Clariant Chemica Director Discussions


DEAR MEMBERS,

Your Directors are pleased to present the 66th Annual Report together with the Audited Statement of Accounts for the year ended March 31, 2023.

1. FINANCIAL PERFORMANCE OF THE COMPANY

( in Lakhs)

particulars year ended March 31, 2023 year ended March 31, 2022
Sales 76,641.66 83,951.00
Profit before tax 4,626.98 4,949.53
Exceptional Item (630.32) -
Less: Tax expenses (Incl. deferred tax) 2,078.75 617.54
Profit after tax 1,917.91 4,331.96
Add : Balance brought forward from previous period 27,360.53 26,317.60
Amount available for appropriation 29,278.44 30,649.59
Appropriations
Less: Dividend (including interim and final) - 3,462.27
Less: Corporate tax on dividend - -
Add : Other comprehensive income (OCI) / (Loss) (61.84) 107.01
Add: Reversal of vested option forfeiture - 66.20
Transferred to retained earnings - -
Balance carried forward to the balance sheet 29,216.29 27,360.53

2. REVIEW OF OPERATIONS

The Companys continued operations reported sales for the year ended March 31, 2023 of 76,641.66 Lakhs as against 83,951.00 Lakhs for the previous year ended March 31, 2022. The Company recorded a decline in sales by 9% of the total sales revenue for the year under review. 36% is contributed by exports.

3. DIVIDEND

The Board of Directors have not recommended any Dividend for the Financial year ended March 31, 2023. Pursuant to the requirement of Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company have formulated and adopted Dividend Distribution Policy which is available on the website of the Company at www.heubach.com.

4. CHANGE IN NAME OF THE COMPANY

Consequent to the change in ownership structure of the Company post acquisition by SK Capital and Heubach Group, the Company changed its name from ‘Clariant Chemicals (India) Limited to ‘Heubach Colorants India Limited which was approved by the Registrar of Companies, Mumbai with effect from October 17, 2022.

5. CORPORATE GOVERNANCE, MANAGEMENT DISCUSSIONS AND ANALYSIS REPORT & BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

The Company is committed to compliance standards, ensuring checks and balances between the Board and Management, as well as a sustainable approach to create value for all stakeholders. As stipulated under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Report on Corporate Governance, Management Discussion and Analysis Report as well as Certificate confirming the compliance with the conditions of corporate governance and Business Responsibility and Sustainability Report are annexed herewith and forms part of this Annual Report.

6. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATIONS IN FUTURE

During the year under review, there has been no such significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Companys operations in future.

7. MateRial changes Between the Date oF the BoaRD RepoRt anD enD oFF inancial yeaR

There have been no material changes and commitments, if any, affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report.

8. SUBSIDIARY COMPANY

As on March 31, 2023, the Company does not have any subsidiary.

9. DETAILS OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

Consequent to acquisition of the Company by SK Capital and Heubach Group, and change in management & control of the Company, the Nomination & Remuneration Committee, the Board of Directors and the Members of the Company, approved the following appointments:

1. Mr. Bharath R. Sesha (DIN: 01983066) as the Managing Director of the Company for a term of three consecutive years, effective from April 23, 2022 to April 22, 2025.

2. Mr. Ravi Kapoor (DIN: 01761752) as Non-Executive Director and Chairman of the Company with effect from April 23, 2022.

3. Mr. Abhijit Naik (DIN: 08097208) as Whole Time Director of the Company for a period of three years from April 23, 2022 to April 22, 2025. However, due to change in work profile within the organization, Mr. Abhijit Naik resigned as a Whole Time Director w.e.f. February 3, 2023.

4. Mr. Jugal Sahu (DIN: 02629782) as the

Executive Director and Chief Financial Officer of the Company for a term of three consecutive years, effective from February 3, 2023 to February 2, 2026.

Mr. Alfred Muench, Mr. Thomas Wenger and Mr. Sanjay Ghadge, being Clariants representative resigned from Directorship of the Company effective from April 23, 2022.

The Board of Directors places on record its sincere appreciation to the Directors for their contribution during the tenure.

Key Managerial Personnel

1. Mr. Ashish Agarwal tendered his resignation to the Company from the post of Interim Chief Financial Officer of the Company, effective from closing working hours of April 20, 2022, for advancement of his career.

2. Mr. Jugal Sahu was appointed as Chief Financial Officer of the Company effective from August 9, 2022.

There were no other changes in the Key Managerial Personnel of the Company during the year.

In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Ravi Kapoor retires by rotation at the ensuing Annual General Meeting, and being eligible, he offers himself for re-appointment.

The above re-appointment forms part of the Notice of the 66th Annual General Meeting and a Resolution is recommended for your approval.

The brief profile of Mr. Ravi Kapoor, covering details of his qualification and experience, as required pursuant to the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 and Secretarial Standards on General Meetings issued by The Institute of Company Secretaries of India is annexed to the notice of this Annual General Meeting.

All Independent Directors of the Company have given declarations that they meet the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013 and the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, amended. They have also confirmed that they have registered their name in the data bank of Independent Directors.

10. AUDIT COMMITTEE

The details on the composition, meeting, attendance, etc. of the Audit Committee are provided in the Corporate Governance Section of the Annual Report. The Board has accepted all the recommendations of the Audit Committee during the Financial year under review.

11. NUMBER OF MEETINGS OF THE BOARD

During the year under review, the Board of Directors met 6 times on April 22, 2022, May 24, 2022, August 9, 2022, November 9, 2022, November 30, 2022 and February 3, 2023.

12. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE

earnings and outgo

As required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014, the relevant information and data for the year ended March 31, 2023 are annexed to this report as Annexure A.

13. CORPORATE SOCIAL RESPONSIBILITY

In terms of the provisions of Section 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended from time to time, the Board of Directors of your Company has constituted a Corporate Social Responsibility (CSR) Committee which constitutes of following members:

name category
Dr. (Mrs.) Indu Shahani Chairperson
Mr. Kewal Handa Member
Mr. Bharath R. Sesha (w.e.f. April 23, 2022) Member
Mr. Sanjay Ghadge (till April 23, 2022) Member

Your Company also has in place a CSR policy and the same is available on the website of the Company at www.heubach.com. A detailed report as per Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed as Annexure B forming part of this report.

14. NOMiNATiON AND REMUNERATiON POLiCY

The Board has, based on the recommendation of Nomination and Remuneration Committee, framed a policy on Nomination and Remuneration of its Directors and Key Managerial Personnel, which is available on the website of the Company at www. heubach.com.

15. BoARD EVALUATiON And FAMiLiARiZATiON

programme

Pursuant to the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out the annual evaluation of its own performance and Board Committees by seeking the inputs of Directors on various aspects of the Board/ Committee Governance. The Board have reviewed the performance of the individual Directors and the Chairperson. The manner in which the evaluation has been carried out is stated in the Corporate Governance Report.

The details of programme for familiarization of the Independent Directors of your Company are available on the Companys website at www.heubach.com.

16. particulars of employee

As per provisions of Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, disclosure pertaining to the particulars of employees who are in receipt of remuneration as prescribed under the Section is annexed as Annexure O.

The statement of particulars of employees pursuant to Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this Annual Report. However, pursuant to proviso to Section 136(1) of the Companies Act, 2013, the report and accounts are being sent to members excluding this statement of particulars of employees. Any member interested in obtaining a copy of this statement, may write to Company Secretary at investor-relations india@heubach.com.

17. DiRECTORS RESPONSiBiLiTYSTATEMENT

Pursuant to the requirement under Section 134(3)(c) of the Companies Act, 2013 with respect to Directors Responsibility Statement, it is hereby confirmed that:

(i) In the preparation of the annual accounts for the year ended March 31, 2023, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) The Directors have 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 as at March 31, 2023 and of the profit & loss of the Company for that period;

(iii) The Directors have 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 have prepared the annual accounts on a going concern basis;

(v) The Directors have laid down Internal Financial Controls to be followed by the Company and that such Internal Financial Controls are adequate and were operating effectively; and

(vi) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

18. STATUTORY AUDiTOR & AUDiT REPORT

M/s. MSKA & Associates, Statutory Auditors, in their Audit report for the Financial year ended March 31, 2023, have commented that the backup of the books of accounts and other books and papers maintained in electronic mode has not been maintained on servers physically located in India. The Company would like to clarify that the Companys SAP is centralized in global Data Centers outside India where the backup storage is maintained. The Company is reviewing the maintenance of backup of SAP data in India as required under Rule 3 of the Companies (Account) Rules, 2014.

19. COST AUDiT

The Board of Directors, in pursuance of order under Section 148 of the Companies Act, 2013, appointed M/s. RA & Co., Cost Accountants, as Cost Auditors of the Company to carry out the audit of the cost accounts of the Company for the Financial year 202324, subject to approval of Central Government, if any. The Cost Audit Report for the 12 months ended March 31, 2022 has been filed on due date.

20. SECRETARiAL AUDiT REPORT

Pursuant to provisions of Section 204 of the Companies Act, 2013, and Rule 9 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board has appointed M/s J. R. Ahuja & Co., Company Secretary, as Secretarial Auditor to carry out the Secretarial Audit for the FY 2022-23.

The Secretarial Audit Report is annexed herewith as Annexure D. The Secretarial Auditor Report does not contain any qualification, reservation or adverse remark and is self - explanatory and thus does not require any further comments.

21. iNTERNAL FiNANCiAL CONTROLS AND THEiR adequacy

The details in respect of Internal Financial Controls and their adequacy are included in the Management Discussion & Analysis Report, which forms part of this Report.

22. extract of annual return

Pursuant to the provisions of Section 92(3) of the Companies Act, 2013, the Annual Return in Form MGT- 7 as on March 31, 2023, is available on Companys website at www.heubach.com.

23. RisK MANAGEMENT poLicY

The Company has a robust Risk Management to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Companys competitive advantage. Many risks identified by the business and functions are systematically addressed through mitigating actions on a continuing basis. The Company has framed a Risk Management Policy to manage the risks involved in all activities of the Company, to maximize opportunities and minimize adversities.

In accordance of the provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors of the Company have constituted the Risk Management Committee. Particulars of the committee are provided in the Corporate Governance Report forming part of this Annual Report.

24. RELATED PARTY TRANSACTiONS

In line with the requirements of Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has framed a Policy on Material Related Party Transactions which is available on Companys website at www. heubach.com.

All the Related Party Transactions entered during the year under review were in ordinary course of business and on arms length basis. All the Related Party Transactions are placed before Audit Committee for review and approval. Prior omnibus approvals are granted by Audit Committee for Related Party Transactions which are of repetitive nature, entered in the ordinary course of business and are on arms length basis.

The disclosure of Related Party Transactions as required under Section 134(3)(h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules 2014 in the Form AOC-2 is annexed as Annexure E to this report.

25. PARTiCULARS OF LOANS, GUARANTEES or investments

The details of loans, guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013, is given in the notes forming part of Financial Statements.

26. public DEpoSITS

During the year under review, the Company has not accepted any deposits from the public falling under Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014 and as such no amount of principal or interest was outstanding as on the balance sheet date.

27. ViGiL MECHANISM

The Company believes in upholding professional integrity and ethical behavior in the conduct of its business. To uphold and promote these standards, the Company has adopted Whistle Blower Policy for its Directors and Employees to report genuine concerns about unethical behavior, actual or suspected fraud or violation of the Code of Conduct without fear of reprisal.

28. PREVENTION OF SEXUAL HARASSMENT OF WOMEN At workplace

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

During the year under review, no complaints were received for sexual harassment of women at workplace.

29. constitution ofinternalcomplaints committee

The Company has constituted an Internal Complaint Committee (ICC) and complied with all the requirements of provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

30. DETAILS iN RESPECT OF FRAUDS REPORTED BY AUDiTORS UNDER SUB-SECTiON (12) OF SECTiON 143 OF THE COMPANIES ACT, 2013 OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT

No matter of actual or alleged fraud has been reported by the auditors under Sub-Section (12) of Section 143 of the Companies Act, 2013.

31. ACKNOWLEDGEMENT

The Board of Directors wish to place on record its sincere appreciation for the support received from its stakeholders including shareholders, bankers, distributors, suppliers and business associates. The Directors recognize and appreciate the sincere and hard work, loyalty, dedicated efforts and contribution of all the employees that ensured sustained performance in a challenging business environment.

For and on behalf of the Board of Directors

Bharath R. Sesha

Managing Director DIN (01983066)

Ravi Kapoor

Chairman DIN (01761752)

Navi Mumbai, July 25, 2023