BASF India : Transcript of the 79th Annual General Meeting of BASF India Limited

Transcript of the 79th Annual General Meeting OF BASF India Limited held on Friday, 04th August, 2023 at 3 p.m. through audio - visual means

• Mr. Manohar Kamath - Director - Legal, General Counsel (India) & Company Secretary, BASF India Limited:
• Dear shareholders, I welcome you to your company's 79th Annual General Meeting, which is being held through video conferencing and audio-visual means. I now would like to inform you about certain important points for the smooth functioning of this meeting. The facility of joining the annual general meeting through video conferencing or other audio-visual means is being made available for the shareholders on first come first serve basis. All the shareholders of the company who have joined this meeting have been muted by the host to avoid any disturbance arising out of background noise and ensure smooth and seamless conduct of the meeting. During the question-and-answer session, the names of the speaker shareholders will be called out and thereafter he or she will be unmuted by the host. Speaker shareholders are requested to ensure that audio video should be enabled and working properly. If you are unable to use the video mode, then you can speak through audio mode. Please use earphones or headphones if possible, so that you are clearly audible. If there is any connectivity problem at your end, we would ask the next speaker to join. Once the connectivity improves, you will be called again to speak.
• I welcome Mr. Pradip P. Shah, our chairman attending this meeting virtually from his office at Mumbai and request him to preside over the Annual General Meeting.
• Mr. Pradip P. Shah - Chairman, BASF India Limited:
• Thank you, Manohar. Ladies and gentlemen, dear shareholders, I have great pleasure in welcoming you all to the 79th Annual General Meeting of your company. In compliance with the circulars issued by the Ministry of Corporate Affairs and the Securities and Exchange Board of India, your company's Annual General Meeting is being conducted through video conferencing. Your company has taken required steps to enable shareholders to participate in this meeting and vote on the resolutions they set out in the notice of the 79th Annual General Meeting. The live streaming of this meeting is also being webcast on NSDL's website. The requisite quorum for this meeting is present and with your permission, I shall commence the proceedings. On behalf of the board of directors and shareholders as a company I welcome Dr. Ramkumar Druva, President Monomers, and Dr. Carola Richter, President - Asia Pacific who are attending this meeting from Brussels and Germany, respectively. All the directors of your company are present at this meeting and I will now request all directors to introduce themselves one by one. Mr. Alexander Gerding.

1

• Mr. Alexander Gerding - Managing Director, BASF India Limited:
• Good afternoon, dear shareholders. I'm Alexandra Gerding, your managing director for your company and attending this meeting from BASF office in Navi Mumbai. I'm also the chairman of the risk management committee.
• Mr. Pradip P. Shah - Chairman, BASF India Limited:
• Thank you, Alexandra. Dr. Ramkumar Dhruva.
• Mr. Ramkumar Dhruva - President, Monomers Division
• Good afternoon shareholders. I'm Ramkumar Dhruva, non-executive Director of BASF India Limited joining this meeting from Brussels.
• Mr. Pradip P. Shah - Chairman, BASF India Limited:
• Thank you, Dr. Carola Richter.
• Dr. Carola Richter - President Asia Pacific, BASF India Limited:
• I am Carola Richter non-executive director of the company and I'm attending this meeting from Germany. Please take that to the minutes.
• Mr. Pradip P. Shah - Chairman, BASF India Limited:
• Thank you, Doctor Richter. Mr. R. A. Shah.
• Mr. R. A. Shah - Independent Director, BASF India Limited:
• Good afternoon, all of you. My name is R. A. Shah. I'm participating in these proceedings from my residence in Bombay, and I'm in possession of full facts and papers.
• Mr. Pradip P. Shah - Chairman, BASF India Limited:
• Thank you, Mr. Shah, Mrs. Shyamala Gopinath. We can't hear you. We can't hear you. Can you put on your mute probably? Mr. Arun Bewoor.
• Mr. Arun Bewoor - Independent Director, BASF India Limited:
• I'm Arun Bewoor, independent director of the committee and attending this meeting from my residence in Mumbai. I am the Chairman of the stakeholders relationship committee, and I'm also Chairman of the Corporate Social Responsibility committee. Welcome to all the shareholders. Thank you.

2

• Mr. Pradip P. Shah - Chairman, BASF India Limited:
• Thank you. Thank you, Arun. Mr. Narendranath J. Baliga.
• Mr. Narendranath J. Baliga - Chief Financial Officer, BASF India Limited:
• Good afternoon, everyone. I am Narendranath J. Baliga Chief Financial Officer of the company and attending this meeting from BASF office in Navi Mumbai.
• Mr. Pradip P. Shah - Chairman, BASF India Limited:
• Thank you, Naren. Mr. Anil Choudhary.
• Mr. Anil Choudhary - Manufacturing Head & Whole-Time Director, BASF India Limited:
• Good afternoon shareholders I'm Anil Choudhary Manufacturing Head and whole-time Director. And I'm attending this meeting from BASF office in Navi Mumbai.
• Mr. Pradip P. Shah - Chairman, BASF India Limited:
• Thanks, Anil. Mr. Manohar Kamath.
• Mr. Manohar Kamath - Director - Legal, General Counsel (India) & Company Secretary, BASF India Limited:
• Good afternoon once again, I'm Manohar Kamath Company Secretary of the company and attending this meeting from the BASF office in Navi Mumbai.
• Mr. Pradip P. Shah - Chairman, BASF India Limited:
• Thank you, Manohar. Your company's statutory auditor, internal auditor, secretarial auditor and cost auditor have also joined the meeting through video conferencing or audio-visual means. The notice convening the 79th Annual General Meeting and the annual report have already been circulated to the shareholders of the company on 7th July 2023. And with your permission, I take the notice dated 10th May 2023 convening the 79th Annual General Meeting as read. The auditor's report does not have any qualification or observation or comments on the financial statements of the company for the financial year ended 31st March 2023. Hence with your permission, I take the same is read. The company has received corporate representations under Section 113 of the Companies Act 2013 from BASF SE and BASF Schweiz AG representing 73.33% of the paid-up equity capital of the company, holding 3,17,43,220 shares of the company. Since the Annual General Meeting is held virtually the requirement of appointment of proxy is not applicable. The registers maintained under the Companies Act 2013 are open for inspection electronically. Shareholders may send a request to Mr. Manohar Kamath, Company Secretary, for inspection of any documents mentioned in the AGM

3

notice. I will now invite Mr. Alexander Gerding to make a presentation to shareholders. Alex.

• Mr. Alexander Gerding - Managing Director, BASF India Limited:
• Thank you very much, Mr. Shah, and good afternoon, dear shareholders. It's an honor and pleasure to talk to you today as your new managing director of BASF India Limited taking over this position first of January 2023. First and foremost, I would like to extend my sincere gratitude to my predecessor, Mr. Krishnamohan for having successfully steered BASF India Limited over the last few years, leaving behind a strong legacy. And my ambition together with a team is to continue and to build on that legacy and navigate towards sustainable growth.
• In the next 30 to 45 minutes, I would like to share with you the financial performance of your company and stroke the key highlights of the company in the last 15 months. And then I'm looking forward to answer your questions. But before we start the presentation, some disclaimer. We only discuss topics that are in the public domain, we do not provide any forecasts about the future business situation. And we don't comment or give guidance on future results in business outlook.
• Next, please. Now safety is our number one priority in the company. We start every meeting with the safety moments. I would also like to start this meeting with a safety moment. Here you see our safety track record in the 15 months from April 2022 to June 2023. Fortunately, we have had no high severity incident. But we had two lost time injuries and three process safety incidents. Now the two lost time injuries the two colleagues effected are back to work. All incidents have been safely contained in remedial measures have been implemented. I would also like to congratulate our manufacturing sites for achieving a great result in our successful responsible care audits. So, we have had six responsible care audits to date, which were passed very successfully. And that's a testament of the safety mindset and safety awareness at our sites.
• It has also been a pleasure for me next slide please to visit all of our manufacturing sites across the country. Next, I visited Dahej site in February, I was able to visit Bangalore site in May. I visited Thane in June and Panoli in July. And I was very inspired by the high professionalism of our teams at the sites and by the high mindset and safety awareness and this is something that we will continue to drive moving forward.
• Next slide. Now if I had to describe the global macro-economic developments in the last fiscal year 22-23 in one picture, the picture would probably look a little bit like this. We were navigating through not so easy waters globally, there are some clouds in the sky, but also some sunlight. Last year was influenced by major events. The ongoing war in Ukraine has triggered an energy crisis in Europe, which influenced inflation, rising interest rates, and ultimately also dampening consumer demand and consumer confidence. And this is something that became especially visible towards the second half

4

of the last calendar year. And in our case, towards the second, third and fourth quarter of the fiscal year. Now, this dampening of demand was especially visible in Europe, but also North America, but even in Asia, if you look at China, which represents today 45% of the global chemical market, doing the most part of the year, doing all the part of last year, China had a zero COVID policy with sustained lockdowns and up until December, which also influenced the demand. And even after lifting the lockdowns in December, there was a strong expectation that after the Chinese New Year, the demand in China would very, very strongly rebound which did not materialize.

• Now, how does this all translate into the situation in India? Next slide, please. India could not be completely isolated and insulated from this regional and global developments. Nonetheless, India showed a very resilient development. If you look at the GDP growth in the last fiscal year with around 7%, and also the GDP expectation for this year in India of around 6%. I think it's a very resilient GDP development compared to global GDP development of 2%. So, large economy growing at this pace, I think it's a very strong result and a very robust result. Inflation and interest rates in India, although historically they might still be on a little bit higher level, they have been stabilizing with inflation around 5% and interest rate around 6.5%. We always look at the purchasing manager index because it tells us a sentiment of purchasing managers. So, the expectations if an economy will continue to expand or contract, and if the purchasing manager index is above 50, that means that there is an expectation that the economy will continue to expand, which has been consistently the case in India. Nonetheless, if you look a bit deeper into the GDP, you will see that last year GDP growth especially coming from manufacturing slowed down tremendously. The manufacturing growth was only 1% whereas in the previous fiscal year 22, it was around 11%. So, there was a strong slowdown of GDP contribution coming from manufacturing. While services had a strong continuation of GDP contribution. After the pandemic, a lot of people are going back to restaurants, are traveling, taking vacation, but they are not buying durable goods and this is a tendency that we see across the world.
• Now, if we go to the right-hand side of this slide by industries, India has shown strong resilience and strong growth in the automotive market. Last fiscal year the production of passenger vehicles growth was above 20% and IHS is projecting passenger vehicles to be produced in India around plus 8% this year. So strong, resilient automotive demand. Construction is picking up again but slowed down also last fiscal year, compared to previous year. We have seen a very robust agricultural market with a population of 1.4 billion people. They need food, high quality food, so obviously the agricultural market has been strong. Nonetheless, we have to acknowledge that we have been facing over the last few seasons very erratic monsoons. The monsoon this year was about one month delayed and we've had floods in the North of India, while it was very dry in the South of India. So, erratic monsoons have become the new normal. The monsoon is still going on. So, we'll have to see in the next two months when harvesting starts, how it will play out. Fast moving consumer goods is still growing, but also in a slower pace. Especially we see that in rural India there is a dampened demand. Now we will have

5