Alfa Transformers Ltd Directors Report.

Dear Members,

Your Directors have pleasure in presenting before you the Thirty-Seventh Annual Report of your Company on the business and operations together with the Audited Financial Statements and Auditors Report for the financial year ended 31st March 2019. You will be happy to know that despite the sluggish market conditions, your company has achieved higher turnover during the year. The performance of the Company during the year under Report is summarized as below :

FINANCIAL HIGHLIGHTS:

The summarized financial results of our operations for the Financial Year ending 31st March 2019 is detailed hereunder.

(Rs.in lakhs)

Particulars 2018-19 2017-18
Revenue from operations 6472.14 4696.52
Other Income 42.40 17.28
Total Income (1+2) 6514.54 4713.80
Profit/(Loss) before Interest, Depreciation and Tax 160.06 35.18
Less : Interest and Finance Charges 181.72 196.60
Less : Depreciation 122.21 115.41
Profit/ (Loss) before Exceptional Items (4-5-6) (143.87) (276.83)
Add : Exceptional Items -- --
Profit/(Loss) before Tax (7+8) (143.87) (276.83)
Less : Income Tax 2.71 (0.53)
Profit/ (Loss) after Tax (9-10) (141.16) (277.36)
Add : Balance Carried forward from Statement of Profit and Loss A/C (1191.43) (914.07)
Balance Carried to Balance Sheet (1332.59) (1191.43)
Earning per Share (Basic & Diluted) (1.54) (3.76)

Note: Previous year s figures are regrouped wherever necessary.

FINANCIAL PERFORMANCE :

IIn the competitive market, the Company was able to achieve Sales and Other income to the extent of Rs. 65.14 cores in the present year as compared to Rs. 47.14 cores in the previous year. With sustained effort the Company has been able to book orders of Rs. 29.16 Crores (At Vadodara Unit Rs. 27.06 Crores and at BBSR Unit Rs. 2.10 Crores approximately). Further orders are under negotiation and the Company expects sufficient orders in Vadodara. However, Bhubaneswar Unit may not be able to procure sufficient order as the electricity utility companies in Odisha are releasing order at old rate and without price variation clause which gives very small margin. Bhubaneswar Unit therefore depends mainly on private orders and repair of power distribution transformers.

Export orders are yet to be materialized due to disturbances in Gulf and African countries.

With its strong market presence and performance, the company is in a position to attract investment from various private equity investors. During the financial year 2018-19 the Company has gone for preferential allotment of shares and warrants which resulted in inflow of funds amounting to Rs 630.89 Lakhs. During the current financial year, the Company is expecting inflows about Rs. 3,41,42,328/- i.e. 75% of the subscription money of Warrants from Non-promoter group from allotment of equity shares on conversion of warrants.

FUTURE PROSPECTS :

As stated above with good order in hand situation, the Company believes to achieve a higher sales turnover in Vadodara the F.Y. 2019-20. However the turnover in Bhubaneswar may fall in comparison to F.Y. 2018-19. In order to reduce the liability, the shareholders have approved the proposal of Directors to close Unit II at BBSR by disposing of land and building and shifting of plant and machineries to Vadodara and Bhubaneswar (Unit-I).

Company is striving to add product qualification as per new BEE system in a big way so as to increase order catchment area and is trying to win vendor approval for these rating from other customers.

As the company has a bright future, we are expecting to crack some overseas deals which will fetch us a good return in future.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND:

No unclaimed dividend amount due for transfer to IEPF.

PARTICULARS OF LOANS GIVEN, INVESTMENT MADE, GUARANTEES GIVEN OR SECURITY PROVIDED UNDER SECTION 186 OF THE COMPANIES ACT, 2013:

The particulars of the loans, guarantees and investments covered under provisions of the Section 186 of the Companies Act, 2013 read with the Companies (Meeting of Board and its Powers) Rules, 2014 are given in the notes to the financial statements, which forms part of this Annual Report.

DISCLOSURE OF PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO :

The disclosure of particulars relating to conservation of energy and technology absorption and foreign exchange earnings and outgo as required by Section 134 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014 are given in Annexure A .

PERSONNEL :

None of the employees of the Company has been in receipt of remuneration exceeding the amounts envisaged under Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 of the Companies Act, 2013.

SUBSIDIARY COMPANY :

Phoenix Surgicare Private Limited is the only wholly owned Subsidiary Company of your Company, is closed on 09.01.2019 by ROC, Cuttack, Odisha.

DEPOSITS:

The Company has not accepted any public deposits so far.

TRANSFER TO GENERAL RESERVE :

During the financial year ending on 31st March, 2019, there has been no transfer to General Reserve.

DIVIDEND:

Your Directors has not recommended any Dividend during this financial year.

SHARE CAPITAL:

During the year under review, the Company had issued 1315645 nos. of Equity Shares of Rs. 10 each on Preferential basis and converted 4,40,000 warrants which were issued earlier during the F.Y. 2017-18 into equal number of equity shares of Rs. 10/- each. Consequently, as at 31st March 2019, the paid-up share capital of the Company stood at Rs. 9,15,06,450/- (consisting of 9150645 nos. of equity shares of Rs. 10/- each).

CORPORATE GOVERNANCE:

Corporate Governance is the system by which Companies are directed and controlled. It also includes Board s accountability to the Company and stakeholders, strategic vision and effective monitoring by the Board, protection and equitable treatment of all stakeholders as well as timely disclosure. Corporate governance is a journey for constantly improving sustainable value creation and is an upward moving target.

Corporate governance at Alfa Transformers Limited (ATL) is a value-based framework to manage our Company affairs in a fair and transparent manner. We have evolved guidelines and best practices over the years to ensure timely and accurate disclosure of information regarding our financials, performance, leadership and governance of the Company. We are an ethically responsible company, operate with transparency, and validate commitment and sincerity, both vertically and horizontally across the organization with a spirit of integrity.

The Company has complied with all mandatory provisions of Corporate Governance as prescribed under SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015. In compliance with Regulation 34 of the Listing Regulations, a separate report on Corporate Governance is annexed in Annexure B , along with the certificate from M/s PAMS & Associates, Chartered Accountants confirming compliance with the requirement of Corporate Governance.

MANAGEMENT S DISCUSION AND ANALYSIS REPORT :

Management s Discussion and Analysis for the year under review is presented in a separate section as Annexure C forming part of the Annual Report.

DIRECTOR S RESPONSIBILITY STATEMENT:

Pursuant to Section 134(5) of the Companies Act, 2013, with respect to Directors Responsibility Statement, it is hereby confirmed that:

i) In the preparation of the annual accounts for the year ended March 31, 2019, 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 are reasonable and prudent so as to give a true and fair view of state of affairs of company at end of Financial Year of Profit and Loss of 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 Act for safeguarding the assets of company and for preventing and detecting fraud and other irregularities.

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

v) The directors had laid down internal financial controls to be followed by company and that such internal financial controls are adequate and were operating effectively.

Explanation: For purpose of this clause, the term internal financial controls means policies and procedures adopted by 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, timely preparation of reliable financial information;

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

DIRECTORS AND KEY MANAGERIAL PERSONNEL :

Pursuant to Sec 196 of Companies Act 2013, Mr. Deepak Kumar Das and Mr. Gopal Krishan Gupta s present tenure is expiring and being eligible offer themselves for reappointment as Whole-time Directors of the company.

Pursuant to Sec 149 of the Companies Act 2013, Mr. Amalendu Mohanty s name is recommended by the Board to be re-appointed as Independent Director of the company.

Pursuant to provisions of section 152 and all other applicable provisions of Companies Act 2013 and the Companies (Appointment and Remuneration) Rules 2014, Mr. Debasis Das is liable to retire by rotation at the ensuing Annual General meeting and, being eligible, offered himself for re-appointment.

Your Directors recommend their reappointment.

INDEPENDENT DIRECTORS :

Mr. Amalendu Mohanty, Independent Director s office for the first term of two years has expired. So the Board of Directors on recommendation of the Nomination and Remuneration Committee has extended the term of Mr. Amalendu Mohanty, Independent Director for another term of Five (5) years which is subject to the approval of the members of the Company in the ensuing AGM scheduled to be held on 14.08.2019 at the Registered Office of the Company at Plot No. 3337, M.I.E. Bhubaneswar-751010 at 11 AM. The Independent Directors are not liable to retire by rotation.

In accordance with Section 149(7) of the Act, each Independent Director has given written declaration to the Company confirming that they meet the criteria of Independence as mentioned under Section 149(6) of the Act and SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015.

The Company has put in place an induction and familiarization programme for all its directors including the Independent Directors. The familiarization programme in terms of the provisions of SEBI (LODR) Regulations is uploaded on the website of the Company.

KEY MANAGERIAL PERSONNEL :

During the year under review, there was no change in the key managerial personnel of the Company. Mr. Debasish Dibyajyoti Deo is continuing as the Company Secretary of the Company.

STATUTORY AUDITORS :

M/S PAMS & Associates have given their consent for re-appointment along with the eligibility certificate as per Section 141 of the Companies Act, 2013. Your Directors request your approval to appoint them as statutory auditors of the Company to hold office from Conclusion of this AGM to the next AGM.

COST AUDITOR :

Pursuant to Provision of Section 148 of the Companies Act, 2013 and the Companies (Audit & Auditors) Rules, 2014 the Board on the recommendation of the Audit Committee has approved the appointment of M/s S. S. Sonthalia & Co., Cost Accountants as the Cost Auditors and remuneration payable to them to conduct the audit of the cost records of the Company for the financial year ending March 31, 2020. The Company has received a letter from M/s S. S. Sonthalia & Co., Cost Accountant, Bhubaneswar showing their willingness to be appointed as Cost Auditors stating that they are not disqualified under Section 148 (5) read with Section 141 (3) of the Companies Act, 2013. Your Directors request your approval to ratify their appointment as cost auditors of the Company and the remuneration payable to them.

SECRETARIAL AUDITOR :

The Board of Directors of the Company has appointed M/S Saroj Ray & Associates, Company Secretaries, Bhubaneswar under Section 204 of Companies Act 2013 and the Companies (Appointment & Remuneration of Managerial Personnel) Rules 2014 to conduct secretarial audit of the Company for the financial year 2019-20.

The Report of the Secretarial Auditor in Form MR-3 for the financial year 2018-19 is attached in Annexure D.

INTERNAL AUDITOR :

Your Company has appointed M/S Goutam & Co. as the Internal Auditor for Vadodara Unit and Bhubaneswar Unit of the Company for the financial year 2019-20.

COMMENTS ON STATUTORY AUDITORS REPORT AND SECRETARIAL AUDITORS REPORT:

Neither the statutory auditors nor the secretarial auditors of the company, in their respective reports, have made any qualifications, reservations or adverse remarks. The Statutory Auditors have not reported any incident of fraud to the Audit Committee or the Board of Directors under Section 143 (12) of the Companies Act 2013 during the financial year ended 31st March, 2019.

The company continues to adopt practices to ensure best practice as per Indian Accounting Standards and Corporate Governance standards.

DISCLOSURE AS PER LISTING AGREEMENT : Cash Flow:

The cash flow statement in accordance with accounting standard is appended to this Annual Report.

Related Party Transactions :

As a matter of policy, your company carries transactions with related parties on an arm-length basis. Statement of these transactions is given in the Notes to the financial statements, forming part of this Annual Report.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY :

There have been no material changes and commitments, affecting the financial position of the company which has been occurred between the end of the financial year of the Company to which the financial statements relate and date of the report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS:

No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company s operation in future.

CHANGE IN NATURE OF BUSINESS:

During the year under review, there has been no change in the nature of business of the Company.

RISK MANAGEMENT POLICY AND INTERNAL FINANC CONTROL ADEQUACY:

The Company has in place a mechanism to identify, assess, monitor and mitigate various risks in achieving key objectives of the Company. The Company has developed and implemented Risk Management Policy of the Company to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Company s competitive advantage.

The Internal Control Systems are commensurate with the nature, size and complexity of the business of the company. These are routinely tested and certified by Statutory Auditor as well as Internal Auditors.

EXTRACT OF ANNUAL RETURN :

The Extract of Annual Return in Form No. MGT 9 as on 31.03.2019 is appended to this Report as Annexure E.

ANNUAL EVALUATION BY THE BOARD:

The evaluation framework for assessing the performance of Board including the individual Directors are based on certain key measures, viz. Attendance of Board Meetings and the Committee Meetings, qualitative contribution in deliberations on agenda items, long term view in the inputs regarding development and sustainability of the Company and consideration of shareholders and other stakeholders interests.

The evaluation involves Self-Evaluation by the Board Member and subsequently assessment by the Board of Directors. A member of the Board does not participate in the discussion of his/her evaluation. The Board of Directors has expressed their satisfaction to the evaluation process.

WHISTLE BLOWER POLICY :

The Whistle Blower Policy (Vigil Mechanism) was constituted by the Board of Directors, pursuant to Section 177 of the Companies Act 2013 and the Rules made there under and SEBI (LODR) 2015 to report genuine concerns of directors and Employees. The Policy has been posted on the website of the company. (http://www.alfa.in).

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (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 Work Place (Prevention, Prohibition and Redressal) Act 2013. Internal Complaint Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. During the year under review no complaints were reported to the Board.

HUMAN RESOURCES :

Your Company believes that human resources will play a critical role in its future growth. With a focus on nurturing and retaining talent, your Company provides avenues for learning and development through functional, behavioral and leadership training programs, knowledge exchange conferences and providing communication channels for information sharing, to name a few of the initiatives.

SECRETARIAL STANDARDS OF ICSI:

Pursuant to the approval by the Central Government to the Secretarial Standards specified by the Institute of Company Secretaries of India, the Secretarial Standards on Meetings of the Board of Directors (SS-1) and General Meetings (SS-2) came into effect from 1st July 2015. The Company is in compliance with the Secretarial Standard.

Listing:

The Company s shares are listed on the The Bombay Stock Exchange Limited . The Annual listing fees to the The Bombay Stock Exchange Limited for the year 2019-20 has been paid.

Voluntary Delisting from Bhubaneswar and Calcutta Stock Exchanges:- The company had already submitted all documents as per rule to Bhubaneswar & Calcutta stock Exchange for delisting of shares. Permission is still awaited

ACHEIVEMENTS :

1) QUALITY SYSTEM:

The company was accredited ISO 9001-2008 for quality management system with respect to Design, Manufacture, Repair and sale of Power Transformers & Distribution Transformers from 1997 with continuity.

The present registration is accredited by TUV SUD South Asia Private Limited from 15/05/2018 which is valid up to 14/05/2021.

2) The Company has got BIS certificate for various rating of Distribution Transformers for Bhubaneswar and Vadodara unit. The Company is also investing heavily in prototype and type testing of other ratings of transformers for inclusion in BIS.

INDUSTRIAL RELATIONS :

The industrial relations continued to be generally peaceful & cordial.

ACKNOWLEDGEMENTS :

Your Directors would like to acknowledge and place on record their sincere appreciation to all stakeholders, clients, Bank, Central & State government, the company s valued investors and all other business partner for their continued co-operation and excellent support received during the year.

FOR AND ON BEHALF OF THE BOARD

Sd/-
PLACE : BHUBANESWAR DILLIP KUMAR DAS
DATE : 24th June, 2019 CHAIRMAN