Refex Industries Ltd Management Discussions.

Industry Structure and Development

Your Company was incorporated on 13 th September 2002 and is an ISO 9001:2015 and ISO 14001:2015 Company. It is primarily engaged in the Business of refilling Non-Ozone depleting refrigerant gases popularly known as Hydro Fluoro Carbon or HFCs, which are used in Automobile Air-Conditioners, Room Air Conditioners and Refrigerating Equipment.

Since November 2011 the Company also entered the business relating to Generation and Distribution of Solar Power by running a Solar Power Plant at Balmer District, Rajasthan.

During the year the actual production of the refrigerant gases accounted for 383.00 against the installed capacity of 2000 MTs. The sale of products in term of quantity recorded is 382.17 Mts

The current facility is 2000 MTs Capacity refilling with Single shift.

The income earned by the Company arising out of solar power generation and distribution during 2018-19 is Rs. 12.06 Lakhs.



The Company is engaged in the Business of Hydro Fluoro Carbon (HFCs) which is replacement of the Ozone depleting CFC which is already banned in India and HCFC that are to be banned in a phased manner from 2020 onwards as per the implementation schedule of the Montreal protocol by the developing Countries. This phase had already started in 2012 in parts and a complete ban will come in by 2020. The phase out of HCFC gives immense potential to your Company to gain additional market share from domestic manufactures. The Companys products are placed as a premium brand in the industry and commend a premium over the other brands. The Companys refrigerant business has grown from Rs. 1007.49 Lakhs in 2017-18 to Rs. 1325.57 Lakhs in 2018-19. It resulted in the increase of market share of your Company. Your Company is now primarily focusing on after markets and retail. Also, planning to reach OEMs, besides also getting Enquiries from Government Sectos.

The margins are better and the demand is increasing in these markets sharply due to the extreme weather conditions.

Under changing Geo-political scenario, Indian products attract renowned interest from overseas customers, taking this into account your Company is working on export of refrigerant gas.

With increasing power shortage in the Country due to growing gap between demand and supply status, the opportunities relating to Non-Conventional energy sources, such as solar energy, is bound to increase in the years to come and the company would be in a position to convert this opportunity to its advantage.

Your company is working with various science and technical institutions to introduce new refrigerants which have Zero Global Warming Potential (GWP) to work towards a more CO2 free world. Your company will have an early mover advantage to launch new refrigerants in the market. Your company is also working on adding additional Solar Power Plants and is keenly looking for opportunities to build more Solar Power Plants.


The energy demand globally is steadily rising. Indias 70% demand is met by coal based thermal power plants. Ash is the by-product from the burning of coal which is the fuel to all thermal power plants. 30-45% of the burnt coal is ash. This ash is full of heavy metals and toxins which if not handled properly could pollute air, land and water bodies.

During the running of a power plant ash is continuously produced and stored in silos which have to be continuously evacuated. The fly ash from the silos is a raw material required for the production of PPC cement, manufacturing of bricks, concreting of infrastructure projects like roads, bridges etc. This fly ash from the silos is transported in closed bulkes.

The excess undisposed ash from the silos is then sent to the ash dyke from where is it evacuated by filling in trucks for mine reclamation, filling of low lying areas, embankments etc. as per the guidelines of Ministry of Mines and Ministry of Environment and Forests (MoEF).

With a boost in infrastructure in India, there is huge potential for supply of ash to such projects.



The Company is largely dependent on foreign countries for the supply of raw materials and hence the shortage in the availability of raw materials coupled with adverse foreign exchange will affect the cost structure and bottom line of the company. HFCs are having GWP potential and is being now phased out in developed countries. India will also have to work towards the phasing out HFCS in the next 20-25 yeas. Year 2018-19 has seen a lot of fluctuation in Forex and hence the risk of higher cost is there. One of the primary products R134a faces Anti-Dumping duties from China and other countries, which will be a major drawback for your Company. Solar Power is driven by Government policies and also any change in Tariff or policy will affect the business plan.

The instability in global economy is also bound to affect the company in both business activities


Since we have work on the basis of the work orders from the power plants, cancellation of such work orders is a potential threat. These threats we however try to mitigate by clauses in the work order and introducing notice periods. Another threat is that most power plants in India are currently financially stressed. This could result in delayed payments from power plants.


The Company is working with various institutions on developing refrigerants which have Zero GWP potential. Various research agencies and scientists have approached your company to commercialize some products. Your company is evaluating the same. The after markets for HFC is increasing with increase in sale of cars and refrigerants.

"Being the first Company to setup a re-filling facility in the country a decade back among nonmanufacturers, Brand REFEX is a prominent brand in the Refrigerant Industry and commands a premium over other brands. The end users like Mechanics and Installers have preferred Refex products over other products. Innovative packing and continuous product and service development has placed the brand in the top in the country.


With good relation with cement factories and other sub-contractors we are able to push for higher disposal of ash. With a lot of abandoned mines in the vicinity of the power plant we are working with, we have an advantage in terms of distance compared to other competitors.


Refexs stringent internal control systems and procedure is well defined and commensurate with the size and nature of the Business to provide reasonable assurance that all assets are safeguarded; transactions are authorized and reported properly. All applicable statutes, code of conduct and corporate policies are duly complied with. The internal Audit Division reviews the adequacy and efficiency of the internal controls. The scope of the Audit activity is guided by the Annual Audit Committee of the Board. The Audit Committee reviews the reports of the Internal Auditors and provides guidance


Your Company provides a diverse and inclusive work environment. It is the policy, practice and aim of your company to provide Employment Opportunities to all qualified persons on an equal basis. Your company does not discriminate against any employee or applicant for employment on the basis of race, religion, disability, ethnicity, marital status or any other characteristic protected by law. Your company does not employ or engage child labour. It provides training, education and promotion opportunities that permit development and career advancement to the companys work force. It provides wellness programs to the employees. Your company is concerned about the safety of its employees. Works of the employees are evaluated periodically. Policies on human rights including the code of Ethical Business Conduct, Anti-Sexual Harassment and Whistle Blower Policies along with the group Business Responsibility Policy covers all aspects on human rights for your company and also extend to all stakeholders of your company. Your company follows an extensive performance Management system to review the performance of its employees, Senior Management Personnel and provide rewards on the basis of Meritocracy.


An overview of the financial performance Vis a Vis the previous year is given separately in the Directors Report.


The company has Six segments Viz. Refrigerant gases and Solar Power. The quantitative performance Vis a Vis the previous year is given below.

2018-19 2017-18
Refrigerant gases Sales (Kgs.) 382170.00 218980
Solar Power (units) 8341950.00 8422350
Solar Accessories (WP.) 21214500.00 -
Ash (MT) 1800549.48 -
Coal (MT) 204055.00 -
Minerals (MT) 572.00 -


The above statement is as perceived by the Directors based on the Current scenario and the input available. Any extraneous development and force majeure conditions may have an impact on the above perception.