2023-2024

To the Members,

Your directors present their 59^th Annual Report of the Company together with the Audited Statements of Assets & Liabilities and Profit & Loss Account for the year ended 31^st March 2024.

financial results

The Company's financial performance for the year under the review, along with previous year figures are given hereunder:

1. review of business operations and future prospects

Stabilizing impact to Aplab's supply chain

Aplab's supply chain conditions have seen significant improvements over last year, and although price stability is not back to normal due to fluctuating commodity prices

and global turmoil, supply chains are performing and under control. Aplab has also secured sufficient supplies to meet short-term demands.

Commodity prices, as mentioned above are stable, but not completely stabilized. This has an impact on company margins on some longer-term Defence procurement contracts. Aplab is well protected on margins.

Defense spending remains robust, and your company is experiencing a strong influx of orders, expected to continue at levels above to previous years. The company's order book is promising and reflects the market's confidence in Aplab. Aplab is one of the few players in this industry offering a pan-India in-house support to its customers. Or Defence partners require, and Aplab ensures support we wherever our customers from Leh Ladakh to the Andamans.

Aplab's will aggressively launch plans to leverage its best-in-class service and support. Aplab's long term aspirational goals are to have 50% of the total revenue come from spares, service and support. This will mean entering lower-margin product areas, where the service and technical support income may significantly exceed income from product sales.

Working capital liquidity continues to remain a challenge, limiting our ability to pursue afore-mentioned opportunities. In addition to Aplab's local business, international business opportunities exist. Most of these currently are customers looking to replace their existing low-cost vendor, and although the volumes are high, these are with long payment cycles. These are opportunities that will be considered in the future, once working capital liquidity stabilizes to support the business already on hand. Aplab is exploring various avenues to raise short-term capital and is looking at both traditional and innovative mechanisms to address working capital requirements.

2. management discussion and analysis:

a) Industry Structure and Developments

Aplab operates in the Industrial Power Electronics market, where many of the larger competitors are now part of multinational corporations. This shift, coupled with the renewed focus on ‘Make in India,' opens exciting opportunities for Aplab. Our extensive support network positions us as a preferred choice for industrial customers.

Aplab is the only Indian manufacturer of rack-mount programmable AC and DC sources. ‘Make In India' market preference offers tremendous opportunities to Aplab. Aplab recently launched its rebranded ‘LONAR Series' programmable AC sources. The new series is named after Maharashtra's Lonar lake, and celebrates this natural wonder. Aplab plans invest in R&D to continuously upgrade their specifications, as the price margins are extremely attractive, and could become a captive market for us.

Aplab has begun deployment of its Al-software based self-service passbook kiosks. The markets for the systems are extremely price-sensitive, and as mentioned previously, income is primarily from supplying consumables and service support. Aplab will need to be extremely strategic while acquiring any market share.

b) Opportunities and Threats

Government spending for defence equipment has seen a multi-fold increase. As more defence infrastructure gets built, Aplab's order inflow will increase. We are seeing a large increase in demand for backup and ground power systems from this sector. The anticipated increase in Aplab's defence business means an increasing percentage of our total business is from a few customers; Aplab will need to seek other lower margin business, as mentioned earlier, to pre-empt any negative impact to a particular sector.

Aplab stands out as one of the few Indian power electronics manufacturers with a comprehensive pan-India presence. Although this extensive support network means higher operational costs compared to newer entrants, it reinforces our commitment to delivering exceptional service. We continue to address pricing challenges in smaller defense projects where a large support network may not be as critical.

Banking self-service products are once again indemand post-Covid. Banks are increasingly looking at these systems to enable zero-manual effort systems, so that they can divert their workforce to income generating tasks. Aplab's AI-software infused systems are extremely attractive as a result. RBI's new goal of 2-hour cheque truncation will mean more opportunities for Aplab's Al-based cheque deposit and imaging kiosks.

Aplab has exited its high-school level electrical laboratory equipment business. Sales from this line were primarily from the UK. Budgets for educational equipment in the UK have seen a consistent decline, and product margins were under continuous pressure. In addition to diverting funds to a low margin activity, this business also required managing a completely separate supply chain. As a result, Aplab has strategically decided to exit this business. Aplab is confident to more than make up the shortfall by increasing production and supply from our other lines.

The new ‘Make-in-lndia' public procurement requirements present exciting growth opportunities, particularly in product segments with minimal local competition. Additionally, India's projected economic resilience makes it a prime location for marketing and sales expansion, despite the increased competition from rising local manufacturing interests. This vibrant market environment offers Aplab the chance to leverage its strengths and capitalize on emerging opportunities.”

c) Segment-wise or product-wise performance.

Aplab's Power Controls division, encompassing UPS systems, inverters, and frequency converters, continues to experience robust sales growth and increasing interest in our products.

The Test and Measurement division, which includes our Lonar-series programmable power and electrical test equipment, has shown encouraging signs of improvement in sales. While performance has been more subdued compared to expectations due to longer payment cycles in defence procurement, Aplab remains committed to its strategic focus on reducing debt and optimizing working capital.

Exciting developments are underway in banking automation, with new investments creating promising opportunities. Aplab is enthusiastic about our upcoming product launches and is optimistic about capturing significant market share in this expanding sector.”

d) Outlook

The demand outlook remains strong, with standout revival in the Defense sector. We anticipate a significant boost in demand for some of Aplab's products in this arena. The Banking sector will also see a revival in demand as mentioned above.

e) Risks and concerns

To support this growth, securing short-term working capital remains a key focus, and we are actively working to address this concern. Some of our newer power-supply products geared to large manufacturing houses will also require capital investment in test machinery. Acquiring funds for business expansion continues to be a concern. International businesses setting up manufacturing plants that compete with Aplab are a small risk as well. Aplab's forte is providing customized solutions for our clients, and we believe that this risk is small.

f) internal control systems and their adequacy

The company has a robust internal control system in place to optimize asset use, ensure accurate and timely financial reporting, and maintain compliance with statutory laws, regulations, and company policies. Management consistently reviews actual performance against budgets and forecasts. While the current internal controls are well-established and effective at all levels, the company is committed to ongoing improvements to enhance these systems wherever possible

g) Discussion on financial performance with respect to operational performance.

The company is steadily progressing towards increased cash flows. Despite ongoing exceptional settlements with labor unions, which do impact fund availability, the overall trajectory remains positive.

h) Material developments in Human Resources / industrial Relations front, including number of people employed.

Throughout the year, your company has fostered a collaborative and supportive work environment among employees. Management remains dedicated to enhancing safety, occupational health, and a positive work environment across all aspects of design, planning, training, and task execution. The company is also strategically streamlining its workforce to drive efficiency.

3. Details of changes in key financial ratios are furnished below.

4. DIVIDEND

While no dividend is recommended this year, the company is focusing on reinvesting funds to fulfill a strong backlog of orders, positioning itself for future growth and success.

(Previous Year - Nil)

5. transfer of dividend to investor eduction and protection fund

In terms of Section 125 of the Companies Act, 2013, no unclaimed or unpaid Dividend due for remittance to the Investor Education and Protection Fund established by the Central Government.

6. material changes and commitment if any affecting the financial position of the

COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THESE FINANCIAL

statements relate and the date of the report

On 12^th June 2023 Bombay Stock Exchange has given formal approval for conversion of Loans from Promoters into Equity and Preference share capital and accordingly allotment to promoters is made. Promoters can't sell any of their shareholding for one year from the date of allotment as per the terms of conversion. This conversion has resulted in a positive net worth for the company.

7. conservation of energy, technology absorption, foreign exchange earnings and outgo

The information pertaining to conservation of energy, technology absorption, foreign exchange Earnings and outgo as required under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished in Annexure to the Directors' Report and is attached to this report. Aplab is planning on developing and installing Active Harmonic Filters at it manufacturing premises. This will not only reduce Aplab's energy consumption, but Aplab may also consider introducing this new line to the market.

8. statement concerning development and implementation of risk management policy of the company

The Risk Management Committee operates throughout the year to identify and evaluate elements of business risks.

9. details of policy developedand implemented by the company on its corporate social responsibility initiative

Though there is no legal compulsion in view of the accumulated losses of the last many years, during the year under review Corporate Social Responsibility could not be implemented. However, with improved performance, the same will be implemented.

10. particulars of loans, guarantees or investments made under section 186 of the companies act, 2013

The particulars of Loans, Guarantees or Investments made under Section 186 are furnished in Notes to Financial Statement attached to this report.

11. related party transactions

All transactions entered into with Related Parties were on an arm's length basis and in the ordinary course of business. There were no material significant related party transactions made by the company during the year under review with Promoter/Directors or Key Managerial Personnel. All related party transactions are placed before the Audit Committee and have been placed at the Board Meeting for approval and omnibus approval was obtained on a yearly basis for transactions which are of repetitive nature. The policy on related party transactions as approved by the Board has been uploaded on the website of the company. Form AOC-2 is not attached to the Directors' Report for the current year since the related party transactions are mentioned in the Notes to Accounts attached to this report.

12. explanation or comments on qualifications, reservations or adverse remarks or disclaimers made by the auditors and the practicing company secretary in their reports

Statutory Auditors have qualified their report for not providing impairment loss on receivables and interest which may be payable to MSME cCreditors due to delay in payments. The Board is analyzing the dDebtors and accordingly the provision for debtors and interest shall considered going forward.

Secretarial Auditors have provided theretheir remarks on delayed//non payments of Provident Fund and Employees dues. AlsoAlso, the auditor have provided remarks on unclaimed fixed deposits in their secretarial auditors report. The liability of past employees' dues has been substantially reduced during the current year. Following the conversion of unsecured loans into equity and preference share capital, the company's net worth has turned positive. With a strong order backlog, we anticipate better profits this year, which will further enhance our net worth and support the payment of past dues.

13. company's policy relating to directors' appointment, payment of remuneration and discharge of their duties

The Company is following Policy relating to appointment of Directors, Payment of Managerial Remuneration, Directors' qualifications, positive attributes, independence of Directors and other related matters as provided under Section 178(3) of the Companies Act, 2013, due to inadequate profit, the present Executive Director is not drawing any remuneration.

14. annual return

The extracts of Annual Return pursuant to provisions of section 92 read with rule 12 of the companies (Management and Administration) Rules, 2014 is furnished in Annexure - B and attached to this report.

15. number of board meetings conducted

DURING THE YEAR UNDER REVIEW

The Board met 6 (Four) times during the financial year 2023-24 i.e., on 30^th May 2023, 12^th June 2023, 11^th August 2023, 1^st September 2023, 9^th November 2023 and 14^th February 2024. In respect of such meetings proper notices were given in time and the proceedings were properly recorded and signed in the Minutes Book maintained for the purpose. No Circular Resolutions were passed by the company during the financial year under review.

The Board confirms compliance of Secretarial Standards issued by Institute of Company Secretaries of India (ICSI).

16. corporate governance report

In terms of SEBI CIRCULAR CIR/CFD/ POLICYCELL/7/2014 dated September 15, 2014, which was effective October 1,2014, the Clause 49 of the Listing Agreement shall be applicable to all companies whose equity shares are listed on a recognized stock exchange.

The Corporate Governance Report is annexed to the Directors Report for the year ended March 31,2024.

17. directors responsibility statement

In accordance with the provisions of Section 134(5) of the Companies Act, 2013 the Board hereby submits its responsibility Statement:

(a) In the preparation of the annual accounts, the applicable accounting standards were followed along with proper explanation relating to material departures.

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

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

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

(e) The directors, in the case of a listed company, have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively. Internal financial control means the policies and procedures adopted by the Company for ensuring the orderly and efficient conduct of its business including adherence to Company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information.

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

18. subsidiaries, joint ventures and associate companies

The Company has no subsidiary company and no joint ventures during the year under review.

19. DEPOSITS

The Company has neither accepted nor renewed any deposits during the year under review.

20. directors

No shares are held by the Independent Directors. The details of Promoter Shareholding are available in MGT-9 annexed to this report.

During the year Mr. P.S. Deodhar, Chairman & Managing Director expired on 27^th January 2024.

Mrs. Amrita P. Deodhar was appointed as Chairperson & Managing Director, Dr. S.K. Hajela was appointed as Additional Director and Miss. Uma Balakrishnan was appointed as Independent Director.

In accordance with the provisions of the Companies Act, 2013, Mrs. Amrita P. Deodhar Director is liable to retire by rotation at the forthcoming Annual General Meeting.

21. declaration of independent directors

The Independent Directors have submitted their disclosures to the Board that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules.

22. STATUTORY AUDITORS

At the 58^th Annual General Meeting held on 29^th September 2023 M/s Bhargava & Associates., Chartered Accountants (Registration no. 120215W) are appointed as the Statutory Auditors of the Company a period of five years to carry out the audit from financial year 2023-2024 to 2027-2028 and shall hold office as such till conclusion of the Annual General Meeting that will be held for adoption of financial statements for the year 2027-2028. The remuneration payable to the Auditor is commensurate with the audit work assigned to them.

23. DISCLOSURE OF COMPOSITION OF AUDIT

committee and providing vigil mechanism

The Audit Committee consists of the following members.

i Dr. S.K. Hajela (DIN: 01001987)

ii Mrs. Amrita P. Deodhar (DIN: 00538573)

iii Mr. Sanjay N. Mehta (DIN:00036539)

The above composition of the Audit Committee consists of independent Directors viz., Mr. Sanjay N. Mehta (DIN: 02115860) and Dr. S.K. Hajela (DIN: 01001987) who form the majority.

The Company has established a vigil mechanism overseas through the committee, the genuine concerns expressed by the employees and other Directors. The Company has also provided adequate safeguards against victimization of employees and Directors who express their concerns. The Company has also provided direct access to the chairman of the Audit Committee on reporting issues concerning the interests of co employees and the Company.

24. SHARES

a. BUY BACK OF SECURITIES

The Company has not bought back any of its securities during the year under review.

b. SWEAT EQUITY

The Company has not issued any Sweat Equity Shares during the year under review.

c. bonus shares

No Bonus Shares were issued during the year under review.

d. RIGHT ISSUE OF EQUITY SHARES

The Company has not issued any Rights Shares during the year under review.

e. EMPLOYEES STOCK OPTION PLAN

The Company has not provided any Stock Option Scheme to the employees.

f. PREFERENTIAL ISSUE TO PROMOTERS OF THE COMPANY

During the year the Company has issued Equity Shares and Compulsorily Convertible Preference

Shares on Preferential basis to the Persons belonging to ‘Promoter & Promoter Group' by conversion of major portion of their unsecured loan.

25. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL ACT, 2013)

The Company has in place an Anti Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at the workplace (Prevention, Prohibition and Redressal) Act, 2013. All employees (permanent, contractual, temporary, trainees) are covered under this policy. No sexual harassment complaints were received during the year 2023-24.

26. PERSONNEL

Industrial relations during the year remained cordial. The Board appreciates the willing co-operation and team spirit in the organization at all levels.

Statement under section 134(3) of the Companies Act,

2013 read with rule 5(2) of the Companies (appointment and remuneration of managerial personnel) rules,

2014 giving details of employees who were employed throughout the year and were in receipt of remuneration not less than Rs. 1,02,00,000/- p.a. or Rs. 8,50,000/- p.m. if employed for part of the year is not attached to this report as there are no employees in this category.

27. ACKNOWLEDGEMENTS

Your directors place on records their sincere thanks to Bankers, Business Associates, Consultants, Employees and various Government Authorities for their continued support extended to your Company's activities during the year under review. Your directors also gratefully acknowledge the shareholders for their support and confidence reposed on your Company.