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Alufluoride Ltd.

BSE: 524634 Sector: Industrials
NSE: N.A. ISIN Code: INE058F01019
BSE 12:34 | 05 Jul 228.80 11.45
(5.27%)
OPEN

221.95

HIGH

228.80

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220.00

NSE 05:30 | 01 Jan Alufluoride Ltd
OPEN 221.95
PREVIOUS CLOSE 217.35
VOLUME 1192
52-Week high 415.05
52-Week low 195.90
P/E 47.18
Mkt Cap.(Rs cr) 179
Buy Price 224.15
Buy Qty 30.00
Sell Price 228.70
Sell Qty 14.00
OPEN 221.95
CLOSE 217.35
VOLUME 1192
52-Week high 415.05
52-Week low 195.90
P/E 47.18
Mkt Cap.(Rs cr) 179
Buy Price 224.15
Buy Qty 30.00
Sell Price 228.70
Sell Qty 14.00

Alufluoride Ltd. (ALUFLUORIDE) - Director Report

Company director report

To

The Members of

Alufluoride Limited

Your Directors have pleasure in presenting the Annual Report of yourCompany along with the Audited Statement of Accounts for the financial year ended 31stMarch 2022. The Report also includes the Management Discussion and Analysis Report and inaccordance with the Guidelines on Corporate Governance.

FINANCIAL RESULTS

The Financial results of the Company for the year under review are asfollows:

(Rs in lakhs)

Standalone Consolidated
As on 31st March 2022 As on 31st March 2021 As on 31st March 2022
Sales and other revenue 8795.43 3849.62 8795.43
Profit before Finance charges Depreciation Tax & other adj's 1428.42 236.29 1399.33
Less: Finance charges 269.13 91.95 269.13
Profit before Depreciation Tax & other Adj's 1159.29 144.34 1130.20
Less: Depreciation 634.66 250.70 634.66
Profit before Tax & other adj's 524.63 (106.36) 495.54
Less: Provision for current tax 95.44 55.84 90.35
MAT Credit entitlement (61.98) (33.46) (56.89)
Taxes of earlier years (37.63) (2.70) (37.63)
Deferred Tax Asset/Liability adj's 147.42 (71.04) 147.42
Profit before appropriations and carried to Balance Sheet 381.38 (55.00) 352.29
Add/Less: Other Comprehensive Income (Ind-AS adj's) 14.96 8.55 14.96
Profit before appropriations and carried to Balance Sheet 396.34 (46.45) 367.25

COMPANY'S PERFORMANCE

Your Directors report that during the year under review the Companyproduced 10380 MT (includes trial run production of 186 MT) and sold 10067 MT AluminiumFluoride (includes trial run produced quantity sales of 286 MT) as against 6072 MTProduction (includes trial run production of 2200 MT) and 6440 MT sold (includes trialrun produced quantity sales of 2100 MT) during 2020-21. Sales and other Revenue reportedat Rs. 8795.43 lakhs (excludes trial runs produced quantity sales of Rs. 242.30 lakhs) asagainst Rs. 3849.62 lakhs (excludes trial runs produced quantity sales of Rs.1869.20lakhs) during 2020-21. In addition to the above results the Company made a profit of Rs7.79 lakhs in year under review as against Rs. 429.51 lakhs during 2020-21while operatingthe new plant on trials and the same was credited to project cost account. With increasedproduction better sales realization efficient working capital management increase inother income and efficient cost control measures and in spite of marginally higherconsumption norms (as the new plant is yet to stabilize its operations) increaseddepreciation and finance costs (due to new plant) the Company posted Profit before tax& other adjustments of Rs. 524.63 lakhs (previous year loss of Rs. 106.36) and Netprofit of Rs. 396.34 lakhs after Ind-AS & tax adjustments as against a Net loss of Rs.46.45 lakhs in FY 2020-21.

Your Directors report that as on 31st March 2022 the Company had twowholly owned subsidiary companies namely ALUFLUORIDE INTERNATIONAL PVT LTD Dubai andALUFLUORIDE INTERNATIONAL PTE. LTD. Singapore and these companies incurred preliminaryand other expenses of Rs. 29.09 lakhs (previous year Rs. Nil) for the period ended 31stMarch 2022 and accordingly the consolidated Profit before appropriations and carried toBalance sheet reported at Rs.367.25 lakhs as against previous year Rs.Nil.

OUT LOOK FOR THE CURRENT YEAR

Your Directors report that Visakhapatnam Aluminium Fluoride plantexpansion work is completed. To facilitate further strengthening of the existing dryingsystems ETP systems construction of roads drains and other civil works etc. theCompany had planned to invest funds for these works and had availed an additional termloan of ICICI Bank Limited Visakhapatnam. All these works are expected to be completed byend September 2022 and the plant is expected to produce the rated production consistentlyduly attaining the better/designed consumption norms. The sale price of AluminiumFluoride for the current year has improved significantly though the cost of productionalso correspondingly increased due to the impact of Ukraine war unstable marketconditions etc. Hydrofluosilicic acid (acid) producers are assuring to supply the agreedquantities in the current year and the plant is expected to improve the production asagainst the previous year. With the expected adequate raw material increased productionand sale price your Directors are hopeful for improved results in the current year.

TERM LOAN AND WORKING CAPITAL LIMITS WITH BANKS

Your Directors report that ICICI Bank Limited Visakhapatnam hassanctioned a term loan of Rs. 25 crores for Visakhapatnam Aluminium Fluoride expansionproject in FY 2019-2020 sanctioned an additional term loan of Rs.10 crores in March 2022and renewed the existing fund & non-fund based working capital limits of Rs. 5 crores.As against these facilities during the year under review entire term loan amount of Rs.25 crores was withdrawn an amount of Rs. 2.85 crores drawn against the sanctionedadditional term loan of Rs.10 crores utilized Rs. 84.77 lakhs (previous year Rs.78.93lakhs) for non-fund based working capital facilities and paid an amount of Rs. 508.46lakhs (previous year Rs.78.93 lakhs) in FY 2021-2022 towards term loan. A charge wascreated in favor of the bank on the assets of the Company to secure the said loanfacilities.

FUTURE PROJECTS

The Company had signed an MOU on 8th January 2020 at Amman Jordan withJordan Phosphate Mines Company PLC (JPMC) to commission a greenfield Aluminium Fluorideplant at Eshidiya Free Trade Zone Jordan. The Company had incorporated a Wholly OwnedSubsidiary Company by name ALUFLUORIDE INTERNATIONAL PTE. LTD. at Singapore on 20thSeptember 2021 and the said subsidiary Company would be the joint venture partner for theJordan project. Due to Covid 19 pandemic incorporation of new JV company at Jordan wasdelayed and as soon as the new JV Company is incorporated at Jordan the new JV Companywill sign various other project agreements with JPMC and other agencies. Consequently thenew plant in Jordan will commence.

EXPORTS

During the year under review the Company registered an Exports Sale ofRs. 0.85 lakhs as a trial run and for the first time the Company exported the product toAustralia as against Rs.1758.84 lakhs Export Sales during FY 2020-21.

INSURANCE

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

DIVIDEND

Your Directors are pleased to recommend payment of Rs.1.00 (Rupee Oneonly) per equity share of Rs.10.00 (Rupees Ten only) each i.e.10% as a final dividendfor the financial year 2021-22 for the approval of the Members at the ensuing AnnualGeneral Meeting (AGM) of the Company.

TRANSFER TO RESERVE

The Company has not transferred any amount to the General Reserve forthe financial year 2021-22.

CORPORATE GOVERNANCE

As per Regulation 34 read with chapter IV of the SEBI (Listingobligations & Disclosure Requirements) Regulations 2015 a separate section onCorporate Governance is enclosed which forms part of the Annual Report. A certificate fromthe Auditors of the Company on compliance with the conditions of Corporate Governance asstipulated under the SEBI (Listing obligations & Disclosure Requirements) Regulations2015 is annexed to this Report.

MANAGEMENT DISCUSSION AND ANALYSIS

A detailed section of the Management Discussion and Analysis for theperiod under review as required under SEBI (Listing obligations & DisclosureRequirements) Regulations 2015 is given as a separate statement forming part of theAnnual Report.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134 (5) of the Companies Act2013 with respect to the Director's Responsibility Statement it is hereby confirmed:

i. In the preparation of the annual accounts for the financial yearended 31st March 2022 the applicable accounting standards have been followed along withproper explanation relating to material departures;

ii. The Directors had selected such accounting policies and appliedthem consistently and made judgments and estimates that were reasonable and prudent so asto give a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit of the company for that period;

iii. The Directors had taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of theCompanies Act 2013 for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities;

iv. The Directors had prepared the accounts for the financial yearended 31st March 2022 on a ‘going concern' basis; and

v. The Directors had laid down internal financial controls to befollowed by the Company and that such internal financial controls are adequate and wereoperating effectively;

vi. The Directors had devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingefficiently.

DIRECTORS & KEY MANAGERIAL PERSONNEL (KMP)

Directors

During the year under review there has been no change in theconstitution of the Board of Directors.

In accordance with the provisions of the Companies Act 2013 and theArticles of Association of the Company Sri Ashok Vemulapalli (DIN: 00730615) retires atthe ensuing Annual General Meeting and has conveyed his consent for re-appointment asDirector of the Company.

The Board of Directors of the Company in its meeting held on 28th May2022 has:

(a) approved the re-appointment of Smt. Jyothsana Akkineni (DIN:00150047) as Executive Director of the Company for a period from 6th May 2022 to 30thSeptember 2024 subject to approval of Members at the ensuing AGM;

(b) approved the re-appointment of Sri K. Purushotham Naidu (DIN:01883663) as Executive Director of the Company for a period from 6th May 2022 to 30thSeptember 2024 subject to approval of Members at the ensuing AGM;

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

Key Managerial Personnel

During the year under review Sri Viswanadham Bhaskara Rama Sarma wasthe Company Secretary and Compliance Officer of the Company up to 12th May 2021 until hissad demise. The Board places on record its deep appreciation for the services rendered bySri Viswanadham Bhaskara Rama Sarma during his term. Thereafter on 13th August 2021 Smt.Vaishali Kohli was appointed as Company Secretary and Compliance Officer of the Company.

The Company has named the Managing Director Director - Finance &Commercial as CFO and Company Secretary as its Key Managerial Personnel under theprovisions of Section. 203 of the Companies Act 2013.

DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS

Sri Grandhi Sreeramakrishna Sri A.V.V.S.S.Ch.B. Sekhar Babu and SriYugandhar Meka are Independent Directors of the Company. The terms and conditions ofappointment of Independent Directors are as per Schedule IV of the Act. They havesubmitted a declaration that each of them meets the criteria of independence as providedin Section 149(6) of the Act and there has been no change in their circumstances whichaffects their status as Independent Director during the year.

NUMBER OF MEETINGS OF THE BOARD

Six meetings of the Board were held during the year. For details of themeetings of the Board please refer to the corporate governance report which forms partof this report.

BOARD EVALUATION

The Board of Directors has carried out an annual evaluation of its ownperformance Board committees and individual Directors pursuant to the provisions of theAct and the corporate governance requirements as prescribed by Securities and ExchangeBoard of India ("SEBI") under SEBI (Listing obligations & DisclosureRequirements) Regulations 2015. The performance of the Board was evaluated by the Boardafter seeking inputs from all the Directors on the basis of the criteria such as the Boardcomposition and structure effectiveness of Board processes information and functioningetc. The performance of the committees was evaluated by the Board after seeking inputsfrom the committee members on the basis of the criteria such as the composition ofcommittees effectiveness of committee meetings etc.

The Board reviewed the performance of the individual Directors on thebasis of the criteria such as the contribution of the individual Director to the Board andcommittee meetings like preparedness on the issues to be discussed meaningful andconstructive contribution and inputs in meetings etc. In addition the Chairman was alsoevaluated on key aspects of his role.

In a separate meeting of Independent Directors performance ofNon-Independent Directors performance of the Board as a whole and performance of theChairman was evaluated taking into account the views of Executive Directors andNon-Executive Directors. The same was discussed in the Board meeting that followed themeeting of the Independent Directors at which the performance of the Board itscommittees and Individual Directors was also discussed.

POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION AND OTHERDETAILS

The Company's policy on Directors' Appointment andRemuneration and other matters provided in Section 178(3) of the Act has been disclosed inthe 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 BoardReport.

RISK MANAGEMENT

The Board of Directors oversee the various strategic operational andfinancial risks that the organization faces along with assessment of risks theirmanagement and mitigation procedures. In the Board's view there are no materialrisks which may threaten the existence of the Company.

SECRETARIAL STANDARDS

The Directors state that applicable Secretarial Standards i.e. SS-1relating 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 withits size and nature of its business. During the financial year under review InternalAuditors of the Company have reviewed the effectiveness and efficiency of these systemsand procedures. As per the said assessment Board is of the view that IFC were adequateand effective during the financial year.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERREDIN SUB - SECTION (1) OF SECTION 188

Details of transactions with related parties falling under the scope ofSection 188(1) of the Act & Information on transactions with related parties pursuantto Section 134(3)(h) of the Act read with rule 8(2) of the Companies (Accounts) Rules2014 (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) orre-enactment(s) thereof for the time being in force) Brahmayya & Co. CharteredAccountants Visakhapatnam (FRN No: 000513S) were appointed as Statutory Auditors of theCompany in the Annual General Meeting held on 29th September 2017 for a term of 5 (five)years until conclusion of the Annual General Meeting to be held in the year 2022.

It is proposed to re-appoint Brahmayya & Co. CharteredAccountants Visakhapatnam (FRN No: 000513S) the Statutory Auditors of the Company forfurther term of five (5) years from the conclusion of the ensuing Annual General Meetingof the Company till the conclusion of Annual General Meeting of the Company to be held inthe year 2027. The Company has received a certificate from the said Statutory Auditorsthat they are eligible to be appointed as the Statutory Auditors of the Company and arenot disqualified from being so appointed.

A resolution for appointment of the said Auditors is included in theNotice of Annual General Meeting for seeking approval of Members.

SECRETARIAL AUDITOR

Pursuant to the provisions of Section 205 of the Act and the rulesframed there under Mr. G.M.V. Dhanunjaya Rao of GMVDR & Associates CompanySecretaries was appointed as Secretarial Auditor of the Company and the Secretarial AuditReport issued by them for the financial year 2021-22 is made a part of this Report.

COST AUDIT

The Company is required to maintain cost records for certain productsas specified by the Central Government under sub-section (1) of Section 148 of the Actand accordingly such accounts and records are made and maintained in the prescribedmanner.

Further Cost Audit for financial year 2021-22 is not applicable inview of the Cost Audit Amendment Rules 2014 Government of India Ministry of CorporateAffairs Notification New Delhi dated 31.12.2014.

ANNUALRETURN

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

SUBSIDIARIES

As on 31st March 2022 the Company had two subsidiaries as follows:

1. Alufluoride International Private Limited Dubai.

2. Alufluoride International Pte. Ltd. Singapore.

Alufluoride International Pte. Ltd. which was incorporated on 20thSeptember 2021 in Republic of Singapore.

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

During the year under review while none of the companies ceased to bea subsidiary of the Company as stated above one subsidiary was incorporated during theyear.

Pursuant to the first proviso to Section 129(3) of the Act and Rule 5and Rule 8(1) of the Companies (Accounts) Rules 2014 the salient features of financialstatements performance and financial position of subsidiary is given in Form AOC-1 asAnnexure C to this Report.

AUDITOR'S REPORT AND SECRETARIAL AUDITOR'S REPORT

The Auditor's Report and Secretarial Auditors' Report does notcontain any qualifications reservations or adverse remarks.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

The particulars of loans guarantees and investments have beendisclosed in the financial statements.

MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIALPOSITION OF THE COMPANY

There are no material changes and commitment affecting the financialposition of the Company.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGEEARNINGS AND OUTGO

Additional information on conservation of energy technology absorptionand foreign exchange earnings and outgo as required to be disclosed in terms of Section134(3) (m) of the Companies Act 2013 read with the Companies (Accounts) Rules 2014 isgiven in Annexure D and forms part of this report.

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 consists of thefollowing:

1. Sri A.V.V.S.S.Ch.B. Sekhar Babu - Chairman
2. Sri Ashok Vemulapalli - Member
3. Smt Jyothsana Akkineni - Member
4. Sri K. Purushotham Naidu - Member

The CSR activities projects and programs that are undertaken by theCompany are those which are approved by the committee that is constituted / reconstitutedby the Board of Directors of the Company in this regard (CSR Committee). The CSR Committeeapproves the undertaking of such activities projects and programs as are covered underthe following areas set out in Schedule VII of the Companies Act 2013. Our company iscommitted to ensuring the social well being of the society through its Corporate SocialResponsibility (CSR) initiatives. Our focus is on rural development programs SwachhBharat promoting education promoting health care including preventive health care andsanitation facilities to weaker sections of society through organizing health campsmeeting operation expenditure of children and poor people.

In accordance with the provisions of Section 135 of the Companies Act2013 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 BalanceSheet.

UNPAID / UNCLAIMED DIVIDEND

Out of the Interim Dividend amount of Rs. 156.41 lakhs declared by yourdirectors during the FY 201920 an amount of Rs. 8.27 lakhs remained unclaimed / unpaid ason 31.03.2022. Further there is no amount (s) of Dividend which remained unclaimed for aperiod of 7 years and hence the requirement of transfer of such amount(s) to InvestorEducation & Protection Fund (IEPF) doesn't arise.

INTERNAL CONTROL

The Company has proper and adequate systems of internal control toensure all the assets are safeguarded and protected against loss from unauthorized use ordisposition and the transactions are authorized regarded and reported correctly. Theinternal control is supplemented by an extensive program of internal audits review bymanagement and procedures. The internal control is designed to ensure that the financialand other records are reliable for preparing financial statements and other data and formaintaining accountability of assets.

The Company's Internal Audit Department is regularly carrying outan Audit in all areas. Additionally the Audit committee is reviewing all Audit Reportswith significant control all issues raised by internal and external auditing regularlyreports on business development all past and future plans are given to the Board ofDirectors Internal Auditor's reports are regularly circulated to all seniormanagement to comply with the findings.

POLICY ON PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

The Company always believed in providing an encouraging workenvironment devoid of discrimination and harassment including sexual harassment and hasadopted 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. Theobjective of the policy is to prohibit prevent and address issues of sexual harassment atthe workplace. The policy covers all employees irrespective of their nature of employmentand also applicable in respect of all allegations of sexual harassment made by an outsideragainst an employee. An Internal Complaints Committee (ICC) has also been set up toredress complaints received on sexual harassment. No complaint was pending at beginning ofthe 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 ofDirectors of the Company has framed the Vigil Mechanism / Whistle Blower Policy forDirectors and Employees of the Company. Under the said Policy provisions have been madeto safeguard persons who use this mechanism from victimization.

The Policy also provides access to the Chairperson of the AuditCommittee under certain circumstances. The Whistle Blower Policy is uploaded on thewebsite of the Company at www.alufluoide.com.

EMPLOYEE RELATIONS

During the year under review the company has enjoyed cordialrelationship with all sections of employees. The company believes that the employees playa vital role in increasing the turnover and profitability of the company and the strengthof the company lies in harnessing its manpower in achieving sustained long-term growth inall spheres.

The Company has formed rigorous safety procedures and regulations tominimize COVID-19 infections and to mitigate adverse consequences for those infected. Anystaff infected were mentored and counselled by one of his/her senior to assure propertimely and adequate steps were taken to resolve the ill-health expediously. All employeeswere covered for insurance by the Company for COVID-19 and timely vaccinations werefacilitated.

ENVIRONMENT & SAFETY MEASURES

Following the ISO Certifications of 9001 14001 and OHSAS 45001 theCompany will continue taking all the necessary measures to maintain high standards ofEnvironment Clean and Green Belt Water Harvesting Pollution Control Health and SafetyPrecautions.

DISCLOSURES UNDER THE ACT

Change in Nature of Business if any:

During the financial year 2021-22 there was no change in the nature ofbusiness of the Company.

Significant and Material Orders:

The Company has not received any significant or material orders passedby any regulatory authority court or tribunal which shall impact the going concern statusand Company's operations in future.

Reporting of Frauds by Auditors:

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

Details on Insolvency and Bankruptcy Code:

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

Disclosure with respect to Valuation:

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

ACKNOWLEDGEMENT

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

For and on behalf of the Board
For ALUFLUORIDE LIMITED
Hyderabad VENKAT AKKINENI
Managing Director DIN: 00013996
28 May 2022 A.V.V.S.S.Ch.B. SEKHAR BABU
Director DIN: 00692448

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