The Members of Alufluoride Limited
Your Directors have pleasure in presenting the Annual Report of yourCompany along with the Audited Statement of Accounts for the financial year ended 31stMarch 2019. The Report also includes the Management Discussion and Analysis Report inaccordance with the Guidelines on Corporate Governance and consolidated FinancialStatements.
The Financial results of the Company for the period under review are asfollows:
| ||31-03-2019 ||31-03-2018 |
|Sales and other revenue ||6551.01 ||4966.90 |
|Profit before Finance charges ||1179.25 ||984.09 |
|Depreciation Tax & other adj's || || |
|Less: Finance charges ||5.54 ||4.85 |
|Profit before Depreciation ||1173.71 ||979.24 |
|Tax & other adj's || || |
|Less: Depreciation ||82.22 ||72.16 |
|Profit before Tax & other adj's ||1091.49 ||907.08 |
|Less: Provision for current tax ||223.00 ||213.07 |
|Taxes of earlier years || ||(2.85) |
|Deferred Tax Asset/ ||42.34 ||51.19 |
|Liability adj's || || |
|Profit before appropriations and ||826.15 ||645.67 |
|carried to Balance Sheet || || |
|Add/Less: Other Comprehensive ||(99.52) ||76.66 |
|Income (INDAS adj's) || || |
|Profit before appropriations and ||726.63 ||722.33 |
|carried to Balance Sheet || || |
Your Directors report that the Company made an ALL-TIME RECORDProduction and Sales of Aluminium Fluoride during the year under review. The Companyproduced 8741 MT and sold 9136 MT Aluminium Fluoride as against 8206 MT Production and8162 MT sold during 2017-18. For reduction of energy cost and to engage with renewableand sustainable green energy the Company spent Rs. 816.12 lakhs for installing Phase 1(1.6 MW) of the 3MW solar power generation project. This included purchase of 18.75 acresof land at Polepalli Visakhapatnam District AP and shifting the existing 0.6 MW existingSolar plant from Visakhapatnam plant to Polepalli. Installation of an additional 1.4 MW ofsolar generation capacity has been scheduled by 31st March 2020. Your Companyexpects further savings over the near future as energy cost is expected to rise year onyear.
With improved consumption norms production sales realizationefficient working capital management and effective cost control measures though there issteep price increase of raw materials during the year the Company posted a net profit(before Ind-AS adjustments) of Rs.826.15 lakhs for the year as against a net profit(before Ind-AS adjustments) of Rs.645.67 lakhs in 2017-18.
OUT LOOK FOR THE CURRENT YEAR
Your Directors report that the Company's ALUMINIUM FLUORIDE productioncapacity expansion works started in FY 2018-19 and it is expected to be completed in FY2019-20. The Company is planning to install the balance 1.4 MW Solar plant at a projectcost of Rs.533.88 lakhs during FY 2019-20 and this will help the Company reduce the powercost to the maximum possible. The plant will be stopped for about four to six weeks tosynchronize the existing plant production facilities to the expanded productionfacilities. Though the plant is to run for aboutten months the Company plans to sustainthe 2018-19 year's Production. As sale price of Aluminium Fluoride for the current yearhas improvedThe Company is hoping to post better returns in the current year.
The Company has signed a Non-Binding Heads of Agreement with JordanPhosphate Mines Co. (JPMC) Jordan to set up of a Green Field Aluminium Fluoride Projectat Eshidiya Jordan as a Joint Venture.The project is expected to be commissioned in FY2021-22. A definitive Joint Venture Agreement will be signed by the end of September2019.
During the year under review the Company has not registered any Exportsales.
All the properties of the Company including Buildings Plant andMachinery and Stocks have been adequately insured.
Your Directors wish to record that the Company has taken up ALUMINIUMFLUORIDE and related products project expansion at Visakhapatnam and the project isexpected to be completed in FY 2019-20. In view of project expansion your Directors arenot recommending any Dividend.
As per chapter IV of the SEBI (Listing obligations
& Disclosure Requirements) Regulations 2015 a separate section onCorporate Governance is enclosed which forms part of the Annual Report. A certificate fromthe Auditors of the Company on compliance with the conditions of Corporate Governance asstipulated under the SEBI (Listing obligations & Disclosure Requirements) Regulations2015 is annexed to this Report.
MANAGEMENT DISCUSSION AND ANALYSIS
A detailed section of the Management Discussion and Analysis for theperiod under review as required under SEBI (Listing obligations & DisclosureRequirements) Regulations 2015 is given as a separate statement forming part of theAnnual Report.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 134 (5) of the Companies Act2013 with respect to the Director's Responsibility Statement it is hereby confirmed: i.In the preparation of the annual accounts for the financial year ended 31st March2019 the applicable accounting standards had been followed along with proper explanationrelating to material departures. ii. The Directors had selected such accounting policiesand applied them consistently and made judgments and estimates that were reasonable andprudent so as to give a true and fair view of the state of affairs of the Company at theend of the financial year and of the profit of the Company for that period; iii. TheDirectors had taken proper and sufficient care for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities; iv.The Directors had prepared the accounts for the financial year ended 31stMarch 2019 on a 'going concern' basis; and v. The Directors had laid down internalfinancial controls to be followed by the Company and that such internal financial controlsare adequate and were operating effectively. vi. The Directors had devised proper systemsto ensure compliance with the provisions of all applicable laws and that such systems wereadequate and operating efficiently.
DIRECTORS & KEY MANAGERIAL PERSONNEL (KMP)
Dr. Mitra Puchalapalli Director was appointed as an alternate Directorto Sri Grandhi Sreeramakrishna Director and he was in the office from 28.02.2018 to24.09.2018.
Sri A.V.V.S.S.Ch.B. Sekhar Babu and Sri Sreeramakrishna Grandhi wereappointed as Independent Directors of the Company with effect from 26.10.2007 and20.10.2014 respectively. Your Directors have proposed their reappointment for a furtherperiod of 5 years I.E. from 1st October 2019 to 30th September2024.
Sri Yugandhar Meka was appointed as Independent Director of the Companywith effect from 31.07.2019.
Key Managerial Personnel
The Company has named the Managing Director Director Finance &Commercial (as CFO) and Company Secretary as its Key Managerial Personnel in accordancewith the provisions of Section 203 of the Companies Act 2013.
DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS
Sri Grandhi Sreeramakrishna Sri A.V.V.S.S.Ch.B. Sekhar Babu and SriYugandhar Meka are the Independent Directors of the Company. The terms and conditions ofappointment of Independent Directors are as per Schedule IV of the Act. They havesubmitted a declaration that each of them meets the criteria of independence as providedin Section 149(6) of the Act and there has been no change in the circumstances which mayaffect their status as Independent Director during the year.
NUMBER OF MEETINGS OF THE BOARD
Five meetings of the Board were held during the year. For details ofthe meetings of the Board please refer to the Corporate Governance Report which formspart of this report.
The Board of Directors has carried out an annual evaluation of its ownperformance Board committees and Individual Directors pursuant to the provisions of theAct and the Corporate Governance requirements as prescribed by Securities and ExchangeBoard of India ("SEBI") under SEBI (Listing obligations & DisclosureRequirements) Regulations 2015. The performance of the Board was evaluated by the Boardafter seeking inputs from all the Directors on the basis of the criteria such as the Boardcomposition and structure effectiveness of Board processes information and functioningetc. The performance of the committees was evaluated by the Board after seeking inputsfrom the committee members on the basis of the criteria such as the composition ofcommittees effectiveness of committee meetings etc.
The Board and the Remuneration Committee reviewed the performance ofthe Individual Directors on the basis of the criteria such as the contribution of theIndividual Director to the Board and committee meetings like preparedness on the issues tobe discussed meaningful and constructive contribution and inputs in meetings etc. Inaddition the Chairman was also evaluated on the key aspects of his role.
In a separate meeting of Independent Directors performance ofNon-Independent Directors performance of the Board as a whole and performance of theChairman was evaluated taking into account the views of Executive Directors andNon-Executive Directors. The same was discussed in the Board meeting that followed themeeting of the Independent Directors at which the performance of the Board itscommittees and Individual Directors was also discussed.
POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION AND OTHER DETAILS
The Company's policy on Directors' appointment and remuneration andother matters provided in Section 178(3) of the Act has been disclosed in the CorporateGovernance Report which forms part of the Directors' report.
DISCLOSURE AS REQUIRED UNDER RULE
5 OF COMPANIES (APPOINTMENT & REMUNERATION OF MANAGERIAL PERSONNEL)RULES 2014
The Disclosure as required under Rule 5 of Companies (Appointment &Remuneration of Managerial Personnel) Rules 2014 is appended in Annexure - A to the BoardReport.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERREDIN SUB - SECTION (1) OF SECTION 188
Details of transactions with related parties falling under the scope ofSection 188(1) of the Act & Information on transactions with related parties pursuantto Section 134(3)(h) of the Act read with rule 8(2) of the Companies (Accounts) Rules2014 (Form No. AOC 2) is given in Annexure - B to the Board Report.
M/s Brahmayya & Co. Chartered Accountants Visakhapatnam theStatutory Auditors of the Company will be retiring at the conclusion of this AnnualGeneral Meeting and have conveyed their consent for reappointment.
Pursuant to the provisions of Section 205 of the Act and the rulesframed there under Mr. G.M.V. Dhanunjaya Rao of GMVDR & Associates CompanySecretaries was appointed as Secretarial Auditor of the Company and the Secretarial AuditReport issued by them for the financial year 2018-19 is made a part of this Report.
Cost Audit for financial year 2018-19 is not applicable in view of theCost Audit Amendment Rules 2014 Government of India Ministry of Corporate AffairsNotification New Delhi dated 31.12.2014.
EXTRACT OF ANNUAL RETURN
As provided under Section 92(3) of the Act the extract of annualreturn is given in Annexure -C in the prescribed Form MGT-9 which forms part of thisreport.
AUDITORS' REPORT AND SECRETARIAL AUDITORS' REPORT
The Auditors' Report and Secretarial Auditors' Report does not containany qualifications reservations or adverse remarks.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
The particulars of loans guarantees and investments have beendisclosed in the financial statements.
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIALPOSITION OF THE COMPANY
On 27.05.2019 the Company has allotted 820082 equity shares ofRs.10/- each on conversion of 820082 warrants of Rs.10/- each.
CORPORATE SOCIAL RESPONSIBILITY
The provisions of Corporate Social Responsibility (CSR) have becomeapplicable to the Company from the financial year 2018-19 as the net profit of the Companyfor the financial year 2017-18 is in excess of Rs.5 crores.
The Company has constituted a Corporate Social Responsibility (CSR)Committee in terms of Section135(1) of the Companies Act 2013 read with Companies(Corporate Social Responsibility Policy) Rules 2014. The committee consists of thefollowing:
|1. ||Sri A.V.V.S.S.Ch.B. Sekhar Babu ||- Chairman |
|2. ||Sri V. Ashok ||- Member |
|3. ||Smt. A. Jyothsana ||- Member |
|4. ||Sri K. Purushotham Naidu ||- Member |
The CSR activities projects and programmes that will be undertaken bythe Company shall be those as may be approved by the committee that will be constituted /reconstituted by the Board of Directors of the Company in this regard (CSR Committee).
The CSR Committee will approve the undertaking of such activitiesprojects and programs as are covered under the following areas set out in Schedule VII ofthe Companies Act 2013. Our Company is committed to ensuring the social well being of thesociety through its Corporate Social Responsibility (CSR) initiatives. Our focus will beon rural development programmes Swatch Bharat promoting education promoting health careincluding preventive health care and sanitation facilities to weaker sections of societythrough organizing health camps meeting operation expenditure of children and poorpeople. In accordance with the provisions of Section 135 of the Companies Act 2013 anabstract of Company's CSR activities is given in Annexure E to this report.
The Company has not availed loans from any Bank
/ Financial Institutions during the financial year under review.
The Company has not accepted any fixed deposits during the year underreview. As such no amount of principal or interest was outstanding on the date of theBalance Sheet.
UNPAID / UNCLAIMED DIVIDEND
Dividend which are unclaimed for a period of 7 years have beentransferred to Investor Education & Protection Fund (IEPF).
The Company has a proper and adequate system of internal control toensure all the assets are safeguarded and protected against loss from unauthorized use ordisposition and the transactions are authorized regarded and reported correctly. Theinternal control is supplemented by an extensive program of internal audits review bymanagement and procedures. The internal control is designed to ensure that the financialand other records are reliable for preparing financial statements and other data and formaintaining accountability of assets.
The Company's Internal Audit Department is regularly carrying out theAudit in all areas.
Additionally the Audit committee is reviewing all Audit Reports withsignificant control all issues raised by internal and external auditing regularlyreports on the business development all the past and the future plans are given to theBoard of Directors Internal Auditor's reports are regularly circulated to all the seniormanagement to comply with the findings.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGEEARNINGS AND OUTGO
Additional information on conservation of energy technology absorptionand foreign exchange earnings and outgo as required to be disclosed in terms of Section134(3) (m) of the Companies Act 2013 read with the Companies (Accounts) Rules 2014 isgiven in Annexure - D and forms part of this report.
POLICY ON PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORK PLACE
The Company always believed in providing an encouraging workenvironment devoid of discrimination and harassment including sexual harassment and hasadopted a policy in line with the provisions of Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 and the rules made thereunder. Theobjective of the policy is to prohibit prevent and address issues of sexual harassment atthe workplace. The policy covers all employees irrespective of their nature of employmentand also applicable in respect of all allegations of sexual harassment made by an outsideragainst an employee. An Internal Complaints Committee (ICC) has also been set up toredress complaints received on sexual harassment. No complaint was pending at beginning ofthe year and none has been received during the year.
During the year under review the Company has enjoyed cordialrelationship with all section of employees. The Company believes that the employees play avital role in increasing the turnover and profitability of the Company and the strength ofthe Company lie in harnessing the manpower in achieving sustained long-term growth in allspheres.
ENVIRONMENT & SAFETY MEASURES
Following the ISO Certifications of 9001 14001 and OHSAS 18001 theCompany will continue taking all the necessary measures to maintain high standards ofEnvironment Clean and Green Belt Water Harvesting Pollution Control Health and SafetyPrecautions.
Your Directors take this opportunity in expressing their gratitude tothe Government of India and the State Government. The Board is also thankful to all itsBankers Contractors Customers and Shareholders for their unstinted support to theCompany.
| ||For and on behalf of the Board |
| ||For ALUFLUORIDE LIMITED |
| ||VENKAT AKKINENI |
| ||Managing Director |
| ||DIN: 00013996 |
| ||A.V.V.S.S.CH.B. SEKHAR BABU |
|Hyderabad ||Director |
|10 August 2019 ||DIN:00692448 |