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:

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:

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

(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

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