Heubach Colorants India Ltd

Dear Stakeholders,

I hope this letter finds you well. I am pleased to share your Company's journey through a year of innovation and growth. As a leader in the colorant industry with a rich history, Heubach Colorants India Limited (HCIL) continues navigating a dynamic environment full of challenges and opportunities.

Despite facing significant headwinds in FY2024 - such as weak demand, price erosion, and global supply chaln disruptions - we achieved strong results, reflecting our focused execution of our strategy and continued operational excellence. The insolvency of the Heubach Group's German entities in April 2024 temporarily impacted Q1 FY2025, but our team's resilience is driving a solid comeback for growth and profitability.

Our foundational pillars include growth, innovation, sustainability, and people. I want to share our progress and reflections on each of these areas.

Growth

As a result of executing our strategy effectively this year, we have achieved significant milestones despite facing numerous challenges. Our commitment to cementing and expanding our market presence has led to solid market share gains and robust volume growth. Additionally, we have grown revenue with our top five customers, driven by our approach to partnering with them on innovation and providing them peace of mind. By investing in newer products and expanding our portfolio, we have successfully captured new market segments and strengthened our competitive position. Our proactive approach to understanding and meeting customer needs has enabled us to foster long-term relationships, driving sustained growth even in a turbulent environment. HCIL remains laser-focused on delivering robust growth.

Innovation

Innovation is at the forefront of our growth strategy.

We continue to invest in developing new products and enhancing our existing offerings to deliver exceptional value

to our customers. In FY2024, we successfully launched 11 new products - nearly one product each month - underscoring our commitment to staying at the cutting edge of the industry. Our relentless focus on innovation fuels our revenue growth and ensures we remain highly competitive in the market. Collaborative development with customers is central to our approach. I am proud to share that many customers regularly visit our Technical Centre to co-create solutions for their evolving needs.

Sustainability

At HCIL, our sustainability practices are comprehensive and deeply ingrained in the way we conduct business. Demonstrating our commitment, we have significantly invested in enhancing the use of renewable energy at our manufacturing sites. The Heubach Group, of which HCIL is a part, is proud to have established the carbon footprint of some of our key products—an industry first. Our flagship site at Roha exemplifies our ethos, utilizing 84% renewable energy, while our overall renewable energy usage across all our plants is 76%. We continue to focus on using renewable and green energy sources to reduce our carbon footprint, and more efforts are ongoing. We continuously innovate our products to meet stringent sustainability criteria, such as transitioning to water-based paints and inks, reducing VOCs, and enhancing energy management through easy dispersibility. Our goal is to become the partner of choice for industry-leading sustainable products.

These initiatives underscore the integration of sustainability into our core operations, making HCIL a leader in the industry.

People

Giving back to the community is fundamental to HCIL.

This year, we invested in education, health, and women's empowerment, aiming for a more equitable world.

To enhance these initiatives, we will continue to uphold our CSR principles, actively engage with the communities we aim to support, and promote employee volunteering and engagement, embedding these values into our working culture.

We strongly focus on employee well-being and development, creating a safe, growth-oriented work environment.

Our employees take pride in being part of the Company, and we communicate frequently with them to foster world-class engagement.

By creating a supportive, growth-focused work environment, we aimed to retain employee confidence and inspire them to reach their full potential, reducing the voluntary attrition rate in FY2024.

As I look ahead, I remain optimistic about HCIL's future.

In FY2024, we significantly strengthened our balance sheet by improving our cash position, EPS, and EBITDA figures.

Despite the challenges we faced with the group entities' insolvency in Q1 FY2025, we have demonstrated a remarkable recovery, thanks to our team's resilience and our shareholders' support.

Our robust financial position, combined with a solid, experienced management team and the dedication of our entire workforce, sets the stage for an even stronger performance in FY2025 as conditions normalize. Our renewed focus on innovation and sustainability reinforces our position as a leading player in the industry.

Before I end this letter, I would like to thank all the shareholders for their support during my stint at HCIL.

I believe we have navigated some unprecedented situations with clarity, focus, and passion. As I hand over the baton to the HCIL leadership, I am confident that the best days for HCIL are ahead.

I sincerely thank all our shareholders and stakeholders for your unwavering support. Together, we will continue to shape a vibrant and sustainable future.