Asahi Songwon Colors Ltd

To

the Members of

Asahi Songwon Colors Limited

Your Directors? take pleasure in presenting their 34^th Annual Report on the business and operations of the Company together with the Audited Financial Statements both Standalone and Consolidated for the Financial Year ended March 31, 2024.

FINANCIAL HIGHLIGHTS

The Company?s standalone and consolidated financial performance for the year ended March 31, 2024 is summarised below:

BRIEF DESCRIPTION OF THE COMPANY?S WORKING DURING THE YEAR•STATE OF COMPANY?S AFFAIRS a. General

Financial year 2023-2024, your Company encountered formidable challenges steaming from inventory destocking, commodity price volatility, fluctuating foreign exchange rates, several challenges including economic slow down in Europe as well as deep geopolitical tensions was evident throughout the year. The war in Ukraine, the major conflict in the Middle East and the crisis in the Red Sea had high impact on global trade. Falling demand coupled with sharp inflation of input cost created additional pressure on margins. The market of the Phthalo pigments was also sluggish during the year, which challenged the volume. The disruption in the global supply chain coupled with reduced demand from various end user industries negatively impacted the demand for pigments. Despite, this challenging environment, your Company sustained its growth trajectory.

The blue pigment segment, which has been the mainstay of the Company, showed signs of recovery in FY2024. The inventory destocking phase has concluded, and the value chain now maintains low inventory levels, leading to higher demand. The Company has successfully passed on increased raw material costs to customers, helping regain profitability margins.

The Azo pigment segment, which includes red and yellow pigments, has also shown improvement. Capacity utilisation for Azo pigments approached 65%, and the Company has made significant customer additions and quality improvements. Although demand remains subdued, the Company is optimistic about the segment's future performance.

The API business, bolstered by the acquisition of Atlas Life Sciences, has made substantial progress. The Chattral site commenced commercial production of API intermediates, which are now fully consumed internally. API?s plant has also commenced commercial production. The backward integration through intermediates is expected to enhance the profitability in the API business.

The Company is strategically positioned as a leading player in the global pigment and API markets. The Company's strong technical capabilities, decades of manufacturing expertise, and long-standing relationships with multinational corporations give it a competitive edge. The Company is commitment to sustainability and quality has made it a preferred supplier for many leading brands.

On Standalone basis

During the year under review, the revenue from operation stood at Rs 27,658 lakhs compared to

Rs 33,716 lakhs in the previous year. EBIDTA for FY2024 stood at Rs 2,209 lakhs with an EBITDA margin of 7.99%.

The Profit after tax (PAT) for FY2024 was Rs 2,633 lakhs compared to loss Rs 471 lakhs in the previous year.

On Consolidated basis

During the year under review, on consolidated revenue from operations was Rs 42,624 lakhs, reflecting a decline from Rs 50,455 lakhs in the previous year. The Company's Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA) stood at

Rs 2,107 lakhs, a significant improvement from Rs 1,114 lakhs in FY2023. The EBITDA margin improved to 4% from 1% in the previous year. Profit After Tax (PAT) for FY2024 was Rs 1,564 lakhs, a remarkable turnaround from a loss of Rs 1,847 lakhs in FY2023.

c. Exports

During the year under review, the total exports on a standalone basis contributed to Rs 15,595 lakhs compared to Rs 20,894 lakhs during the previous year. Your Company continues to focus on export markets for its product competitiveness and for seeking profitable opportunities for growth. The Company keeps close watch on global developments with an aim to cater to global requirements to the maximum extent possible.

SALE OF LEASE HOLD LAND

During the year under review, the Company has completed sale of land Company?s leasehold land located at Saykha Industrial Estate, Village Saykha, Tal: Vagra, Dist: Bharuch for a total consideration of Rs 4,657.21 lakhs resulting into a gain of Rs 2,561.03 lakhs (net of transaction cost and incidental costs). The buyer is a third party and not belonging to the Promoter or Promoter Group/Group Companies and the transaction does not fall under the ambit of Relative Party Transactions.

TRANSFER TO RESERVE

Yours Directors do not propose to transfer any amount to the General Reserves for the Financial Year ended March 31, 2024.

DIVIDEND

The Board of Directors at their meeting held on May 28, 2024 has recommended dividend on equity shares at a rate of 0.50 per share (Fifty Paise Only) (5%) of face value of Rs 10/- each on the fully paid up equity share capital as final dividend for the Financial Year 2023-2024. The dividend payment is subject to approval of the members of the Company at the ensuing 34^th Annual General Meeting ("AGM") of the Company.

During the previous financial year, the Company has paid Final Dividend of 0.50 per share (5%) of face value of Rs 10/- each on the fully paid up equity share capital of the Company.

The final dividend, if approved by the members at the ensuing Annual General Meeting would involve a total outgo of Rs 58.94 lakhs towards dividend for the year.

As per the Income Tax Act, 1961, the Dividend is taxable in the hands of the Shareholders at the applicable tax rates of the respective shareholders and the Company is required to deduct tax at source from dividend paid to the members at prescribed rates as per Income Tax Act, 1961.

The dividend recommended is in accordance with the Dividend Distribution Policy of the Company. The Dividend Distribution Policy, in terms of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and is available on the Company?s website at http://www.asahisongwon.com/pdf/ Dividend-Policy.pdf.

ANY REVISION MADE IN FINANCIAL STATEMENTS OR BOARD?S REPORT

The Company has not revised the Financial Statements or Board?s Report in respect of any of the three preceding Financial Years.

SHARE CAPTIAL a. Issue of equity Shares with differential rights

The Company?s issued, subscribed and paid-up equity share stood at Rs 1,178.73 lakhs divided into 1,17,87,262 equity shares of Rs 10/- each. During the year under review, no equity shares with differential rights as to dividend, voting or otherwise where issued.

b. Issue of sweat equity shares

During the year under review, the Company has not issued any sweat equity shares.

c. Issue of employee stock options

The Company has not granted any Employee Stock Option within the meaning of Section 62(1)(b) of the Companies Act, 2013 read with its Rules framed there under and Regulation 14 of the Securities Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulation, 2015.

d. Debentures

During the financial year under review, your Company has not issued any Debenture in terms of Section 42 of the Companies Act, 2013 read with Rule 14 of the Companies (Prospectus and Allotment) Rules, 2014 and no debentures were redeemed during the Financial Year 2023-2024.

LISTING

As at March 31, 2024, 1,17,87,262 Equity shares of the Company continue to remain listed on BSE Limited (BSE) and National Stock Exchange of India Limited (NSE). The Company has paid the Annual Listing Fees to the said Stock Exchange(s) for the financial year 2024-2025.

CREDIT RATINGS

During the year under review, CARE has assigned CARE A-: Stable rating to the long-term facilities of your Company. This rating is applicable to facilities having tenure of more than one year.

CARE has also assigned the CARE A2+ rating to the short-term facilities of your Company. This rating is applicable to facilities having tenure up to one year.

FINANCE AND INSURANCE

The Company has been financed by State Bank of India, Federal Bank Limited and HDFC Bank Limited for both working capital and term loans.

The Company?s Plant, Property, Equipment?s and Stocks are adequately insured under the Industrial All Risk Policy. The Company has insurance coverage for Public Liability, Marine Coverage and Commercial General Liability (CGL). The Company has Directors and Officers Liability Policy (D&OL) to provide coverage against risk arising thereon.

Composition of the Board of Directors

As on March 31, 2024, the Board of Directors of the Company comprised of ten Directors, with four Executive and six Non-Executive Directors, which includes five Independent Directors. The composition of the Board of Directors meets the requirements of provisions of Regulation 17 of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Section 149 of the Companies Act, 2013.

Directors liable to retirement by rotation

In accordance with the provisions of Section 152(6) of the Companies Act, 2013 and in terms of the Articles of Association of the Company, Mrs. Paru M. Jaykrishna and Mr. Gokul M. Jaykrishna, Directors of the Company is due to retire by rotation at the ensuing 34^th Annual General Meeting and being eligible, offers themself for re-appointment. The Board recommends their re-appointment.

Independent Director

Based on the recommendations of the Nomination and Remuneration Committee and approval of the Board, Mr. Anil Jain was appointed as Non-Executive Independent Director of the Company for a period of five years commencing from July 27, 2024 to July 26, 2029. The aforesaid appointment is required to be approved by the members of the Company by way of Special Resolution at the ensuing Annual General Meeting. Your Directors recommend passing of the special resolution by the members.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as per Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

In terms of Regulation 25(8) of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Independent Directors have confirmed that they are not aware of any circumstance or situation which exists or may be reasonably anticipated that could impact or impair their ability to discharge their duties with an objective independent judgement and without any external influence. Based on the declarations received from the Independent Directors, the Board has confirmed that they meet the criteria of independence as mentioned under Regulation 16(1)(b) of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and that they are independent of the management.

In the opinion of the Board, there has been no change in the circumstances which may affect their status as Independent Directors of the Company and the Board is satisfied of the integrity, expertise, and experience (including proficiency in terms of Section 150(1) of the Companies Act, 2013 and applicable rules thereunder) of all Independent Directors on the Board. Further, in terms of Section 150 read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, as amended,

Appointment of Executive Director

During the year under review, Mr. Miteshkumar Nandubhai Patel (DIN: 10362008) was appointed as Executive Director by the members through Postal Ballot on January 24, 2024 for three consecutive years with effect from October 25, 2023.

Based on the recommendations of the Nomination and Remuneration Committee, the Board of Directors at its meeting held on July 27, 2024 considered the reappointment of Mr. Arjun Gokul Jaykrishna as Executive Director of the Company for a period of 3 years from October 19, 2024 to October 18, 2027. Your directors propose re-appointment of Mr. Arjun Gokul Jaykrishna, Executive Director of the Company for the approval of the members of the Company by way of Special Resolution at the ensuing Annual General Meeting.

Profile of Directors seeking appointment/ re-appointment

As required under Regulation 36(3) of the Securities Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulation, 2015, particulars of Directors seeking appointment/ re-appointment at the ensuing Annual General Meeting are annexed to the notice convening 34^th Annual General Meeting.

Performance Evaluation of Directors

Pursuant to the provisions of the Companies Act, 2013 and Regulation 17(10) of Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Committees. The way, the evaluation has been carried out has been explained in the Corporate Governance Report.

Remuneration Policy

The Board has framed a policy for selection and appointment of Directors, Key Managerial Personnel, Senior Management and their remuneration as recommended by the Nomination & Remuneration Committee.

The policy of the Company on directors? appointment, including criteria for determining qualifications, positive attributes, independence of a director and other matters, as required under Sub-section (3) of Section 178 of the Companies Act, 2013 and Regulation 19 of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the remuneration paid to the directors are governed by the Nomination and Remuneration Policy of the Company. The detailed Policy may be accessed from the website of the Company. The highlights of the Remuneration Policy and other details are given in the Corporate Governance Report, which is forming part of Board Report.

Familiarization programmes

The details of programmes for familiarization of Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company and related matters are put up on the website of the Company at the web link: www.asahisongwon.com.

Director and Officers Insurance

The Company has taken Directors and Officers insurance for all the Directors of the Company pursuant to Regulation 25(10) of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

KEY MANAGERIAL PERSONNEL

Pursuant to the provisions of Sections 2(51) and 203 of the Companies Act, 2013, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as on March 31, 2024, the Key Managerial Personnel (KMP) in the Company are as follows:

• Mr. Gokul M. Jaykrishna, Joint Managing Director & CEO

• Mr. Alok Jhawar, Chief Financial Officer

• Mr. Saji Varghese Joseph, Company Secretary

During the year under review, Mr. Alok Jhawar was appointed as Chief Financial Officer and Key Managerial Personnel in the terms of provisions of Section 203 of the Companies Act, 2013 with effect from October 11, 2023 upon the resignation of Mr. Narendra Rathi as Chief Financial Officer and Key Managerial Personnel with effect from close of business hours on May 29, 2023.

Mr. Gokul M. Jaykrishna, Joint Managing Director & CEO of the Company who is also serving as Managing Director & CEO of Asahi Tennants Color Private Limited, the Subsidiary of the Company received

Rs 84 lakhs as remuneration from the Subsidiary Company during the year 2023-2024. Whereas Mr. Arjun G. Jaykrishna, Executive Director of the Company who is also serving as Managing Director of Atlas Life Science Private Limited the Subsidiary of the Company received Rs 48 lakhs as remuneration from the Subsidiary Company during the year 2023-2024. Mr. Miteshkumar Nandubhai Patel (DIN: 10362008), Executive Director of the Company who is also serving as Executive Director of Asahi Tennants Color Private Limited the Subsidiary of the Company received Rs 3.65 lakhs as remuneration from the Subsidiary Company during the year 2023-2024.

Women Director

The Composition of the Board of Directors of the Company includes women Directors viz. Mrs. Paru M. Jaykrishna and Mrs. Shivani Revat Lakhia. Accordingly, the Company is in compliance with the requirement of Section 149(1) of the Companies Act, 2013 read with Rule 3 of the Companies (Appointment and Qualification of Directors) Rules, 2014.

Policy on Directors? appointment and Policy on remuneration

Pursuant to Section 134(3)(e) and Section 178(3) of the Companies Act, 2013, the policy on appointment of Board members including criteria for determining qualifications, positive attributes, independence of a director and the policy on remuneration of directors, KMP and other employees. The same are also available on the website of the Company at weblink https://www.asahisongwon.com.

Particulars of remuneration of Directors/KMP/ Employees?

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as per Annexure-"D" to this report.

Certificate from Practicing Company Secretary

Pursuant to Regulation 34(3) and Schedule V Para C clause (10)(i) of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, M/s. Shyamsingh Tomar Associates, Company Secretary in Practice, Ahmedabad, has certified that none of the Directors on the Board of the Company has been debarred or disqualified from being appointed or continuing as Directors of the Company by the Securities and Exchange Board of India/Ministry of Corporate Affairs or any such statutory authority and the certificate forms part of the Report of Corporate Governance forming part of this Annual Report.

DIVERSITY OF THE BOARD

The Company recognises and embraces the benefit of having a diverse Board of Directors and views increasing diversity at the Board level as an essential element in maintaining competitive advantage in the Business in which it operates. This Policy can be accessed from the Company?s website at http:// www.asahisongwon.com/pdf/Policy%20of%20 Board%20Diversity.pdf

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134(5) of the Companies Act, 2013, the Board of Directors hereby states and confirms that: i) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanations relating to material departures, if any.

ii) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2024 and of the profits of the Company for the financial year ended on March 31, 2024.

iii) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv) the Directors had prepared the Annual Accounts on a ‘going concern? basis.

v) the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

vi) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Number of Meetings of the Board of Directors

The Board meets at regular intervals to consider and approve financial results, business policies and strategic proposals apart from other items of business. The Board and Committee meetings are pre-scheduled, and a tentative annual calendar of meetings is circulated to the Directors in advance to ensure participation of all Directors.

During the year under review, five (5) Board meetings were held, and meetings of Subcommittees were also held. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013 and Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The details of the meetings are given in the Report on Corporate Governance which forms part of this Report. The Company provides all the Board members the facility to participate the meetings of Board and Subcommittees through Video Conferencing/ Other Audio-Visual means. Pursuant to the requirements of Schedule IV to the Companies Act, 2013 and the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 a separate Meeting of the Independent Directors of the Company was held on October 25, 2023, and the Directors reviewed the matters enumerated under Schedule IV(VII)(3) to the Act and Regulation 25(4) of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

STATUTORY COMMITTEES OF THE BOARD

The Company has the following five (5) Board level Committees, which have been established in compliance with the requirements of the relevant provisions of applicable laws and statutes:

1. Audit Committee

2. Nomination and Remuneration Committee

3. Corporate Social Responsibility Committee

4. Stakeholders? Relationship Committee

5. Risk Management Committee

Audit Committee

The Audit Committee comprises of three Non-Executive Directors, all of whom are Independent Directors. Dr. Pradeep Jha is the Chairman of the Audit Committee. The Composition of the Audit Committee meets the requirement of Section 177 of the Companies Act, 2013 and Regulation 18 of the Securities Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulation, 2015.

Dr. Pradeep Jha is the Chairman of the Audit Committee. The Composition of the Audit Committee meets the requirement of Section 177 of the Companies Act, 2013 and Regulation 18 of the Securities Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulation, 2015. The Company Secretary is the Secretary of the Committee. The Joint Managing Director, Chief Financial Officer and Auditors are permanent invitees to the committee meetings.

The detail of terms of reference of Audit Committee, number and dates of meetings held, attendance of the directors and remunerations paid to them are given separately in the attached Corporate Governance Report. Your Company has a well structured Internal Audit System commensurate with its size and operations. During the year there were no instances where the board had not accepted the recommendations of the Audit Committee.

Further details on the Audit Committee are provided in the Corporate Governance Section of the Annual Report.

Nomination and Remuneration Committee

The constitution and terms of reference of nomination and remuneration committee of the Company are in compliance with Section 178 of the Companies Act, 2013 and Regulation 19 and Part D of Schedule II of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

As on March 31, 2024, the Nomination and Remuneration Committee comprises of three (3) Non-Executive Independent Directors Mr. Jayprakasah M. Patel, Chairman, Mr. R. K. Sukhdevsinhji and Dr. Pradeep Jha, Member as its members.

Further details relating to the Nomination and Remuneration Committee are provided in the Corporate Governance Report, which forms an integral part of this Annual Report.

Corporate Social Responsibility Committee

In terms of the provisions of Section 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014 the Board of Directors of your Company has constituted a Corporate Social Responsibility (‘CSR") Committee which is Chaired by Mrs. Paru M. Jaykrishna the Chairperson and Managing Director of the Company, the other members of the committee are Mr. Jayprakash M. Patel and Dr. Pradeep Jha who are independent directors of the Company. Your Company also has in place a CSR policy and the same is available on the website of the Company. The committee places before the Board the details of the activities to be undertaken during the year. A detail report is attached as Annexure-"E" forming part of this report.

Stakeholders Relationship Committee

The Stakeholders? Relationship Committee is primarily responsible to review all matters connected with the Company?s transfer of securities and redressal of shareholders?/investors?/security holders? complaints. The constitution and terms of reference of Stakeholder Relationship Committee of the Company pursuant to Section 178(5) of the Companies Act, 2013 and Regulation 20 and Part D of Schedule VI of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Risk Management Committee

As per Regulation 21 of Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has constituted a Risk Management Committee. Your Company has prepared Risk Management Policy and Formulated Risk Management Committee and define role and responsibilities as per Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

AUDITORS RELATED MATTERS a. Statutory Auditors

Pursuant to the provisions of Section 139 of the Companies Act, 2013 read with rules made thereunder, M/s. Talati & Talati LLP., Chartered Accountants, Ahmedabad (ICAI Firm Registration No. 110758W/W100377) Independent Auditors of the Company shall to hold office from the conclusion of the 32^nd Annual General Meeting ("AGM") until the conclusion of the 37^th Annual General Meeting of the Company to be held in the calendar year 2027.

The Independent Auditors of the Company have not reported any fraud as specified under the second proviso of Section 143(12) of the Companies Act, 2013 (including any statutory modification(s) or re-enactment(s) for the time being in force).

M/s. Talati & Talati LLP, Chartered Accountants, Ahmedabad, have submitted their Report on the Financial Statements of the Company for the Financial Year 2023-2024, which forms part of the Annual Report 2023-2024.

The Notes on financial statement referred to in the Auditors? Report are self-explanatory and do not call for any further comments. The Auditors? Report does not contain any qualification, reservation or adverse remark.

The Company has received a certificate from the Auditors stating that their appointment, if made, will be within the limit specified under Sections 139 and 141 of the Companies Act, 2013.

The Auditors have also confirmed that they have subjected themselves to the peer review process of Institute of Chartered Accountants of India (ICAI) and hold a valid certificate issued by the Peer Review Board of the ICAI.

b. Cost Auditors

During the year under review, cost audit was not applicable to the Company.

c. Secretarial Auditors

Pursuant to Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board has appointed M/s. Shyamsingh Tomar & Associates, Company Secretaries, Ahmedabad as a Secretarial Auditor to conduct Secretarial Audit of the Company for the Financial Year 2023-2024 (Period from April 1, 2023 to March 31, 2024).

The Report of Secretarial Auditor in the prescribed form MR-3 for the financial year 2023-2024 is set out as Annexure-"F" and it forms a part of this Report.

Certain remarks in the Secretarial Audit Report do not have material impact on financial performance of the Company. The views of the Management on such remark are given hereunder:

During the year under review, penalty was levied by National Stock Exchange of India Limited and BSE Limited under Regulation 29(9) of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 for delay disclosure of related party transactions for the quarter and half year ended September 30, 2023 (Late Submission). The Company has duly paid penalty levied by National Stock Exchange of India Limited as per their Invoice.

Further, under regulation 24A of Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has received Secretarial Compliance Report for the 2023-2024 from M/s. Shyamsingh Tomar & Associates, Company Secretaries, Ahmedabad and same has filed with the Stock Exchanges (BSE& NSE).

d. Internal Auditors

M/s. Fenil P. Shah & Associates, a Practicing Chartered Accountants, Ahmedabad are the Internal Auditors of the Company for the financial year 2023-2024. Internal Auditors are appointed by the Board of Directors of the Company on a yearly basis, based on the recommendation of the Audit Committee. The Internal Auditors report their findings on the internal audit of the Company, to the Audit Committee on a quarterly basis. The scope of internal audit is approved by the Audit Committee.

DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT

During the year under review, neither the Statutory Auditors or the Secretarial Auditors have reported to the Audit Committee under Section 143(12) of the Companies Act, 2013 any instances of fraud committed against your Company by its officers and employees, details of which would need to be mentioned in the Board?s Report.

Transfer of Unpaid/Unclaimed Dividend & Share Application Money to Investor Education and Protection Fund (IEPF)

During the year under review, unclaimed dividend amount of 0.59 lakhs towards the unpaid dividend account of the Company for the financial year 2015-2016 (Interim Dividend) was transferred to Investor Education and Protection Fund (IEPF) of the Central Government. The said amount had remained unclaimed for seven years.

Reminders are sent regularly to the Shareholders who have not claimed the dividend amount, to claim the same from the Company failing which, the unclaimed dividend lying in the unpaid account for seven years shall be transferred to IEPF within thirty days from the due date for transfer of unpaid dividend. Unclaimed dividend in respect of the financial year 2017-18 (Final) is due for transfer to IEPF.

Transfer of Equity Shares to Investor Education Protection Fund Authority (IEPFA)

Pursuant to Section 124(6) of the Companies Act, 2013 read with Rule 6 of the Investor Education Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (as amended from time to time), all shares in respect of which dividend has not been paid or claimed for seven consecutive years or more shall be transferred by the Company to the Demat Account of IEPFA within a period of thirty days of such shares become due for transfer. Upon transfer of such shares, all benefits (like dividend, bonus, split, consolidation etc.), if any, accruing on such shares shall also be transferred to the demat/bank Account of IEPF and the voting rights on such shares shall remain frozen till the rightful owner claims the shares. The Company is in the process to transfer all shares in respect of which dividends declared for the year 2017-2018 or earlier financial years has not been paid or claimed by members for 7 (seven) consecutive years or more.

FINANCIAL STATEMENTS

As per the provisions of the Act and in accordance with the Circulars issued by the Ministry of Corporate Affairs ("MCA") and Securities and Exchange Board of India (SEBI), from time to time, the Annual Report 2023-2024 containing Balance Sheet, Statement of Profit & Loss, other statements and notes thereto, including consolidated financial statements, prepared as per the requirements of Schedule III to the Act, Boards Report (including Management Discussion & Analysis and Corporate Governance Report) is being sent to all shareholders through permitted mode.

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

During the year under review, the Company has three (3) Subsidiary Companies and one (1) Associate Company.

Asahi Tennants Color Private Limited ("ATC")

Asahi Tennants Color Private Limited ("ATC") is a joint venture between your Company and Tennants Textile Colours Limited, England, where in your Company is holding 51% of total Equity Share Capital and the balance share capital of 49% is held by Tennants Textile Colours Limited, England.

Tennants Textile Colours Limited (TTC) is the leading UK manufacturer of colour, based beside the River Lagan in Belfast, Northern Ireland with solvent production facility outside Birmingham, England. They produce a wide range of colour dispersions (Water & Solvent base) tailored to optimise their suitability for a range of markets including Textile, Paper, Paints & Coatings, Ink, Agriculture & Plastic. Today they export to over 41 countries globally from their base in the UK. The Company has a state of art plant at Dahej, Bharuch, Gujarat manufacturing AZO pigments.

Atlas Life Sciences Private Limited

On April 18, 2022, the Company acquired 78% stake of Atlas Life Sciences Private Limited, a manufacturer of Active pharmaceutical ingredients (APIs) for an all-cash consideration of Rs 4,800 lakhs. Atlas Life Sciences Private Limited is a leading manufacturer of Anti-convulsant, Anti-psychotic and Anti-diabetic APIs with focus on product and process research. Its key products includes : Pergabalin, R-Compound, Levosulpiride, Amisulpride, Glicazide, Phenylephrine. On March 26, 2024 the Company has acquired remaining 22% stake of Atlas Life Sciences Private Limited and it is now a wholly owned Subsidiary of the Company. The Company has plant at Odhav, Ahmedabad, Gujarat.

Atlas Life Sciences (India) Private Limited

On April 28, 2022 the Company has incorporated Atlas Life Sciences (India) Private Limited a wholly owned subsidiary of the Company to manufacture Active Pharmaceutical Ingredient and Bulk Drugs. The commercial operation of API and Intermediate has started at the new plant at Chhatral, Mehsana, Gujarat.

Plutoeco Enviro Association

Plutoeco Enviro Association, an Associate Company of the Company incorporated on October 27, 2020 as Section 8 Company to work as Non-Profit Organisation. Further, it is not Material associates as per the Securities Exchange Board of India (Listing Obligation and Disclosures Requirements) Regulations, 2015.

Pursuant to Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014, statement containing the salient features of the financial statements of its subsidiaries in AOC-1 is attached to the financial statements in a separate section and forms part of this Report. The policy relating to material subsidiaries as approved by the Board may be accessed on the Company?s website http://www.asahisongwon.com/pdf/Policy%20 of%20Material%20Subsidiaries.pdf.

During the year, no other Company, except the companies mentioned above, has become or ceased to be subsidiary, joint venture or associate of the Company.

Financial Position and Performance of Subsidiaries, Joint Ventures and Associates

The financial summary of the subsidiary companies are as follows:

ANNUAL ACCOUNTS OF SUBSIDIARY COMPANY

As provided in Section 136 of the Companies Act, 2013, the Balance Sheet, Statement of Profit and Loss and other documents of the subsidiary Company are not being attached with the Financial Statements of the Company. The Company has uploaded on its website the Audited Financial Statements of the subsidiary Company and the related detailed information to any member of the Company who may be interested to receive the same.

The Financial Statements of the subsidiary Company will also be kept open for inspection at the Registered Office of the Company. The Consolidated Financial Statements presented by the Company include financial results of its subsidiary companies and the financial highlights of subsidiaries are part of this Annual Report as Annexure-"A" as prescribed in Form AOC-1.

CONSOLIDATED FINANCIAL STATEMENTS

Your Directors have pleasure in attaching the Consolidated Financial Statements pursuant to the requirement of Regulation 33 & Regulation 34 of the Securities Exchange Board of India (Listing Obligations & Disclosure Requirements) Regulations, 2015 (hereinafter referred as Listing Regulations) read with other applicable provisions and prepared in accordance with applicable Ind AS, for financial year ended March 31, 2024.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY?S OPERATIONS IN FUTURE

The Company has not received any significant or material orders passed by any regulatory authority, court or tribunal which shall impact the going concern status and Company?s operations in future.

BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT

There have been no material changes and commitments, affecting the financial position of the Company since the close of Financial Year i.e. March 31, 2024 and the date of this report.

CHANGE IN THE NATURE OF BUSINESS, IF ANY

There was no change in the nature of business of the Company during the financial year ended March 31, 2024.

FIXED DEPOSITS

During the year under review, your Company has not accepted any deposit from the shareholders and public within the meaning of Sections 73 and 74 of the Companies Act, 2013 read together with the Companies (Acceptance of Deposits) Rules, 2014 (including any statutory modification(s) or re-enactment(s) for the time being in force). Further, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013

The Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013, if any, are given in the notes to the Financial Statements.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All related party transactions which were entered during the Financial Year were in the ordinary course of business and on an arm?s length basis. There were no materially significant related party transactions entered by the Company with the Promoters, Directors, Key Managerial Personnel or other persons which may have a potential conflict with the interests of the Company.

A statement of all related party transactions is presented before the Audit Committee on quarterly basis, specifying the nature, value and terms and conditions of transactions. Since all the related party transactions entered during the financial year were on an arm?s length basis and in the ordinary course of business, no details are required to be provided in Form AOC-2 as per Annexure-"B" as prescribed under Section 134(3) (h) of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014. In accordance with the requirements of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has also adopted Policy on Materiality and dealing with Related Party Transactions and the same has been placed on the website of the Company at http:// www.asahisongwon.com/pdf/Policy%20on%20 Relative%20Party%20Transaction.pdf.

CASH FLOW STATEMENT

As required under Regulation 34(2)(c) of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015, a Cash Flow Statement prepared in accordance with the Indian Accounting Standard 7 (Ind AS-7) is attached to the Financial Statement.

ANNUAL RETURN

The details forming part of the Annual Return of the Company containing the particulars prescribed under Section 92 and 132 of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014, in Form MGT-7, as on March 31, 2024, is made available on the Company?s website www.asahisongwon.com.

EXPORT HOUSE STATUS

The Company has been awarded status of "Three Star Export House" by Directorate of Foreign Trade in accordance with provisions of Foreign Trade Policy 2023. This status is valid till March 31, 2028.

RESEARCH AND DEVELOPMENT –R&D—

The Company has a Research and Development center, which is recognized by the Ministry of Science and Technology, Government of India. Focused areas of the Research and Development Centre was on product quality, cost reduction, new product offerings and environmental sustainability.

CERTIFICATIONS

Your Company has ISO 14001:2015 for Environmental Management System certification and ISO 9001-2015 for quality management system for plant at Vadodara.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In compliance with Regulation 34(2)(e) of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Management Discussion and Analysis Report forms part of this Annual Report.

CORPORATE GOVERNANCE

The report of the Board of Directors of your Company on Corporate Governance in terms of Regulation 34 read with Schedule V of Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is presented as a separate section titled Corporate Governance Report as per Annexure-"G".

The composition of the Board, the Audit Committee, the Nomination and Remuneration Committee, the Stakeholders Relationship Committee, the Corporate Social Responsibility Committee and other Committees of the Board, the number of meetings of the Board and Committees of the Board, and other matters are presented in the Corporate Governance Report.

A certificate from M/s. Shyamsingh Tomar & Associates, Company Secretaries, Ahmedabad regarding compliance with the Corporate Governance requirements as stipulated in the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, which forms part of the Annual Report.

Further as required under Regulation 17(8) of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, a certificate from the Joint Managing Director & CEO and Chief Financial Officer is annexed with this Report.

Nomination, Remuneration and Evaluation Policy

In terms of provisions of Section 178(3) of the Act, the Nomination and Remuneration Committee of the Company has formulated and recommended to the Board a policy, containing the criteria for determining qualifications, competencies, positive attributes and independence for appointment of a Director (Executive/Non- Executive) and it highlights the remuneration for the Directors, Key Managerial Personnel and other employees, ensuring that it covers the matters mentioned in Section 178(4) of the Act. Nomination, Remuneration and Evaluation Policy approved by the Board is available on the website of the Company at http://www.asahisongwon.com/ pdf/Nomination-and-Remuneration-Policy.pdf.

Vigil Mechanism/Whistle Blower Policy

The Company has adopted a Whistle Blower Policy, which enables the Directors and Employees to report instances of unethical behavior, fraud or violation of Company?s Code of Conduct. The policy provides for direct access to the Chairperson of the Audit Committee and safeguarding the employees and Directors who raises grievances against victimization. The policy has been circulated amongst the employees of the Company working at various locations, divisions/units. The policy formulated in line with the provisions of the Act and the Securities Exchange Board of India

(Listing Obligations and Disclosure Requirements) Regulations, 2015 is available on the website of the Company at http://www.asahisongwon.com/pdf/ Policy%20of%20Whistle%20Blower%20Policy.pdf.

Corporate Social Responsibility Policy

In terms of the provisions of Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Board of Directors of your Company has constituted a Corporate Social Responsibility (CSR) Committee and framed a CSR policy which details the programs/activities that can be carried out under various program heads and the same is available on the website of the Company at http://www.asahisongwon.com/pdf/ Policy%20on%20CSR.pdf

The Company?s CSR Programmes are focused on Health Care and Education, Infrastructure Development, Sustainable Livelihood and Social Empowerment & Welfare. During the year, the Company carried out several initiatives under the CSR programme heads a report on CSR activities is attached as Annexure-"E" forming part of this report.

Risk Management Policy

The Company has formulated Risk Management policy in accordance with the guidelines provided under the Charter of the Risk Management Committee of the Board of Directors, and pursuant to Regulation 21 of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Risk Management policy provides a structured, consistent, and continuous process across the whole organization for identifying, assessing, deciding on mitigations and reporting on the opportunities and threats that may affect the achievement of its strategic objectives. For detailed framework and outcome refer to Risk Management section in the Management Discussion and Analysis Report.

Your Company has an elaborate Risk Management procedure covering various Risks including Business, Operational, Financial, Sectoral, Market, Regulatory and Compliance, Sustainability, Human Resources, Information and Cyber Security and Strategic Risks and its Assessment, measurement and mitigation processes. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuous basis within the risk appetite as approved from time to time by the Board of Directors.

Your Company has a Risk Management Committee in accordance with the requirements of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The key risks and mitigating actions are being placed before the Committee and the Board of Directors of the Company.

CODE OF CONDUCT

In compliance with Regulation 26(3) of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the Companies Act, 2013, the Company has framed and adopted Code of Conduct (the Code) for Directors and Senior Management, which provides guidance on ethical conduct of business and compliance of law All members of the Board and Senior Management personnel have affirmed the compliance with the Code as on March 31, 2024. A declaration to this effect, signed by the Managing Director in terms of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is given in the Report of Corporate Governance forming part of this Annual Report. The Code is made available on the Company?s website www.asahisongwon,com,

CODE OF PRACTICES AND PROCEDURES FOR FAIR DISCLOSURE OF UNPUBLISHED PRICE SENSITIVE INFORMATION

The Board has formulated Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information (Fair Disclosure Code) for fair disclosure of events and occurrences that could impact price discovery in the market for the Company?s securities and to maintain the uniformity, transparency and fairness in dealings with all stakeholders and ensure adherence to applicable laws and regulations. The copy of the same is available on the website of the Company at http://www.asahisongwon.com/pdf/ Asahi%20Songwon%20Colors%20Code%20of%20 Practices%20and%20Procedure%20for%20Fair%20 Disclosure%20of%20Unpublished%20Price%20 Sensitive%20Information.pdf

PREVENTION OF INSIDER TRADING

The Board has formulated code of conduct for regulating, monitoring and reporting of trading of shares by Insiders. This code lays down guidelines, procedures to be followed and disclosures to be made by the insiders while dealing with shares of the Company and cautioning them on consequences of non-compliances. The copy of the same is available on the website of the Company www.asahisongwon.com.

PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Information in accordance with the provisions of Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 regarding conservation of energy, technology absorption and foreign exchange earnings and outgo is given as per Annexure-"C" hereto forming part of this Report.

DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

Your Company has in place adequate internal control systems commensurate with the size of its operations. The internal control systems, comprises of policies and procedures which are designed for safeguarding the assets, optimal utilization of resources, sound management of Company?s operations. These are continually reviewed by the Company to strengthen the same wherever required. The internal control systems are supplemented by internal audit carried out by an Independent Chartered Accountant and periodical review by management. The Audit Committee of the Board addresses issues, if any, raised by both, the Internal Auditors and the Statutory Auditors.

Details in respect of adequacy of internal financial controls with reference to the financial statements are stated in Management Discussion and Analysis which forms part of this Report.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORK PLACE –PREVENTION, PRHIBITION & REDRESSAL— ACT, 2013

The Company has in place a policy on prevention of sexual harassment at workplace. The policy aims at prevention of harassment of employees and lays down the guidelines for identification, reporting and prevention of sexual harassment. All women employees (permanent, temporary, contractual and trainees) are covered under this policy and it has been circulated amongst the employees of the Company and the same is exhibited on the notice board of all the business locations of the Company.

The Company has complied with the provisions relating to the constitution of the Internal Complaints Committee as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

During the financial year 2023-24, there was no complaint/case of sexual harassment and hence no complaint remains pending as on March 31, 2024.

DETAILS OF THE DESIGNATED OFFICER

Mr. Saji V. Joseph, Company Secretary & Compliance officer of the Company is a Designated officer under Rule (9)(5) of the Companies (Management and Administration) Rules, 2014.

ENVIRONMENT, HEALTH AND SAFETY

The Company is committed to health and safety of its employees, contractors and visitors. We are compliant with all EHS Regulations stipulated under the Water (Prevention and Control of Pollution) Act, The Air (Prevention and Control of Pollution) Act, The Environment Protection Act, The Factories Act and Rules made there under. Safety and environmental standards are periodically reviewed and upgraded. The Company preserves in its efforts to educate safe and environmentally accountable behavior in every employee, as well as its vendors.

The Company has undertaken various environment friendly measures in its different Units for promoting a better environment. The Company has in place adequate pollution control equipment.

The solid waste generated at the Works, after treatment of its liquid effluent is shifted to a Gujarat Pollution Control Board (GPCB) approved site.

The Company has maintained a greenbelt around its sites as a part of its commitment to environment management.

The Company continues to demonstrate its commitment to a clean and safe environment. The state of the art effluent treatment plant continues to run satisfactorily, so that the treated wastewater discharged is well within the stipulated norms set by GPCB. As a part of water conservation efforts, the Company has implemented suitable engineering solution to utilize recycled water as much as possible in cleaning, gardening and other utilities.

REGISTRAR AND SHARE TRANSFER AGENT

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

PARTICULAURS OF EMPLOYEES AND RELATED DISCLOUSRES

The information required pursuant to Section 197 of Companies Act, 2013 read with Rule 5 of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company is given as per Annexure-"D" hereto forming part of this Report.

In accordance with the provisions of Section 197(12) of the Companies Act, 2013 read with rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the names and other particulars of employees drawing remuneration in excess of the limits, set out in the aforesaid rules, forms part of this Report. In line with the provisions of Section 136(1) of the Companies Act, 2013, the Annual Report, as set out therein, are being sent to all the Members of your Company excluding the aforesaid information about the employees. Any Member, who is interested in obtaining these particulars about employees, may write to the Company Secretary of the Company.

INDUSTRIAL RELATIONS

The Company maintained healthy, cordial and harmonious industrial relations at all levels. The enthusiasm and unstinting efforts of employees have enabled the Company to remain at the leadership position in the industry. It has taken various steps to improve productivity across organization.

COMPLIANCE WITH SECRETARIAL STANDARDS

The Board of Directors affirms that the Company has complied with the applicable Secretarial Standards issued by the Institute of Companies Secretaries of India (SS1 and SS2) respectively relating to Meetings of the Board and its Committees which have mandatory application during the year under review.

SIGNIFICANT OR MATERIAL ORDERS WERE PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

No significant or material orders were passed by the Regulators or Courts or Tribunals, which affect the going concern status and Company?s operations in future.

DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016

During the year under review, the Company has neither made any application nor any proceeding pending under the Insolvency and Bankruptcy Code, 2016.

ONE TIME SETTLEMENT WITH BANKS

There is no instance for one time settlement with Banks or Financial Institutions. Hence, there is no question of difference between amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the Banks or Financial Institutions.

DETAILS OF UTILIZATION OF FUNDS

During the year under review, the Company did not raise any funds through preferential allotment or qualified institutions placement as specified under Regulation 32(7A) of the Securities Exchange

Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

GREEN INITIATIVE

The Ministry of Corporate Affairs had taken the Green Initiative in Report on Corporate Governance by allowing paperless compliances by Companies through electronic mode. Your Company supports the Green Initiative and has accordingly decided to send necessary communications to its Shareholders to their respective registered E-mail addresses.

DISCLOSURE OF EVENTS OR INFORMATION

In compliance with Regulation 30 of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, your Company has formulated a policy for determination of materiality of events and pursuant to the same, the Company makes disclosures to the Stock Exchanges.

The said policy can be accessed from the website of the Company at http: www.asahisongwon.com

Your Company has authorized the Key Managerial Personnel (KMP) jointly and severally for the purpose of determining materiality of an event or information and making disclosures to the Stock Exchanges.

APPRECIATION AND ACKNOWLEDGEMENTS

Your directors place on records their gratitude for the valuable support extended by the Government of India, Government of Gujarat, Electricity supply companies, various stake holders and Bankers and look forward to their continued support in future. The directors also place on record appreciations to all employees for their contribution to your Company?s performance.

The Company is thankful to the shareholders for reposing trust in the Company and their unflinching enthusiasm and patronage.