Alufluoride Ltd

To

Your Directors have pleasure in presenting the Annual Report of your Company along with the Audited Statement of Accounts for the financial year ended 31^st March 2025. The Report also includes the Management Discussion and Analysis Report and in accordance with the Guidelines on Corporate Governance.

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

Your Directors report that during the year under review, the Company produced 16,377 MT and sold 15,831 MT Aluminium Fluoride, an all-time record production and sales, as against 15,016 MT production and sales of 15,260 MT during FY 2023-24. Sales and other Revenue are reported at an all-time record of 19,052.92 lakhs as against 16,667.62 lakhs during FY 2023-24. With record production and sales, better average sales rate per ton, efficient working capital management, increase in other income, efficient cost control measures, after providing a provision of 260.84 lakhs for diminution in value of investment in wholly owned subsidiary Company in Singapore (this was due to disinvestment of entire stake in Jordanian Renewable

Aluminium Fluoride Manufacturing Company (JRAFMC)) and despite substantial increase in Alumina Hydrate (a key raw material in producing Aluminium Fluoride) cost and its volatility throughout the year, the Company has posted a record Profit before tax and other adjustments of 2,438.01 lakhs and a Net profit of 1,874.14 lakhs after Ind-AS & tax adjustments as against a Net Profit of 1,853.52 lakhs in FY 2023-24. These results have been largely influenced by the Company's production of captive green solar energy resulting in reduced power costs

Your Directors report that as on 31^st March 2025, the Company's wholly owned subsidiary company, namely ALUFLUORIDE INTERNATIONAL PTE. LTD., Singapore had incurred expenses of 280.38 lakhs

(previous year 62.72 lakhs), which includes disinvestment in JRAFMC of 260.84 lakhs, for the period ended 31^st March 2025, and accordingly, the consolidated Profit before appropriations and carried to Balance sheet reported at 1,851.60 lakhs as against previous year 1,790.80 lakhs.

Your Directors report that the average sale price of Aluminium Fluoride for the current year remains almost the same as the previous year and as Fluosilicic acid (FSA) producers assure increased supply of FSA, 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.

Your Directors report that for further expansion of Aluminium Fluoride production facilities, during the year under review, Punjab National Bank, Visakhapatnam (PNB), had sanctioned an additional term loan of 13 crores and renewed working capital limits with increased values i.e., sanctioned a limit of 15 crores as against previous limit of 12.50 crores and at a competitive rate of interest compared to other banks. A charge was created, in favour of PNB, on the assets of the Company for the loans/working capital limits.

Due to the continued conflict in Gaza, uncertain political environment in the Middle East and the Jordanian banks insistence of a Corporate Guarantee from the parent company, ALUFLUORIDE LIMITED, VISAKHAPATNAM, for sanction of term loans and working capital facilities to the JRAFMC project in Jordan, your Directors have withdrawn from the JRAFMC project as it has a major impact on the parent company and disinvested the entire stake through transfer of shares to avoid liquidation proceedings in Jordan. The Company is exploring a new project to manufacture Alumina Hydrate. To initiate this project the objects of the Company were to be amended and the shareholders consented to the amendment of the objects through postal ballot on 20^th April 2025. Also, the Company is exploring other overseas and domestic projects in the fields of Aluminium Fluoride and fluorine derivatives.

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

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

Your Directors are pleased to recommend payment of

3.00 (Rupees Three only) per equity share of 10.00 (Rupees Ten only) each, i.e., 30% as final dividend for the financial year 2024-25, for the approval of the Members at the ensuing Annual General Meeting (AGM) of the Company.

The Company has not transferred any amount to the General Reserve for the financial year 2024-25.

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.

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.

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 2025, 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 2025 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.

During the year under review, the Board of Directors of the Company at its meeting held on 14^th August 2024 has approved the following appointments/reappointments, 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 1^st 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 1st 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.

The shareholders at the Annual General Meeting of the Company held on 16^th September, 2024 through Video Conference ("VC")/Other Audio-Visual Means ("OAVM") approved the aforesaid appointments / re-appointments.

Further the tenure of Sri A.V.V.S.S.Ch.B. Sekhar Babu as Non-Executive and Independent Director of the Company ended on 1^st October 2024, as per regulations limiting Independent Directorship to a tenure two terms of five years.

During the year under review, Sri Aditya Akkineni (DIN: 01629979) was appointed as Additional Director being a Whole-Time Director designated as Chief Executive Officer on the Board of the Company with effect from 10^th March, 2025 for a period of three years up to 9^th March, 2028. The shareholders through postal ballot approved the aforesaid appointment on 20^th April, 2025.

In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Sri Venkat Akkineni (DIN: 00013996) retires at the ensuing Annual General Meeting and has conveyed his consent for 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 Sri Venkat Akkineni are given in Notice of AGM. Your Directors recommend the re-appointment of the said Director.

During the year under review, there has been no change in the Key Managerial Personnel of the Company. Smt. Vaishali Kohli continues to be the Company Secretary and Compliance Officer of the Company.

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

Sri Yugandhar Meka, Sri Sohrab Chinoy Kersasp and Dr. Ravi Prasad Gorthy 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.

Six 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.

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, performance 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.

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.

The Board at its meeting held on 31^st May, 2025 has subject to approval of shareholders of the Company, approved payment of commission to the Independent Directors not exceeding 1 (one) percent of the profits of the Company in a financial year computed as per and subject to the provisions of the Act, at the end of the financial year or not exceeding aggregate of

12,00,000/- (Rupees Twelve Lakhs only) p.a., whichever is lower, to be paid equally among all the Independent Directors. The proposal forms a part of the notice of the AGM.

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.

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

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.

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.

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.

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 2022 for a term of 5 (five) years until conclusion of the Annual General Meeting to be held in the year 2027.

Pursuant to the provisions of Section 204 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 2024-25 is made a part of this Report.

Further the Board at its meeting held on 31^st May, 2025 has subject to approval of shareholders of the Company, approved the appointment of Sri G.M.V. Dhanunjaya Rao (GMVDR & Associates) as the Secretarial Auditor of the Company for a term of five years commencing from the financial year 2025-26 upto financial year 2029-2030 at a remuneration fixed by Managing Director/Director – Finance & Commercial of the Company in consultation with Audit Committee from time to time. The said proposal forms a part of the notice of the AGM.

The Company maintains cost records for its products as specified by the Central Government under subsection (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, 2025. The Cost Audit Report, for FY 2024-25, has be 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 2024-25 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, 2026. M/s. J K & Co., have confirmed their eligibility for the said appointment.

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

As on 31^st March 2025, the Company had one subsidiary, i.e. Alufluoride International Pte. Ltd., Singapore.

Further Jordanian Renewable Aluminium Fluoride Manufacturing Company P.S.C. ceased to be the step-down subsidiary with effect from 23^rd March 2025.

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.

The Auditors' Report and Secretarial Auditors' Report does not contain any qualifications, reservations or adverse remarks.

The particulars of loans, guarantees and investments have been disclosed in the financial statements.

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

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, 2025:

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.

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.

Out of the Interim Dividend amount of 156.41 lakhs declared by your directors during the FY 2019-20, an amount of 7.68 lakhs remained unclaimed / unpaid as on 31.03.2025 and out of the Final Dividend amount of 78.40 lakhs, 156.41 lakhs and 234.61 lakhs declared by your directors during the FY 2021-22, FY 2022-23 and 2023-24, an amount of 3.41 lakhs and 6.58 lakhs and 11.58 lakhs remained unclaimed / unpaid as on 31.03.2025.

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.

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.

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.

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 have been received during the year.

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.

During the year under review, the company has enjoyed cordial relationship with all sections 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 lies in harnessing the manpower in achieving sustained long-term growth in all spheres. The Company provides health insurance for all employees and their families.

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, Cleanliness and Green Belt, Water Harvesting, Pollution Control, Health and Safety Precautions.

During the financial year 2024-25, there was no change in the nature of business of the Company. However, the Board at its meeting held on 10^th March, 2025 had approved alteration of objects clause in the Memorandum of Association of the Company for expanding the existing main objects to include activities with respect to business of manufacture, importer and export, trading and sale of Alumina Hydrate or other associate minerals. The same was approved by the shareholders through postal ballot on 20^th April, 2025.

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.

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

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.

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.

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.