Alufluoride Ltd

To

The Members of Alufluoride Limited

Your Directors have pleasure in presenting the Annual Report of your Company along with the Audited Financial Statement for the financial year ended 31^st March 2024. The Report also includes the Management Discussion and Analysis and in accordance with the Guidelines on Corporate Governance.

FINANCIAL RESULTS

The Financial results of the Company for the year under review are as follows: (Rs. In lakhs)

COMPANY'S PERFORMANCE

Your Directors report that during the year under review, the Company produced 15,016 MT and sold 15,260 MT Aluminium Fluoride, at an all-time record production and sales, as against 13,801 MT production and sales of 13,662 MT during 2022-23. Sales and other Revenue are reported at an all-time record of Rs. 16,667.62 lakhs as against Rs.13,891.48 lakhs during 2022-23. With record production and sales, better average sales rate per ton, efficient working capital management, increase in other income and efficient cost control measures, in spite of increased depreciation and finance costs of the new plant, the Company has posted a record Profit before tax and other adjustments of Rs. 2,453.87 lakhs and a Net profit of Rs. 1,853.52 lakhs after Ind-AS & tax adjustments as against a Net Profit of Rs.1,414.51 lakhs in FY 2022-23 – an increase of 31%. These results have been largely influenced by the Company's production of captive green solar energy and thus reducing power cost.

Your Directors report that as on 31^st March 2024, the Company's wholly owned subsidiary company, namely ALUFLUORIDE INTERNATIONAL PTE. LTD., Singapore had incurred preliminary and other expenses of Rs. 62.72 lakhs (previous year Rs. 154.00 lakhs) for the period ended 31^st March 2024 and this relates to the Stepdown Subsidiary Company, namely Jordanian Renewable Aluminium Fluoride Manufacturing Company P.S.C, Jordan and accordingly, the consolidated Profit before appropriations and carried to Balance sheet reported at Rs.1,790.80 lakhs as against previous year Rs.1,274.80 lakhs.

OUTLOOK FOR THE CURRENT YEAR

Your Directors report that the average sale price of Aluminium Fluoride for the current year, remains almost the same as previous year prices and as Hydrofluosilicic acid (acid) producers assure to continue supplying increased acid supplies, to enable the Company to increase production and sales of the product like previous year. With the expected adequate raw material, increased production, contracted sale price and better production efficiencies, your Directors are hopeful for improved results in the current year.

TERM LOAN AND WORKING CAPITAL LIMITS WITH BANKS

Your Directors report that the Company has switched over from ICICI Bank Limited, Visakhapatnam (ICICI) to Punjab National Bank, Visakhapatnam (PNB), all the banking facilities, like term loans and working capital, as PNB offered a competitive rate of interest compared to ICICI. PNB sanctioned a new term loan of Rs. 10.50 crores for expansion of the plant production facilities and had taken over the ICICI's term loans of Rs. 16.51 crores, outstanding as on 27^th March 2024. A charge was created, in favor of PNB, on the assets of the Company to secure the said loan and working capital.

FUTURE PROJECTS

Due to the continued severe conflict in Gaza, uncertain political environment in the Middle East and the insistence of a Corporate Guarantee from the parent company, ALUFLUORIDE LIMITED, VISAKHAPATNAM from the Banks in Jordan for sanction of term loans and working capital facilities for the Jordan project, your Directors decided to withdraw from the Jordan project as it will have a major impact on the parent company and disinvest from the Jordan Company. The Company filed the Jordan project disinvestment proposal to BSE vide letter dated 10.06.2024. The Company is exploring other overseas and domestic projects in the fields of Aluminium Fluoride and fluorine derivatives.

EXPORTS

During the year under review, the Company had not registered any Exports Sales for the current and previous year.

INSURANCE

All the properties of the Company including Buildings, Plant and Machinery and Stocks have been adequately insured.

DIVIDEND

Your Directors are pleased to recommend payment of Rs.3.00 (Rupees Three Only) per equity share of Rs. 10.00 (Rupees Ten only) each, i.e., 30% as final dividend for the financial year 2023-24, for the approval of the Members at the ensuing Annual General Meeting (AGM) of the Company.

TRANSFER TO RESERVE

The Company has not transferred any amount to the General Reserve for the financial year 2023-24.

CORPORATE GOVERNANCE

As per Regulation 34 read with chapter IV of the SEBI (Listing obligations & Disclosure Requirements) Regulations, 2015 a separate section on Corporate Governance is enclosed 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 SEBI (Listing obligations & Disclosure Requirements) Regulations, 2015 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 SEBI (Listing obligations & Disclosure Requirements) Regulations, 2015 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 31^st March 2024, 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 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 31^st March 2024 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 Directors 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

During the year under review, subsequent to the sad demise of Sri Sreeramakrishna Grandhi, Chairman and Non-Executive Independent Director of the Company on 31^st July, 2023, Sri Sohrab Chinoy Kersasp (DIN: 03300321) was appointed as Additional Director (Non-Executive & Independent) on the Board of the Company with effect from 16^th September, 2023. The shareholders at the Extra-ordinary General Meeting (EGM) of the Company held on Monday, 11^th December, 2023 through Video Conference ("VC")/Other Audio-Visual Means ("OAVM") approved the appointment of Sri Sohrab Chinoy Kersasp as Non-Executive & Independent Director of the Company w.e.f. 16^th September 2023 for a term of 5 (five) consecutive years up to 15^th September, 2028.

During the year under review Sri Venkat Akkineni (DIN: 00013996) was re-appointed as Managing Director of the Company for a period of five years with effect from 1^st August, 2023 to 31^st July, 2028.

The Board of Directors of the Company in its meeting held on 14^th August 2024 has approved the following appointments/re-appointments, subject to approval of shareholders of the Company at the ensuing AGM:

(a) Smt. Jyothsana Akkineni (DIN: 00150047) as Executive Director of the Company for a period of three (3) consecutive years with effect from 1^st October 2024 up to 30^th September 2027.

(b) Sri K. Purushotham Naidu (DIN: 01883663) as Executive Director of the Company for a period of three (3) consecutive years with effect from 1st October 2024 up to 30^th September 2027.

(c) Sri Yugandhar Meka (as Non-Executive & Independent Director of the Company for a period of five (5) consecutive years with effect from 1^st August 2024 up to 31^st July 2029 (DIN: 00012265) as Non-Executive & Independent Director of the Company.

(d) Dr. Ravi Prasad Gorthy (DIN: 02698389) as Additional (Non-Executive & Independent Director) of the Company for a period of five (5) consecutive years with effect from 14^th August 2024 up to 13^th August 2029.

With regard to integrity, expertise and experience (including the proficiency) of Sri Yugandhar Meka and Dr. Ravi Prasad Gorthy, the Board of Directors have taken on record the declarations and confirmations submitted respectively by them and is of the opinion that both the Directors are persons of integrity and possesses relevant expertise and experience (including proficiency as per applicable law) and their respective association with the Company as Independent Directors will be of immense benefit and in the best interest of the Company.

In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Sri Ashok Vemulapalli (DIN: 00730615) retires at the ensuing Annual General Meeting and has conveyed his consent to be re-appointment as Director of the Company.

Particulars in pursuance of Regulation 36 of the SEBI LODR Regulations read with Secretarial Standard – 2 on General Meetings relating to Smt. Jyothsana Akkineni (DIN: 00150047), Sri K Purushotham Naidu (DIN: 01883663) and Sri Ashok Vemulapalli (DIN: 00730615) are given in Notice of AGM. You Directors recommend the re-appointment of the said Director.

Key Managerial Personnel

During the year under review, there has been no change in the Key Managerial Personnel of the Company. The Company has named the Managing Director, Director Finance & Commercial as CFO and Company Secretary as its Key Managerial Personnel under the provisions of Section. 203 of the Companies Act, 2013.

DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS

Sri Yugandhar Meka, Sri A.V.V.S.S.Ch.B. Sekhar Babu and Sri Sohrab Chinoy Kersasp 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 & Regulation 25(8) of SEBI (LODR) Regulations, 2015 and there has been no change in the circumstances which affects 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 SEBI (Listing obligations & Disclosure Requirements) Regulations, 2015. 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 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, perfor-mance 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& 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 Board Report.

RISK MANAGEMENT

The Board of Directors oversee the various strategic, operational and financial risks that the organization faces, along with assessment of risks, their manage-ment and mitigation procedures. In the Board's view, there are no material risks, which may threaten the existence of the Company.

SECRETARIAL STANDARDS

The Directors state that applicable Secretarial Standards, i.e., SS-1 relating to ‘Meetings of the Board of Directors' and SS-2, relating to ‘General Meetings', have been duly followed by the Company.

INTERNAL FINANCIAL CONTROLS

The Company has adequate internal financial controls commensurate with its size and nature of its business. During the financial year under review, Internal Auditors of the Company have reviewed the effectiveness and efficiency of these systems and procedures. As per the said assessment, Board is of the view that IFC were adequate and effective during the financial year.

PARTICULARS OF CONTRACTS OR ARRANGE-MENTS 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.

STATUTORY AUDITOR

Pursuant to the provisions of Section 139 of the Act and the Companies (Audit and Auditors) Rules, 2014 (including any statutory modification(s) or re-enactment(s) thereof, for the time being in force), Brahmayya & Co., Chartered Accountants, Visakhapatnam (FRN No: 000513S), were appointed as Statutory Auditors of the Company in the Annual General Meeting held on 9^th July 2023 for a term of 5 (five) years until conclusion of the Annual General Meeting to be held in the year 2027.

SECRETARIAL AUDITOR

Pursuant to the provisions of Section 205 of the Act and the rules framed there under Mr. G.M.V. Dhanunjaya Rao of GMVDR & Associates, Company Secretaries was appointed as Secretarial Auditor of the Company and the Secretarial Audit Report issued by them for the financial year 2023-24 is made a part of this Report.

COST AUDITOR

The Company maintains cost records for its products as specified by the Central Government under sub-section (1) of Section 148 of the Act, and accordingly such accounts and records are made and maintained in the prescribed manner.

M/s. J K & Co., Cost Accountants, Vijayawada (Firm Registration No.: 004010), were appointed as the Cost Auditor to conduct the audit of the Company's cost records for the financial year ended 31^st March, 2024. The Cost Audit Report, for FY 2023-24, was filed with the Central Government within the statutory timelines.

In accordance with the provisions of Section 148 of the Act read with the Companies (Audit and Auditors) Rules, 2014, since the remuneration to be paid to the Cost Auditor for FY 2023-24 is required to be ratified by the members, the Board of Directors recommends the same for ratification at the ensuing AGM. The proposal forms a part of the notice of the AGM.

M/s. J K & Co., Cost Accountants, Vijayawada (Firm Registration No.: 004010), are appointed as the Cost Auditor to conduct the audit of the Company's cost records for the financial year ended 31^st March, 2025. M/s. J K & Co., have confirmed their eligibility for the said appointment.

ANNUAL RETURN

The Annual Return of the Company in prescribed Form MGT-7 is available on the website of the Company at www.alufluoride.com.

SUBSIDIARIES

As on 31^st March 2024, the Company had one subsidiary, i.e. Alufluoride International Pte. Ltd., Singapore and one step-down subsidiary i.e. Jordanian Renewable Aluminium Fluoride Manufacturing Company PSC. The Company is in the process of disinvesting the Jordan Company as explained above.

The Company does not have any joint venture / associate company(ies) within the meaning of Section 2(6) of Companies Act, 2013.

Pursuant to the first proviso to Section 129(3) of the Act and Rule 5 and Rule 8(1) of the Companies (Accounts) Rules, 2014, the salient features of financial statements, performance and financial position of subsidiary is given in Form AOC-1 as Annexure C to 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 commitment affecting the financial position of the Company.

Corporate Social Responsibility

The Company has constituted a Corporate Social Responsibility (CSR) Committee in terms of Section 135(1) of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014. The committee constitution is as follows as on 31^st March, 2024:

The CSR activities, projects and programs that are undertaken by the Company are those which are approved by the committee that is constituted / reconstituted by the Board of Directors of the Company in this regard (CSR Committee). The CSR Committee approves the undertaking of such activities, projects and programs as are covered under the following areas set out in Schedule VII of the Companies Act, 2013. Our company is committed to ensuring the social wellbeing of the society through its Corporate Social Responsibility (CSR) initiatives. Our focus is on rural development programs, Swachh Bharat, promoting education, promoting health care including preventive health care and sanitation facilities to weaker sections of society through organizing health camps, meeting operation expenditure of children and poor people. In accordance with the provisions of Section 135 of the Companies Act, 2013, the Annual Report on CSR Activities is given in Annexure E to this report.

DEPOSITS

The Company has not accepted any 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

Out of the Interim Dividend amount of Rs. 156.41 lakhs declared by your Directors during the FY 2019-20, an amount of Rs. 8.24 lakhs remained unclaimed / unpaid as on 31.03.2024 and out of the Final Dividend amount of Rs. 78.20 lakhs and Rs. 156.4 lakhs declared by your Directors during the FY 2021-22 and FY 2022-23, an amount of Rs. 3.88 lakhs and Rs. 7.19 lakhs remained unclaimed / unpaid as on 31.03.2024.

Further, there is no amount (s) of Dividend which remained unclaimed for a period of 7 years and hence the requirement of transfer of such amount(s) to Investor Education & Protection Fund (IEPF) doesn't arise.

INTERNAL CONTROL

The Company has proper and adequate systems 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.

POLICY ON PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

The Company always believed in providing an encouraging work environment devoid of discrimination and harassment including sexual harassment and has adopted 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. The objective of the policy is to prohibit, prevent and address issues of sexual harassment at the workplace. The policy covers all employees irrespective of their nature of employment and also applicable in respect of all allegations of sexual harassment made by an outsider against an employee. An Internal Complaints Committee (ICC) has also been set up to redress complaints received on sexual harassment. No complaint was pending at beginning of the year and none has been received during the year.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

Pursuant to the provisions of Section 177(9) of the Act, the Board of Directors of the Company has framed the Vigil Mechanism / Whistle Blower Policy for Directors and Employees of the Company. Under the said Policy, provisions have been made to safeguard persons who use this mechanism from victimization.

The Policy also provides access to the Chairperson of the Audit Committee under certain circumstances. The Whistle Blower Policy is uploaded on the website of the Company at www.alufluoride.com.

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.

The Company had formed rigorous safety procedures and regulations to minimize COVID-19 infections etc and to mitigate adverse consequences for those infected. Any staff infected where mentored and counselled by one of his/her senior to assure proper, timely and adequate steps were taken to resolve the ill-health expediously. All employees were covered for insurance by the Company for COVID 19 etc and free timely vaccinations were facilitated.

ENVIRONMENT & SAFETY MEASURES

Following the ISO Certifications of 9001, 14001 and OHSAS 45001 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.

DISCLOSURES UNDER THE ACT Change in Nature of Business, if any:

During the financial year 2023-24, there was no change in the nature of business of the Company.

Significant and Material Orders:

The Company has not received any significant or material orders passed by any regulatory authority, court or tribunal which shall impact the going concern status and Company's operations in future.

Reporting of Frauds by Auditors:

During the year under review, there were no frauds reported by Auditors under Section 143(12) of the Act.

Details on Insolvency and Bankruptcy Code:

During the year under review, no application has been made by the Company nor is any proceeding pending against the Company under the Insolvency and Bankruptcy Code.

Disclosure with respect to Valuation:

During the year under review there was no instance of onetime settlement with any Bank or Financial Institution. Accordingly, disclosure relating to the details of difference between amount of the valuation done at the time of onetime settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof, is not applicable to the Company.

ACKNOWLEDGEMENT

Your Directors take this opportunity in expressing their gratitude to the Government of India and the State Government. The Board is also thankful to all its Bankers, Contractors, Customers and Shareholders for their unstinted support to the Company.