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 fabrics are 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 fabrics which also resemble the wings of a bird flapping in unison, connote harmony between the two partners, all to serve customers with world-class products. Creativity is thinking up new things. Innovation is doing new things. ~ Theodore Levitt Contents 01 Corporate identity 02 Purpose 03 Values 04 Board of Directors 05 Directors’ Report 09 Annexure to the Directors’ Report 13 Management Discussion and Analysis 15 Corporate Governance Report 25 Notice 32 Performance trend 33 Independent Auditor’s Report 42 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 2023-24 Corporate identity Rudolf Atul Chemicals Ltd is a 50-50 joint venture company of Rudolf GmbH and Atul Ltd (Atul), engaged in the 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 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 to effectively serve 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 product 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 2023-24 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 theseValuesare consistentlypractisedandnurturedandensured that theyarenot 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. 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. 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. 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. 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.
04 Board of Directors Wolfgang Schumann Tejas Shukla Gopi Kannan Thirukonda Sujal Shah Oliver Kusterle Sudhir Merchant
Company Overview Financial Statements Notice Statutory Reports 05 Rudolf Atul Chemicals Ltd | Annual Report 2023-24 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, 2024. 01. Financial results (` cr) 2023-24 2022-23 Revenue from operations 139.26 111.18 Other income 1.09 0.98 Total revenue 140.35 112.16 Profit before tax 27.79 10.50 Provision for tax 8.57 2.73 Profit for the year 19.22 7.77 Balance in retained earnings at the beginning of the year 30.36 45.83 Transfer from comprehensive income 0.05 0.10 Disposable surplus 49.63 53.71 Dividend paid (5.84) (23.35) Balance carried forward 43.79 30.36 02. Performance Sales increased by 25% from ` 110.37 cr to ` 138.04 cr, primarily due to introduction of new products and increase in customer base. Major growth drivers are continuous bleaching range, dyeing chemicals and silicones. Profit before tax increased by 265 % from ` 10.50 cr to ` 27.79 cr. The earnings per share increased from ` 13.31 to ` 32.93. Cash flow from operating activities before working capital changes increased from ` 10.26 cr to ` 27.56 cr and the net cash flow from operating activities increased from ` 12.37 cr to ` 15.71 cr. During the year, the Company received an approval from the Gujarat Pollution Control Board (GPCB) to expand the capacity from 19,000 tpa to 44,000 tpa. Additionally, the Company completed the registration of 112 products with the Global Organic Textile Standard list for version 7.0, received approval for 192 products for ‘INDITEX the LIST’ and achieved Zero Discharge of Hazardous Chemicals (Manufacturing Restricted Substance List - Version 3.1) Level 3. Furthermore, the Company implemented Oracle (Operations), Customer Relationship Management and Atul Setu – an order management system to digitalise key business processes. The Company is working extensively with various certification agencies to promote its business operations. 03. Dividend The Board recommended payment of a dividend of ` 30 per share on 58,37,500 equity shares of
06 ` 10 each ful ly paid-up for the year ended March31, 2024. Thedividendwill entail anoutflowof ` 17.51 cr on the paid-up equity share capital of ` 5.84 cr. 04. Energy conser vat i on , techno l ogy absorption and 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 on page number 09. 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. As per the requirements of Rule 3(1) of the Companies (Accounts) Rules 2014, the Company uses only such accounting software for maintaining its books of account that records audit trail of all the transaction, creates an edit log of all the changes made in the books of accounts along with when such changes are made and by whom. This feature of recording audit trail has operated throughout the year and was not tampered with during the year. In respect of the aforesaid accounting software, after thorough testing and validation, audit trail was not enabled for direct data changes at the database level in view of the possible impact on efficient performance of system. In respect of audit trail at database level, the Company has established and maintained an adequate internal control framework over its financial reporting and based on its assessment, has concluded that the internal controls for the year endedMarch 31, 2024, were effective. The Company is in the process of system upgradation to meet the database level audit trail requirement. We expect to implement this from May 01, 2024. 07. Internal financial controls TheManagement assessed the effectiveness of the internal financial controls over financial reporting as of March 31, 2024, and the Board believes that the controls are adequate. 08. Fixed deposits During 2023-24, the Company did not accept any fixed deposit. 09. Loans, guarantees, investments and security Particulars of loans, guarantees, investments and security provided are given on page number 55. 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 the ordinary course of business and on an arm’s length basis. Details of such transactions are given on page number 65. No transactions that required disclosure in Form AOC-2 were entered into by the Company. 12. Corporate social responsibility The composi t ion of the Corporate Social Responsibility (CSR) Committee, the CSR Policy and the CSR Report are given on page number 10. 13. Annual return Annua l return for 2023-24 i s ava i l ab l e o n t h e we b s i t e o f t h e Comp a n y a t www.racl.co.in/investors/stakeholders-information/ annual-reports/ 14. Auditors DeloitteHaskins&Sells LLP, CharteredAccountants were reappointed as the Statutory Auditors of the Company at the 18th Annual General Meeting (AGM) held on August 19, 2022, until the conclusion of the 23rd AGM. The Auditors’ Report for the financial year ended March 31, 2024, does not contain any qualification,
Company Overview Financial Statements Notice Statutory Reports 07 Rudolf Atul Chemicals Ltd | Annual Report 2023-24 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 for the annual accounts for the financial year endedMarch 31, 2024, 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. 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, 2024, 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 a) Subject to approval of the members in the AGM Dr Oliver Kusterle was appointed as a Director liable to retirement by rotation effective August 18, 2023 and Mr Tejas Shukla was appointed as the Managing Director for a period of five years effective October 01, 2023. b) According to Article 88 of the Articles of Association of the Company, Mr Sudhir Merchant and Mr Gopi Kannan Thirukonda retire by rotation and being eligible offer themselves for reappointment at the forthcoming AGM. c) Dr G Venugopala Rao, Managing Director retired on September 30, 2023, upon completion of his term. The Company immensely benefited from his knowledge, exper ience and exper t ise in the last 13 years. d) Mr Ulrich Hambrecht, Director ceased to be a Director effective August 18, 2023. The Board places on record its deep appreciation for his valuable contribution through sustained involvement, critical analysis and valuable guidance. 16.2 Policy on appointment and remuneration The Policy on appointment and remuneration is displayed on the website of the Company at www.racl.co.in/investors/company-policies-2/ . The salient features of the Policy are as under: 16.2.1Appointment While recommending the appointment of the Directors, the Nomination and Remuneration Committee considers the following factors: a) Qualification:well-educatedandexperienced in senior leadership positions in industry | profession b) Trait: positive attributes and qualities c) Independence: criteria prescribed in Section 149(6) of the Companies Act, 2013, for the Independent Directors, including no pecuniary interest and conflict of interest 16.2.2Remuneration of the Non-executive Directors a) Sitting fees: up to ` 30,000 for attending a Board, Committee and any other meeting b) Commission: up to 1% of net profit as may be decided by the Board based on
08 i) Membership of committee(s), ii) Profit iii) Attendance iv) Category (Independent or Non-executive) 16.2.3Remuneration 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 During 2023-24, Dr G Venugopala Rao, Managing Director retired on September 30, 2023, upon completion of his term and Mr Tejas Shukla was appointed as the Managing Director of the Company effective October 01, 2023, for a period of five years. 17.2 Remuneration The Remuneration Policy of the key managerial personnel and other employees consists of the following: 17.2.1 Components: a) Fixed pay i) Basic Salary ii) Allowances iii) Perquisites iv) Retirals b) Variable pay 17.2.2 Factor for determining and changing fixed pay: a) Existing compensation b) Education c) Experience d) Salary bands e) Performance f) Market benchmark 17.2.3 Factors for determining and changing variable pay: a) Company performance b) Business performance c) Individual performance d) Work level 18. Analysis of remuneration No employee falls in 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 the performance of the Company is given on page number 13. 20. Corporate Governance Report 20.1 Report The Corporate Governance Report is given on page number 15. Details about the number of meetings of the Board held during 2023-24, are given on page number 18. The composition of the Audit Committee is given on page number 21. 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 2023-24. 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 on page number 22. 22. 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) Mumbai Chairman April 22, 2024 DIN: 01995827
Company Overview Financial Statements Notice Statutory Reports 09 Rudolf Atul Chemicals Ltd | Annual Report 2023-24 Annexure to the Directors’ Report Index No. Subject title Page 1. Energy conservation, technology absorption and foreign exchange earnings and outgo 1.1 Energy conservation 09 1.2 Technology absorption 09 1.3 Foreign exchange earnings and outgo 09 2. Corporate social responsibility 2.1 A brief outline of CSR Policy, programs and scope of the Company 10 2.2 Composition of the CSR Committee 11 2.3 Details of URL for disclosure of composition of the CSR Committee, CSR Policy and CSR projects on the website of the Company 11 2.4 Impact assessment 11 2.5 CSR obligation 11 2.6 Details of the CSR amount spent | unspent for the financial year 11 2.7 Details of the unspent CSR amount for the preceding three financial years 12 2.8 Details relating to the capital asset created or acquired through CSR spend 12 2.9 Reasons for not spending two percent of the average net profit 12 1. Energy conservation, technology absorption and foreign exchange earnings and outgo 1.1 Energy conservation 1.1.1. Measures taken: a) storage tanks installed for two key liquid rawmaterial to avoid use of intermediate bulk container (plastic waste) 1.1.2. Additional investments and proposals being implemented: nil 1.2. Technology absorption No major steps were taken during the year. 1.3. Foreign exchange earnings and outgo (` cr) Particulars 2023-24 2022-23 Earnings Commission income 1.00 0.63 Outgo Import of raw materials 19.77 18.45
10 2. Corporate social responsibility 2.1. A brief outline of 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 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 under six broad programs: a) Education b) Empowerment, c) Health d) Relief e) Infrastructure and f) Conservation with the varied scope of work. a) Education i) Establish and | or support educational institutions ii) Enhance education in rural areas iii) Support needy and | or meritorious students b) Empowerment i) Establish and | or support vocational training and institutions ii) Promote sustainable livelihood opportunities for women | youth iii) Promote integrated development of rural | tribal areas c) Health i) Establish and | or improve medical care centres ii) Promote health, nutrition, hygiene and sanitation iii) Promote sports and fitness d) Relief i) Eradicate hunger and malnutrition ii) Support deserving | needy people iii) Support during natural calamities e) Infrastructure i) Develop and | or improve rural infrastructure ii) Develop and | or improve rural amenities iii) Develop and | or improve child-friendly infrastructure f) Conservation i) Conserve natural resources ii) Protect environment | flora and fauna iii) Protect and | or promote art and culture
Company Overview Financial Statements Notice Statutory Reports 11 Rudolf Atul Chemicals Ltd | Annual Report 2023-24 2.2 Composition of the CSR Committee: No. Name of Directors 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 the composition of the CSR Committee, CSR Policy and CSR projects on the website of the Company: www.racl.co.in/investors/company-policies-2/ 2.4 Impact assessment (attach the report ): not applicable 2.5 CSR obligation: (` lakhs) a) Average net profit of the Company as per Section 135(5) 1,736.96 b) 2% of the average net profit of the Company as per Section 135(5) 35.00 c) Surplus arising out of the CSR projects or programs or activities of the previous financial years NIL d) Amount required to be set-off for the financial year NIL Total CSR obligation for the financial year [b) + c) - d)] 35.00 2.6 a) Details of the amount spent (ongoing projects and other than ongoing projects) for the financial year: ` 35.00 lakhs b) Amount spent on administrative overheads: nil c) Amount spent on impact assessment: nil d) Total amount spent for the financial year [a) + b) + c)]: ` 35.00 lakhs e) 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 35.00 – – – – –
12 f) Excess amount for set-off, if any: nil (` lakhs) No. Particular Amount (i) 2% of the average net profit of the Company as per Section 135(5) 35.00 (ii) Total amount spent for the financial year 35.00 (iii) Excess amount spent for the financial year [(ii)-(i)] 0.00 (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 2.7 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 in Unspent CSR Account under Section 135(6) Amount spent in the financial year Amount transferred to any fund specified under Schedule VII as per Section 135(5), if any Amount remaining to be spent in succeeding financial years Deficiency, if any Amount Date of transfer – – – – – – – – 2.8 Whether any capital assets have been created or acquired through CSR spending in the financial year? No. If yes, enter the number of capital assets created | acquired: not applicable Details relating to the asset(s) created or acquired through CSR spending in the financial year: No. Short particulars of the property | asset(s) including complete address and location of the property Pincode of the property | asset(s) Date of creation Amount of CSR amount spend Details of entity | authority | the beneficiary of the registered owner CSR registration number, if applicable Name Registered address – – – – – – – 2.9 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 Tejas Shukla DIN: 10309971
Company Overview Financial Statements Notice Statutory Reports 13 Rudolf Atul Chemicals Ltd | Annual Report 2023-24 Management Discussion and Analysis Rudolf Atul Chemicals Ltd (RACL) is intomanufacturing and marketing of specialty chemicals for the 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 a CAGR of 11% in the last 5 years and aims to become one of the leading suppliers in India. The Company achieved sales of ` 138 cr, which is 25% higher than the previous year mainly due to new products introduced and increased customer base. Major product group growth drivers are Pretreatment chemicals, dyeing chemicals and silicones used in Textile wet processing. Sales of effect chemicals (EC) segment increased by 21% due to customised silicone product offerings for key markets, and due to durable water repellent sales at new customers. Whereas the process chemicals (PC) segment showed a growth of 27%, majorly due to new customers being added for pretreatment chemicals, for printing auxi l iaries and for dyeing chemicals. Improved per formance in both segments helped increase sales revenue. 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 improved demand for i) specialty chemicals for synthetic textiles used in sports and athleisure applications, ii) per fluorocarbon-free repellents and iii) silicones for improved performance in home and knit segments. It has planned to establish a complete processing package for the denim segment along with sulphur black, a rapid dyeing concept in the polyester segment and new products for polyester printing. The growing demand for Continuous Bleaching Range chemicals for knit fabrics will boost its growth in PC sales.
14 The world Textile industry has shown an average capacity utilisation rate stagnating at 74% since the beginning of the year. However, domestic demand will continue to grow at a steady pace, owing to government initiatives like the setting up of textile parks under the PM mega integrated textile region and apparel scheme. It also put efforts in promoting textile value chain in India through events like Bharat Tex Expo 2024 in New Delhi. Free trade pacts with major markets will boost competitiveness of India in the ready-made garment space. The government also extended by the production-linked incentive scheme, which will give a boost to domestic manufacturing, particularly in synthetic textiles. The Indian Textile industry is expected to reach to US$350 bn by 2030. The Indian Textile Chemicals industry is estimated at US$320 mn and is growing at about 6% CAGR. The Company will expand its market share in the domestic segment by introducing new products, offering new concepts and providing strong technical support with a new market development team. Fluctuation in cotton prices, key raw material prices, direct entry of key raw material suppliers especially from China may affect sales. Demand from user countries may influence order situation at our customers. 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. The established systems provide reasonable assurance on the effectiveness and efficiency of its operations, reliability of financial reporting and compliance with the applicable laws and regulations. These are routinely tested, certified and upgraded whenever required by the Statutory as well as the Internal Auditors covering all key business areas. 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 leverages continuous learning and build strong capabilities to align with the pace of evolution and expansion of the business. It emphasises on use of technology in HR processes with parallel creative initiatives to keep enhancing people engagement. Employee relations remained cordial.
Company Overview Financial Statements Notice Statutory Reports 15 Rudolf Atul Chemicals Ltd | Annual Report 2023-24 There is no witness so terrible and no accuser so powerful as the conscience which dwells within us. ~ Gautama Buddha Corporate Governance Report
16 1. Philosophy Transparency and accountability are the two basic tenets of Corporate Governance. The Company is committed to conducting business the right way, whichmeans making decisions and acting in away that is ethical and in compliancewith the applicable legal requirements. It endeavours to continuously improve its Corporate Governance performance to earn the 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 longterm interests of the shareholders and other stakeholders. 2. Board 2.1. Board business The normal business of the Board comprises: 2.1.1 Approving: a) appointment of the Cost Auditors b) capital expenditure and operating budgets c) commission payable to the Directors within the limit set by the shareholders d) contracts inwhich theDirector(s) are deemed to be interested e) cost audit reports f) creation of charge on assets in favour of lenders g) declaration of interim dividend h) joint ventures, collaborations, mergers and acquisitions i) loans and investments j) matters requiring statutory | Board consent k) sale of investments and assets l) short, medium or long-term borrowings m) unaudi ted quar ter ly f inancial resul ts and audited annual accounts, including segments revenue, results and capital employed 2.1.2 Monitoring: a) effectiveness of the governance practices and making desirable changes b) implementation of performance objectives and corporate performance c) potent ial conf l icts of interest of the Management, the Board members and the shareholders, including misuse of corporate assets and abuse in related party transactions d) the Board nomination process such that it is transparent and results in a diversity of experience, gender, knowledge, perspective and thoughts in the Board e) 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: a) general notices of interest of the Directors b) minutes of the meetings of the Board and its Committees and also the resolution(s) passed by circulation 2.1.4 Recommending: a) appointment of the Statutory Auditors b) final dividend 2.1.5 Reviewing: a) corporate strategy, major plans of action, Risk Policy, annual budgets and business plans b) default in payment of statutory dues c) fatal or serious accidents, dangerous occurrences and material environmental matters d) foreign exchange exposure and exchange rate movement e) 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: a) a well-defined mandate, composition and working procedures of the committees
Company Overview Financial Statements Notice Statutory Reports 17 Rudolf Atul Chemicals Ltd | Annual Report 2023-24 b) corporate culture and the Values 2.1.7 Others: a) 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 b) Aligning remuneration of the key executives and the Board Members with the longterm interests of the Company and the shareholders c) Applying high ethical standards d) Assigning a sufficient number of Nonexecutive Board Members capable of exercising independent judgement to items where there isapotential for conflict of interest e) 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 f) Encouraging training of the Directors on a continuous basis to ensure that the Board Members are kept updated g) Exercising objective and independent judgement on corporate affairs h) Facilitating the Independent Directors to perform their role effectively as Board MembersandalsoasMembersofCommittees i) Meeting the expectations of operational transparency of the stakeholders while maintaining the confidentiality of information to foster a culture 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 of up to five years. 2.3. Composition, name, other directorships | committee memberships The Board comprises experts drawn from diverse fields | professions. It consists of eight 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 1 – – Managing Director 2. G Venugopala Rao3 1 – – 3 Tejas Shukla4 – – – Non-executive Directors 4. Ulrich Hambrecht5 – – – 5. Gopi Kannan Thirukonda 8 4 6. Sudhir Merchant 2 2 7. Sujal Shah 8 4 2 8 Oliver Kusterle6 – – – 1Excludes Directorships in foreign companies and private limited companies 2Memberships | Chairmanships of only the Audit Committees and Stakeholders Relationship Committees of all public limited companies, including the Company were considered 3up to September 30, 2023 | 4effective October 01, 2023 | 5up to August 18, 2023 | 6effective August 18, 2023
18 2.4. Board meetings and attendance in meetings No. 1 2 3 4 Date Friday, April 25, 2023 Friday, August 18, 2023 Friday, November 03, 2023 Friday, February 09, 2024 Total attendance in Board meeting AGM on August 18, 2023 Venue Atul Atul Atul Atul Wolfgang Schumann P P P P 4 P G Venugopala Rao P P NA NA 2 P Ulrich Hambrecht P P NA NA 2 NA Gopi Kannan Thirukonda P P P P 4 P Sudhir Merchant P P P P 4 P Sujal Shah P P P P 4 P Oliver Kusterle NA P P P 3 NA Tejas Shukla NA NA P P 2 NA Total attendees 6 7 6 6 - - P - Present | NA - Not applicable 2.5. Appointment | Cessation 2.5.1 Appointed: a) Dr Oliver Kusterle was appointed as a Director from August 18, 2023. b) Mr Tejas Shukla was appointed as the Managing Director of the Company effective October 01, 2023, for a period of five years. 2.5.2 Ceased: a) Mr G Venugopala Rao ceased to be the Managing Director of the Company effective September 30, 2023 b) Mr Ulrich Hambrecht resigned from the Company effective August 18, 2023 2.6. Remuneration (` lakhs) No. Name Remuneration during the year Sitting fees Salary and perquisites Commission Total Chairman 1. Wolfgang Schumann - - - - Managing Director 2. G Venugopala Rao1 - 19,41,324 - 19,41,324 3. Tejas Shukla1 - 9,41,193 - 9,41,193
Company Overview Financial Statements Notice Statutory Reports 19 Rudolf Atul Chemicals Ltd | Annual Report 2023-24 (` lakhs) No. Name Remuneration during the year Sitting fees Salary and perquisites Commission Total Non-executive Directors 4. Ulrich Hambrecht - - - - 5. Gopi Kannan Thirukonda - - - - 6. Sudhir Merchant 1,00,000 - 3,00,000 4,00,000 7 Sujal Shah 90,000 - 3,00,000 3,90,000 8 Oliver Kusterle - - - - 1for part of year Sitting fees of up to ` 30,000 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 18, 2023, for a period of five years effective April 01, 2024. The Board approves, within the aforesaid limit, the commission payable to a Non-executive Director. 3. Committees of the Board The Board has const i tuted the fol lowing Committees: • Audit Committee • Corporate Social Responsibility Committee • Nomination and Remuneration Committee 3.1. Audit Committee 3.1.1 Role a) Approving: i) appointment of theChief Financial Officer ii) transactions with related parties and subsequent modifications thereof b) Conducting: i) pre-audit discussions with the Auditors regarding the nature and scope of the audit and post-audit discussion to ascertain any area of concern ii) valuation of undertakings or assets, wherever necessary c) Formulating: i) code of conduct and related matters ii) scope, functioning, periodicity and methodology for conducting the internal audit in consultation with the Internal Auditor d) Reviewing: i) adequacy of the internal audit function, including the structure of the internal audit department, staffing and seniority of the official heading the department, repor t ing structure coverage and frequency of internal audit ii) compliance reports of all applicable laws aswell as steps taken to rectify instances of non-compliances periodically iii) financial reporting process and the disclosure of financial information to ensure that the Financial Statements are correct, credible and sufficient iv) 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
20 v) 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 vi) significant transactionsandarrangements entered into by the unlisted subsidiary companies vii) statement of related party transactions submitted by the Management viii) 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 • compliancewithaccountingstandards • disclosure of any related par ty transactions • going concern assumption • 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 ix) theAuditors’ independence, performance and effectiveness of the audit process x) the Financial Statements, in particular, investments made by the unl isted subsidiary companies xi) the 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 xii) the functioning of the whistleblowing mechanism xiii) with the Internal Auditors any significant findings and follow-up thereon, including findings of any internal investigations into matters where there is a suspected fraud or irregularity or failure of the internal control systems of material nature and reporting such matters to the Board xiv) 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 utilised for purposes other than those stated and the report submitted by the monitoring agency monitoring the utilisation of proceeds of such issue e) Others: i) 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 ii) Evaluating internal financial controls and risk management system iii) Recommendingappointment, remuneration and terms of appointment of the Auditors and approval for payment for any other services iv) Scrutinising inter-corporate loans and investments v) Other functions asmentioned in the terms of reference of the Audit Committee
Company Overview Financial Statements Notice Statutory Reports 21 Rudolf Atul Chemicals Ltd | Annual Report 2023-24 3.1.2 Composition, meetings and attendance The Committee comprises the following members, all having relevant experience in financial matters. During 2023-24, four meetings were held: No. Name Designation Meetings entitled Meetings attended 1. Sudhir Merchant Chairman 4 4 2. Sujal Shah Member 4 4 3. Gopi Kannan Thirukonda Member 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. 3.1. Corporate Social Responsibility Committee 3.2.1 Role a) Formulating and recommending the Corporate Social Responsibility (CSR) Policy to the Board. b) Formulating and recommending to the Board the annual action plan, which will include: i) the list of CSR projects or programs that are to be undertaken ii) the manner of execution iii) the modalities of utilisation of funds and implementation schedules iv) monitoring and reporting mechanism v) details of need and impact assessment c) Indicating reasons to the Board in case the amount of expenditure is less than 2% of the average net profit in a given year. d) Monitoring the CSR Policy from time to time. e) 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, meetings and attendance The Committee comprises the following members. During 2023-24, one meeting was held: No. Name Designation Meeting entitled Meeting attended 1. Gopi Kannan Thirukonda Chairman 1 1 2. Wolfgang Schumann Member 1 1 3. Sudhir Merchant Member 1 1 3.1. Nomination and Remuneration Committee 3.3.1 Role a) Devising a policy on Board diversity. b) 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. c) Formulating criteria for evaluation of the Independent Directors and the Board.
22 d) 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 an evaluation of the performance of every Director. e) Recommending | determining the remuneration of the Executive Director as per the policy. 3.3.2 Composition, meetings and attendance The Committee comprises the following members. During 2023-24, one meeting was held: No. Name Designation Meeting entitled Meeting attended 1. Sudhir Merchant Chairman 1 1 2. Sujal Shah Member 1 1 3. Gopi Kannan Thirukonda Member 1 1 4. Ulrich Hambrecht1 Member - - 5 Oliver Kusterle2 Member - - 1up to August 18, 2023 | 2effective February 09, 2024 4. Company policies 4.1. Compliance Compliance certificates confirming due compliance with statutory requirements are placed at the Boardmeeting 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 noncompliance, if any, are also separately reported to the Board and subsequently rectified. 4.2. Code of Conduct The Code of Conduct is available on thewebsite of the Company at www.racl.co.in/investors/company-policies-2/ 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 the 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 the prevention of sexual harassment of women at the workplace and constituted Internal Complaints Committee. The status of complaints received during 2023-24, is as under: Filed during 2023-24 Nil Disposed of during 2023-24 Nil Pending as at end of 2023-24 Nil 4.4. Related party transactions The Company has formulated a Related Party Transactions Policy.
Company Overview Financial Statements Notice Statutory Reports 23 Rudolf Atul Chemicals Ltd | Annual Report 2023-24 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 others during 2023-24 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 Last three Annual General Meetings (AGMs) Year Location Date Time 2020-21 Through video conferencing at deemed venue: Atul Ltd, Atul 396 020, Gujarat, India August 06, 2021 4:00 pm 2021-22 B | 18598, Survey number 33, Atul 396 020, Gujarat, India August 19, 2022 4:00 pm 2022-23 Through video conferencing at deemed venue: Atul Ltd, Atul 396 020, Gujarat, India August 18, 2023 4:00 pm 6.2 Special resolutions passed in the previous three AGMs: no 6.3 Resolutions passed through postal ballot: nil 6.4 Annual General Meeting 2024 Details of the 20th AGM are as under: Year Location Date Time 2032-24 Through video conferencing at deemed venue: Atul Ltd, Atul 396 020, Gujarat, India August 05, 2024 4:00 pm As required, particulars of the Directors seeking reappointment | appointment are given in the Notice of the AGM. 6.5 Financial year April 01 to March 31 6.6 Date of book closure July 20, 2024, to July 26, 2024 6.7 Date of dividend payment August 10, 2024 6.8 Location of plant Atul 396 020, Gujarat, India 6.9 Address of correspondence B | 18598, Survey number 33, Atul 396 020, Gujarat, India E-mail address: racl_legal@atul.co.in
24 6.10 Tentative Board meeting dates for consideration of results for 2024-25 No. Name Date 1. First quarter results August 05, 2024 2. Second quarter and half-yearly results November 15, 2024 3. Third quarter results February 14, 2025 4. Fourth quarter and annual results April 21, 2025 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 the 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 Mr Tejas Shukla, 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, 2024, in which the accounts for the year ended March 31, 2024, were considered and approved by the Board. For Rudolf Atul Chemicals Ltd (Tejas Shukla) Mumbai Managing Director April 22, 2024 DIN: 10309971
Company Overview Financial Statements Notice Statutory Reports 25 Rudolf Atul Chemicals Ltd | Annual Report 2023-24 Notice NOTICE is hereby given that the 20th Annual General Meeting of the members of Rudolf Atul Chemicals Ltd will be held on Monday, August 05, 2024, at 4:00 pm through video conferencing | other audiovisual means to transact the following businesses: Ordinary business 1. To receive, consider and adopt the audited Financial Statements of the Company for the financial year ended March 31, 2024, and the Reports of the Directors and the Auditors thereon. 2. To declare dividend on equity shares. 3. To appoint aDirector in place of Mr Sudhir Merchant (DIN: 00033406), who retires by rotation and is eligible, offers himself for reappointment. 4. To appoint a Director in place of Mr Gopi Kannan Thirukonda (DIN: 00048645) who retires by rotation and being eligible, offers himself for reappointment. Special business 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 Sections, 152 of the Companies Act, 2013 and any other applicable provisions for the time being in force (including any statutory modification(s) or re-enactment thereof), Dr Oliver Kusterle (DIN: 10209763), be and is hereby appointed as the Director of the Company liable to retire by rotation.” 6. 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 Sections, 152 of the Companies Act, 2013 and any other applicable provisions for the time being in force (including any statutory modification(s) or re-enactment thereof), Mr Tejas Shukla (DIN: 10309971), be and is hereby appointed as the Director of the Company.” RESOLVED FURTHER THAT pursuant to the provisions of Sections 196, 197, 203 read with Schedule V of the Companies Act, 2013 and any other applicable provisions for the time being in force (including any statutory modification(s) or re-enactment thereof), approval be and is hereby accorded to the appointment of Mr Tejas Shukla (Director identification number: 10309971) as the Managing Director of the Company, and his receiving of remuneration, including minimum remuneration fromOctober 01, 2023 to September 30, 2028, as per the draft agreement submitted to this meeting and for identification initialed by the Chairman. RESOLVED FURTHER THAT the Board of Directors (Board) be and is hereby authorised to alter and vary any or all of the terms and conditions of the agreement, as approved, vide this resolution as may be deemed fit from time to time, which may have the effect of increasing the remuneration and for considering modifications, if any, by the Central Government in regard to the policy I guidelines pertaining to managerial remuneration and for the purpose of giving effect to this resolution, the Board be and is hereby authorised to do all such acts, deeds, matters and things as it may in its absolute discretion deem expedient, necessary, proper or in the best interest of the Company.” 7. To consider and, if thought fit, to pass with or without modifications, the following resolution as an ordinary resolution: “RESOLVEDTHATpursuant toSection148(3) of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014, the remuneration of ` 65 , 200 p l us taxes as app l i cab l e and reimbursement of actual travel and out-of-pocket expenses for the financial year ending March 31, 2025, as recommended by the Audit Committee and approved by the Board of Directors of the Company, to be paid to Tadhani & Co, Cost Accountants, firm registration number: 003635 for conducting cost audits of the applicable products in the category of Chemicals, Inorganic Chemicals, Organic Chemicals, their derivatives be and is hereby ratified and confirmed.” Notes 1. The 20th Annual General Meeting (AGM) is being
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