DIRECTORS' REPORT To The Members of Alufluoride Limited Your Directors have pleasure in presenting the Annual Report of your Company along with the audited Statement of Accounts for the financial year ended 31st March, 2015. The Report also includes the Management Discussion and Analysis Report in accordance with the Guidelines on Corporate Governance and consolidated Financial Statements. EXTENSION OF TIME FOR CONVENING AGM OF THE COMPANY Your Directors are to report that, the Company requested Registrar of Companies (ROC, for Extension of time upto 31st December, 2015 for convening the Annual General Meeting (AGM) of the Company. ROC approved the Company's request and has granted extension of time up to 31st December, 2015 for convening and holding the AGM. COMPANY'S PERFORMANCE Your Directors are to report that the Company produced 4,113 MT of Aluminium Fluoride during the year under review as against 4,465 MT during 2013-14. During the year the Company sold 3,331 MT Aluminium Fluoride as against 4,606 MT in 2013-14. With the increased Sales Price and other Income, though sales has reduced during the year, sales and other revenue reported at Rs. 2,361.93 lakhs as against Rs.3,003.00 lakhs during 2013-14. With the increased sales price, with the efficient working capital management, planned increase in other income and with effective cost control measures, the Company posted a net profit of Rs.303.98 lakhs for the year under review as against net profit of Rs.96.60 lakhs in 2013-14. OUT LOOK FOR THE CURRENT YEAR The sale price of Aluminium Fluoride for the current year has dropped by over 9 % in view of severe drop of LME price for Aluminium. With the adjacent fertilizer complex assurance for increasing their acid supplies for the current year, as against their low supplies of 1,787 MT acid in 2014-15 and with the availability of balance acid supplies from long distance acid suppliers, the Company is hoping to post good returns in the current year. EXPORTS During the year under review, the Company registered an Export sale of Rs.120.10 lakhs as against Rs.406.80 lakhs during 2013-14. INSURANCE All the properties of the Company including Buildings, Plant and Machinery and Stocks have been adequately insured. DIVIDEND In view of the proposed shifting of the Plant to the place where the Company will get assured acid supplies, your Directors are not recommending any Dividend. CORPORATE GOVERNANCE : As per Clause 49 of the Listing Agreement with the Stock exchanges, a separate section on Corporate Governance is enclosed herewith which forms part of the Annual Report. A certificate from the Auditors of the Company on compliance with the conditions of Corporate Governance as stipulated under the Clause 49 of the Listing Agreement is annexed to this Report. MANAGEMENT DISCUSSION AND ANALYSIS A detailed section of the Management Discussion and Analysis for the period under review as required under Clause 49 of the Listing Agreement is given as a separate statement forming part of the Annual Report. DIRECTORS' RESPONSIBILITY STATEMENT: Pursuant to the requirement under Section 134 (5) of the Companies Act, 2013 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 March, 2015, the applicable accounting standards had been followed along with proper explanation relating to material departures. ii. The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that were 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 or loss of the Company for that period; iii. The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; iv. The Directors had prepared the accounts for the financial year ended 31st March, 2015 on a 'going concern' basis; and v. The Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively. vi. The Director had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating efficiently. DIRECTORS & KEY MANAGERIAL PERSONNEL (KMP) Directors In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company Sri A.V.V.S.S.Ch.B. Sekhar Babu, Director and Sri K.Purushotham Naidu, Director will be retiring at the Annual General Meeting and are eligible for reappointment. Sri Grandhi Sreeramakrishna was appointed as Additional Director of the Company effect from 20th October, 2014. Sri Grandhi Sreeramakrishna holds office only up to the date of the forthcoming AGM. The Company has received from its member, a notice under Section 160(1) of the Act proposing his candidature for the office of Director. His appointment requires the approval of the Members at the ensuing AGM. Key Managerial Personnel The Company has designated the Managing Director, Director Finance (as CFO) & Company Secretary as its Key Managerial Personnel in accordance with the provisions of Section.203 of the Companies Act, 2013. DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS Dr. T.R. Ramachandran, Sri A.V.V.S.S.Ch.B. Sekhar Babu and Sri Grandhi Sreeramakrishna are the Independent Directors of the Company. The terms and conditions of appointment of Independent Directors are as per Schedule IV of the Act. They have submitted a declaration that each of them meets the criteria of independence as provided in Section 149(6) of the Act and there has been no change in the circumstances which may affect 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 of the meetings of the Board, please refer to the Corporate Governance report, which forms part of this report. BOARD EVALUATION The Board of Directors has carried out an annual evaluation of its own performance, Board Committees and Individual Directors pursuant to the provisions of the Act and the Corporate Governance requirements as prescribed by Securities and Exchange Board of India ("SEBI") under Clause 49 of the Listing Agreements ("Clause 49"). The performance of the Board was evaluated by the Board after seeking inputs from all the Directors on the basis of the criteria such as the Board composition and structure, effectiveness of Board processes, information and functioning, etc. The performance of the committees was evaluated by the Board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc The Board and the Remuneration Committee reviewed the performance of the Individual Directors on the basis of the criteria such as the contribution of the individual Director to the Board and Committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the Chairman was also evaluated on the key aspects of his role. In a separate meeting of Independent Directors, performance of Non-Independent Directors, performance of the Board as a whole and performance of the Chairman was evaluated, taking into account the views of Executive Directors and Non-Executive Directors. The same was discussed in the Board meeting that followed the meeting of the Independent Directors, at which the performance of the Board, its Committees and Individual Directors was also discussed. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION AND OTHER DETAILS The Company's policy on Directors' appointment and remuneration and other matters provided in Section 178(3) of the Act has been disclosed in the Corporate Governance report, which forms part of the Directors' report. DISCLOSURE AS REQUIRED UNDER RULE 5 OF COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES 2014 The Disclosure as required under Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is given in Annexure - A to the Board Report. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED IN SUB - SECTION (1) OF SECTION 188 Details of transactions with related parties falling under the scope of Section 188(1) of the Act & Information on transactions with related parties pursuant to Section 134(3)(h) of the Act read with rule 8(2) of the Companies (Accounts) Rules, 2014 (Form No. AOC.2) is given in Annexure - B to the Board Report. AUDITORS M/s Rao & Kumar, Chartered Accountants, Visakhapatnam, the Auditors of the Company will be retiring at the conclusion of this Annual General Meeting and have conveyed their consent for reappointment. SECRETARIAL AUDITOR Pursuant to the provisions of Section 205 of the Act and the rules framed there under, M/s. GMVDR & Associates, Company Secretary was appointed as Secretarial Auditor of the Company and the Secretarial Audit Report issued by them for the Financial Year 2014-15 is made a part of this Report. COST AUDIT Cost Audit for financial year 2014-15 is not applicable in view of the Cost Audit Amendment Rules, 2014, Government of India, Ministry of Corporate Affairs, Notification, New Delhi, dated 31.12.2014. EXTRACT OF ANNUAL RETURN As provided under Section 92(3) of the Act, the extract of Annual Return is given in Annexure - C in the prescribed Form MGT-9, which forms part of this report AUDITORS' REPORT AND SECRETARIAL AUDITORS' REPORT The Auditors' Report and Secretarial Auditors' Report does not contain any qualifications, reservations or adverse remarks. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS The particulars of loans, guarantees and investments have been disclosed in the financial statements. MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY There are no material changes and commitments affecting the financial position of the Company from the date of closure of financial year to the date of Board Report. CHARGES The Company has not availed loans from any Bank/ Financial Institutions during the financial year under review. FIXED DEPOSITS The Company has not accepted any fixed deposits during the year under review. As such no amount of principal or interest was outstanding on the date of the Balance Sheet. UNPAID / UNCLAIMED DIVIDEND Dividend which is unclaimed for a period of 7 years shall be transferred to Investor Education & Protection Fund (IEPF). An amount of Rs. 2,22,089/-for the FY 2007-08 which was unclaimed by the Shareholders of the Company was transferred to IEPF on 23 October, 2015 and an amount of Rs. 2,79,660/- for the FY 2008-09 which was unclaimed by the Shareholders of the Company will be transferred to Investor Education and Protection Fund (IEPF) on or before 23.10.2016. INTERNAL CONTROL The Company has a proper and adequate system of internal control to ensure all the assets are safeguarded and protected against loss from unauthorized use or disposition and the transactions are authorized, regarded and reported correctly. The internal control is supplemented by an extensive program of internal audits, review by management and procedures. The internal control is designed to ensure that the financial and other records are reliable for preparing financial statements and other data, and for maintaining accountability of assets. The Company's Internal Audit Department is regularly carrying out the Audit in all areas. Additionally the Audit committee is reviewing all Audit Reports with significant control, all issues raised by internal and external auditing regularly, reports on the business development, all the past and the future plans are given to the Board of Directors, Internal Auditor's reports are regularly circulated to all the senior management to comply with the findings. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO: Additional information on conservation of energy, technology absorption and foreign exchange earnings and outgo as required to be disclosed in terms of Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 is given in Annexure - D and forms part of this report. EMPLOYEE RELATIONS During the year under review, the Company has enjoyed cordial relationship with all section of employees. The Company believes that the employees play a vital role in increasing the turnover and profitability of the Company and the strength of the Company lie in harnessing the manpower in achieving sustained long-term growth in all spheres. ENVIRONMENT & SAFETY MEASURES Following the ISO Certifications of 9001, 14001 and OHSAS 18001 the Company will continue taking all the necessary measures to maintain high standards of Environment, Clean and Green Belt, Water Harvesting, Pollution Control, Health and Safety Precautions. ACKNOWLEDGEMENT Your Directors take this opportunity in expressing their gratitude to the Government of India, the State Government. The Board is also thankful to all its Bankers, Contractors, Customers and Shareholders for their unstinted support to the Company. For and on behalf of the Board For ALUFLUORIDE LIMITED VENKAT AKKINENI Managing Director DIN: 00013996 G. SREERAMAKRISHNA Director DIN: 06921031 Hyderabad 14 November, 2015 |