The logo of Rudolf Atul Chemicals Ltd (RACL) signifies cooperation between two companies, one headquartered in Germany and the other in India. RACL is scripted in the same colour used by the Rudolf Group in its logo and the two flowing pieces of fabric in the same colours used by Atul Ltd in its logo. The first two letters of the logo depict garnering the strengths of the two companies and the two pieces of fabric, which also resemble the wings of a bird flapping them in unison, connote harmony between the two partners, all to serve customers with world-class products. Innovation is change that unlocks new value. ~ Jamie Notter Contents 01 Corporate identity 02 Purpose and Values 04 Board of Directors 05 Directors’ Report 09 Annexure to the Directors’ Report 15 Management Discussion and Analysis 17 Corporate Governance Report 27 Notice 30 Performance trend 31 Independent Auditor’s Report 40 Financial Statements Forward looking statements In this annual report, we have shared information and made forward looking statements to enable investors to know our product portfolio, business logic and direction and thereby comprehend our prospects. Such statements that we make are based on our assumptions. We have tried wherever possible to identify such statements by using words such as ’anticipate’, ‘believe’, ‘estimate’, ‘intend’, ‘plan’, ‘project’ or words of similar substance in connection with any discussion of future performance. We cannot guarantee that these forward looking statements will be realised although we believe we have been prudent in our assumptions. The actual results may be affected because of uncertainties, risks and even inaccurate assumptions. If uncertainties or known or unknown risks materialise or if underlying assumptions prove inaccurate, actual results may vary materially from those anticipated, believed, estimated, intended, planned or projected. We undertake no obligation to publicly update any forward looking statements, whether as a result of new information, future events or otherwise.
Company Overview Financial Statements Notice Statutory Reports 01 Rudolf Atul Chemicals Ltd | Annual Report 2021-22 Corporate Identity Rudolf Atul Chemicals Ltd is a 50-50 joint venture company of Rudolf GmbH and Atul Ltd, engaged in manufacturing and marketing of textile chemicals in India. The Company is effectively leveraging the strengths of Rudolf and Atul in serving its customers by becoming a total solution provider and is thereby helping both the partners to participate in the growing marketplace. About Rudolf GmbH Incorporated and headquartered in Germany, Rudolf GmbH has 28 subsidiary and joint venture companies in various countries in the world so as to effectively service local customers. The Group is engaged in the business of ‘specialty’ textile chemicals and offers a full range of technically proven textile chemicals - its motto is ‘think global, act local’. It has an excellent brand image in international markets - its brands stand for extraordinary functional finishes and finishing processes. About Atul Ltd Incorporated and headquartered in India, Atul Ltd is a diversified company belonging to Lalbhai Group. The Company meets the needs of varied industries such as Adhesives, Agriculture, Animal Feed, Automobile, Composites, Construction, Cosmetic, Defence, Dyestuff, Electrical and Electronics, Flavour, Food, Footwear, Fragrance, Glass, Home Care, Horticulture, Hospitality, Paint and Coatings, Paper, Personal Care, Pharmaceutical, Plastic, Rubber, Soap and Detergent, Sport and Leisure, Textile, Tyre and Wind Energy. It manages complex chemical processes in a responsible way.
02 Purpose We are committed to significantly enhancing value for our stakeholders by: fostering a spirit of continuous learning and innovation adopting developments in science and technology providing high quality products and services, thus becoming the most preferred partner having people who practice Values and exemplify a high standard of behaviour seeking sustained, dynamic growth and securing long-term success taking responsible care of the surrounding environment improving the quality of life of the communities we operate in
Company Overview Financial Statements Notice Statutory Reports 03 Rudolf Atul Chemicals Ltd | Annual Report 2021-22 Values In an environment where change is a way of life, continuity of Values provides stability and is fundamental to us. We have therefore formalised key Values and are committed to institutionalising them. We will seek to create an environmentwherein theseValues are consistently practisedandnurturedand ensured that they are not compromised. Integrity Working with honesty, following the highest standards of professionalism. Integrity is when our decisions and actions remain consistent with our thoughts and words, written or spoken. Unity Working together and taking advantage of synergy while harnessing unique abilities of each of us to achieve a larger goal. Unity is the realisation that though we may work in different areas, we are finally interconnected and that interdependence is a higher order of living than independence. Though we may be many, we share a common purpose. Excellence A drive that is more from inside than outside; it is about us seeking to continuously improve and develop an eye for innovation even in day to day work. Excellence is about excelling in everything we do and not giving up. Excellence is also a journey, not simply a destination in itself. Understanding How well we work with others depends on our ways to connect and this in turn is based on our level of Understanding of human relationships. This certainly does not mean that we accept poor performance, but that we do it the right way. Understanding is the external manifestation of internal realisation. Responsibility Delivering value and taking ownership of actions. Responsibility must also give us the realisation that what is good for the business must be in the overall good. In essence, we must work with a spirit of trusteeship for the shareholders and other stakeholders. What comes to us must be returned many times over.
04 Board of Directors Wolfgang Schumann G Venugopala Rao Gopi Kannan Thirukonda Sujal Shah Ulrich Hambrecht Sudhir Merchant
Company Overview Financial Statements Notice Statutory Reports 05 Rudolf Atul Chemicals Ltd | Annual Report 2021-22 Directors’ Report Dear Members, The Board of Directors (Board) presents the annual report of Rudolf Atul Chemicals Ltd together with the audited Financial Statements for the year ended March 31, 2022. 01. Financial results (` cr) 2021-22 2020-21 Sales 120.04 88.27 Revenue from operations 121.16 88.88 Other income 1.37 1.28 Total revenue 122.53 90.16 Profit before tax 21.75 18.60 Provision for tax 5.36 4.81 Profit for the year 16.39 13.79 Balance brought forward 38.26 27.45 Transfer from comprehensive income (0.07) (0.06) Disposable surplus 54.59 41.18 Less: Dividend paid 8.76 2.92 Balance carried forward 45.83 38.26 02. Performance Sales increased by 36% from ` 88.27 cr to ` 120.04 cr, primarily due to higher demand for effect chemicals. Profit before tax increased by 17% from ` 18.60 cr to ` 21.75 cr. The earnings per share increased from ` 23.63 to ` 28.09. Cash flow from operating activities beforeworking capital changes increased from ` 17.94 cr to ` 21.00 cr and the net cash flow from operating activities increased from ` 6.28 cr to ` 9.38 cr. During the year, the Company has streamlined zero l iquid discharge operations to make it liquid effluent-free. This envisages an approach that not only protects environment but also creates a better ecosystem for the society. The Company also worked extensively with various certification bodies. The Company was audited by the certification body Global Organic Textile Standard (GOTS) and renewed GOTS list for version 6.0 with 66 products. 03. Dividend The Board recommends payment of dividend of ` 40 per share on 58,37,500 equity shares of ` 10 each fully paid-up. The dividend will entail an outflow of ` 23.35 cr on the paid-up equity share capital of ` 5.84 cr. 04. Conservation of energy, technology absorption, foreign exchange earnings and outgo Information required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 as amended from time to time, forms part of this Report, which is given at page number 09.
06 05. Insurance The Company has taken adequate insurance to cover the risks to its employees, property (land and building), plant, equipment, other assets and third parties. 06. Risk management The Company has identified risks and has initiated a mitigation plan for the same. 07. Internal financial controls TheManagement assessed the effectiveness of the internal financial controls over financial reporting as of March 31, 2022, and the Board believes that the controls are adequate. 08. Fixed deposits During 2021-22, the Company did not accept any fixed deposit. 09. Loans, guarantees, investments and security Particulars of loans, guarantees, investments and security provided are given at page number 53. 10. Subsidiary, joint venture and associate company The Company does not have any subsidiary, joint venture and associate company. 11. Related party transactions All the transactions entered into with the related parties were in ordinary course of business and on arm’s length basis. Details of such transactions are given at page number 61. No transactions that required disclosure in Form AOC-2 were entered into by the Company. 12. Corporate social responsibility Composition of the Corporate Social Responsibility (CSR) Committee, the CSR Policy and the CSR Report are given at page number 10. 13. Annual return Annual return for 2021-22 is available on the website of the Company at www.racl.net.in/investors.html 14. Auditors Deloitte Haskins & Sells LLP (DHS), Chartered Accountants were appointed as the Statutory Auditors of the Company at the 13th Annual General Meeting (AGM) held on August 11, 2017, until the conclusion of the 18th AGM. The first term of five years of DHS will expire at the upcoming AGM. Pursuant to Section 139 of the Companies Act, 2013 and rules made thereunder, the Company can reappoint DHS for a second term of five years. Accordingly, based on the recommendation of the Audit Committee, the Board at itsmeeting held on April 22, 2022, recommended the reappointment of DHS, as the Statutory Auditors of the Company for a second term of five years. DHS will hold the office for a period of five consecutive years from the conclusion of the 18th AGM of the Company till the conclusion of the 23rd AGM to be held in the year 2027, subject to the approval of the shareholder(s) of the Company at the upcoming AGM. DHS have given their consent to act as the Auditors and confirmed their eligibility for appointment. The Auditors’ Report for the financial year ended March 31, 2022, does not contain any qualification, reservation or adverse remark. The report is enclosed with the financial statements in this annual report. 15. Directors’ responsibility statement Pursuant to Section 134(5) of the Companies Act, 2013, the Directors confirm that, to the best of their knowledge and belief: 15.1. In preparation of the annual accounts for the financial year endedMarch 31, 2022, the applicable accounting standards have been followed and there are no material departures. 15.2. The accounting policies were selected and applied consistently and judgements and estimates were made 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 and loss of the Company for that period.
Company Overview Financial Statements Notice Statutory Reports 07 Rudolf Atul Chemicals Ltd | Annual Report 2021-22 15.3. Proper and sufficient care was taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. 15.4. The attached annual accounts for the year ended March 31, 2022, were prepared on a going concern basis. 15.5. Adequate internal financial controls to be followed by the Company were laid down and the same were adequate and operating effectively. 15.6. Proper systems were devised to ensure compliance with the provisions of all applicable laws and the same were adequate and operating effectively. 16. Directors 16.1. Appointments | Reappointments | Cessations 16.1.1. Mr Sudhir Merchant and Mr Sujal Shah were re-designated as Non-executive Directors of the Company effective February 04, 2022. 16.1.2. According to Article 88 of the Articles of Association of the Company, Mr Ulrich Hambrecht and Mr Sudhir Merchant retires by rotation and being eligible offer themselves for reappointment at the forthcoming Annual General Meeting scheduled on August 19, 2022. 16.2. Pol icy on appointment and remuneration is displayed on the website of the Company at www.racl.net.in/investors.html The salient features of the Policy are as under: 16.2.1. Appointment While recommending appointment of the Directors, the Nomination and Remuneration Committee considers the following factors: i) Qualification:well-educatedandexperienced in senior leadership positions in industry | profession ii) Trait: positive attributes and qualities iii) Independence: cr i ter ia prescr ibed in Section 149(6) of the Companies Act, 2013 for the Independent Directors, including no pecuniary interest and conflict of interest 16.2.2. Remuneration of the Non-executive Directors i) Sitting fees: up to ` 10,000 for attending a Board, Committee and any other meeting ii) Commission: up to 1%of net profit asmay be decided by the Board based on the following factors: a. Membership of committee(s) b. Profit c. Attendance d. Category (Independent or Non-executive) 16.2.3. Remuneration of the Managing Director This is given under para number 17.2. 17. Key Managerial Personnel and other employees 17.1. Appointments and cessations of Key Managerial Personnel There were no appointments | cessations of the Key Managerial Personnel during 2021-22. 17.2. Remuneration The Remuneration Policy of the Key Managerial Personnel and other employees consists of the following: 17.2.1. Components: i) Fixed pay a. Basic salary b. Allowances c. Perquisites d. Retirals ii) Variable pay 17.2.2. Factors for determining and changing fixed pay: i) Existing compensation ii) Education iii) Experience iv) Salary bands v) Performance vi) Market benchmark 17.2.3. Factors for determining and changing variable pay: i) Business performance ii) Individual performance iii) Grade
08 18. Analysis of remuneration There is no employee who falls within the criteria provided in Sections 134(3)(q) and Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Thus, the disclosure of the information in respect thereof is not applicable. 19. Management Discussion and Analysis TheManagement Discussion andAnalysis covering performance of the Company is given at page number 15. 20. Corporate Governance Report 20.1. Report The Corporate Governance Report is given at page number 17. Details about the number of meetings of the Board held during 2021-22 are given at page number 20. The composition of the Audit Committee is given at page number 22. All the recommendations given by the Audit Committee were accepted by the Board. 20.2. Secretarial standards Secretarial standards as applicable to the Company were followed and complied with during 2021-22. 20.3. Prevention, prohibition and redressal of sexual harassment Details required under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and rules thereunder are given at page number 24. 21. Acknowledgements The Board expresses its sincere thanks to all the employees, customers, suppliers, investors, lenders, regulatory and government authorities for their support. For and on behalf of the Board of Directors (Wolfgang Schumann) Atul Chairman April 22, 2022 DIN: 01995827
Company Overview Financial Statements Notice Statutory Reports 09 Rudolf Atul Chemicals Ltd | Annual Report 2021-22 Annexure to the Directors’ Report Index No. Subject title Page 1. Conservation of energy, technology absorption and foreign exchange earnings and outgo 09 1.1. Conservation of energy 09 1.2. Technology absorption 09 1.3. Foreign exchange earnings and outgo 10 2. Corporate social responsibility 10 2.1. Brief outline on CSR Policy of the Company 10 2.2. Committee 11 2.3. Details of the URL for disclosure of Composition of CSR Committee, CSR Policy and CSR projects on the website of the Company 11 2.4. Impact assessment 11 2.5. Details of the amount available and required for set-off 11 2.6. Average net profit of the Company 11 2.7. CSR obligation 11 2.8. CSR amount spent | unspent for the financial year 11 2.9. Details of unspent amount for preceding three financial years 13 2.10. Details relating to the capital asset created or acquired through CSR spent 14 2.11. Reasons for not spending two percent of the average net profit 14 1. Conservation of energy, technology absorption and foreign exchange earnings and outgo 1.1. Conservation of energy 1.1.1. Measures taken: i) Installed LED bulbs in the entire plant for saving energy. ii) Used permeate water for vessel washing by RO treatment of effluent, and reduced raw water consumption by 50%. 1.2. Technology absorption No major steps were taken in 2021-22 due to low usage of utilities in manufacturing activities.
10 1.3. Foreign exchange earnings and outgo (` cr ) Particulars 2021-22 2020-21 Earnings Commission income 0.87 0.44 Outgo Import of raw materials 21.46 18.70 2. Corporate social responsibility 2.1. Brief outline on CSR Policy, programs and scope of the Company 2.1.1. Policy The Company will help enhance the quality of life of people belonging to the marginalised sections of the society and volunteer its resources to the extent it can reasonably afford to Atul Foundation Trust (Atul Foundation) and (or) other entities under its umbrella. Atul Foundation will particularly undertake projects in and around the locations where the Company operates. 2.1.2. Programs and scope Atul Foundation will take up projects and | or carry out activities under three broad programs: i) Education and Empowerment, ii) Health and Relief and iii) Infrastructure and Conservation with varied scope of work. i) Education and Empowerment a) Establish and | or support colleges b) Encourage sports c) Establish and | or support schools d) Establish and | or support vocational institutes e) Promote integrated development of tribal areas ii) Health and Relief a) Assist during natural calamities b) Enhance rural hygiene and sanitation c) Establish medical care centres d) Establish mobile medical care facilities e) Organise medical camps iii) Infrastructure and Conservation a) Develop and | or maintain rural amenities b) Develop and | or maintain rural utilities c) Promote use of renewable resources d) Protect environment e) Restore sites of historical importance
Company Overview Financial Statements Notice Statutory Reports 11 Rudolf Atul Chemicals Ltd | Annual Report 2021-22 2.2. Composition of the CSR Committee: No. Name Designation | Nature of Directorship Number of meetings held during the year Number of meetings attended during the year 1. Gopi Kannan Thirukonda Chairman | Non-executive Director 1 1 2. Wolfgang Schumann Member | Non-executive Director 1 1 3. Sudhir Merchant Member | Non-executive Director 1 1 2.3. Details of URL for disclosure of composition of the CSR Committee, CSR Policy and CSR projects on the website of the Company: www.racl.net.in/pdf/RACL-CSR_Policy.pdf 2.4. Impact assessment (attach the report ): not applicable 2.5. Details of the amount available for set-off in pursuance of sub-rule (3) of Rule 7 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 and amount required for set-off for the financial year: (` lakhs) No. Financial year Amount available for set-off from preceding financial years Amount required to be set-off for the financial year, if any – – – – 2.6. Average net profit of the Company as per Section 135(5): ` 1,627.90 lakhs 2.7. CSR obligation: (` lakhs) a) 2% of average net profit of the Company as per Section 135(5) ` 32.56 b) Surplus arising out of the CSR projects or programs or activities of the previous financial years Nil c) Amount required to be set-off for the financial year Nil d) Total CSR obligation for the financial year [a) + b) - c)] ` 32.56 2.8. a) CSR amount spent or unspent for the financial year: (` lakhs) Amount unspent Total amount spent for the financial year Total amount transferred to the Unspent CSR account as per Section 135(6) Amount transferred to any fund specified under Schedule VII as per the second proviso to Section 135(5) Amount Date of transfer Name of the fund Amount Date of transfer 32.60 – – – – –
12 b) Details of CSR amount spent against ongoing projects for the financial year: (` lakhs) No. Name of the project Item from the list of activities in Schedule VII to the Act Local area Location of the project Project duration (years) Amount allocated for the project Amount spent in the current financial year Amount transferred to the Unspent CSR Account for the project as per Section 135 (6) Mode of implementation - direct Mode of implementation – through implementing agency State District Name CSR registration number – – – – – – – – – – – – c) Details of CSR amount spent against other than ongoing projects for the financial year: (` lakhs) No. Name of the project Item from the list of activities in Schedule VII to the Act Local area Location of the project Amount spent for the project Amount transferred to the Unspent CSR Account for the project as per Section 135 (6) Mode of implementation - direct Mode of implementation - through implementing agency State District Name CSR registration number 1. Promotion of nutrition garden Promoting health Yes Gujarat Valsad 25.60 NA No Atul Foundation CSR00000635 2. Support related to COVID-19 pandemic Promoting health Yes Gujarat Valsad 7.00 NA No Atul Foundation CSR00000635 Total 32.60 d) Amount spent in administrative overheads: nil e) Amount spent on impact assessment: nil f) Total amount spent for the financial year [b) + c) + d) + e)]: ` 32.60 lakhs g) Excess amount for set-off, if any: nil
Company Overview Financial Statements Notice Statutory Reports 13 Rudolf Atul Chemicals Ltd | Annual Report 2021-22 (` lakhs) No. Particular Amount (i) 2% of average net profit of the Company as per Section 135(5) 32.56 (ii) Total amount spent for the financial year 32.60 (iii) Excess amount spent for the financial year [(ii)-(i)] 0.04* (iv) Surplus arising out of the CSR projects or programs or activities of the previous financial years Nil (v) Amount available for set-off in succeeding financial years [(iii)-(iv)] Nil * Being a small amount, no set-off is considered. 2.9. (a) Details of unspent CSR amount for the preceding three financial years: (` lakhs) No. Preceding financial year Amount transferred to the Unspent CSR Account under Section 135 (6) Amount spent in the reporting financial year Amount transferred to any fund specified under Schedule VII as per Section 135(6), if any Amount remaining to be spent in succeeding financial years Name of the fund Amount Date of transfer – – – – – – – (b) Details of CSR amount spent in the financial year for ongoing projects of the preceding financial year(s): (` lakhs) No. Project ID Name of the project Financial year in which the project was commenced Project duration Total amount allocated for the project Amount spent on the project in the reporting financial year Cumulative amount spent at the end of reporting financial year Status of the project – completed | ongoing – – – – – – – –
14 2.10. In case of creation or acquisition of capital asset, furnish the details relating to the asset(s) so created or acquired through CSR spent in the financial year: No. Detail Name of asset a) Date of creation or acquisition of the capital asset(s) - b) Amount of CSR spent for creation or acquisition of capital asset - c) Details of the entity or public authority or beneficiary under whose name such capital asset(s) is | are registered, their addresses, etc - d) Provide details of the capital asset(s) created or acquired (including complete address and location of the capital asset ) - 2.11. Reasons if the Company has failed to spend two percent of the average net profit as per Section 135(5): not applicable Chairman of CSR Committee Managing Director Gopi Kannan Thirukonda DIN: 00048645 G Venugopala Rao DIN: 03635806
Company Overview Financial Statements Notice Statutory Reports 15 Rudolf Atul Chemicals Ltd | Annual Report 2021-22 Management Discussion and Analysis Rudolf Atul Chemicals Ltd (RACL) is intomanufacturing and marketing of specialty chemicals for textile industry in India. The Company offers a complete range of products for pre-treatment, dyeing and finishing processes of apparels, home furnishing and technical textiles. It has achieved multi-fold growth since inception and aims to become one of the leading suppliers in India. The Company achieved sales of ` 120 cr, which is 36% higher than the previous year despite shortage of raw materials and lower capacity utilisation by key customers. Sales of process chemicals (PC) product group registered 48% growth primarily due to the increased demand for continuous bleaching range (CBR), dyeing and printing chemicals, whereas sales of the effect chemicals product group increased by 21%, mainly driven by silicone, repellents and wet waxing products. The Company offers customised solutions to its customers and aims to achieve its own niche in sustainable innovations. It will continue to focus on using renewable raw materials and energy saving processes. It expects demand for i) perfluorocarbon-free repellents and ii) HYDROCOOL moisture management concept for sportswear and athleisure. It has planned to establish the rapid dyeing concept in polyester segment and new products for polyester printing. The growing demand of CBR chemicals for knits fabric will boost its growth in PC sales. The domestic Textile industry, which had seenademand slump in fiscal 2021 owing to the disruptions caused by the COVID-19 pandemic, recovered in fiscal 2022 with reopening of businesses, educational institutions and retail outlets. The newstrategic approach ‘China-1’ by premier brands have boosted Indian textile exports. Government announcements such as the production linked incentive scheme, setting up of mega textile parks, and extension of the rebate of state and central taxes and levies scheme have given fresh impetus to this industry. Currently, high cotton prices and rising utility
16 costs have become a subject of concern to the domestic Textile industry. However, the Indian Textile industry is expected to grow by 10% CAGR to reach US$190 bn by 2025-26. The Indian Textile Chemicals industry is estimated at US$320 mn and is growing at about 6% CAGR. The Company expects an increasing trend for specialty finishes (repellents, antibacterial agents, etc) in coming times. It has also developed products with a special focus on changing machinery trends in the Textile industry. Uncertainty and consequent high volatility seen in certain rawmaterials may strain the sales margin. The Company will take necessary actions to defend the existing market and achieve further growth. Internal control systems Internal control systems of the Company are commensurate with the nature of its business and the size and complexity of its operations. These are routinely tested, certified and upgraded whenever required by the Statutory as well as the Internal Auditors covering all key areas of business. Significant audit observations and follow-up actions and recommendations thereon are reported to the Senior Management and the Audit Committee for their review. Human Resources The Company continued its drive to institutionalise and upgrade its HR processes, to help build a more robust workforce capable of managing dynamic and growing business needs. The process of identification and review of key initiatives has become stronger and is continuously upgraded. The requisite training was imparted during 2021-22. Employee relations remained cordial.
Company Overview Financial Statements Notice Statutory Reports 17 Rudolf Atul Chemicals Ltd | Annual Report 2021-22 Labour to keep alive in your breast that little spark of celestial fire, called conscience. ~ George Washington Corporate Governance Report
18 1. Philosophy Transparency and accountability are the two basic tenets of Corporate Governance. The Company is commi tted to conduct ing business the right way, which means taking decisions and acting in a way that is ethical and in compliance with the applicable legal requirements. It endeavours to continuously improve its Corporate Governance performance with a view to earn trust and respect of all its stakeholders. The Board of Directors (Board) is responsible for and is committed to good Corporate Governance and plays a critical role in overseeing how the Management serves the short-term and long-term interests of the shareholders and other stakeholders. 2. Board 2.1. Board business The normal business of the Board comprises: 2.1.1. Approving: i) capital expenditure and operating budgets ii) commission payable to the Directors within the limit set by the shareholders iii) contracts in which the Director(s) are deemed to be interested iv) creation of charge on assets in favour of lenders v) declaration of interim dividend vi) joint ventures, collaborations, mergers and acquisitions vii) loans and investments viii) matters requiring statutory | Board consent ix) sale of investments and assets x) short, medium or long-term borrowings xi) unaudited quarterly financial results and auditedannual accounts, including segments revenue, results and capital employed 2.1.2. Monitoring: i) effectiveness of the governance practices and making desirable changes ii) implementation of performance objectives and corporate performance iii) potent ial conf l icts of interest of the Management, the Board members and the shareholders, including misuse of corporate assetsandabuse in relatedparty transactions iv) the Board nomination process such that it is transparent and results in diversity of experience, gender, knowledge, perspective and thoughts in the Board v) the Management and providing strategic guidance while ensuring that encouraging positive thinking does not result in over optimism that either leads to significant risks not being recognised or exposes the Company to excessive risk 2.1.3. Noting: i) general notices of interest of the Directors ii) minutes of the meetings of the Board and its Committees and also the resolution(s) passed by circulation 2.1.4. Recommending: i) appointment of the Statutory Auditors ii) final dividend 2.1.5. Reviewing: i) corporate strategy, major plans of action, Risk Policy, annual budgets and business plans ii) default in payment of statutory dues iii) fatal or serious accidents, dangerous occurrences and material environmental matters iv) foreign exchange exposure and exchange rate movement v) the integrity of the accounting and financial reporting systems, and that appropriate systems of control are in place, in particular, systems for risk management, financial and operational control, and compliancewith the law and relevant standards 2.1.6. Setting: i) a corporate culture and the Values
Company Overview Financial Statements Notice Statutory Reports 19 Rudolf Atul Chemicals Ltd | Annual Report 2021-22 2.3. Composition, name, other directorships | committee memberships The Board comprises experts drawn from diverse fields | professions. It consists of six members: No. Name Directorship(s) in other company(ies)¹ Membership(s) of the Committee(s) of the Board(s)² Chairmanship(s) of the Committee(s) of the Board(s)² Chairman 1. Wolfgang Schumann – – – Managing Director 2. G Venugopala Rao 1 – – Non-executive Directors 3. Ulrich Hambrecht 1 – – 4. Gopi Kannan Thirukonda 8 4 – 5. Sudhir Merchant 2 2 2 6. Sujal Shah 9 5 3 1 This excludes Directorships in foreign companies and private limited companies. 2 Memberships | Chairmanships of only the Audit Committees and Stakeholders Relationship Committees of all public limited companies, including the Company were considered. ii) well-defined mandate, composition and working procedures of the Committees 2.1.7. Others: i) Acting on a fully informed basis, in good faith, with due diligence and care, and in the best interest of the Company and the shareholders ii) Aligning remuneration of the key executives and the Board Membe r s wi th the long-term interests of the Company and the shareholders iii) Applying high ethical standards iv) Ass igning suf f i c ient number of the Non-executive Board Members capable of exercising independent judgement to items where there is a potential for conflict of interest v) Assisting the Executive Management by challenging the assumptions underlying strategy, strategic initiatives (such as acquisitions), risk appetite, exposures and the key areas of focus for the Company vi) Encouraging training of the Directors on a continuous basis to ensure that the Board Members are kept updated vii) Exercising objective and independent judgement on corporate affairs viii) Facilitating the Independent Directors to perform their role effectively as the Board Members and also as the Members of Committees ix) Meeting the expectations of operational transparency of the stakeholders while maintaining confidentiality of information in order to foster a cul ture of good decision-making 2.2. Appointment and tenure 2|3rd of the Directors are rotational Directors. 1|3rd of rotational Directors retire in every Annual General Meeting (AGM) and, if eligible, offer themselves for reappointment. The Managing Director is appointed by the Members for a period up to five years.
20 2.4. Board meetings The Board meeting dates were normally determined well in advance. During 2021-22, the Board met four times. No. Day Date Venue 1. Friday April 23, 2021 Atul* 2. Friday August 06, 2021 Atul* 3. Friday November 19, 2021 Mumbai 4. Friday February 04, 2022 Atul* *Meetings were held through video conferencing 2.5. Attendance at the Board meetings and the AGM No. Name Board meetings AGM on August 06, 2021 Total Attended 1. Wolfgang Schumann 4 4 Present 2. G Venugopala Rao 4 4 Present 3. Ulrich Hambrecht 4 4 Present 4. Gopi Kannan Thirukonda 4 4 Present 5. Sudhir Merchant 4 4 Present 6. Sujal Shah 4 4 Present 2.6. Appointment | Cessation » Appointed: nil » Ceased: nil » Resigned: nil 2.7. Remuneration (`) No. Name Remuneration during 2021-22 Sitting fees Salary and perquisites Commission Total Chairman 1. Wolfgang Schumann - - - - Managing Director 2. G Venugopala Rao - 36,60,493 - 36,60,493 Non-executive Directors 3. Ulrich Hambrecht - - - - 4. Gopi Kannan Thirukonda - - - - 5. Sudhir Merchant 90,000 - 3,00,000 3,90,000 6. Sujal Shah 80,000 - 3,00,000 3,80,000 Sitting fees of up to ` 10,000 per meeting constitute fees paid to the Non-executive Directors for attending the Board, Committee and other meetings as approved by the Board. Commission of up to 1% of the net profit of the Company to the Non-executive Directors was approved by the Members of the Company at the AGM held on August 03, 2018, for a period of five years effective April 01, 2019. The Board approves, within the aforesaid limit, commission payable to a Non-executive Director.
Company Overview Financial Statements Notice Statutory Reports 21 Rudolf Atul Chemicals Ltd | Annual Report 2021-22 3. Committees of the Board The Board has constituted the following Committees: • Audit Committee • Corporate Social Responsibility Committee • Nomination and Remuneration Committee 3.1. Audit Committee 3.1.1. Role i) Approving: • appointment of theChief Financial Officer • transactions with related parties and subsequent modifications thereof ii) Conducting: • pre-audit discussions with the Auditors regarding nature and scope of the audit and post-audit discussion to ascertain any area of concern • valuation of undertakings or assets, wherever necessary iii) Formulating: • code of conduct and related matters • scope, functioning, periodicity and methodology for conducting the internal audit in consultation with the Internal Auditor iv) Reviewing: • adequacy of the internal audit function, including the structure of internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit • compliance reports of all applicable laws aswell as steps taken to rectify instances of non-compliances periodically • financial reporting process and the disclosure of financial information to ensure that the Financial Statements are correct, credible and sufficient • following information mandatorily: - appointment, removal and terms of remuneration of the Chief Internal Auditor - Internal Audit Reports relating to weaknesses in the internal control systems - ManagementDiscussionandAnalysis of financial condition and results of operations - management letters | letters of internal control weaknesses issued by the Statutory Auditors • periodical ly with the Auditors, the internal control systems, the scope of audit, including the observations of the Auditors and the Financial Statements before submission to the Board • reasons for substantial defaults, if any, in the payment to the depositors, the debenture holders, the members (in case of non-payment of declared dividends) and creditors • significant transactions and arrangements entered into by the unlisted subsidiary companies • statement of related party transactions submitted by the Management • the annual Financial Statements and Auditor’s Report with the Management before submission to the Board for approval with particular reference to: - any change in accounting policies and practices compliancewith accounting standards - disclosure of any related par ty transactions - going concern assumption
22 - major accounting entries involving estimates based on the exercise of judgement by the Management - matters required to be included in the Directors’ Responsibility Statement for the Directors’ Report - qualifications in the draft Audit Report - significant adjustments made in the Financial Statements arising out of audit findings • theAuditors’ independence, performance and effectiveness of the audit process • the Financial Statements, in particular, investments made by unlisted subsidiary companies • with the Internal Auditors any significant findings and follow-up thereon, including findings of any internal investigations into matters where there is suspected fraud or irregularity or failure of the internal control systems of material nature and reporting such matters to the Board • with the Management the statement of uses | applications of funds raised through an issue (public issue, rights issue, preferent ial issue, etc) , the statement of funds uti l ised for the purposes other than those stated. v) Others: • Determi n i ng procedures for r i sk assessment and minimisation, and reviewing them periodically to ensure that the Executive Management controls risks throughmeans of a properly defined framework • Evaluating internal financial controls and risk management system • Remuneration and terms of appointment of the Auditors and approval for payment for any other services • Scrutinising inter-corporate loans and investments • Other function as mentioned in the terms of reference of the Audit Committee 3.1.2. Composition The Committee comprises following members, all having relevant experience in financial matters: No. Name Designation 1. Sudhir Merchant Chairman 2. Sujal Shah Member 3. Gopi Kannan Thirukonda Member 3.1.3. Meetings and attendance During 2021-22, four meetings were held: No. Name Total Attended 1. Sudhir Merchant 4 4 2. Sujal Shah 4 4 3. Gopi Kannan Thirukonda 4 4 The Statutory Auditors, the Chairman, the Managing Director, the Chief Financial Officer, the Company Secretary and the Internal Auditors are permanent invitees to the meetings. The Board notes the minutes of the Audit Committee meetings.
Company Overview Financial Statements Notice Statutory Reports 23 Rudolf Atul Chemicals Ltd | Annual Report 2021-22 3.2. Corporate Social Responsibility Committee 3.2.1. Role i) Formulating and recommending the Corporate Social Responsibility (CSR) Policy to the Board ii) Formulating and recommending to the Board the annual action plan, which will include: a) the list of CSR projects or programs that are to be undertaken b) the manner of execution c) the modalities of utilisation of funds and implementation schedules d) monitoring and reporting mechanism e) details of need and impact assessment iii) Indicating reasons to the Board in case the amount of expenditure is less than 2% of the average net profit in a given year iv) Monitoring the CSR Policy from time to time v) Recommending the amount of expenditure to be incurred on the CSR initiatives, which may not be less than 2% of the average net profit of the last three years 3.2.2. Composition The Committee comprises following members: No. Name Designation 1. Gopi Kannan Thirukonda Chairman 2. Wolfgang Schumann Member 3. Sudhir Merchant Member 3.2.3. Meetings and attendance During 2021-22, one meeting was held: No. Name Total Attended 1. Gopi Kannan Thirukonda 1 1 2. Wolfgang Schumann 1 1 3. Sudhir Merchant 1 1 3.3. Nomination and Remuneration Committee 3.3.1. Role i) Devising a policy on the Board diversity ii) Formulating criteria for determining qualifications, traits and independence of aDirector and recommending to the Board a policy relating to the remuneration for the Directors, Key Managerial Personnel and other employees iii) Formulating criteria for evaluation of the Independent Directors and the Board iv) Identifying persons who are qualified to become Directors and who may be appointed in Senior Management in accordance with the criteria laid down, recommending to the Board their appointment and removal and carrying out evaluation of performance of every Director v) Recommending | determining remuneration of the Executive Director as per the policy
24 3.3.2. Composition The Committee comprises following members: No. Name Designation 1. Sudhir Merchant Chairman 2. Sujal Shah Member 3. Gopi Kannan Thirukonda Member 4. Ulrich Hambrecht Member 3.3.3. Meetings and attendance During 2021-22, one meeting was held. No. Name Total Attended 1. Sudhir Merchant 1 1 2. Sujal Shah 1 1 3. Gopi Kannan Thirukonda 1 1 4. Ulrich Hambrecht 1 1 The Board notes the minutes of the Nomination and Remuneration Committee meetings. 4. Company policies 4.1. Compliance Compliance certificates confirming due compliance with statutory requirements are placed at the Board meeting for review by the Directors. A system of ensuring material compliance with the laws, orders, regulations and other legal requirements concerning the business and affairs of the Company is in place. Instances of non-compliance, if any, are also separately reported to the Board and subsequently rectified. 4.2. Code of Conduct The Code of Conduct is available on the website of the Company at www.racl.net.in/investors.html All the Directors and the Senior Management personnel have affirmed their compliancewith the Code of Conduct. A declaration to this effect signed by the Managing Director forms part of this report. 4.3. Prevention of sexual harassment of women at workplace Pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Rules, 2013, the Company has framed a policy on prevention of sexual harassment of women at workplace and constituted Internal Complaints Committee. The status of complaints received during 2021-22 is as under: Filed during 2021-22 Nil Disposed of during 2021-22 Nil Pending as at end of 2021-22 Nil
Company Overview Financial Statements Notice Statutory Reports 25 Rudolf Atul Chemicals Ltd | Annual Report 2021-22 4.4. Related party transactions The Company has formulated a Related Party Transactions Policy. 5. Affirmation and disclosure There were no materially significant related party transactions, pecuniary transactions or relationships between the Company and its Directors or the Management and their subsidiary companies or relatives, amongst other during 2021-22 that may have a potential conflict with the interests of the Company at large. All details relating to financial and commercial transactions where the Directors may have a pecuniary interest are provided to the Board and the interested Directors neither participate in the discussion nor vote on such matters. The Company complied with the statutory provisions, rules and regulations, and in the last three years, no strictures or penalties were imposed on the Company by any statutory authority. 6. Shareholders’ information 6.1. General Body meetings 6.1.1. Location and time where the last three AGMs were held: Year Location Date Time 2018-19 B | 18598, Survey number 33, Atul 396 020, Gujarat, India August 09, 2019 1:00 pm 2019-20 Through video conferencing at deemed venue: Atul Ltd, Atul 396 020, Gujarat, India August 07, 2020 4:00 pm 2020-21 Through video conferencing at deemed venue: Atul Ltd, Atul 396 020, Gujarat, India August 06, 2021 4:00 pm 6.1.2. Special resolutions passed in the previous three AGMs: no 6.1.3. Resolutions passed through postal ballot: nil 6.2. Annual General Meeting 2022 Details of the 18th AGM are as under: Year Location Date Time 2021-22 B | 18598, Survey number 33, Atul 396 020, Gujarat, India August 19, 2022 4:00 pm As required, particulars of the Directors seeking reappointment | appointment are given in the Notice of the AGM. 6.3. Financial year April 01, 2021 to March 31, 2022 6.4. Date of book closure July 16, 2022 to July 22, 2022 6.5. Date of dividend payment August 10, 2022 6.6. Location of plant Atul 369 020, Gujarat, India
26 6.7. Address of correspondence B | 18598, Survey number 33, Atul 396 020, Gujarat, India E-mail address: sec@racl.net.in 6.8. Tentative Board meeting dates for consideration of results for 2022-23 No. Name Date 1. First quarter results August 19, 2022 2. Second quarter and half-yearly results November 11, 2022 3. Third quarter results February 10, 2023 4. Fourth quarter and annual results April 21, 2023 7. Role of the Company Secretary in the overall governance process All the Directors have access to the suggestions and services of the Company Secretary in ensuring an effective functioning of the Board and its Committees. The Company Secretary administers, attends and prepares minutes of the Board and the Committee proceedings in accordance with the statutory requirements as well as the norms of Corporate Governance. 8. Certification by the Chief Executive Officer and the Chief Financial Officer Dr G Venugopala Rao, Managing Director, and Mr Rajas Khaladkar, Chief Financial Officer, issued certificates to the Board. The certificates were placed before the Board at the meeting held on April 22, 2022, in which the accounts for the year ended March 31, 2022, were considered and approved by the Board. For Rudolf Atul Chemicals Ltd (G Venugopala Rao) Atul Managing Director April 22, 2022 DIN: 03635806
Company Overview Financial Statements Notice Statutory Reports 27 Rudolf Atul Chemicals Ltd | Annual Report 2021-22 Notice NOTICE is hereby given that the 18th Annual General Meeting of the members of Rudolf Atul Chemicals Ltd will be held on Friday, August 19, 2022, at 4.00 pm at B | 18598, Survey number 33, Atul 396 020, Gujarat, India to transact the following business: Ordinary business 1. To receive, consider and adopt the audited Financial Statements of the Company for the financial year ended March 31, 2022, and the Reports of the Directors and the Auditors thereon. 2. To declare dividend on equity shares. 3. Toappoint aDirector inplaceofMrUlrichHambrecht (Director identification number: 01967154), who retires by rotation and being eligible, offers himself for reappointment. 4. To appoint aDirector in place of Mr Sudhir Merchant (Director identification number: 00033406) who retires by rotation and being eligible, offers himself for reappointment. 5. To consider and, if thought fit, to pass with or without modifications, the following resolution as an ordinary resolution: “RESOLVED THAT pursuant to the provisions of Section 139 and 140 of the Companies Act, 2013 and pursuant to the Companies (Audit and Auditors) Rules, 2014 and any other applicable provisions for the time being in force (including any statutory modification(s) or re-enactment thereof), Deloitte Haskins & Sells LLP, Chartered Accountants, firm registration number 117366W | W-100018 be and they are hereby reappointed as the Statutory Auditors of the Company for a second term of five years to hold the office from the conclusion of this Annual General Meeting (AGM) till the conclusion of 23rd AGM at a remuneration to be decided by the Board or its Committee.” Notes 1. A member entitled to attend and vote at the meeting, is entitled to appoint a proxy to attend and vote instead of himself | herself and the proxy need not be a member. A person can act as proxy on behalf of not more than 50 members and holding in aggregate not more than 10% of the total share capital of the Company. In order that the appointment of a proxy is effective, the instrument appointing the proxy must be received at the registered office of the Company not later than 48 hours before the commencement of the meeting, that is, by 04:00 pm on July 17, 2022. 2. Copies of the Balance Sheet, the Statement of Profit and Loss, the Directors’ Report, the Auditor’s Report and every other document required by law to be annexed or attached to the Balance Sheet for the financial year ending March 31, 2022, are annexed | attached. 3. The Register of Members and the Share Transfer Books of the Company will remain closed from July 16, 2022 to July 22, 2022 (both days inclusive). 4. The dividend, if approved, will be paid to those members whose names stand on the Register of members on July 15, 2022. 5. The physical copies of the documents which are referred in this Notice and not attached will also be available at the registered office of the Company for inspection during normal business hours on working days. The Members are entitled to receive communication in physical form (upon making a request for the same) by post, free of cost. 6. The Register of Directors and Key Managerial Personnel and their shareholding, maintained under the Companies Act, 2013, will be available for inspection by the Members at the Annual General Meeting.
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