of the Companies Act, 2013, issued by Mr. Venkatesh
Reddy Datla, Practicing Company Secretary, in Form
MR-3 for the financial year 2022-23 is annexed to
the Board''s Report as Annexure-B. The secretarial
auditors'' report is forming the part of this report and
there are no qualifications, observations, adverse
remarks or disclaimer in the said Report.

Further, the Board has approved the appointment
of M/s. MNM & Associates, Company Secretaries,
Hyderabad (Firm Registration No : P2017TL059600)
as the Secretarial Auditor of the Company for the
Financial Year 2023-24 in the Board Meeting held on
10^th August 2023.

29. MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis Report
("MD&A") for the year under review as stipulated under
the SEBI Listing Regulations is presented in a separate
section forming part of this Annual Report.

30. REPORT ON CORPORATE GOVERNANCE

The Company has complied with the Corporate
Governance requirements under the Companies Act,
2013 and as stipulated under the SEBI Listing Regulations.
A separate section titled Corporate Governance Report
as Annexure-H under the SEBI Listing Regulations
along with a Corporate Governance Certificate from the
Practicing Company Secretary in the Annexure-I and
CFO Certification in compliance with Regulation 17(8) of
SEBI Listing Regulations in the Annexure-J forms the
part of this report.

31. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an Internal Control System,
commensurate with the size, scale and complexity of its
operations. To maintain its objectivity and independence,
the Internal Audit Functions reports to the Board
including Audit Committee of the Company. Based on
the report of internal audit function, process owners
undertake corrective action in their respective areas and
thereby strengthen the controls.

32. VIGIL MECHANISM

The Company''s Board of Directors, pursuant to the
provisions of Section 177(9) of the Act read with Rule 7 of
the Companies (Meetings of Board and its Powers) Rules,
2014, has framed ''Whistle Blower Policy'' for Directors
and employees of the Company. The policy is to provide
a mechanism, which ensures adequate safeguards
to employees and Directors from any victimisation
on raising of concerns of any violations of legal or
regulatory requirements, incorrect or misrepresentation
of any, financial statements and reports, and so on. The
employees of the Company have the right/option to
report their concern/grievance to the Chairman of the
Audit Committee. The Company is committed to adhere to
the highest standards of ethical, moral and legal conduct
of business operations. The Whistle Blower Policy is
hosted on the Company''s website https://apollo-micro.
com/wp-content/uploads/2017/09/WHISTLE-BLOWER-
POLICY.pdf under the section "Investors".

33. INVESTORS EDUCATION AND PROTECTION FUND
(IEPF)

Pursuant to section 124 of the Act, Dividends that are
unclaimed for a period of seven years are required to be
transferred to the IEPF, established by the Government
of India. During the year under review, there was no
outstanding amount of unclaimed dividends which was
liable to be transfer to the IEPF.

34. HUMAN RELATIONS

The Company continues to have cordial and harmonious
relationship with its employees and thank all employees
for their cooperation and the contribution towards
harmonious relationship and progress of the company.

35. POLICY ON SEXUAL HARASSMENT

Your Company is committed to provide work environment
that ensures every employee is treated with dignity and

respect and afforded equitable treatment. The Company
is also committed to promoting a work environment that
is conducive to the professional growth of its employees
and encourages equality of opportunity and will not
tolerate any form of sexual harassment and to take all
necessary steps to ensure that its employees are not
subjected to any form of harassment.

Thus, in order to create a safe and conducive work
environment 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.

Further, the Company has complied with provisions
relating to constitution of Internal Complaints
Committee ("ICC") under Sexual Harassment of women
at workplace (Prevention, Prohibition, & Redressal)
Act, 2013. The Committee has been set up to redress
complaints received regarding sexual harassment. The
detail of the committee members is available on the
website of the Company https://apollo-micro.com/wp-
content/uploads/2019/09/REVISED-Workplace-Sexual-
Harassment-Policy-apollo-micro-systems-limited.pdf
under the section "Investors". All employees (permanent,
contractual, trainees, temporary) are covered under
this policy. During the year under review, there were no
cases filed under the Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Act,
2013.

36. ACKNOWLEDGEMENTS

The Directors thank all customers, bankers, investors,
shareholders, vendors and other stakeholders for their
continued support and patronage during the year under
review. The Board appreciates its employees for their
efforts, hard work and dedication, which enabled the
Company to achieve the targets and recognitions.

For and on behalf of the Board
APOLLO MICRO SYSTEMS LIMITED

Sd/- Sd/-

Place: Hyderabad Karunakar Reddy Baddam Krishna Sai KumarAddepalli

Date: 10^th Aug, 2023 Managing Director Whole Time Director (Operations)

DIN:00790139 DIN:03601692

---

Mar 31, 2018

To

The Members of

APOLLO MICRO SYSTEMS LIMITED

The Directors have pleasure in presenting their 21st Annual Report on the business and operations of the Company together with the Audited Financial Statements for the financial year ended March 31, 2018.

FINANCIAL RESULTS AND OPERATIONS

The summary of financial performance for the Financial Year ended March 31, 2018 and the corresponding figures for the Financial Year ended March 31, 2017 are as under:

(Amount in Rs.)

Particulars	For the financial year ended
	March 31, 2018	March 31, 2017
Revenue from Operations	2,20,46,13,913	2,00,86,70,952
Other Income	1,52,79,316	53,31,845
Total Revenue	2,21,98,93,229	2,01,40,02,797
Cost of materials consumed	2,03,85,79,062	1,94,19,69,377
Changes in inventories of finished goods, WIP, stock- in -trade	(43,61,78,739)	(42,91,41,144)
Employee Benefit Expenses	6,39,75,210	6,07,81,756
Profit Before Interest, Depreciation & Tax	55,35,17,696	44,03,92,808
Financial charges	12,16,58,491	11,43,75,551
Depreciation	6,49,84,582	3,92,59,661
Other Expenses	4,51,01,582	2,89,34,667
Profit or Loss Before exceptional and extraordinary items and tax	32,17,73,041	25,78,22,929
Exceptional Items	(1,21,92,105)	1,34,09,440
Profit or Loss Before Tax	30,95,80,936	27,12,32,369
Tax Expenses (including prior period taxes)	11,79,15,736	96,6,97,406
Net Profit or Loss After Tax	19,16,65,200	17,45,34,963
Earnings Per Share (Basic)	12.46	12.73
Earnings Per Share (Diluted)	12.08	12.73

(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, 2018 have been prepared under Ind AS (Indian Accounting Standards). The financial statements for the year ended March 31, 2017 have been restated in accordance with Ind AS for comparative information.

PERFORMANCE REVIEW & THE STATE OF COMPANY’S AFFAIRS

During the year under review, your company sales have gone up by 9.8% to Rs. 2,20,46,13,913 from Rs. 2,00,86,70,952 during previous year.

Profit Before Interest, Depreciation & Tax increased by 25.68% to Rs. 55,35,17,696 from Rs. 44,03,92,808.

Profit before tax increased by 14.1% to Rs. 30,95,80,936 from Rs. 27,12,32,369.

Net Profit After Tax increased by 10% to Rs. 19,16,65,200 from Rs. 17,45,34,963.

During the year under review the Earning per Share of the company is Rs. 12.46(Basic) and Rs. 12.08 (Diluted)

BUSINESS OUTLOOK:

The changing global security paradigm requires new ways of thinking: new threats therefore new weapon systems, new technologies and new organizational structures and partnerships for cooperation and risk-mitigation. This new security environment is driving India’s need for cutting-edge technology weapons and equipment. Encouragement of Private Industry in Defense Production by Government and G2G contracts for Weapon and other Defense System exports is a boost for Defense Electronics companies.

Your company has been working on cutting edge technologies in Electronics and Electro -Mechanical systems which are custom built, specific to client needs. These systems are integrated as On-Board equipment and Ground Support Equipment for Aerospace, Defense and Space markets. There is a constant requirement for growth in the Programs which we have been working and we expect the existing facility to meet these requirements.

We are also contemplating to bid for turnkey projects which significantly consolidate our market position aiming to enter niche league of business not only in Defence but also in emerging markets like Smart City projects by leveraging the existing technologies developed by the company. We are looking forward to steer in these areas by strategic partnerships, Joint Ventures and MOU’s with domestic and international companies. Our company is looking forward for selective acquisitions to consolidate its presence in the existing sectors

CREDIT RATING

In April 2018, ICRA Limited, after due consideration, has assigned the long-term rating of “[ICRA] BBB” (pronounced ICRA triple B) and the, short-term rating of ‘[ICRA] A3 ’ (pronounced ICRA A three plus) to the Rs. 142 Crores Line of Credit of the Company. The outlook on the long term rating is ‘Stable’.

INITIAL PUBLIC OFFER

The Directors are pleased to inform that the Company’s Initial Public Offering (IPO) of 57,63,886 Equity Shares of face value of Rs. 10/- (Rupees Ten only) by way of Book Building Process received an overwhelming response from the investors. The Issue was opened on 10th January, 2018 and closed on 12th January, 2018. The issue was oversubscribed by 248.51 times, with QIB portion getting oversubscribed by 101.93 times, non-institutional portion by 958.04 times and the retail portion by 40.19 times and Employees portion 16.04 times. The allotment of 57, 63,886 Equity Shares of Rs. 10/- each for cash at a premium of Rs. 265/- per share (Discount of Rs. 12/- per share to Retail Individual Investors (“Retail Discount”) and to Eligible Employees Bidding in the Employee Reservation Portion (“Employee Discount”) aggregating to Rs. 15,600 Lakhs under the said IPO. Subsequent to the completion of IPO, the paid up equity share capital of the Company got increased from Rs. 1,500 Lakhs to Rs. 2,076.38 Lakhs.

The trading of Equity Shares of the Company commenced on National Stock Exchange of India Limited and BSE Limited from 22nd January, 2018. The success of IPO reflects the trust, faith and confidence that customers, business partners and markets have reposed in your Company.

UTILISATION OF IPO PROCEEDS

The proceeds realized by the Company from the Issue shall be utilized as per the Objects of the Issue i.e. Working Capital Requirement and General Corporate Purpose. The proceeds of the issue are being utilized to meet additional working capital requirements of the company and General Corporate Purposes.

There has been no deviation in the utilisation of the IPO proceeds of the Company.

SHARE CAPITAL

During the period under review, the Authorised Share capital of the Company increased from Rs. 14,00,00,000 (Rupees Fourteen Crores only) divided into 1,40,00,000 (One Crore Forty Lakhs) Equity shares of Rs. 10/- (Rupees Ten Only ) each to Rs. 27,00,00,000/- (Rupees Twenty Seven Crore only) divided into 2.70.00.000 (Two Crore Seventy Lakh) Equity shares of Rs. 10/-(Rupees Ten Only) each in two trenches and Capital Clause of Memorandum of Association is altered accordingly.

During the year, the company issued and allotted 10,00,000 (Ten Lakh) unrated, unsecured compulsory convertible Debentures on private placement basis to OHM Commodity Broker Private Limited and OHM Equity Solution India Private Limited at a face value of Rs. 200/- each aggregating to Rs. 20,00,00,000 (Rupees Twenty Crore only)on May 31, 2017, further the same were converted in to Equity on November 24, 2017 by issuing 10.00.000 Equity shares of face value of Rs. 10/- per share at a price of Rs. 200/- per share at a premium of Rs. 190/- per share aggregating to Rs. 20,00,00,000/- (Rupees Twenty Crores only).

In addition to the above, Company has also offered 2,88,300 (Two Lakhs Eighty Eight Thousand and Three hundred) Equity Shares of the Company of face value of Rs. 10/- each at a price of Rs. 200/- (including a premium of Rs. 190/- per share) aggregating to Rs. 5,76,60,000/- (Rupees Five Crores Seventy Six Lakhs Sixty Thousands only) on Private Placement basis to 12 investors on June 13, 2017.

During the year the company made an allotment of 57,63,886 Equity Shares of Rs. 10/- each for cash at a premium of Rs. 265/- per share (Discount of Rs. 12/- per share to Retail Individual Investors (“Retail Discount”) and to Eligible Employees Bidding in the Employee Reservation Portion (“Employee Discount”)through Initial Public Offering (IPO). Post IPO the paid up Equity Share Capital of the Company as on March 31, 2018 amounted to Rs. 2,076.38 Lakhs.

The Company has not issued any shares with differential rights as to dividend, voting or otherwise.

EXTRACT OF THE ANNUAL RETURN [SECTION 134 (3) (a) & SECTION 92(3)]:

The details forming part of the extract of the Annual Return in Form MGT-9 is enclosed as Annexure - 1

NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS [SECTION 134 (3) (b)]:

During the financial year 2017-18, the Board of Directors has met 21times viz., 03.04.2017, 20.04.2017, 16.05.2017, 20.05.2017, 29.05.2017, 31.05.2017, 01.06.2017, 13.06.2017, 11.08.2017, 21.08.2017, 26.08.2017, 01.09.2017, 23.09.2017, 24.11.2017, 19.12.2017, 22.12.2017, 09.01.2018, 13.01.2018, 16.01.2018, 18.01.2018 and 13.02.2018. Details of attendance of directors more clearly explained in Corporate Governance Report

In terms of requirements of Schedule IV of the Act, a separate meeting of Independent Directors was also held on 13th February, 2018 to review the performance of Non Independent Directors (including the Chairpersons), the entire Board and its Committees thereof, quality, quantity and timelines of the flow of information between the Management and the Board.

DIRECTORS’ RESPONSIBILITY STATEMENT [SECTION 134 (3) (c) & 134(5)]:

Pursuant to Section 134(5) of the Companies Act, 2013, Directors of your Company hereby state and confirm that:

(a) in the preparation of the annual accounts for the period ended March 31, 2018 the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit of the company for that period;

(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) the directors had prepared the annual accounts on a going concern basis;

(e) the directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and

(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS [SECTION 134 (3) (c) & 134(5)]:

The Company has received and taken on record the declarations received from the Independent Directors of the Company in accordance with the Section 149(6) of the Companies Act, 2013 confirming their independence.

FAMILIARISATION PROGRAMME

In compliance with the requirements of the Listing Regulations, the Company has put in place a familiarisation programme for the Independent Directors to familiarise them with their roles, rights and responsibilities as Independent Directors, the working of the Company, nature of the industry in which the Company operates, business model and so on. The same is also available on the Company website at www.apollo-micro.com

AUDIT COMMITTEE, NOMINATION AND REMUNERATION COMMITTEE & STAKEHOLDERS RELATIONSHIP COMMITTEE [SECTION 134(3) (e) & 178]:

Please refer to Corporate Governance Report as annexed to this report.

EXPLANATIONS OR COMMENTS BY THE BOARD ON EVERY QUALIFICATION, RESERVATION OR ADVERSE REMARK OR DISCLAIMER MADE [SECTION 134 (3) (f)]:

a) by the Auditor in their report : has no qualification or adverse remarks

b) by Company Secretary in Practice in Secretarial Audit Report : has no qualification or adverse remarks

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 [SECTION 134 (3) (g)]:

During the period under review, the Company has not given any loans or guarantees to any person or other bodies corporate or acquired securities of any other body corporate as referred to in Section 186 of the Companies Act, 2013 and the Companies (Meetings of Board and its Powers) Rules, 2014.Further the company has not made any investment during the period under review.

SUBSIDIARIES AND ASSOCIATES [RULE 8(5)(iv) OF COMPANIES (ACCOUNTS) RULES, 2014]

Our Company does not have subsidiaries/joint ventures/ Associate Companies, during the period under review.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES [SECTION 134 (3) (h)]:

All related party transactions entered into by the Company during the financial year were in the ordinary course of business and on arm’s length basis and in compliance with the applicable provisions of the Companies Act, 2013 and the Listing Regulations. During the financial year under review, none of the transactions entered into with related parties were material as defined under the Act and Listing Regulations.

The particulars of contract or arrangements entered into by the Company, during the financial year 2017-18, with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arms length transactions under third proviso thereto has been disclosed in Form No. AOC -2, attached to the Board’s report as Annexure - 2. The Policy on Related Party Transactions as approved by the Board is uploaded on the Company’s website at www.apollo-micro.com

RESERVES [SECTION 134 (3) (j)]:

During the Financial Year under review, 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 under review has been carried forward to the Statement of Profit and Loss.

DIVIDEND [SECTION 134 (3) (k)]:

With a view to conserve resources and expansion of business, your Directors have thought it prudent not to recommend any dividend for the financial year under review.

DIVIDEND DISTRIBUTION POLICY

Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”) mandates top 500 Listed Companies based on their market capitalization to formulate Dividend Distribution Policy. As per Regulation 43A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, your company has voluntarily adopted Dividend Distribution policy.

Accordingly, the policy was adopted to set out parameters and circumstances that will be taken into account by the Board in determining the distribution of dividend to the shareholders. The Policy is also available on the Company’s website under the available on the Company’s Website www.apollo-micro.com.

MATERIAL CHANGES AND COMMITMENTS, IF ANY [SECTION 134 (3) (l)]:

There were no material changes and commitments 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 this report.

CONSERVATION OF ENERGY, TECHNICAL ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO [SECTION 134 (3) (m)]:

A. Conservation of Energy

The operations of the company are not energy intensive. Adequate measures are taken to conserve and reduce the energy consumption like usage of LED Lights and power saving centralized air conditioners.

Research & Development

During the year our R&D team has worked on fresh development activity for futuristic requirements along with re-engineering of legacy designs to address obsolescence. We focus our R&D efforts in areas where we believe there is significant growth potential. Our R&D team has focused to leverage the existing technologies to develop products for Non Defence verticals. By developing new solutions and by offering a wide range of systems across segments, which enables us to increase customer portfolio and position ourselves across all sectors in ESDM. In Fiscal 2018 we have spent ''1578.37 Lakhs towards our R&D activities.

B. Technical Absorption

The Company works on in house Technology.

C. Foreign Exchange Earnings and Outgo:

Foreign Exchange outgo and earnings

RISK MANAGEMENT POLICY [SECTION 134 (3) (n)]:

Our Risk Management Committee was constituted pursuant to resolution of our Board dated February 24, 2017 and was reconstituted on August 26, 2017, which has been entrusted with the responsibility to assist the Board in overseeing and approving the Company’s enterprise wide risk management framework.

Sr. No.	Name of Member	Designation
1.	Venkata Siva Prasad Chandrapati	Chairman
2.	Karunakar Reddy Baddam	Member
3.	Srinivas Pagadala	Member

(Note: The Risk Management Committee was reconstituted w.e.f. August 09, 2018 due to resignation of Mr. Srinivas Pagadala (DIN: 02669528) and in his place Mrs. Karunasree Samudrala (DIN: 06960974) was inducted.)

The Company Secretary shall act as the secretary of the “Risk Management Committee”. The terms of reference and role of the Risk Management Committee of our Company include the following:

1. To recommend risk management plan to the Board for implementation;

2. To monitor and review the risk management plan;

3. To lay down procedures to inform Board members about the risk assessment and minimization procedures;

4. To develop and implement the risk management policy for the company, identification therein of elements of risk, if any, which in the opinion of the Board may threaten the existence of the company; and

5. To perform such other functions which are appropriate and necessary to manage the risk.

CORPORATE SOCIAL RESPONSIBILITY (CSR) [SECTION 134(3) (o)]:

Our Corporate Social Responsibility Committee was constituted pursuant to resolution of our Board dated February 24, 2017 and was reconstituted on August 26, 2017. The Corporate Social Responsibility Committee comprises of the following:

Sr. No.	Name of Member	Designation
1.	Karunakar Reddy Baddam	Chairman
2.	Raghupathy Goud Theegala	Member
3.	Sri Lakshmi Reddy Vangeti	Member

The Company Secretary shall act as the secretary of the Corporate Social Responsibility Committee.

The terms of reference, powers and scope of the Corporate Social Responsibility Committee of our Company is in accordance with Section 135 of the Companies Act, 2013. The Committee is entrusted with the responsibility of:

- Formulating and recommending to the Board, Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken,

- monitoring the implementation of the framework of the CSR Policy, and

- recommending the CSR amount to be spend on the CSR activities.

The Committee formulated and recommended to the Board the CSR Policy. On the recommendations of the CSR Committee, the Board approved and adopted the CSR Policy of the Company. The Corporate Social Responsibility Policy is posted under the Investors section of the Company’s website “www.apollo-micro.com”.

The Company believes in undertaking business in such a way that it leads to overall development of all stake holders and society.

As per Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014, annual report on CSR is prepared and the same is enclosed as Annexure - 3 to this Report.

Apollo considers social responsibility as an integral part of its business activities and endeavors to utilize allocable CSR budget for the benefit of society.

During the year under review the company has spent an amount of Rs. 3,25,000/-towards CSR Expenditure by contributing to Prime Minister’s National Relief Fund (PMNRF).The Company is searching for the new owned avenues or projects in the direction of Company’s CSR Policy so that the benefits of such an initiative can reach to the downtrodden people, hence could not spent full amount.

ANNUAL EVALUATION ON PERFORMANCE [SECTION 134(3) (p)]:

Pursuant to the captioned requirements, an annual evaluation had been carried out and the Board is pleased to report that the result thereof show that the Company is well-equipped in the management as well as the governance aspects.

In a separate meeting of Independent Directors held on February 13, 2018 performance of Non-Independent Directors and performance of the Board as a whole was evaluated. The

Independent Directors were satisfied with the overall functioning of the Board, its various committees and performance of other Non-Executive and Executive Directors.

OTHER MATTERS [SECTION 134(3) (q)]:

Listing approval on Recognised Stock Exchanges:

The Company which went for IPO during the year under review received Listing approval from BSE Limited (BSE) and National Stock Exchange of India Limited (NSE) on January 19, 2018 and admitted to deal on Exchanges with effect from January 22, 2018.

EMPLOYEE STOK OPTIONS SCHEME [RULE 12(9) OF COMPANIES (SHARE CAPITAL AND DEBENTURES) RULES, 2014]:

There were no such instances during the financial year under review.

CHANGE IN THE NATURE OF BUSINESS [RULE 8(5)(ii) OF COMPANIES (ACCOUNTS) RULES, 2014]

There is no change in the nature of the business of the Company during the financial year under review.

CHANGE IN THE DIRECTORS OR KEY MANAGERIAL PERSONNEL [RULE 8(5)(iii) OF COMPANIES (ACCOUNTS) RULES, 2014]

DIRECTORS

The constitution of the Board of Directors is in accordance with Section 149 of the Companies Act and Listing Regulations.

Appointments

Mr. Raghupathy Goud Theegala (DIN: 07785738) and Mr. Srinivas Pagadala (DIN: 02669528) were appointed as Independent Director under Section 161 of the Companies Act, 2013 w. e. f August 21, 2017. The Shareholders of the Company at their Adjourned 20th Annual General Meeting (AGM) held on August 26, 2017 approved the appointment of Mr. Raghupathy Goud Theegala and Mr. Srinivas Pagadala as Independent Director of the Company, for a term of five years as per the provisions of Section 149 of the Companies Act, 2013 read with rules made thereunder.

Re-appointments

Mr. Karunakar Reddy Baddam (DIN: 00790139) was reappointed as a Managing Director and Key Managerial Person of the company. The Shareholders of the Company at their Adjourned 20th Annual General Meeting (AGM) held on August 26 , 2017 approved the re-appointment of Mr. Karunakar Reddy Baddam (DIN: 00790139)as a Managing Director and Key Managerial Person of the company for a term of five years as per the provisions of the Companies Act, 2013 read with rules made thereunder and revision in remuneration pursuant to the Provisions of Section 196, 197 read with Part-I and Section I of Part II of schedule V and other applicable provisions, if any, of the Companies Act, 2013.

Mr. Addepalli Krishna Sai Kumar (DIN: 03601692) and Mr. Chandrapati Venkata Siva Prasad (DIN:03601703) were re-appointed as Whole Time Director (Operations) and Whole Time Director (Technical) respectively. The Shareholders of the Company at their Adjourned 20th Annual General Meeting (AGM) held on August 26, 2017 approved the re-appointment of Mr. Addepalli Krishna Sai Kumar (DIN: 03601692) and Mr. Chandrapati Venkata Siva Prasad (DIN:03601703) as Whole Time Director (Operations) and Whole Time Director (Technical) respectively for a term of five years as per the provisions of the Companies Act, 2013 read with rules made thereunder and revision in remuneration pursuant to the Provisions of Section 196, 197 read with Part-I and Section I of Part II of schedule V and other applicable provisions, if any, of the Companies Act, 2013.

Retire by rotation

Further, Mrs. Sri Lakshmi Reddy Vangeti (DIN:02757567) retires by rotation at the ensuing Annual General Meeting and being eligible, offers herself for reappointment.

Key Managerial Persons (KMP)

During the year under review, the Company has appointed Mr. Sudarshan Chiluveru, as Chief Financial Officer (CFO), in compliance with the provisions of Section 203 of Companies Act, 2013 and Rule 8 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, with effect from April 01, 2017.

DEPOSITS [RULE 8(5) (v) OF COMPANIES (ACCOUNTS) RULES, 2014]

The Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014. There are no unpaid or unclaimed deposits as the Company has never accepted deposits within the meaning of the Act and the rules made thereunder.

SIGNIFICANT AND MATERIAL ORDERS [RULE 8(5) (vii) OF COMPANIES (ACCOUNTS) RULES, 2014]

The Company hasn’t received any significant and material orders that impact the going concern status and company’s operations in future

INTERNAL FINANCIAL CONTROLS [RULE 8(5)(viii) OF COMPANIES (ACCOUNTS) RULES, 2014]

The Company has kept in place adequate financial controls to check and control any defects and frauds in the Company. Adequate internal control systems commensurate with the nature of the Company’s business, its size, and complexity of its operations are in place and have been operating satisfactorily. Internal control systems comprising policies and procedures are designed to ensure reliability of financial reporting, timely feedback on achievement of operational and strategic goals, compliance with policies, procedure, applicable laws and regulations and that all assets and resources are acquired economically, used efficiently and adequately protected.

PARTICULARS OF EMPLOYEES

Disclosure with respect to remuneration of Directors and employees as required under Section 197 of the Companies Act, 2013 read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of the Board’s Report Annexure - 4.

AUDIT REPORT

The statutory auditors’ report is forming the part of this report. The notes on financial statements referred to in 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 statutory auditors in their report. They have not reported any incident of fraud to the Board of the Company during the year under review.

STATUTORY AUDITOR’S:

M/s. S T Mohite & Co. (FRN 011410S), were appointed as Statutory Auditors of the Company in the adjourned Annual General Meeting held on August 26, 2017 for a period of 5 Years and holds office until the conclusion of the 25th Annual General Meeting to be held in the calendar year 2022 (subject to ratification by the shareholders at each Annual General Meeting).The Members year on year will be requested to ratify their appointment as Statutory Auditors and to authorise the Board of Directors to fix their remuneration.

Accordingly the appointment of M/s. S T Mohite & Co., Statutory Auditors of the Company, is placed for ratification by the shareholders at the ensuing Annual General Meeting. The Members are requested to ratify their appointment as Statutory Auditors and to authorise the Board of Directors to fix their remuneration.

Further M/s. S T Mohite & Co., has confirmed their eligibility to the effect that their re-appointment, if made, would be within the prescribed limits under the Act and that they are not disqualified for re-appointment.

The Auditors’ Report does not contain any qualifications, reservations or adverse remarks. Notes to Accounts and Auditors remarks in their Report are self-explanatory and do not call for any further comments.

INTERNAL AUDITORS, COST AUDITORS, SECRETARIAL AUDIT:

INTERNAL AUDITOR

M/s. Surya Pavan & Co., Chartered Accountants were the Internal Auditors for the Year 2017-18 and they being eligible, the Board has re-appointed them for the Financial Year 2018-19.

COST AUDITOR

As per Cost Audit applicability, cost compliance is not applicable for FY 2017-18 as the Company is small scale industry under The Micro, Small and Medium Enterprises Development Act, 2006.

SECRETARIAL AUDIT

Secretarial Audit Report, pursuant to the provisions of Section 204 read with Section 134(3) of the Companies Act, 2013, was obtained from Datla Venkatesh, Practicing Company Secretary in Form MR-3 for the period under review. The said Report is attached and forms part to this report as Annexure - 5.

MANAGEMENT DISCUSSION AND ANALYSIS

A report on management discussion and analysis is placed as a separate section in the annual report.

REPORT ON CORPORATE GOVERNANCE

The Company has complied with the Corporate Governance requirements under the Companies Act, 2013, and as stipulated under the Listing Regulations. A separate section titled ‘Corporate Governance Report’ Annexure - 6 under the Listing Regulations along with a certificate from the Practicing Company Secretary in the Annexure - 7 and CFO Certificate in the Annexure - 8 forms the part of this report.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. To maintain its objectivity and independence, the Internal Audit Functions reports to the Board. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and recommendations along with corrective actions thereon are presented to the Board.

VIGIL MECHANISM:

The Company’s Board of Directors, pursuant to the provisions of Section 177(9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014, has framed ‘Whistle Blower Policy’ for Directors and employees of the Company. The policy is to provide a mechanism, which ensures adequate safeguards to employees and Directors from any victimisation on raising of concerns of any violations of legal or regulatory requirements, incorrect or misrepresentation of any, financial statements and reports, and so on. The employees of the Company have the right/option to report their concern/ grievance to the Chairman of the Audit Committee. The Company is committed to adhere to the highest standards of ethical, moral and legal conduct of business operations. The Whistle Blower Policy is hosted on the Company’s website www.apollo-micro.com

HUMAN RELATIONS:

The Company continues to have cordial and harmonious relationship with its employees and thank all employees for their cooperation and the contribution towards harmonious relationship and progress of the company.

POLICY ON SEXUAL HARASSMENT:

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. 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. The Company did not receive any complaint during the period under review.

ACKNOWLEDGEMENTS:

Your Directors gratefully acknowledge the continued support, co-operation and wise counsel extended by the Government Authorities, Banks, and Financial Institutions.

Your Directors place on record their sincere appreciation for the significant contribution made by the employees through their dedication, hard work and commitment.

Your Directors sincerely acknowledge the confidence and faith reposed in the Company by the Shareholders, Creditors and other stake holders.

For and on behalf of the Board

APOLLO MICRO SYSTEMS LIMITED

Sd/- Sd/-

Place: Hyderabad Karunakar Reddy Baddam Krishna Sai Kumar Addepalli

Date: August 09, 2018 Managing Director (DIN 00790139) Whole Time Director (Operations)

(DIN 03601692)