Alkali Metals Limited
Your Directors have pleasure in presenting the 51 Annual Report on the business andoperations of the Company and the accounts for the Financial Year ended 31 March 2019.
1. Financial Summary or Highlights / Performance of the Company
The performance of the company for the financial year ended 31 March 2019 issummarized as below:
| || ||(All Figures in Rs. ) |
| ||2018 - 19 ||2017 - 18 |
|Net Turnover ||715562262 ||657798312 |
|Profit/(Loss) before finance charges depreciation and taxation ||78160649 ||73576511 |
|Less : Finance Charges ||27097451 ||25246821 |
|Depreciation and Amortization expense ||34141716 ||34772450 |
|Profit/(Loss) before exceptional items and tax ||16921482 ||13557240 |
|Less: Exceptional items ||0 ||484751 |
|Profit/(Loss) before tax ||16921482 ||13072489 |
|Less : Current Year's tax (MAT) ||3560365 ||2799034 |
|MAT Credit Entitlement ||(3560365) ||(2799034) |
|Previous Years ||0 ||3833 |
|Profit / (Loss) After tax ||16921482 ||13068656 |
|Other Comprehensive Income (net) ||1883398 ||1631464 |
|Total Comprehensive income for the period ||18804880 ||14700120 |
Dividend of 1.20 per equity share of 10 each has been recommended by the Board ofDirectors for the year ended 31 March 2019 subject to the approval of the shareholders atthe ensuing Annual General Meeting. Dividend if approved will be paid within 30 days ofthe Annual General Meeting.
During the year under review Company had not transferred any amount to GeneralReserves.
4. Brief description of the Company's performance during the year
During the year 2018-19 the Company recorded a turnover of 7156 Lakhs and Net Profitof 188 Lakhs compared to the turnover of 6578 Lakhs and Net Profit of 147 Lakhs in theprevious year 2017-18.
The Company achieved 8.79% growth in turnover and 1.28 times gain in net profit. YourDirectors are confident that Company will able to achieve better turnover and margins inthe coming years.
5. Future outlook
The facility at Vishakhapatnam had received an Establishment Inspection Report (EIR)from US Food and Drug Administration (USFDA) which indicates closure of the inspectionand it also indicates that the Unit is in acceptable state of Compliance of Current GoodManufacturing Practice(CGMP). This will indeed serve as a big boost for the Company andenable it to venture into wide range of campaign products. The Company got a voluntaryaction indicated inspection from the USFDA for the Vishakhapatnam facility.
The Company expects to commercialize three to four products in the current financialyear. The efforts are fully focused on improving the profitability in the currentfinancial year and build on. Furthermore the Company plans to implement various marketingstrategies to counter the competition from other manufacturers and boost the regularproducts to increase the turnover as well as margins.
6. Research & Development
The Company has spent 91 Lakhs towards Research and Development during the financialyear and is putting continuous efforts in R&D to develop the new products and processfor optimum material consumptions by effective yield.
The revenues generated by the R&D products for the last 3 years are
| || ||(All Figures in Rs. Lakhs) |
|2016-17 ||2017-18 ||2018-19 |
|113 ||741 ||42 |
7. Change in the nature of business if any
Company had not changed its nature of business during the year under review.
8. Material changes and commitments after the closure of financial year
Company had not faced any material changes subsequent to the closure of the financialyear which will affect the financial position or operations of the Company.
9. Significant and Material Orders
There are no significant and material orders passed by the regulators or court ortribunals impacting the going concern status and Company operations in future.
10. Internal Financial Control
Your Company has adequate internal controls and such procedures are adopted by theCompany for ensuring the orderly and efficient conduct of its business includingsafeguarding of all its assets and prevention / detection of frauds and errors accuracyand completeness of accounting records.
Auditors have verified the internal financial controls and tested the adequacy and theprocedures adopted by the company and confirm that the controls are adequate to the sizeof the transactions. The management reviews and monitors the controls and process on aregular basis.
11. Risk Management
The Management of the Company will take adequate steps in identifying assessingcontrolling and mitigating the risks associated with different areas of its businessoperations.
12. Details of Subsidiary / Joint Ventures / Associate Companies
Your Company had no Subsidiaries Joint Ventures and Associate Companies during thefinancial year under review.
Your Company has not accepted any deposits covered under Chapter V of the CompaniesAct 2013 during the financial year under review and also has no outstanding deposits atthe beginning of the financial year.
M/s. C K S Associates Chartered Accountants were appointed as Statutory Auditors for aterm of 5 years during the Annual General Meeting held on 21 August 2014 as per theprovisions of the Section 139 of the Companies Act and their term of 5 years is going tobe completed at the end of the ensuing Annual General Meeting. The audit firm will becompleting a total term of 10 years and pursuant to the provisions of the Companies Act2013 they have to vacate their office mandatorily at the end of the ensuing AnnualGeneral Meeting.
The Company had identified M/s. Nagendrasundram & Co. Chartered Accountants (FRN005355S) (Peer Review certificate No.010122) who expressed their willingness to beappointed by way of consent letter confirming their eligibility. The Audit Committee andthe Board had reviewed the same and recommended their appointment as Statutory Auditorsfor a period of 5 years to the shareholders to be passed as on ordinary resolution.
As observed by the Auditors for FY 2018-19 an amount of 1434921 has not been paidtowards income tax dues for the FY 2002-03 the Company confirms that provision has beenmade for the said amount but due to non receipt of consequential order from the departmentamount is not paid by the company.
The Board of directors of the company had appointed M/s. Ramakrishna & AssociatesChartered Accountants as Internal Auditors to conduct the Internal Audit of the companyfor the financial year ended 31 March 2019.
The Board of directors of the company had appointed CS B. Venkatesh Babu PracticingCompany Secretary as Secretarial Auditor to conduct Secretarial Audit of the Company forthe financial year ended 31 March 2019.
15. Share Capital
Your Company had not issued and raised any share capital including sweat equityemployee stock options during the financial year under review. Your Company has also notprovided any money for purchase of its own shares by employees or for the benefit ofemployees.
16. Extract of the Annual Return
The extract of the annual return in Form MGT 9 is annexed and forming part of theBoard's Report as Annexure -1.
17. Conservation of energy technology absorption and foreign exchange earnings andoutgo
The details of conservation of energy technology absorption foreign exchange earningsand outgo have been provided in Annexure - 2 and shall form part of this report.
18. Corporate Social Responsibility (CSR)
The provisions of the Section 135 of the Companies Act 2013 relating to CorporateSocial Responsibility are not applicable to the Company. However the Promoters firmlybelieve in giving back to the society and provide free medical help to the poor andfinancial assistance to the needy students through a Charitable Trust run by them.
As on the date of this report the following are the Board of Directors of the Company
|S.No. ||Name of the Director ||Designation |
|1 ||Sri. Y.S.R. Venkata Rao ||Managing Director |
|2 ||Dr. J.S. Yadav ||Director |
|3 ||Sri. G. Jayaraman ||Director |
|4 ||Sri. K.V. Suryaprakash Rao ||Additional Director |
|5 ||Smt. Y. Lalithya Poorna ||Director |
|6 ||Mr. Y.V. Prashanth ||Director |
During the year under review the following changes took place in the Board:
Sri. V.S.N. Murty and Sri. K.V. Suryaprakash Rao were appointed as an AdditionalDirectors of the Company on 15 October 2018 and their term of office is upto the date ofAnnual General Meeting.
ii) Change in Designation :
Mr. Y.V. Prashanth resigned as Executive Director and continuing as Director witheffect from 15 October 2018.
iii) Vacation of office:
Sri. Ch. S. Prasad Sri. P.C. Patnaik and Sri. V.S.N. Murty Directors had vacatedtheir office with effect from 1 April 2019 pursuant to the SEBI (LODR) (Amendment)Regulations 2018 due to their age being over 75 years.
Board expressed their appreciation for the services rendered by the vacated DirectorsSri. Ch. S. Prasad Sri. P.C. Patnaik and Sri. V.S.N. Murty during their tenure asDirectors and also acknowledged the services rendered by Mr. Y.V. Prashanth as ExecutiveDirector. Further the following proposals were made:
a) Mr. Y.V. Prashanth Director retires by rotation being eligible offers himself forreappointment at the ensuing annual general meeting.
b) Sri. K.V. Suryaprakash Rao Independent Additional Director holds office upto theAnnual General Meeting and it has been proposed to ratify his appointment at the ensuingAnnual General Meeting for a period of 5 years from the original date of appointment.
c) The term of office of Sri. G. Jayaraman and DR. J.S. Yadav Independent Directorswill end on 20 August 2019 and as per the provisions of the Companies Act 2013 It isproposed to re- appoint them for an another term of 5 years at the ensuing Annual GeneralMeeting.
Independent Director's appointment and re-appointment was made as per the applicableprovision and evaluation process of the Act. Details of No. of Board meetings and profileof directors are covered under the Corporate Governance section.
Declaration by an Independent Director Company had received the declaration from allthe Independent Directors that they meet the criteria of independence as per theprovisions of Section 149 of the Companies Act 2013 Formal Annual Evaluation Pursuant tothe provisions of the Companies Act 2013 the Board has devised a policy on evaluation ofperformance of Board of Directors Committees and Individual Directors. Accordingly theChairman of the Nomination and Remuneration Committee obtained from all the board membersduly filled in evaluation templates for evaluation of the Board as a whole evaluation ofthe committees and peer evaluation. The summary of the evaluation reports were presentedto the respective Committees and the Board for their consideration.
20. Key Managerial Persons
During the year under review Mr. P. Shankar Rao Chief Financial Officer of the Companyhad retired due to attaining the superannuation w.e.f. 1 January 2019 and Ms. K. UmaKumari had been appointed as the Chief Financial Officer of the Company w.e.f. 5 February2019.
Further Ms. M. Neeharika Company Secretary and Compliance officer had resigned w.e.f.18 April 2019 and the company is in the process of appointing a new compliance officer indue course.
21. Director's Responsibility Statement
As per the provisions of clause (c) of sub-section (3) of Section 134 of the CompaniesAct 2013your Directors shall state that
(a) in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures;
(b) the directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit or loss of the Company for that period;
(c) the directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets 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; and
(e) the directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively.
(f) the directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
Your company has Audit Committee Nomination and Remuneration Committee andStakeholders Relationship Committee and during the year there is a reconstitution of thecommittees and the details are provided in the Corporate Governance section.
23. Vigil mechanism for Directors and Employees
The Company believes in the standard of conduct which all employees are expected toobserve in their business endeavors. The Code (Vigil Mechanism) reflects the Company'scommitment to principles of integrity transparency and fairness. The copy of the Code ofVigil Mechanism is available on the Company website www.alkalimetals.com underInvestors tab.
The Company has adopted a Whistle Blower Policy as part of vigil mechanism to provideappropriate avenues to the Directors and employees to bring to the attention of themanagement any issue which is perceived to be in violation of or in conflict with thefundamental business principles of the Company. The employees are encouraged to voicetheir concerns by way of whistle blowing and all the employees have been given access tothe Audit Committee. The Director Mr. Y.V. PRASHANTH is designated as ombudsperson to dealwith all the complaints registered under the policy.
24. Policy on Sexual Harassment
Company had adopted policy on Prevention of Sexual Harassment of Women at Workplace inaccordance with The Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013. The Company had committee with internal persons and during the yearthere were no complaints / incident of harassment.
25. Particulars of loans guarantees or investments
The Company had not given any loans guarantees or made investments as per theprovisions of Section 186 of the Companies Act 2013 during the financial year underreview and also there are no outstanding amounts of loans given guarantees provided and /or investments made at the beginning of the year.
26. Particulars of contracts or arrangements with related parties
During the Financial Year under review Company had entered into certain Related PartyTransactions which are on arms length basis; details of all such transactions as requiredunder section 188 of the Companies Act are annexed in Form AOC-2 forming part of theBoard's Report as Annexure - 3.
The Company has formulated a policy on materiality of Related Party Transactions anddealing with Related Party Transactions which can be accessed at the Company websitewww.alkalimetals.com under Investors tab.
27. Managerial Remuneration / Employee Details
The Details required to be provided pursuant to Rule 5(1) of the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 are annexed and forming part of theBoard's Report as Annexure - 4. There are no employees in the company in receipt ofamounts covered in rule 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014. The top 10 employees details to be provided to the shareholderswho made specific request to the company.
28. Secretarial Audit Report
Secretarial Audit Report obtained from CS B. Venkatesh Babu Company Secretary inPractice is annexed and forming part of the Board's Report as Annexure - 5.
29. Corporate Governance / Management Discussion and Analysis
In terms of Regulation 34 of the SEBI (LODR) Regulations 2015 a Report on CorporateGovernance along with Compliance Certificate issued by Statutory Auditor's of the Companyand also the Management Discussion and Analysis report is annexed and forms integral partof the Board's Report.
All the properties and insurable interests of the Company including building plant andmachinery and stocks have been adequately insured.
31. Listing on Stock Exchanges
The securities of the company are continued to be listed on BSE and NSE. The listingfees for these stock exchanges are paid till the current financial year.
32. Cost Audit
Pursuant to provisions of section 148 of the Companies Act 2013 read with Companies(Cost Records and Audit) Rules 2014 cost audit is not applicable for the financial year2018-19 for the Company.
33. Compliance of Secretarial Standards
The Company has duly complied with the applicable Secretarial Standards issued by TheInstitute of Company Secretaries of India for the Board and General Meetings.
Your Directors express their gratitude to all stakeholders bankers RegulatoryAuthorities Government customers suppliers business associates from India and abroadstaff and workers for their continued support at all times and look forward to have thesame in our future endeavours. Directors are pleased to record their appreciation of thesincere and dedicated services of the employees and workmen at all levels.
Your Directors look forward to the long term future with confidence
| ||For and on Behalf of Board of Directors |
| ||For Alkali Metals Limited |
|Place : Hyderabad ||Y.S.R.VENKATA RAO ||DR.J.S.YADAV |
|Dated : 27.05.2019 ||MANAGING DIRECTOR ||CHAIRMAN |
| ||DIN: 00345524 ||DIN: 02014136 |