AFFLUENCE

Your Directors take pleasure in presenting the 30th Annual Report on the operations of your Company together with the audited accounts for the financial year ended 31st March 2022.     Standalone Consolidated Particulars 2021-22 (In Lakhs) 2020-21 (In Lakhs) 2021-22 (In Lakhs) Total Income 14364.70 8808.53 14364.95 Profit before Deprecation, Finance Cost, Tax and Exceptional items 1774.31 1370.82 1763.33 Depreciation and amortization expenses 143.30 148.55 143.30 Finance cost 151.19 191.97 135.36 Exceptional Items NIL NIL NIL Profit before Tax 1479.82 1030.30 1484.67 Less: Tax expenses 431.62 299.26 431.62 Profit for the year 1048.20 731.03 1053.05 Other comprehensive income for the year -15.56 -20.79 -15.56 Total comprehensive income for the year 1032.64 710.24 1037.49 Future Prospects   ARCL is a seasoned player in the formaldehyde and downstream chemicals market due to our long-term commitment and family-like relations with our stakeholders as well as our strong technical know-how in our processes and products. Keeping the same mother product base, we have diversified our product portfolio to cater to various industries such as feed, foundries, refractories, rubber and tyre, agriculture, etc.    To service our newly developed usages, we are building new capacities for drying, upgrading our paraformaldehyde plant and increasing capacities for feed additives. For our newly built Phenolic Novolac facilities, we are in the process of entering into a German collaboration. This will help us in doubling our exports as well as our domestic market sales.    The next 10 years are India's decade for the growth of chemical industries. The Russia-Ukraine conflict saw the demand for Speciality chemicals shifting to India, and Indian companies like ours are well positioned to take advantage of the situation.  

Conservation of Energy a.       Energy Conservation Measures Taken: ·         Improvisation and continuous monitoring of Power Factor and replacement of weak capacitors by conducting periodical checking of capacitors. ·         Installation of isolating valve in main airline for preventing air loss. ·         The Company has relentlessly aimed at optimising the use of energy resources and taken adequate measures to avoid wastage and use latest technology and equipments.   b.      Impact of the above Measures: ·         Opportunity to compete in International Markets ·         Technology up-gradation ·         Development of new designs in products ·         Attaining accreditation of our products from Internationally recognized Organizations   c.       Total Energy Consumption and Energy Consumption per Unit of Production: ·         Power & Fuel Consumption* I. Electricity Rs.   Purchased Units (KWH in lacs) 58.37                   Total Amount (in Lacs) 464.27                    Monthly average (Rs. In Lacs) 38.69                    Rate (Rs/KWH) 7.95 II. Fuel Consumption     LDO Consumption (in KL) 715.27                   Total Amount (Rs. In Lacs) 407.95                   Monthly average (Rs. Lacs) 34                   Rate (Rs/Lacs) 57.04       FO Consumption from April 2021 to March 2022 = 1122.41KL   Total amount = 514.59 Lacs   Monthly Average (Rs in Lacs) = 42.88 L   Rate (Rs/Litre) = 45.85

Technology Absorption: Research and Development (R & D): The current success, and our future success, is largely dependent on our ability to develop new products and processes and to improve the features of existing products. The research activity includes-   a) Low emission formaldehyde E0/E1 in plywood application. b) Slow Release Nitrogen crude protein in cattle field application, M PRO. c) Import Substitution cross linker HMMM. Expenditure on R & D: No. Particulars 2021-22 (Rs.) I. Capital Expenses 35,33,659 II. Revenue Expenses 84,16,127 III. Total 1,19,50,436 IV. Total R & D Expenditure as a % of Turnover (x% of 707,853,032) 0.08%

Foreign Exchange Earnings and Outgo: a)       Expenditure in Foreign Currency - Rs. 11,62,651/- b)      Earnings in Foreign Currency- Rs. 43,63,02,791/-

Director’s Responsibility Statement Your directors, in terms of Section 134 (5) of the Companies Act, 2013, state that: a)       In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures. b)      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 the state of affairs of the company at the end of the financial year and of the profit/loss of the company for that period. c)       The directors to the best of their knowledge & ability have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; d)      The directors had prepared the annual accounts on a going concern basis; and e)      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. f)        The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.