BASF India : Annual Report 2021-2022

Message from the Managing Director

Dear Members,

At the outset, I express my sincere gratitude for your support and confidence over the last years where we have successfully charted the path towards profitable growth. It is with immense pride that I report the all-time record high sales and profits achieved by your Company in the financial year 2021-22. Topline growth achieved through strong volume growth and higher price realizations coupled with agile margin management, prudent fixed cost and working capital management were the fundamental levers driving the success of your Company. You may be pleased to note that your Company ended the year with zero debt and is well positioned to leverage on its strengths in the coming years. Several unexpected challenges faced over the course of the year significantly amplifies the importance of these achievements. Our teams have demonstrated tremendous resilience during turbulent crisis times to deliver the extraordinary results that we have witnessed during the year. I humbly salute and thank each and every member of the BASF family for their invaluable contributions towards an outstanding year.

The Indian economy registered a smart recovery during the FY 2021-22 by registering a GDP growth of 8.7%, as per World Bank estimates, after a contraction of 7.3% witnessed in the preceding year. Despite erratic schedule and uneven geographical spread of the monsoon impacting agricultural activity in several parts of the country, this important segment which contributes a fifth to India's GDP grew by 3.95% in the reporting year. Industrial activity registered a sharp rebound in the year growing by 11.8% with robust growth in the automotive, construction and consumer durables segments. Your Company outperformed the market in every segment to register revenue from operations of Rs.130,997.3 million, a growth of 37% Y-o-Y. Keeping our customers as our top-most priority and delivering high quality products & services on a sustained basis, your Company recorded significant growth in volumes and price realizations in every quarter of the financial year 2021-22 in comparison to prior year.

Excluding exceptional items, Profit before tax grew by 71% to Rs. 7,473.6 million against Rs. 4,378.7 million in the previous year. Higher asset utilization, a strong focus on margin improvement and fixed cost discipline set the foundation for this significant improvement in the overall earnings of your Company. Additionally, effective planning and management enabled reduce the working capital requirements to 8.3% of revenue from 8.8% in the previous year. The significant increase in earnings and prudent capital management enabled increase the Return on Capital Employed (ROCE) to a record high of 35.8%. Your Company also ended FY 2021-22 with zero debt, a significant achievement given the overall macroeconomic scenario. Based on the improved financial performance, the Board of Directors of your Company have recommended a dividend of Rs. 6/- per equity share i.e. 60% for FY 2021-22.

Your Company continues to invest in its competencies to meet the growing demands of its customers. Capacity expansion projects executed in the field of Cellasto® and Dispersions will enable meet the growing demand from automotive, construction, paint and paper industries. Your Company continues to launch new products and solutions across our segments. I am pleased to inform you about the launch of our first Herbicide for the Sugarcane market and a new insecticide targeting multiple crops for the upcoming season. New products and solutions from the engineering plastics and polyurethane portfolio targeting the automotive, consumer appliances, construction and footwear industry are being developed through co-creation activities with our customers. Novel ingredients and formulations developed at our innovation centers form the basis of our growth in the Nutrition and Care segment.

As I write this message to you, I cannot help but reflect on the fact that this is third consecutive year that we live under the shadow of COVID. As was the case in the past two years the number of cases is rising across the country and near-term uncertainty is a matter of concern for the Company and all its stakeholders. Thankfully, unlike the Delta variant that severely impacted the nation as well as your Company with high severity infections and unfortunate fatalities during the first quarter of FY 2021-22, the Omicron variant, though highly transmissible, has resulted in significantly lower cases of severe infections. Your Company provided vaccination to all employees and contract staff including their families which contributed to their wellbeing and enabled them to operate seamlessly through these challenging times. As reported earlier your Company concentrated its CSR activities towards COVID relief activities during the FY 2021-22 contributing through our Chemistry by donating oxygen generating molecular sieves which was a dire need during the Delta wave. We also donated diagnostic and life-saving equipment such as ventilators & oxygen plants to hospitals in the vicinity of our stake holder communities. Additionally, we continued to engage our neighboring communities with our well-established programs in the areas of sanitation, water, hygiene and education.

We are currently in times of high business uncertainty. While COVID is still prevalent, geo-political tensions with the war in Ukraine, persisting supply chain challenges, global inflationary pressures and rising interest rates casting a shadow on demand development are major factors that will influence our business in the coming year. The resilience of our team and the mitigation measures developed to deal with the uncertainties and challenges give me the confidence that we are well positioned to continue to perform well even in these uncertain times. I thank you once again for your support and confidence and look forward to continuing our path of Sustainable and Profitable Growth.

Stay safe and take care, With Best Wishes

Narayan Krishnamohan

Managing Director

Annual Report 2021-2022

78th Annual General Meeting

Wednesday, 3rd August, 2022 at 3.00 p.m. through Video Conferencing / Other Audio Visual Means.

Agenda

1. Presentation of Audited Financial Statements and the Directors' / Auditors' Reports thereon.
2. Declaration of Dividend.
3. Re-appointmentof Director.
4. Re-appointmentof Statutory Auditors.

5-6. Special Business:

Notice of the Meeting is attached.

BASF India Limited

Registered Office:

The Capital, 'A' Wing, 1204-C 12th Floor, Plot No. C-70,'G'-Block, Bandra Kurla Complex, Bandra (East), Mumbai - 400051.

Telephone : [phone]

Website : www.basf.com/in

E-mail ID : [e-mail]

Corporate Identification Number:

L33112MH1943FLC003972

Manufacturing Sites:

Maharashtra (Navi Mumbai)

Plot No. 12, TTC Industrial Area, MIDC, Thane-Belapur Road, Turbhe, Navi Mumbai - 400 705.

Karnataka (Mangalore)

Bala/Thokur Village, Surathkal-Bajpe Road,

Mangalore Taluka, Dakshina Kannada District,

Karnataka - 575 030.

Gujarat (Dahej)

4B, Dahej Industrial Estate, Village Dahej,

Taluka Vagra, District Bharuch, Gujarat - 392 130.

Gujarat (Panoli)

Village Umarwada,

Survey No 432/1+2,

Taluka Ankleshwar, Gujarat - 393 001

India.

Offices:

Bangalore, Chennai, Delhi, Hyderabad, Indore, Kolkata and Pune.

Registrar & Share Transfer Agent: TSR Consultants Private Limited Unit : BASF India Limited,

C-101, 1st Floor, 247 Park,

Lal Bahadur Shastri Marg,

Vikhroli (West), Mumbai - 400 083.

Tel. No. : [phone] Extn: 411/412/413

Fax No. : [phone]

Email : [e-mail]

Contents

Page

Board of Directors & Key Managerial Personnel	2
Directors' Report	4
Management Discussion and
Analysis Report	54
Report on Corporate Governance	64
Independent Auditors' Report	83
Balance Sheet	94
Statement of Profit & Loss	95
Cash Flow Statement	96
Statement of Changes in Equity	98
Notes to the Financial Statements
for the financial year ended
31st March, 2022	99

BASF India Limited 1

Board of Directors & Key Managerial Personnel

Mr. Pradip P. Shah	Mr. Narayan Krishnamohan	Dr. Ramkumar Dhruva	Dr. Carola Richter
	Chairman	Managing Director

Mr. R. A. Shah		Mrs. Shyamala Gopinath		Mr. Arun Bewoor

Mr. Narendranath J. Baliga	Mr. Rajesh Naik	Mr. Manohar Kamath
Chief Financial Officer &	Manufacturing Head &	Company Secretary
Alternate Director	Whole-time Director

2 Annual Report 2021-2022

Management Committee	Bankers
Mr. Narayan Krishnamohan	(i)	Citibank N.A.
Mr. Narendranath J. Baliga	(ii)	Deutsche Bank AG
(iii)	BNP Paribas
Mr. Brieux Boisdequin
(iv)	Credit Agricole CIB
Mr. Rajesh Naik
(v)	Bank of America
Mr. Manohar Kamath	(vi)	HDFC Bank
	(vii) Mizuho Bank

Statutory Auditors	Secretarial Auditors
Messrs Price Waterhouse Chartered Accountants LLP	Messrs HSPN & Associates, LLP
206, 2nd Floor,
252, Veer Savarkar Marg,
Tantia Jogani Industrial Estate,
Shivaji Park, Dadar (West),
J. R. Boricha Marg, Opp. Lodha Excelus,
Mumbai - 400 028.
Lower Parel (E), Mumbai - 400 011.
Cost Auditors	Advocates & Solicitors
Messrs R. Nanabhoy & Co.	(i) Messrs Crawford Bayley & Co.
Cost Accountants	State Bank Building, 4th Floor,
Jer Mansion,	N. G. N. Vaidya Marg, Fort,
70 August Kranti Marg,	Mumbai - 400 023.
Mumbai - 400 036.	(ii) Messrs Dhruve Liladhar & Co.,
Internal Auditors	61 Free Press House,
215 Free Press Journal Marg,
Messrs Mahajan & Aibara	Nariman Point, Mumbai - 400 021.
Chartered Accountants	Director - Legal, General Counsel (India) &
1, Chawla House,
Company Secretary
62, Wodehouse Road,
Mr. Manohar Kamath
Colaba, Mumbai - 400 005.

Dr. Carola Richter, President of BASF Asia Pacific attended the United Nations Climate Change Conference as a panelist.

During the session "Climate Ambition in Asia", she shared her insights on creating sustainable impact as a business,

focusing especially on your Company's efforts in India to reduce emissions in the automotive industry.

BASF India Limited 3