Alfa Transformers Ltd Directors Report.

Dear Members,

Your Directors have pleasure in presenting before you the 38th (Thirty-Eighth) 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 2020. 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 2020 is detailed hereunder.

(Rs.in lakhs)
Particulars 2019-20 2018-19
Revenue from operations 3298.05 6472.14
Other Income 32.55 42.40
Total Revenue 3330.60 6514.54
Profit/(Loss) before Interest, Depreciation and Tax (505.60) 160.06
Less : Interest and Finance Charges 135.30 181.72
Less : Depreciation 121.89 122.21
Profit/(Loss) before Tax (762.79) (143.87)
Current Tax - 2.71
Profit/(Loss) after Tax (762.79) (141.16)
Other Comprehensive Income - -
Total Comprehensive Income for the Year (762.79) (141.16)
Earnings per Share (Basic & Diluted) (8.34) (1.54)

Note: Previous years figures are regrouped wherever necessary.

FINANCIAL PERFORMANCE :

During the last quarter of Financial Year 2019-20, COVID-19 pandemic has caused havoc across the Globe and India, a rising economic power certainly has not remained on touch. The current economic crisis due to COVID-19 has drastically effected the operation and liquidity of our company. In our Vadodara Unit the import of raw material from China was affected very badly resulting reduction of sale and accumulation of semi finished transformers for want of imported AMDT resulting in heavy penalty due to delayed supply. Bhubaneswar unit also suffer heavily for lack of orders which are not yet finalise by electricity utility Companies & others. Further, Bhubaneswar Unit suffered heavily due to Cyclone ‘FANI during May 2019.

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.

DEPOSITS:

The Company has not accepted any public deposits so far.

TRANSFER TO GENERAL RESERVE :

During the financial year ending on 31st March, 2020, there has been no transfer to General Reserve.

DIVIDEND :

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

SHARE CAPITAL:

1379488 nos of Warrants issued on 13/07/2018 to the non promoter investors was forfeited during year as they prefer not to pay the balance 75% of warrants money within due date i.e., 13/01/2020 (due on 13/01/2020). The forfeited advance amount received by the Company was reflected under Capital reserve in the Balance Sheet during the current year.

The Paid up share Capital of the Company stood at Rs.91506450.00 consisting of 9150645 of equity shares of Rs.10/- each.

CORPORATE GOVERNANCE:

Corporate Governance is the system by which Companies are directed and controlled. It also includes Boards 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.

MANAGEMENTS DISCUSSION AND ANALYSIS REPORT :

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

DIRECTORS 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, 2020, 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.

DIRECTORS AND KEY MANAGERIAL PERSONNEL:

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

Pursuant to provisions of section 152 and all other applicable provisions of Companies Act 2013 and the Companies (Appointment and Remuneration) Rules 2014, Mr. Gopal Krishan Gupta 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.

During the year under review Mr. Debasis Dibyajyoti Deo the Company Secretary has resigned on 28/09/2019 and the Board has appointed Mr. Amarnath Tripathy Company Secretary as the Company Secretary with effect from 03/10/2019.

During the Year Mr. Deepak Kumar Das has resigned from the post of Chief Financial Officer and he was relieved with effect from 14/08/2019 and in its place Sri Ranjit Kumar Biswal was appointed as Chief Financial Officer (CFO) of the Company with effect from 14/08/2019.

INDEPENDENT DIRECTORS :

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 change in the key managerial personnel of the Company namely Company Secretary and Chief Financial Officer which was mentioned in this report earlier.

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, 2021. 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 2020-21.

The Report of the Secretarial Auditor in Form MR-3 for the financial year 2019-20 is attached in Annexure D.

INTERNAL AUDITOR :

Your Company has appointed M/s. Goutam Lenka & Co. as the Internal Auditor for Vadodara Unit and Bhubaneswar Unit of the Company for the financial year 2020-21.

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, 2020.

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 Companys 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 FINANCE 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 Companys 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 31.03.2020 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 Companys shares are listed on the ‘The Bombay Stock Exchange Limited. The Annual listing fees to the ‘The Bombay Stock Exchange Limited for the year 2020-21 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.

ACHIEVEMENTS :

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 companys 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 : 30th June, 2020 MANAGING DIRECTOR