Indigo Paints Director Discussions


Dear Members,

Your Directors are pleased to present the 23rd Annual Report on the business and operations of Indigo Paints Limited ("the Company/your Company") together with the Audited Financial Statements for the Financial Year ended March 31, 2023.

FINANCIALS

The key highlights of the financial results of your Company for the financial year ended March 31, 2023 and comparison with the previous financial year ended March 31, 2022 are summarised below:

(Rs. In Lakhs)

Particulars

Year ended 31st March, 2023 Year ended 31st March, 2022

Revenue from operations

1,07,333.43 90,597.48

Less: Expenses

89,180.19 76,999.11

EBITDA

18,153.24 13,598.37

Less:

Finance Cost

13759 133.04

Depreciation

3,434.66 3,125.08

Add:

Other income

1,006.75 1,089.32

Profit before Tax

15,587.74 11,429.57

Less: Tax expenses (including deferred Tax)

2,393.80 3,024.77

Profit after Tax

13,193.94 8,404.80

Add/(Less): Total Other Comprehensive Income

(2.35) 13.36

Total Comprehensive Income for the year

13,191.59 8,418.16

OVERVIEW OF COMPANYS FINANCIAL PERFORMANCE

• Revenue from Operations of the Company stood at Rs.1,07,333.43 Lakhs as against Rs.90,59748 Lakhs for the previous year, registering a growth of 18.47% in the revenue.

• EBITDA of the Company increased to Rs.18,153.24 Lakhs as against Rs.13,598.37 Lakhs for the previous year, registering a growth of 33.50% in EBITDA.

• Profit after Tax (PAT) of the Company increased to Rs.13,193.94 Lakhs as against Rs.8,404.80 Lakhs for the previous year, registering a growth of 56.98% in PAT.

Major Events:

The Company has entered into a Share Purchase and Share Subscription Agreement and Share Holders Agreement with Apple Chemie India Private Limited ("Subsidiary Company") on April 03, 2023 and acquired 51% Equity shares in the subsidiary company.

The subsidiary company is operating in the space of Construction Chemicals and Water Proofing products.

Acquiring controlling stake in the subsidiary company would provide the Company with an opportunity to expand its footprint in the waterproofing segment.

DIVIDEND

The Board of Directors at its meeting held on May 26, 2023, has recommended payment of Rs.3.50/- (Three Rupees and Fifty Paisa only) per equity share of the face value of Rs.10/- (Rupees Ten only) each as final dividend for the financial year ended March 31, 2023. The payment of final dividend is subject to the approval of the shareholders at the ensuing Annual General Meeting of the Company.

In view of the changes made under the Income-tax Act, 1961, by the Finance Act, 2020, dividends paid or distributed by the Company shall be taxable in the hands of the Shareholders. The Company shall, accordingly, make the payment of the final dividend after deduction of tax at source.

The dividend recommended is in accordance with the Dividend Distribution Policy of the Company. The Dividend Distribution Policy, in terms of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") is available on the Companys website: www.indigopaints.com/investors

The dividend pay-out ratio including the proposed final dividend of the Company would be 12.62%

RESERVES

There is no amount proposed to be transferred to any reserves for Financial Year 2022-23.

CHANGE IN NATURE OF BUSINESS

There is no change in nature of business of your Company.

UTILIZATION OF IPO PROCEEDS

Your Company has appointed ICICI Bank Limited as the Monitoring agency in terms of regulation 41(2) of the SEBI (Issue of Capital & Disclosure Requirements) Regulations, 2018, as amended from time to time, to monitor the utilization of the IPO proceeds. Your Company obtains the monitoring report from the Monitoring agency every quarter and discloses the same with BSE Limited and National Stock Exchange of India Limited, where the equity shares of the Company are listed.

Out of the IPO proceeds of Rs.28,711.21 Lakhs, your Company has utilized the funds as per the below mentioned table as on March 31, 2023:

(Rs. In Lakhs)

Sr. No. Item Head

Amount to be utilized Amount utilized Total unutilized Amount

1 Funding capital expenditure for the Proposed Expansion

15,000.00 15,000.00 -

2 Purchase of tinting machines and gyro shakers

5,000.00 4,858.11 141.89

3 Repayment/prepayment of certain borrowings of our Company

2,500.00 2,500.00 -

4 General corporate purposes*

6,211.21 6,211.21 -

Total

28,711.21 28569.32 141.89

*net of IPO related expenses

The Monitoring Agency Reports are available at the Companys website at www.indigopaints.com /investors

Further, the details of Utilisation of Net IPO Proceeds for the year ended March 31, 2023 has been provided in notes to the Accounts of the Financials of the Company.

As on the date of this report, your company has utilized the entire amount from the IPO proceeds.

Your directors confirm that there have been no deviations from the objects as mentioned in the Companys prospectus dated January 25, 2021.

SHARE CAPITAL

During the year under review there was no change in the authorised capital of the Company. However, the paid up share capital of the Company was increased from 4,75,68,997 number of equity shares amounting to Rs.47,56,89,970/- to 4,75,88,282 number of equity shares amounting to Rs.47,58,82,820/-.

The above mentioned increase was due to the allotment of additional shares vide exercise of options by the eligible employees under the Indigo Paints- Stock Option Scheme, 2019.

EMPLOYEE STOCK OPTION SCHEME

In order to enable the employees to participate in the future growth and to attract and retain talent, the Company has adopted the "Indigo Paints- Stock Option Scheme, 2019" ("ESOS, 2019").

The Members of the Company, in the Annual General Meeting held dated September 02, 2021 had ratified the ESOS 2019, owing to the requirements under Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations 2021.

As per Rule 12 of the Companies (Share Capital and Debenture) Rules, 2014 the disclosures are as follows:

Sr. No. Particulars

ESOS 2019

1 Number of Options granted

27,450

2 Exercise price or Pricing formula

Rs.10/-

3 Number of Options vested and exercisable

27,800

4 Number of Options exercised

19,285

5 Total number of shares arising out of exercise of Options

19,285

6 Number of Options lapsed (includes forfeited and lapsed options)*

6,720

7 Variation in the terms of the Options

-

8 Money realized by exercise of Options (H)

1,92,850/-

9 Total number of Options in force

1,26,210

 

Name Options granted

10 Employee wise details of options granted to -

A Senior Management Personnels and Key Managerial Personnels

NA NA

B Any other employee who receives a grant in any one year of option amounting to 5% or more of options granted during the year

NA NA

C Identified employees who were granted options, during any one year, equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the company at the time of grant.

NA NA

The applicable disclosures as stipulated under The Companies Act, 2013 and SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 are provided in Annexure A to this Report

*As approved by the Nomination and Remuneration Committee and Board of Directors of the Company.

CREDIT RATING

As your Company has not availed any credit facility, there was no requirement for obtaining any credit rating.

INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

During the year under review, the Company had not transferred any amount or Shares to the Investor Education and Protection Fund.

HUMAN RESOURCES & EMPLOYEE RELATIONS

The Companys Human Resources division concentrated on efficient plan execution throughout the year under review by utilizing its skilled staff. The HR department of the companys main focus during the year was handling the benefits administration and employee life cycle. Additionally, to focus on rebuilding the complete support system for assuring the health and wellbeing of employees. Steps including workforce planning, digitalization of HR systems, enhancement of medical facilities, health monitoring, and ongoing communication were necessary for this. These actions increased employee confidence, and the workers reciprocated by offering their entire support by adjusting to the new working circumstances and schedules.

Employee Performance & Engagement

We provide a wide range of benefits to assure our employees financial, social, mental, and physical welfare during all phases of their lives while working for the company. For the purpose of retaining and luring qualified and experienced employees, the company has implemented an employee stock options policy.

We have a 360-degree collective feedback system in place to grow and plan our talent pipeline. This helps us to cultivate, elevate, and grow these leaders. This strategy is closely related to our pay structure and promotion procedure. We have a People Review process, which identifies development possibilities and plans the development path for our managerial talent pipeline, and we provide frequent performance feedback to all of our staff. Additionally, this has improved interactions between management and employees.

In the year under review, an organization-wide employee pulse survey was also carried out. The poll was built around a number of drivers, including participants opinions of their workplace, leadership, career objectives, teamwork, rewards, and recognition. Numerous activities have been launched throughout the company to close the gaps that have been discovered as a result of the surveys results.

Employee Welfare and Policies

It is critical for us to comprehend what engages and motivates our staff members as well as how they view the workplace. As a result, we promote frequent and open communication between managers and their teams, conduct surveys, and provide a structure that gives people the confidence to speak up, express problems, and suggest changes.

A complete human resources (HR) policy framework is in place at our company, which covers maternity benefits, employee and family insurance, and flexible scheduling to support employees in striking a work-life balance. Every month, a number of courses are held to educate staff members on their physical, mental, and overall wellbeing.

By utilising the variety of viewpoints and perspectives offered by staff members who are diverse in age, gender, and race, diversity and inclusion at work fosters innovation. The organisation takes deliberate action to broaden inclusion and diversity throughout the organisation.

We strongly believe that our Equal Employment Opportunity, Equal Pay, and Conditions of Employment Policy does not discriminate between male and female employees performing similar roles. Similarly, salaries and employment conditions will not be discriminated against on the basis of race, religion, caste, creed, or similar reasons. Decisions regarding hiring, promotions, and performance reviews are based solely on merit and performance.

Digital Transformation

The Company embarked on a digital transformation of its human resources management system to enable innovation, agility, operational excellence and create value for its employees. The mobile app allows employees to manage company-wide holiday dates, documents, payslips, and all other notifications and events.

An online expense management module was introduced to provide employees with the opportunity to record expenses digitally.

The Company focuses broadly on people analytics to measure the effectiveness of HR programs and identify mechanisms for making meaningful business decisions based on trends, patterns, and feedback.

Building Talent

We have a rich tradition of developing people and developing leaders within our company, and we are proud that most of our senior positions today are filled by individuals who have built their entire careers with the company. increase.

The management team is committed to solid succession planning at all levels. To this end, a comprehensive leadership development initiative is currently underway to identify, promote and retain high potential across the sector.

A structured recruitment process has helped your company attract the right talent at every level. Entry-level candidates are now responding to a variety of approaches, including social media, campus participation, and job boards, and are looking for a true value proposition for their employees. We have adopted several of these approaches. At the same time, we have emphasized internal mobility and have strived to maintain our expertise and experience by offering attractive career opportunities. Internal shifts also helps turn necessary restructurings into opportunities.

Employee and Leadership Development

Your company strives to help its employees develop the knowledge, skills, and abilities they need for lasting success, and encourages professional development throughout each employees career. The company trains its employees through a well-structured training process to help them improve their efficiency and skills.

To ensure we continue to develop future leaders within our company, we offer a variety of cross-functional programs to promote management and leadership skills. Its purpose is to lead the organization through change, develop teams, manage performance, and equip employees with the necessary qualities to ensure business success in line with corporate strategy and our values and beliefs.

Employee Relations & Compliance

The Company has zero tolerance for sexual harassment at workplace and have adopted a policy on the prevention, prohibition, and remediation of sexual harassment in the workplace in accordance with the provisions of Sexual Harassment against Women in the Workplace (Prevention, Prohibition, and Remediation). Law 2013 and regulations thereunder. All of our facilities and offices have an Internal Complaints Committee ("ICC") to handle complaints received regarding sexual harassment.

DIRECTORS & KEY MANAGERIAL PERSONNEL

The appointment and remuneration of Directors are governed by the Policy devised by the Nomination and Remuneration Committee of your Company. The detailed Nomination and Remuneration Policy is contained in the Corporate Governance Section of the Annual Report.

Your Companys Board comprises of the following Directors and Key Managerial Personnel:

Sr.

No.

Name of the Director & KMP

Designation

1.

Mr. Hemant Kamala Jalan

Chairman and Managing Director

2.

Ms. Anita Hemant Jalan

Executive Director

3.

Mr. Narayanankutty Kottiedath Venugopal

Executive Director

4.

Ms. Nupur Garg*

Independent

Director

5.

Mr. Sunil Badriprasad Goyal

Independent

Director

6.

Mr. Praveen Kumar Tripathi

Independent

Director

7.

Mr. Ravi Nigam

Independent

Director

8.

Ms. Sakshi Vijay Chopra

Non-Executive Nominee Director

9.

Mr. Sujoy Sudipta Bose**

Company Secretary & Compliance Officer

10.

Mr. Chetan Bhalchandra Humane

Chief Financial Officer

*Ms. Nupur Garg, Independent Director of the Company had resigned with effect from closure of Business Hours on May 04, 2023. The Board took note of this resignation at its meeting held on May 26, 2023.

**Mr. Sujoy Sudipta Bose, Company Secretary & Compliance Officer had resigned with effect from closure of Business Hours on June 28, 2023. The Board took note of this resignation at its meeting held on June 29, 2023

The constitution of the Board of the Company is in accordance with Section 149(6) of the Companies Act, 2013 and Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Further, in terms of the regulatory requirements, the name of every Independent Director is to be registered in the online database of Independent Directors maintained by Indian Institute of Corporate Affairs, Manesar ("IICA"). Accordingly, the Independent Directors of the Company have registered themselves with the IICA for the said purpose.

Mr. Ravi Shankar Venkataraman Ganapathy Agraharam Nonexecutive Alternate Director of the Company had resigned with effect from closure of business hours on February 10, 2023, the Board took note of his resignation in its meeting held on February 10, 2023 and same had been intimated to the stock exchanges in accordance with SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015.

The Board had appointed Ms. Ashwini Deshpande (DIN: 00240443) as an Additional Non- Executive Independent Director in its Board Meeting held on May 26, 2023 based on recommendation of the Nomination and Remuneration Committee, subject to the approval of the shareholders of the Company. Ms. Deshpande is a graduate from the National Institute of Design, Ahmedabad. She is the co-founder of Elephant Design, Indias pioneering independent integrated design consultancy firm that was established in 1989.

The Board had reappointed Mr. Ravi Nigam (DIN: 00024577) as an Independent Director for the further term of 5 consecutive years in its meeting held on May 26, 2023 based on the recommendation of Nomination and Remuneration Committee, subject to approval of shareholders of the Company. Mr. Nigam has vast experience in the Food and Agribusiness sectors. He is currently the President of The Indus Entrepreneurs Association (TiE), Pune Chapter. He is also currently serving as a Board Member on various companies. His rich experience as an entrepreneur has immensely helped the Company in the current term as an Independent Director.

The Board had appointed Ms. Dayeeta Gokhale as the Company Secretary and Compliance Officer of the Company w.e.f June 29, 2023 at its meeting held on June 29, 2023. Ms. Gokhale is an Associate Member of the Institute of Company Secretaries of India and has a Bachelors degree in law. She also has more than 7 years of experience in Corporate Laws and Compliance.

KEY MANAGERIAL PERSONNEL (KMP):

During the year under review, there was no change in the Key Managerial Personnel of the Company.

In terms of the Companies Act, 2013, the following are the KMPs of the Company as on March 31, 2023:

• Mr. Hemant Kamala Jalan- Managing Director

• Mr. Chetan Bhalchandra Humane- Chief Financial Officer

• Mr. Sujoy Sudipta Bose- Company Secretary*

• Ms. Dayeeta Gokhale- - Company Secretary**

*Mr. Sujoy Sudipta Bose, Company Secretary & Compliance Officer had resigned with effect from closure of Business Hours on June 28, 2023. The Board took note of his resignation at its meeting held on June 29, 2023.

**Ms. Dayeeta Gokhale has been appointed as the Company Secretary and Compliance Officer of the Company w.e.f June 29, 2023 by the Board at its meeting held on June 29, 2023.

DIRECTORS RETIRING BY ROTATION

Mr. Narayanankutty Kottiedath Venugopal, Executive Director, is liable to retire by rotation and being eligible for re-appointment at the ensuing Annual General Meeting ("AGM") of your Company, has offered himself for re-appointment. His details as required under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015: and Secretarial Standards are contained in the accompanying Notice convening the ensuing AGM of your Company.

An appropriate resolution seeking your approval to his reappointment as Director is included in the Notice to AGM.

DECLARATION FROM INDEPENDENT DIRECTORS

The Company has received necessary declaration from each independent director under Section 149(7) of the Companies Act,2013, that he / she meets the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

BOARD AND COMMITTEE MEETINGS

Your Board of Directors met 5 (Five) times during the financial year 2022-2023. The details of the meetings and the attendance of the Directors are mentioned in the Corporate Governance Report.

The Board of Directors of your Company have formed various Committees, as per the provisions of the Companies Act, 2013 and as per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and as a part of the best corporate governance practices, the terms of reference and the constitution of these Committees is in compliance with the applicable laws and to ensure focused attention on business and for better governance and accountability. The constituted Committees are as below:

a) Audit Committee;

b) Nomination and Remuneration Committee;

c) Stakeholders Relationship Committee;

d) Corporate Social Responsibility Committee and;

e) Risk Management Committee;

The details with respect to the composition, terms of reference, number of meetings held and business transacted by the aforesaid Committees are given in the "Corporate Governance Report" of the Company which is presented in a separate section and forms a part of the Annual Report of the Company.

During the year under review, a separate meeting of the Independent Directors was held on March 13, 2023, with no participation ofNon- Independent Directors or the Management of the Company. The Independent Directors had discussed and reviewed the performance of the Non-Independent Directors and the Board as a whole and also assessed the quality, quantity and timeliness of the flow of information between the Management and the Board, which is necessary for the Board to effectively and reasonably perform its duties.

BOARD EVALUATION

In terms of requirements of the Companies Act, 2013 read with the Rules issued thereunder and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Board is required to carry out the annual performance evaluation of the Board of Directors as a whole, Committees of the Board and individual Directors.

Your Company understands the requirements of an effective Board Evaluation process and accordingly conducts the Performance Evaluation in respect of the following:

i. Board of Directors as a whole.

ii. Committees of the Board.

iii. Individual Directors including the Chairperson of the Board of Directors.

In compliance with the requirements of the provisions of Section 178 of the Companies Act, 2013, SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the Guidance Note on Board Evaluation issued by SEBI, your Company has carried out a Performance Evaluation process internally for the Board/Committees of the Board/Individual Directors including the Chairperson of the Board of Directors for the financial year ended March 31, 2023.

The Board on the recommendation of Nomination & Remuneration Committee has adopted the Remuneration and Evaluation Policy for selection, appointment and remuneration of Directors and Senior Management Personnel including criteria for determining qualifications, positive attributes, independence of a director and other matters as required by the Companies Act, 2013. Necessary diversity in the board was ensured. Detailed policy is available at Companys website at www.indigopaints.com/investors

The key objectives of conducting the Board Evaluation process were to ensure that the Board and various Committees of the Board have appropriate composition of Directors and they have been functioning collectively to achieve common business goals of your Company. Similarly, the key objective of conducting performance evaluation of the Directors through individual assessment and peer assessment was to ascertain if the Directors actively participate in the Board/Committee Meetings and contribute to achieve the common business goals of the Company.

The Directors carry out the aforesaid Performance Evaluation in a confidential manner and provide their feedback on a rating scale of 1-5.

Also, the Board was of the opinion that the directors and Board collectively stand the highest level of integrity and all members of the Board had specified skill set and experience required for the Company.

FAMILIARISATION PROGRAMME

Pursuant to the SEBI Regulations, the Company has worked out a Familiarisation Programme for the Independent Directors, with a view to familiarise them with their role, rights and responsibilities in the Company, nature of Industry in which the Company operates, business model of the Company etc. Through the Familiarisation Programme, the Company apprises the Independent directors about the business model, corporate strategy, business plans, finance human resources, technology, quality, facilities, risk management strategy, governance policies and operations of the Company. Details of Familiarisation Programme of Independent Directors with the Company are available on the website of the Company at www.indigopaints.com/investors.

SUBSIDIARY COMPANIES, ASSOCIATES & JOINT VENTURES

The Company has no subsidiaries as on March 31, 2023.

However, the Company has acquired 51% Equity stake in Apple Chemie India Private Limited ("Subsidiary Company") w.e.f April 03, 2023.

The Company does not have a material subsidiary.

RELATED-PARTY TRANSACTIONS

In accordance with the requirements of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, your Company has a Policy on Related-Party Transactions which can be viewed at www.indigopaints.com/investors

There was no material transaction with related parties during the year under review as defined under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Accordingly, the disclosure of transactions entered into with related parties pursuant to the provisions of Section 188(1) of the Companies Act, 2013 and Rule 8(2) of the Companies (Accounts), Rules 2014 in Form AOC-2 is not applicable.

PUBLIC DEPOSITS

No public deposits have been accepted by your Company during the year under review.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

No loans, guarantees or investments have been made by the Company during the financial year March 31, 2023.

ACCOUNTING TREATMENT

The Accounting Treatment is in line with the applicable Indian Accounting Standards (IND-AS) as recommended by the Institute of Chartered Accountants of India (ICAI) and prescribed by the Central Government.

The Ministry of Corporate Affairs ("MCA") on August 5, 2022 had amended Rule 3 of Companies (Accounts) Rules, 2014 relating to maintenance of electronic books of account and other relevant books and papers w.e.f April 01, 2023.

Your Company confirms that it is in compliance with the requirement of the above amended rule.

AUDITORS

(a) Statutory Auditors:

In accordance with the provisions of section 139 of the Companies Act 2013 and the rules made thereunder M/s. SRBC & Co LLP. Chartered Accountants, bearing FRN 324982E/E300003 were appointed as the statutory auditors of the Company, for a period of five years at the 19th Annual General Meeting held on 30th September, 2019.

The Auditors have issued an unmodified opinion on audited financial statements of the Company for the year ended 31st March, 2023. The Report given by the Auditors on the financial statements of the Company is part of the Annual Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report.

(b) Cost Auditors:

Your Company is not required to maintain cost records as specified under Section 148(1) of the Companies Act, 2013, and hence, no cost auditors have been appointed.

(c) Secretarial Auditors:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Regulation 24A of SEBI Listing Regulations, Mr. Sushant Kulkarni, Partner of M/s. ARKS and Associates, Practising Company Secretaries had been appointed as Secretarial Auditor, to undertake Secretarial Audit of the Company for the financial year 2022-23. The report of the Secretarial Auditor in the prescribed Form MR-3 is annexed to this report as Annexure B.

The secretarial auditors report has no qualifications for the financial year 2022-23

(d) Internal Auditors:

Pursuant to the provisions of Section 138 of the Companies Act, 2013 and The Companies (Accounts) Rules, 2014, Mr. Srihari Santhakumar, General Manager- Finance, was appointed by the Board of Directors to conduct internal audit of your Company for the financial year 2022-23.

INSTANCES OF FRAUD, IF ANY, REPORTED BY THE AUDITORS

During the year under review, the Statutory Auditors, Secretarial Auditors and Internal Auditor have not reported any instances of fraud committed in the Company by its officers or employees to the Audit Committee under section 143(12) and Rule 13 of the Companies (Audit and Auditors) Rules, 2014 of the Companies Act, 2013.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Act, the Board of Directors, to the best of its knowledge and ability, confirm that:

a. The Annual Accounts have been prepared in conformity with the applicable Accounting Standards and there are no material departures;

b. They have selected such Accounting Policies and applied them consistently, and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the affairs of the Company at the end of Financial Year 2022-23 and of the profit for that period;

c. Proper and sufficient care has been taken and that adequate accounting records have been maintained in accordance with the provisions of the Act for safeguarding the assets of the Company; and for prevention and detection of fraud and other irregularities;

d. The Annual Accounts have been prepared on a going concern basis;

e. The internal financial controls laid down by the Company were adequate and operating effectively; and

f. The systems devised to ensure compliance with the provisions of all applicable laws were adequate and operating effectively.

RISK AND CONTROL

Through the Risk Management Committee, the Board of Directors oversees your Companys Risk Management.

Risk Management Policy

Your Company has adopted a Risk Management Policy wherein all material risks faced by the Company are identified and assessed. The Company has formed a Risk Management Committee which defines the Companys approach towards risk management and includes collective identification of risks impacting the Companys business its process of identification and mitigation of such risks. The Risk Management Policy is uploaded on the website of the Company and can be viewed through the following web link: www.indigopaints.com/investors

Internal Control Systems

Your Company is committed in maintaining the highest standards of internal controls. We have deployed controls through appropriate policies, procedures and implemented a robust Internal Financial Control system that encompasses the following:

- Key processes affecting the reliability of the Companys financial reporting together with the required controls

- Periodic testing of controls to check their operational effectiveness

- Prompt implementation of remedial action plans arising out of tests conducted

- Regular follow-up of these action plans by senior management

In addition, the Internal Auditor performs periodic audits in accordance with the pre-approved plan. He reports on the adequacy and effectiveness of the internal control systems and provides recommendations for improvements.

Audit findings along with management response are shared with the Audit Committee. Status of action plans are also presented to the Audit Committee which reviews the steps taken by the management to ensure that there are adequate controls in design and operation.

The Certificate provided by Managing Director and Chief Financial Officer in the Corporate Governance Report discusses the adequacy of the internal control systems and procedures.

DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (31 OF 2016) DURING THE YEAR

Your Company confirms that there has been no application or any proceedings pending under the Insolvency and Bankruptcy Code, 2016 ("the Code") during the year under review. Your Company further confirms there are no past applications or proceeding under the Code.

CONSERVATION OF ENERGY, TECHNOLOGY

ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

As required by the Companies Act, 2013, read with the Companies (Accounts) Rules, 2014, the relevant data pertaining to conservation of energy, technology absorption and foreign exchange earnings and outgo is given as below:

A. Energy conservation measures taken:

• Installation of Solar Panels at one factory location.

• Motors running on automated DCS for efficient use of Electricity.

• Installation of Energy Efficient Machines at the New Factory Location situated in Pudukkottai, Tamil Nadu.

B. Technology Absorption:

Your Company focuses greatly on Research and Development (R&D) for developing innovative products for its consumers. R&D is a continuous activity to create differentiated products so as to maintain the technological edge in the market.

The natures of activities carried out by R&D team are as follows:

• Offering premium product with multifunctional use.

• Upgrading our current products to meet the needs of the consumer.

• Value generation via formula optimization, new sourcing, process efficiency and usage of alternative raw material to enhance profitability.

• Development of new lab testing methods for faster approval of raw materials.

• Continuous benchmarking of our product with other market players.

New product developed in the financial year 2022-23 is as follows:

• Damp Seal Primer;

• Leak Poof Emulsion.

C. The foreign exchange earnings and outgo during the reporting period is as under:

FOREIGN EXCHANGE EARNINGS AND OUTGO (in J Lakhs)

Foreign exchange inflows

-

Foreign exchange outflows

4,314.45

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Companys CSR Policy statement and annual report on the CSR activities undertaken during the financial year ended March 31 2023, in accordance with Section 135 of the Companies Act, 2013 and Companies (Corporate Social Responsibility Policy) Rules, 2014 are annexed to this report as Annexure C.

As per the provisions of Section 135 of the Companies Act, 2013, every Company falling under the applicability of Corporate

Social Responsibility is required to spend 2% of its average net profits of previous three years on the activities given under Schedule VII of the Companies Act, 2013, and CSR policy adopted by the Board of Directors. The Company has spent a total amount of Rs.1,82,00,000/- during financial year 2022 - 23.

During the year under review your Company has been actively involved in CSR activities. Your Company has carried out CSR activities in fields of education and women empowerment. Your Company has spent the requisite amount in line with the recommendations by the CSR Committee and approval of the Board of Directors of your Company.

The Composition of CSR Committee and meetings of the CSR Committee held during the year has been disclosed in the "Corporate Governance Report.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORTING

A Business Responsibility and Sustainability Report ("BRSR") describing the initiatives taken by the Company from an environment, social and governance perspective, as required in terms of the provisions of Regulation 34 (2) (f) of SEBI LODR, 2015, separately forms a part of the Annual Report

PREVENTION OF INSIDER TRADING

Your Company has adopted a Code of Conduct for Prevention of Insider Trading, in accordance with the requirements of Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations 2015, as amended from time to time.

The Company Secretary is the Compliance Officer for monitoring adherence to the said Regulations. The Code is displayed on the Companys website at www.indigopaints. com/investors

MATERIAL CHANGES AND COMMITMENT AFFECTING FINANCIAL POSITION OF THE COMPANY

There were no material changes during the year affecting financial position of the Company.

MATERIAL ORDERS OF REGULATORS/COURTS/ TRIBUNALS

No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Companys operations in the future.

SHARE REGISTRAR & TRANSFER AGENT (R&T)

Link Intime India Private Limited is the Registrar and Transfer Agent of the Company.

PARTICULARS OF EMPLOYEES

2 employees are in the receipt of remuneration of not less than Rs.1,02,00,000/- (Rupees one crore and two lakh) who is employed throughout the year. No employee was employed for part of the year.

Disclosures concerning the remuneration of Directors, KMPs and employees as per Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as well as Details of employee remuneration as required under provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(2) & 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given in Annexure D to this Report. Your Directors affirm that the remuneration is as per the remuneration policy of the Company.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis Report for the year under review, as stipulated under Regulation 34 of the (Listing Obligations Disclosures Requirements), Regulations, 2015 is presented in a separate section forming part of the Annual Report of the Company.

CORPORATE GOVERNANCE

Report on Corporate Governance and Certificate by the Practicing Company Secretary regarding compliance of the conditions of Corporate Governance as stipulated in Part C of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, are provided in a separate section and forms a part of the Annual Report of the Company.

STATEMENT UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013

Your Company has in place a Prevention of Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this Policy.

During the year under review, Company had not received any complaints on sexual harassment.

VIGIL MECHANISM

Your Company has formulated a Vigil Mechanism and Whistle Blower Policy intending to provide a mechanism for employees to report violations. It also assures them of the process that will be observed to address the reported violation. The Policy also lays down the procedures to be followed for tracking complaints, giving feedback, conducting investigations and taking disciplinary actions. It also provides assurances and guidelines on confidentiality of the reporting process and protection from reprisal to complainants.

Any incident that is reported is investigated and suitable action is taken in line with the Policy.

The Whistle Blower Policy of your Company is available on the website of the Company and can be viewed at the web link at www.indigopaints.com/investors

No complaint has been receieved under the Whistle Blower Policy during the year under preview.

ANNUAL RETURN

Pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return of the Company is available on the website of the Company at www.indigopaints.com/investors.

SECRETARIAL STANDARDS

Your Directors state that applicable Secretarial Standards, i.e., SS-1 and SS-2, relating to Meetings of the Board of Directors and General Meetings, respectively, have been duly followed by the Company.

OTHER DISCLOSURES

In terms of the applicable provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, your Company additionally discloses that, during the year under review no disclosure or reporting is required with respect to the following:

• Issue of equity shares with differential rights as to dividend, voting or otherwise;

• Issue of Sweat equity shares; and

• Buyback of shares

Your Company has not taken any debt and therefore, the details of difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the Banks or Financial Institutions in accordance with the disclosure requirements under Rule 8 (5) of Companies (Accounts) Rules, 2014 is not applicable.

CAUTIONARY STATEMENT

Statements in the Boards Report and the Management Discussion & Analysis Report describing the Companys objectives, expectations or forecasts may be forward-looking within the meaning of applicable laws and regulations. Actual results may differ from those expressed in the statements.

ACKNOWLEDGEMENTS

Your Directors wish to convey their gratitude and appreciation to all the employees of the Company posted at all its locations for their tremendous personal efforts as well as collective dedication and contribution to the Companys performance.

Your Directors would also like to thank the employee unions, shareholders, customers, dealers, suppliers, bankers, Government and all other business associates, consultants and all the stakeholders for their continued support extended to the Company and the Management.

On behalf of the Board of Directors

For Indigo Paints Limited

Hemant Kamala Jalan

Place: Pune

Chairman and Managing Director

Date: June 29, 2023

DIN: 00080942