Heubach Colorants India Ltd Directors Report

Dear Members,

Your Directors are pleased to present the 67^th Annual Report together with the Audited Statement of Accounts for the Year ended March 31, 2024.

1. Financial performance of the Company

( in Lakhs)

Particulars	Year ended 31.03.2024	Year ended 31.03.2023
Sales	79,070.15	76,641.66
Profit before tax from continuing operations	5,599.99	4,626.98
Exceptional Item	-	(630.32)
Less: Tax expenses (Incl. deferred tax)	1,486.14	2,078.75
Profit after tax from continuing operations	4,113.85	1,917.91
Profit before tax for discontinued operations	-	-
Less: Tax expenses (Incl. deferred tax)	-	-
Profit after Tax for discontinued operations	-	-
Add: Balance brought forward from previous period	29,216.29	27,360.53
Amount available for appropriation	33,330.14	29,278.44
Appropriations	-	-
Dividend (including interim and final)	-	-
Corporate tax on dividend	-	-
Other comprehensive income (OCI)	(111.94)	(61.84)
Reversal of vested option forfeiture	-	-
Transferred to retained earnings	-	-
Balance carried forward to the balance sheet	33,218.16	29,216.29

2. Review of operations

The Companys continued operations reported sales, for the year ended March 31, 2024 of 79,070.15 lakhs as against 76,641.66 lakhs for the previous year ended March 31, 2023. Company recorded a spike in sales of 3.2% out of the total revenue from contracts with customers for the year under review 31.7% is contributed by exports.

3. Reserves

There is no amount proposed to be transferred to Reserves.

4. Dividend

The Board of Directors have not recommended any Dividend for the Financial Year ended March 31, 2024. 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 https://admin. heubach.com/wp-content/uploads/2023/02/HCIL- Dividend-Distribution-Policy-EN.pdf

5. State of Company Affairs & Change in Business

There is no change in company affairs or business by the company during the period under review.

6. 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 & 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.

7. 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.

8. Material changes between the date of the Board report and end of financial year

On April 22, 2024, the Company received a communication from Heubach GmbH, a related party within the Heubach Group, informing that it had issued a press release announcing the filing of an application for the opening of regular insolvency proceedings over its assets with the competent insolvency court in Braunschweig. In the same communication, Heubach GmbH also notified that it had applied for the Braunschweig insolvency court to serve as the group court for the German subgroup of the Heubach Group. The court has since appointed an insolvency administrator to evaluate the feasibility of continuing business operations and exploring potential restructuring

or sale options. Additionally, a preliminary insolvency administrator and custodian have been appointed by the court.

Subsequently, on May 3, 2024, the Company received another communication from Heubach Group GmbH, the holding company of Heubach Holding Switzerland AG (formerly known as Colorants International AG and one of the Companys promoter shareholders). The notice stated that Heubach Group GmbH, along with certain affiliated companies, had also filed for insolvency proceedings over its assets with the Braunschweig insolvency court.

The Company continues to closely monitor any related developments and assess the impact on our Company. The Company disclosed this material information to the stock exchanges in its letter dated April 23, 2024 and May 03, 2024.

There have been no other material changes and commitments, 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.

9. Subsidiary Company, Associates Company and Joint Ventures

As on March 31, 2024, the Company does not have any subsidiary, associates Company and joint ventures.

10. Details of Directors and Key Managerial Personnel

Your Company is dedicated to following best practices and values a diverse board that enhances stakeholder value and ensures strong governance. Companys board consists of highly skilled and respected individuals who provide valuable experience and leadership.

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.

As required under Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, all the Independent Directors (including those appointed during the year) have registered themselves with the Independent Directors Databank and also completed the online proficiency test conducted by the Indian Institute of Corporate Affairs, wherever required.

The Board also confirm that all of the independent directors are persons of integrity and possess adequate knowledge and experience in the field.

Changes in Directors and Key Managerial Personnel

I. Appointment/Re-appointment of Directors:

During the year under review, the voting results & the Scrutinizer report dated September 27, 2023 related to

the voting on resolutions as mentioned in the AGM Notice convening the 66^th Annual General Meeting held on September 26, 2023, the resolution for "appointment of Mr. Ravi Kapoor (DIN: 01761752), who retires by rotation and being eligible, offers himself for re-appointment" was not passed with requisite majority. Accordingly, he ceased to be the Director of the Company w.e.f. September 26, 2023. Subsequently, Mr. Ravi Kapoor was appointed as Non- Executive Director and Chairman of the Company with the approval of the members on November 29, 2023 through Postal Ballot.

Dr. (Mrs.) Indu Shahani (DIN: 00112289) retired from her role as Independent Director after completing her second term with effect from March 31, 2024. The Board of Directors and Management place on record their deep appreciation for the contributions made by Dr. (Mrs.) Indu Shahani during her association with the Company over the years.

Dr. (Mrs.) Indu Shahani was succeeded by Mrs. Diana Dhote (DIN: 10558367), who was appointed as an Additional Director in the capacity of a Non-Executive Independent Director, effective April 1, 2024. This appointment was made by the Board of Directors during its meeting on March 27, 2024, based on the recommendation of the Nomination and Remuneration Committee. The Board then referred the appointment to the shareholders for approval. Subsequently, Mrs. Diana Dhote was confirmed as the Independent Director by the shareholders through a Postal Ballot on June 14, 2024, for a term of five consecutive years, starting from April 1, 2024.

Mr. Bharath Sesha (DIN 01983066), Managing Director of the Company, submitted his resignation vide letter dated June 28, 2024, to pursue other opportunities outside the Organization. The Nomination and Remuneration Committee and the Board formally accepted his resignation during its meeting held on June 28, 2024 and Mr. Bharath Sesha will be relieved from his service as a Director and Managing Director of the Company with effect from the close of business hours on August 31, 2024.

In accordance with the provisions of Section 152 of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Jugal Sahu (DIN: 02629782), Executive Director and Chief Financial Officer, 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 67^th Annual General Meeting and a Resolution is recommended for your approval. The brief profile of Mr. Jugal Sahu, 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.

II. Key Managerial Personnel:

Ms. Amee Joshi, Company Secretary & Nodal Officer (Key Managerial Personnel) of the Company, submitted her resignation vide letter dated June 24, 2024, to pursue an alternate career opportunity outside the Organization. Ms. Amee Joshi was relieved from her duties with effect from the close of business hours on June 30, 2024.

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

11. 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.

12. Number of meetings of the Board

During the year under review, the Board of Directors met 6 (Six) times on May 16, 2023, July 25, 2023, October 27, 2023, December 28, 2023, January 24, 2024 and March 27, 2024.

13. 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, 2024 are annexed to this report as Annexure A.

14. 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
(till March 31, 2024)
Mrs. Diana Dhote	Chairperson
(w.e.f April 1, 2024)
Mr. Kewal Handa	Member
Mr. Bharath R. Sesha	Member
(till August 31, 2024)

Your Company also has in place a CSR policy and the same is available on the website of the Company at https://admin.heubach.com/wp-content/

uploads/2024/04/CSR-Policy.pdf. 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.

15. 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 https://admin.heubach.com/ wp-content/uploads/2023/02/HCIL-Nomination- Remuneration-Policy-EN.pdf.

16. Board Evaluation and Familiarization programme

Pursuant to the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations & 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 https://admin.heubach.com/ wp-content/uploads/2023/02/HCIL-Familiarization- Programme-EN.pdf.

17. Particulars of Employee

As per provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(1) and 5(3) 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 C.

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 at investor.relations_india@heubach.com.

18. Directors Responsibility Statement

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, 2024, 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, 2024 and of the profit and 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.

19. Statutory Auditor & Audit Report

M/s. MSKA & Associates, Statutory Auditors, in their Audit report for the Financial year ended March 31, 2024, 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.

20. Cost Audit

The Board of Directors, in pursuance of order under Section 148 of the Companies Act, 2013 had 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 2023-24 however they resigned from their role as Cost Auditors of the Company for the financial year ending March 31, 2024. This resignation is consequent to Mr. Rasesh Chokshi, one of the Partners of the firm, becoming ineligible to continue in this capacity following his inheritance of Company shares.

The Board has appointed M/s. Kishore Bhatia & Associates, Cost Accountants, as Cost Auditors for the financial year ended March 31, 2024, to fill the casual vacancy caused by the resignation of M/s. R.A.& Co.

The Cost Audit Report for the 12 months ended March 31, 2023 has been filed on due date.

21. 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 Financial year 2023-24.

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.

22. 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.

23. 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, 2024, is available on Companys website at https://heubach.com/heubach-india/investor- relations-india-overview/annual-reports/.

24. 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 with 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.

25. 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 https://admin.heubach.com/wp- content/uploads/2022/09/Clariant-CCIL-Related- Party-Transaction-Policy-20220803-EN.pdf.

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.

26. 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.

27. 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.

28. Secretarial Standards

The Institute of Company Secretaries of India has currently mandated compliance with the Secretarial Standards on board meetings and general meetings. During the year under review, the Company has complied with the applicable Secretarial Standards.

29. 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.

30. 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, three complaints were received for sexual harassment of women at workplace, which was investigated by the Company and stands resolved.

31. Constitution of Internal Complaints 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.

32. 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.

33. 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
Ravi Kapoor	Bharath R. Sesha
Chairman	Managing Director
DIN (01761752)	DIN (01983066)
Place: Navi Mumbai
Date: August 31, 2024