Your Board of Directors ("Board”) are pleased to present this 42nd Annual Report on the performance of your Company ("theCompany” or "Aarti” or "AIL”) together with the Audited Financial Statements of the Company for the Financial Year endedMarch 31, 2025.
[The Consolidated Performance of the Company and its Subsidiaries has been referred to wherever required]
1. FINANCIAL HIGHLIGHTS & SUMMARYFinancial Highlights
Particulars
Standalone
Consolidated
2024-25
2023-24
Total Income from Operations (Gross)
8,079
6,984
8,046
7,011
Earnings before Interest, Taxes, Depreciation andAmortisation (EBITDA)
1,005
974
1,000
Depreciation & Amortisation
433
377
434
378
Profit from Operations before Other Income, Finance Costand Exceptional Items
572
597
566
596
Other Income
19
11
14
Profit before Finance Cost
591
608
580
607
Finance Cost
275
211
Profit before Tax
316
396
307
Total Tax Expense
(24)
(21)
Non-controlling Interest
-
Net Profit for the period
340
417
331
416
Other Comprehensive Income (net of taxes)
15
6
Total Comprehensive income for the year
355
423
345
422
Earnings Per Share (1)(Basic & Diluted)
9.37
9.36
11.51
9.13
9.12
11.49
Book Value Per Share (1)
155
146
Your Company reported gross total Income at 18,079Crores as against 16,984 Crores for FY 2023-24.Similarly, the export during the year was reported at14,369 Crores for FY 2024-25 as against 13,642 Croresfor FY 2023-24.
Likewise, the consolidated gross total incomefrom operations for FY2024-25 was at18,046 Crores compared to 17,011 Crores forFY 2023-24 and export for FY 2024-25 was reportedat 14,337 Crores as against 13,668 Crores forFY 2023-24.
In accordance with the provisions of CompaniesAct, 2013, Regulation 33 of the Listing Regulations,and applicable Accounting Standards, the Audited
Consolidated Financial Statements of the Companyfor the FY 2024-25, together with the Auditors' Report,form part of this Annual Report.
Your Board of Directors recommend a Dividend of11.00/- (@ 20%) per share subject to approval of theShareholders at the ensuing 42nd AGM, for the year2024-25, resulting in a total payout of 136.25 Crores(Previous Year: 136.25 Crores).
The Dividend payout is in accordance with the DividendDistribution Policy which is available on the website ofthe Company. The Dividend Distribution Policy, in termsof Regulation 43A of the Securities and ExchangeBoard of India (Listing Obligations and DisclosureRequirements) Regulations, 2015 ("SEBI ListingRegulations”) is available on the Company's website at :
https://www.aarti-industries.com/investors/GetReport?strcont id=b22bcY6v1CAOIQL33MM
Your Company has transferred 134 Crores to the GeneralReserve (Previous Year: 142 Crores).
As on March 31, 2025, the Company has 7 (Seven)direct subsidiaries, namely, Aarti Corporate ServicesLimited, Innovative Envirocare Jhagadia Limited, AartiPolychem Private Limited, Aarti Bharuch Limited, AartiCircularity Limited (Formerly known Aarti SpechemLimited), Alchemie (Europe) Limited and Aarti ChemicalTrading - FZCO and 2 (two) indirect subsidiary namelyShanti Intermediates Private Limited (through itsHolding Company: Aarti Corporate Services Limited)and Aarti Chem Trading USA Inc (w.e.f. October 09,2024) (through its Holding Company: Aarti ChemicalTrading - FZCO).
During the year on July 22, 2024, Augene Chemical PrivateLimited ceased to be a subsidiary of Company. Thefollowing day, July 23, 2024, it became the joint venture.The Company does not have any associate companies.
During the year, Nascent Chemical Industries Limited,an indirect subsidiary through holding Company AartiCorporate Services Limited, ceased to be Subsidiary ofthe Company on September 30, 2024.
The Company does not have any material subsidiarywhose net worth or turnover exceeds 10% of theconsolidated net worth or turnover respectively, of theCompany in the immediately preceding accountingyear. A policy on determining material subsidiaries hadbeen formulated and is available on the website of theCompany and the web link thereto is:
https://www.aarti-industries.com/investors/GetReport?strcont id=A8DuSuG1AT8OIQL33MM
During the year, the Board of Directors reviewed theaffairs of the subsidiaries. In accordance with Section129(3) of the Companies Act, 2013, we have preparedconsolidated financial statements of the Company andall its subsidiaries, which form part of the Annual Report.
Further a statement containing salient features of thefinancial statements of our Subsidiaries and JointVentures in the prescribed format AOC-1 is included inthe Report as Annexure- A and forms an integral part ofthis Report.
Particulars(As onMarch 31,2025)
No. ofShares
Face ValuePer Share(in K)
Total Amount(in K)
Authorised
Share
Capital
60,00,00,000
5
3,00,00,00,000
Issued,Subscribed& Paid-up ShareCapital
36,25,19,910
1,81,25,99,550
During the year 2024-25, there was no change in theauthorised share capital of the Company. However,during the year, the Company allotted 15,875 (FifteenThousand Eight Hundred and Seventy Five) EquityShares of face value of 15 (Five) each aggregating to179,375 (Seventy Nine Thousand Three Hundred andSeventy Five) to its Employees in accordance with theterms of 'Aarti Industries Limited Performance StockOption Plan 2022' ("PSOP 2022”). The new equityshares issued, rank pari passu with the existing equityshares of the Company in all respects.
The Company's State of Affairs is given in theManagement Discussion and Analysis, which formspart of this Annual Report.
In accordance with the prevailing provisions ofthe Section 149 of the Companies Act, 2013 readwith Regulation 17 of the Listing Regulations, asamended from time to time, as on March 31, 2025, theBoard of Directors, comprises of Fourteen Directors(with Six Executive Directors, One Non-ExecutiveNon- Independent Director and Seven IndependentDirectors).
As part of ongoing commitment to strengtheningcorporate governance and aligning with globalbest practices, during the year Company inducteda professional Chief Executive Officer (CEO) andExecutive Director, Shri Suyog Kalyanji Kotecha(DIN: 10634964) w.e.f. June 17, 2024 to lead theCompany into its next phase of growth. The CEO bringswith him a wealth of experience, domain expertise, anda proven track record of strategic leadership in dynamicbusiness environments.
I n parallel, during the year, the Board was furtherstrengthened with the appointment of four accomplishedIndependent Directors:
• Shri Belur Krishna Murthy Sethuram (DIN: 03498701)- appointed with effect from June 1, 2024.
• Shri Ashok Kumar Barat (DIN: 00492930), Shri NikhilJaysinh Bhatia (DIN: 00414281) and Smt. Rupa DeviSingh (DIN: 02191943) - all appointed with effectfrom September 15, 2024.
Each Independent Director brings a diverse set ofskills, industry expertise, and strategic insights. Theirinclusion, alongside existing Independent DirectorsShri Lalitkumar Shantaram Naik (DIN: 02943588), ShriShekhar Shreedhar Khanolkar (DIN: 02202839), andProf. Aniruddha Bhalchandra Pandit (DIN: 02471158),reinforces the Company's commitment to transparency,stakeholder alignment, and enhanced board oversight.
During the year, Executive Director; Shri ParimalHasmukhlal Desai (DIN: 00009272) ceased to thedirector w.e.f. August 2, 2024. Further upon completionof their term as Independent Directors; Shri K.V. S.Shyam Sunder (DIN:00502621), Shri Bhavesh R. Vora(DIN :00267604) and Shri P. A. Sethi (DIN:00004038)ceased to be Independent Directors of the Companywith effect from September 23, 2024 and Smt. NatashaTreasurywala (DIN:07049212) ceased to be IndependentDirector of the Company with effect from October 13,2024. The Board placed on record its appreciation fortheir invaluable contribution and guidance.
Shri Renil Rajendra Gogri (DIN: 01582147) and ShriManoj Mulji Chheda (DIN: 00022699) retire by rotationand being eligible, offers themselves for re-appointment.A resolution seeking members approval for their re¬appointment along with other required details formspart of the Notice of Annual General Meeting.
Pursuant to Regulation 36 of the Listing Regulationsread with Secretarial Standard-2 on General Meetings,a brief profile of the Directors proposed to be appointedis made available, as an Annexure to the Notice of theAnnual General Meeting.
Pursuant to the provisions of Regulation 34(3) readwith Schedule V to the Listing Regulations, theCompany has obtained a Certificate from CS SunilM. Dedhia (COP No. 2031), of Sunil M. Dedhia & Co.Company Secretary in Practice, certifying that noneof the Directors of the Company have been debarredor disqualified from being appointed or continuing asDirectors of Companies by the Securities and ExchangeBoard of India or by the Ministry of Corporate Affairsor by any such statutory authority. The said Certificateis annexed to the Corporate Governance Report of theCompany for the Financial Year 2024-25.
During the year under review, Shri Suyog KalyanjiKotecha (DIN: 10634964), CEO & Executive Directorwas appointed as Key Managerial Personnel with effectfrom June 17, 2024.
In accordance with Section 149(7) of the CompaniesAct, 2013, all Independent Directors have givendeclarations that they meet the criteria of independenceas prescribed under Section 149(6) of the CompaniesAct, 2013 and Regulation 16(1)(b) of the ListingRegulations. In terms of Regulation 25(8) of the SEBIListing Regulations, they have confirmed that theyare not aware of any circumstance or situation whichexists or may be reasonably anticipated, that couldimpair or impact their ability to discharge their dutieswith an objective independent judgement and withoutany external influence. The Board of Directors of theCompany has taken on record the declaration andconfirmation submitted by the Independent Directorsafter undertaking due assessment of the veracity ofthe same.
In the opinion of the Board of Directors, the IndependentDirectors fulfil the conditions specified in the CompaniesAct, 2013 read with the rules made thereunder as wellas Listing Regulations and are independent fromManagement, hold the highest degree of integrityand possess expertise in their respective fields withenormous experience.
All the Independent Directors have complied with theCode for Independent Directors prescribed in ScheduleIV to the Companies Act, 2013.
All the Independent Directors of the Company haveenrolled their names in the 'Independent Directors DataBank' maintained by Indian Institute of Corporate Affairs("IICA").
Company implemented a comprehensive DirectorsFamiliarisation Programme aimed at ensuring thatits Board members, including newly appointedIndependent Directors, acquire a thoroughunderstanding of the company's strategic initiatives,operational capabilities, and governance framework.
• Strategic Orientation: Directors were acquaintedwith the company's vision, mission, values, andstrategic priorities, encompassing areas such as
sustainability efforts, technological advancements,expansion plans, business development strategies,and overall strategic direction.
• Operational Immersion: The programme includedvisits to manufacturing plants, primarily locatedin the State of Gujarat, and tours of Research andDevelopment centres. These visits provided first handexposure to the company's operational capabilities,manufacturing processes, and technologicalinnovations, facilitating a deeper understanding ofthe company's core functions.
• Interactive Engagement: One-to-one interactivesessions with the senior management team, business,and functional heads were conducted, fostering opencommunication and alignment on strategic goals.
• Ongoing Awareness: Periodic presentations duringBoard and Committee meetings covered variousaspects such as business models, new businessstrategies and initiatives by business leaders, riskminimization procedures, changes in domestic andoverseas industry scenarios, digital transformationand the regulatory regime affecting the company.
• Knowledge Dissemination: Regular newsletterscirculated to keep Directors informed about thedevelopments happening in the Company, IndustryScenario, Sustainability, Governance Initiatives etc.
Details of familiarisation programmes imparted tothem are placed on the website of the Company andthe web link thereto is: https://www.aarti-industries.com/upload/authpdf/Familiarisation-Programme-FY-2024-25.pdf.
Pursuant to the provisions of Section 134(3)(c) and134(5) of the Act, the Directors, to the best of theirknowledge and ability, confirm that for the year endedMarch 31, 2025 that;
a. in the preparation of the annual financial statementsfor the year ended March 31, 2025, the applicableaccounting standards have been followed andthere are no material departures;
b. they have selected such accounting policies andapplied them consistently and made judgmentsand estimates that are reasonable and prudent soas to give a true and fair view of the state of affairsof the Company at the end of the Financial Year andof the profit of the Company for that period;
c. they have taken proper and sufficient care for themaintenance of adequate accounting recordsin accordance with the provisions of the Actfor safeguarding the Assets of the Company
and for preventing and detecting fraud andother irregularities;
d. t hey have prepared the annual accounts on agoing concern basis;
e. they have laid down internal financial controlsto be followed by the Company and that suchinternal financial controls are adequate and wereoperating effectively; and
f. they have devised proper systems to ensurecompliance with the provisions of all applicablelaws and that such systems were adequate andoperating effectively.
During the Financial Year under review Eight (8) BoardMeetings were held. The details of the number ofmeetings of the Board and its Committees held duringthe Financial Year 2024-25 and the attendance of eachDirector/member at these meetings are provided inthe Corporate Governance Report forming part of theAnnual Report.
The attendance at Board meetings during the yearwas nearly 100%, reflecting your Directors' activeengagement and commitment to the Company'sgovernance and strategic oversight. More than 80%of the Board includes members who hold four or lessexternal directorships (Public Companies), ensuringthey can give adequate time and attention to theCompany's matters.
The intervening gap between the Board meetings waswithin the period prescribed under the Companies Act,2013 and the Listing Regulations.
The Company has a structured assessment process,wherein the Nomination and Remuneration Committeeof the Company has laid down the criteria of performanceevaluation of the Board, its Committees and theDirectors, including the Chairman. The evaluations arecarried out in a confidential manner and each memberof the Board provides his/her feedback by rating basedon various metrics. Feedback is collected through astructured questionnaire.
Under the two layers evaluation process, IndependentDirectors evaluate the performance of the Board ofDirectors, Non-independent Directors and the Chairmanof the Company. Later the Board of Directors evaluateperformance of the Board itself, its Committees and theBoard members.
The performance evaluation during the year highlightedan overall better rating in areas such as Board procedure,participation, and leadership. The Board demonstratedstrong independence and integrity, with full participationin the evaluation process. Improvements were noted inBoard Committees, particularly in risk managementand ESG compliance, with effective communicationbetween executive and non-executive members.
Suggestions for further enhancement included a focuson emerging risks (digital, cyber, and geopolitical),more frequent formal communication regarding budgetimpacts, and additional training sessions to keepDirectors updated on industry developments. The Boardand Management are committed to implementing thesemeasures to enhance governance effectiveness in thecurrent financiacial year.
Pursuant to Section 178 of the Companies Act, 2013 andRegulation 19 of the Listing Regulations, your Companyhas in place a Nomination and Remuneration Policywhich lays down a framework in relation to criteria andqualification for Nomination & Appointment of Directors,remuneration of Directors, Key Managerial Personneland Senior Management of the Company. The policyalso lays down criteria for selection and appointmentof Board members. The said policy has been posted onthe website of the Company and the web link theretois: https://www.aarti-industries.com/investors/GetReport?strcont id=pTvbr0JryL0OIQL33MM
The details of this policy are given in the CorporateGovernance Report.
Your Company through its CSR arms - Aarti Foundationand Dhanvallabh Charitable Trust - undertakescommunity interventions to enhance the lives of thecommunities. Besides our direct involvement, wepartner with numerous implementing agencies to carryout need assessment and make impactful interventions.Our Focus areas during the year has been;
• Education & Skill Development
• Childcare & Healthcare Facilities
• Tribal & Rural Development
• Women Empowerment
• Green Environment and Water Conservation
• Relief to Poor (Urban Housing Aid)
• Technology, Research and Development
• Others (Livestock Development Senior CitizenWelfare etc)
The detailed policy on Corporate Social Responsibilityis available on the website of the Company on the weblink thereto is:
https://www.aarti-industries.com/investors/GetReport?strcont id=rQxVNvkXxIkOIQL33MM
A brief note on various CSR initiatives undertaken duringthe year is presented in this Annual report. The details ofthe composition of the Corporate Social ResponsibilityCommittee, their terms of reference, meetings held, etc.are provided in the Corporate Governance Report, whichforms part of this Report.
Detailed CSR report is annexed as Annexure - B andforms an integral part of this Report.
The details of the composition of the Audit Committeetheir terms of reference, meetings held, etc. areprovided in the Corporate Governance Report, whichforms part of this Report. During the year there wereno cases where the Board had not accepted anyrecommendation of the Audit Committee.
The Company has established a Vigil Mechanismand Whistleblower Policy to facilitate the reportingof concerns related to unethical conduct, actual orsuspected fraud, potential or confirmed leakage ofUnpublished Price Sensitive Information (UPSI), andany violations of the Company's Code of Conduct.
This mechanism provides a secure and confidentialplatform for Directors and Employees to voice theirconcerns, ensuring stringent safeguards are in place toprotect whistleblowers against any form of retaliationor victimisation. The policy also allows for directaccess to the Chairperson of the Audit Committee, inexceptional cases.
To ensure organization-wide awareness and adherence,the Company has integrated this policy into itsonboarding and compliance training framework. Allemployees are required to complete the Aarti OnlineTraining Module (ATOMs) upon joining, which providescomprehensive guidance on the Company's critical
policies and codes, thereby reinforcing the culture oftransparency, accountability, and ethical governance.
The said policy has been posted on the website of theCompany and the web link thereto is: https://www.aarti-industries.com/investors/GetReport?strcontid=ZMPluse33MMnrACtosYOIQL33MM
The Company affirms that no person has been deniedaccess to the Audit Committee Chairman.
The Company has a Policy on Materiality of RelatedParty Transactions and dealing with RelatedParty Transactions which is uploaded on theCompany's website at the web- link given below:https://www.aarti-industries.com/investors/GetReport?strcont id=TNJu6Gnbr7sOIQL33MM
All the transactions with the related parties carried outduring the FY 2024-25 are in ordinary course of businessand on an arm's length basis. There are no materiallysignificant related party transactions made by theCompany with Promoters, Directors, Key ManagerialPersonnel or their relatives which may have potentialconflict with interest of the Company at large.
The related party transactions are approved by theAudit Committee. Omnibus approval is obtained forthe transactions that are foreseen and repetitive innature. A statement of related party transactions ispresented before the Audit Committee on a quarterlybasis, specifying the nature, value and terms andconditions of transactions. A report of factual findingsarising out of the accepted procedures carried out inregard to transactions with Related Parties is givenby the Statutory Auditors on quarterly basis and thesame is placed before the Audit Committee. Thedetails of related party transactions are provided in theaccompanying financial statements.
In terms of Regulation 23 of Listing Regulations, theCompany submits details of related party transactionson a consolidated basis as per the specified format tostock exchanges on a half yearly basis.
Further during the financial year 2024-25, the Companyorganized a deep-dive session for the Audit Committeemembers to raise awareness of evolving regulatoryrequirements, particularly regarding Related PartyTransactions (RPTs). The session covered keyregulatory changes in RPT regulations over the last three
financial years, the introduction of RPT InformationSharing Format (ISF) Standards, and their rationale.Additionally, recent SEBI rulings on RPTs involvingreputed companies were discussed, providing valuableinsights into enforcement trends and regulatoryexpectations. This initiative reinforced the Company'scommitment to enhancing governance and ensuringthe Audit Committee is well-equipped to overseecompliance in an evolving regulatory landscape.
Since all related party transactions entered into by theCompany were in ordinary course of business and onan arm's length's basis, disclosure in Form AOC-2 isnot applicable to Company.
Below are the details of Credit Ratings as on March
31 9095
Facilities
CRISIL
Ratings
India Ratingsand ResearchRatings
Long Term Issuers
CRISIL AA/
IND AA/ Stable
Rating and Bank Loan
Stable
Commercial Paper
CRISL A1
IND A1
Your Company has not accepted any deposits coveredunder Chapter V of the Companies Act, 2013 [(i.e.,deposits within the meaning of Rule 2(1)(c) of theCompanies (Acceptance of Deposits) Rules, 2014)],during the Financial Year 2024-25. Accordingly, noamount pertaining to principal or interest on depositsfrom public was outstanding as on March 31, 2025.
Particulars of loans given, investments made,guarantees given during the year under review andas covered under the provisions of Section 186 ofthe Companies Act, 2013 have been disclosed in thenotes to the financial statements forming part of theAnnual Report.
The information required under Section 197(12)of the Companies Act, 2013 read with Rule 5(1) ofthe Companies (Appointment and Remunerationof Managerial Personnel) Rules, 2014 forms part
of this Report and annexed as Annexure - C. As perfirst proviso to Section 136(1) of the Act and secondproviso of Rule 5(2) of the Companies (Appointmentand Remuneration of Managerial Personnel) Rules,2014, the report and financial statements are beingsent to the members of the Company excluding thestatement of particulars of employees under Rule 5(2).However, these are available for inspection duringbusiness hours up to the date of the forthcoming AGMat the registered office of the Company. Any memberinterested in obtaining a copy of the said statementmay write to the Company Secretary at the RegisteredOffice address of the Company.
20. MATERIAL DEVELOPMENTS IN HUMANRESOURCES/INDUSTRIAL RELATIONS FRONT,INCLUDING NUMBER OF PEOPLE EMPLOYED
Employee wellbeing remains a top priority, with a strongfocus on inclusivity. This year, the Culture Surveyextended participation to Associate families, fosteringdeeper engagement. The Engagement Survey achieved100% participation in just 8 days with a rise in scores aswell as percentiles at both the India and Global levels.
Leadership excellence was evident, with 293 out of 475people managers placed in the top quartile (4.71 - 5.0).Employee engagement initiatives also saw impressiveparticipation. The Holistic Wellbeing UmbrellaIntervention, "Nirvana,” recorded 16,826 participantsin FY 2024-25, representing a notable 39.62% increasefrom 12,052 in FY 2023-24.
AIL has embedded a robust listening culture throughoutthe organisation, initiating structured Conversationsbetween people managers and their teams, facilitatingBuddy Meets for peer-to-peer sharing, and organisingshop-floor listening tours where leadership engagesdirectly with employees on the ground.
AIL devised the Metamorphosis program as atailored cultural transformation initiative for early-career professionals, equipping them with AIL'shigh-performance vocabulary, core values, and theAarti engaging leadership framework, while activelyaddressing unworkabilities in their work environment.
In FY 2024-25, Aarti Industries advanced its workforcedevelopment with over 215,000 training hours. Keyinitiatives included the Progressio program, whichachieved a 99% success rate with 197 trainees,and the Meraki mentorship program, where 60mentors maintained an 83% meeting adherencerate. The Eklavya initiative had a 45% success rate,
while competency-based learning engaged 1,600participants. Training hours were distributed acrossfunctional (73,464), behavioural (37,920), system(35,600), and sustainability (54,142) areas. Compliancetraining totalled 11,445 hours, reaching 80% ATCcompliance across categories.
Learning Management System, offering over 100 micro¬learning modules and gamified content
21. AARTI INDUSTRIES LIMITED PERFORMANCESTOCK OPTION PLAN 2022
Your Company has implemented and through theNomination and Remuneration Committee, administersthe Aarti Industries Limited Performance Stock OptionPlan 2022 ("PSOP 2022”), under which stock optionsare granted to the Eligible Employees, in compliancewith the provisions of the SEBI (Share Based EmployeeBenefits and Sweat Equity) Regulations, 2021.
Your Company has received a certificate from CS SunilM. Dedhia (COP No. 2031), of Sunil M. Dedhia & Co.Company Secretary in Practice that PSOP 2022 hasbeen implemented in accordance with the provisionsof the SEBI (Share Based Employee Benefits and SweatEquity) Regulations, 2021 and the resolution passed bythe Shareholders. Any request for inspection of the saidCertificate may please be sent to investorrelations@aarti-industries.com.
22. MATERIAL CHANGES AND COMMITMENT IFANY AFFECTING THE FINANCIAL POSITIONOF THE COMPANY OCCURRED BETWEEN THEEND OF THE FINANCIAL YEAR TO WHICH THISFINANCIAL STATEMENTS RELATE AND THEDATE OF THE REPORT
There are no other material changes and commitmentsaffecting the financial position of the Company occurredbetween the end of the Financial Year to which thesefinancial statements relate and the date of the report.
23. INVESTOR EDUCATION AND PROTECTIONFUND (IEPF)
Pursuant to the applicable provisions of the CompaniesAct, 2013 read with IEPF Authority (Accounting,Audit, Transfer and Refund) Rules, 2016 ('the Rules')all unpaid or unclaimed dividends are required to betransferred by the Company to the IEPF establishedby the Government of India, after the completion ofseven years. Further, according to the rules, the shareson which Dividend has not been paid and claimed bythe Shareholders for seven consecutive years or more
shall be transferred to the Demat account of the IEPFAuthority. Accordingly, during the year, the Companyhas transferred the unclaimed and unpaid dividend of17,63,366/- Further 62,426 corresponding shares weretransferred as per the requirement of the IEPF Rules.
24. ANNUAL RETURN
Pursuant to Section 92(3) read with Section 134(3)(a) of the Companies Act, 2013, the Annual Return inform MGT- 7 as on March 31, 2025 is available on theCompany's website on www.aarti-industries.com
25. CORPORATE GOVERNANCE
Corporate Governance essentially involves balancingthe interests of a Company's stakeholders. TheCompany continues to nurture a culture of goodgovernance practices across functions, offices andmanufacturing facilities.
Your Company has complied with the mandatoryCorporate Governance requirements stipulatedunder the Listing Regulations. The separate Reporton Corporate Governance is annexed hereto formingpart of this report. The requisite certificate from M/sGokhale & Sathe, Chartered Accountants is attachedto the Report on Corporate Governance.
26. MANAGEMENT'S DISCUSSION AND ANALYSISREPORT
Pursuant to Regulation 34 read with Schedule V to theListing Regulations, Management's Discussion andAnalysis for the year under review is presented in aseparate section forming part of the Annual Report.
27. BUSINESS RESPONSIBILITY &
SUSTAINABILITY REPORTING (BRSR)
BRSR for the year under review, as stipulated underRegulation 34 (f) of Listing Regulations is in a separatesection forming part of the Annual Report.
28. RISK MANAGEMENT
As part of our ongoing efforts to enhance organizationalresilience and sustainable performance, theCompany has adopted a robust Enterprise-wide RiskManagement (ERM) Framework, integrating both Top-Down and Bottom-Up approaches to risk identificationand mitigation.
This hybrid methodology enables a comprehensiveunderstanding of risks at both strategic andoperational levels:
• The Top-Down approach ensures that key businessrisks - as viewed by the Board and senior leadership- are identified, prioritized, and aligned with theCompany's strategic objectives.
• Simultaneously, the Bottom-Up approach facilitatesthe capture of emerging and process-level risksthrough active involvement of departmental headsand frontline teams, thereby enabling timelyresponses to ground-level vulnerabilities.
By combining these perspectives, the ERM Frameworkoffers a holistic view of the Company's risk landscape,allowing Company to:
• Proactively identify and manage critical risks,
• Strengthen risk ownership and accountability acrossfunctions,
• Enhance decision-making through risk-informedstrategies, and
• Build a risk-aware culture throughout the organization.
This framework is further supported by periodic riskassessments, a centralized risk register, and regularreviews by the Risk Management Committee to ensurerelevance, responsiveness, and compliance withregulatory expectations.
The Risk Management policy has been posted on thewebsite of the Company and the web link thereto is:aarti-industries.com/investors/GetReport?strcontid = dCIEPn8aX6wOIQL33MM
29. COMPLIANCE MANAGEMENT SYSTEM
In pursuit of strengthening our governance frameworkand ensuring a proactive approach to regulatoryadherence, the Company has a ComplianceManagement Tool as part of its enterprise-wide riskmanagement initiative.
This digital tool is designed to systematize andstreamline compliance tracking across all applicablelaws, regulations, and industry mandates. It enablesreal-time monitoring, timely alerts, and seamlessdocumentation, significantly reducing the chances ofinadvertent non-compliance.
By automating compliance processes and integratingaccountability at various levels, the tool acts as astrategic enabler in:
• Curtailing regulatory risks,
• Enhancing transparency and audit-readiness,
• Enabling prompt response to statutory changes,• Promoting a culture of responsibility and control.
This initiative reflects the Company's commitment toinstitutionalizing compliance, minimizing exposure topenalties or reputational damage, and upholding thehighest standards of corporate governance.
At AIL, safety is not merely a policy; it is an integralpart of our culture and essence, shaping every process,decision, and action. Our safety journey has evolvedthrough initiatives like "Besafe” and "Besafe (Dilse...).” While "Besafe” established a strong foundationin process safety, "Besafe (Dil Se.)” is elevatingsafety further, emphasizing culture, leadership,and governance. AIL's partnership with dss for the"Besafe (Dil se..)” initiative aims to enhance AIL'ssafety journey.
Besafe (Dil se.) initiative has enhanced the BBSO tooland introduced new tools such as Condition Listening(CL), Safety Action Meetings (SAM), and Personal SafetyAction Plans (PSAP). Through these tools, we're activelyinvolving our shop floor teams and further strengtheningour safety culture.
Unsafe situations have been identified and rectifiedthrough BBSO, while SAM has enabled shop floorteams to resolve recurring unsafe acts by promotingengagement. The Condition Listening program isimproving plant upkeep and eliminating unsafeconditions. Additionally, PSAPs are fostering a personalcommitment to safety among managers, leaders andsenior Leaders.
Our ambitious digital transformation journey, Unnati2.0, is improving digital tools for safety. BBSO andGPC tools have been successfully migrated to a newplatform with significant value additions and receivingpositive feedback from users, representing a pivotalleap in our commitment to innovation, growth, andexcellence as we propel into the future of work.
AIL's unwavering commitment to safety is evident inits continuous efforts to elevate safety standards.Despite Global business challenges, FY 2024-25 saw AILfoster a culture of safety by promoting awareness andadherence to best practices at all organizational levels.
To further enhance our safety measures, AIL hasstrengthened leading indicators during FY 2024-25,which include:
• Senior Leadership Engagement: Senior Leadershipis spending time on the shop floor through SafetyWorkdays and Apex Sustainability Councils on amonthly and quarterly basis..
• Knowledge Capsules: Over 200 Knowledge Capsulesshared via email by the Corporate Safety andCompliance Head to provide regular updates onsafety topics
• Learning from Incident sessions: More than 50Learning from Incidents (LFI) sessions conductedon monthly basis, each lasting for 1 hour, to sharekey insights from both internal and external incidentswith 300 participants
• Behavior Based Safety Observation (BBSO) rounds:
Over 4000 BBSO rounds, reflecting an increase from2000 per month, due to the Besafe Dil Se initiative,which has strengthened our focus on BBSO
• Safety Action Meeting (SAM): 150 Employees areperforming one SAM per month to enable shop floorteam in eliminating recurring unsafe actions
• General Plant Conditions(GPC) rounds: More than2000 internal inspections conducted each monthacross the organization using to detect and rectifyunsafe conditions
• Work Permit Audits: Over 1500 work permit auditsperformed monthly to ensure compliance with workpermit conditions
• Monthly gate meetings organized on the 4th day ofevery month in all Factories (divisions) to acknowledgethe safety efforts of on-roll and contract employees
• Monthly Safety Theme: 12 Monthly Safety Themesimplemented annually to focus on specific safetytopics and raise awareness on the shop floor
• Monthly Safety video competition: Over 2000participants in monthly safety video competitions toencourage active employee involvement and promotelearning from incidents
• Celebrations and observances of Road SafetyWeek, National Safety Week, Fire Services Weekand Process Safety Week across all organizationsto encourage participation from all levels
• Capability Building: Sessions on Scaffolding Safety,Rigging and Lifting Safety, Process Hazard Analysis,First Aid, and Incident Investigation were conductedacross the organization.
Process safety is paramount, and AIL has implemented
robust measures through Barrier Management to ensure
its effectiveness. By consolidating risks and prioritizingpreventive and mitigative barriers, AIL ensures theadequacy and reliability of controls. This approach hasresulted in Risk-Based Process Safety, robust controlof high risks, and an enhanced understanding of risksat the shop floor level. A comprehensive process safetydashboard tracks the status of various initiatives,and progress is reviewed through platforms like theOperations Group Review, Process Safety Council, ZoneSustainability Sub-Council, and Apex SustainabilityCouncil. This structured approach, combined with risksensitization and proactive emergency preparedness,has led to significant improvements in process safetyat the shop floor level.
To further strengthen our commitment to safety, weare implementing and enhancing our Process Safetyinitiatives. These initiatives include cyclic HAZOPs,QRAs, LOPAs, SIL studies, and PHA championdevelopment. AIL has also developed a world-classProcess Safety lab enabling process safety studies likeChemical reaction hazards, thermal degradation studies,powder safety analysis. The data developed throughthis lab creates a strong process safety informationfoundation for building a safe and scalable process.
The company also has developed a Robust FirePrevention & Protection program with well-trained FireSafety teams, world-class fire tenders and EmergencyResponse vehicles. AIL has also on boarded a businesspartner for availing emergency support services duringchemical transport emergencies while in transit.
World class OHCs, well qualified & trained FactoryMedical Officers and supporting Staff ensures thehealth of the employees is taken care of. Additionally,we are providing 24/7 ambulances with advancedlife support systems. AIL has also implemented aWorkplace Monitoring System for health and hygiene,and organised programs on occupational and non¬occupational health issues.
Our commitment extends to the surrounding communityin the form of training, awareness programs, emergencysupport, and handholding other MSMEs/industries todevelop safety management systems.
I CC granted AIL permission to use the RC Logo forthree years, from April 2025 to March 2028, following asuccessful Responsible Care Audit during Feb-2025.
This permission was granted following a recent auditconducted by a team of three highly experienced
auditors from ICC, who spent five days at our factoriesand Emerald office, Vadodara from February 17th to21st, 2025. During the audit, the auditors meticulouslyexamined our Aarti management system, interactedwith employees, and verified system implementation.
This achievement is a testament to our collectivecommitment to the Responsible Care Ethos and itsprinciples. It showcases our dedication to sustainablepractices and ethical conduct across all our operations.
As a responsible organization, we have focussedapproach towards environmental compliance,circular economy, efficient resource utilization, wasteminimization, water stewardship, climate actionand reduction of GHG gases. AIL has implementedEnvironment Management System (EMS) ISO -14001:2015 at all our manufacturing locations. 50% of our sitesare Zero Waste to landfill certified. AIL has publishedand implemented comprehensive guidelines for theWaste management and Environmental Managementsystem. Efficient usage of water, effective effluentmanagement, waste management, climate actions isimperative to us, making them high priority materialtopics. A considerable number of EnvironmentalProjects have been successfully implemented, andwe are beginning to see the benefits, such as effluentreduction and enhancement in effluent quality, wastereduction, waste recycling and use in manufacturingof valuable products, cost reduction and CO2Emission Reduction.
Towards reducing our water footprint, we are focussingon 3R (Reduce, Reuse & Recycle) and strategizing toachieve zero-liquid discharge (ZLD) for our facilities.During FY 2024-25, AIL has taken various initiativesfor water conservation by enhancing water harvestingsystem's capacity, increased steam condensaterecovery, increased MEE condensate recovery, STPtreated water recycling and RO permeate recycling,different process initiatives for recycling washingwater etc. Eight manufacturing facilities are Zero LiquidDischarge (ZLD) compliant, three are ZLD-ready, andthe rest are progressing toward ZLD readiness. Out ofthe total effluent generation about 81% effluent is beingrecycled back into process through the ZLD system and19% treated effluent is being sent to CETP for furthertreatment and discharge to deep sea. As part of waterconservation, Out of the total water recycled 75% isutility water. We have adopted a proactive approach
for ZLD and incorporated it in the conceptualisation &designing phase of new projects. ETP final dischargeparameters are connected to CPCB and SPCB portalsfor real time monitoring.
AIL has provided adequate Air pollution controlmeasures to control process and flue gas emissions likewet scrubbers, dust collectors, Bag filters, ElectrostaticPrecipitators (ESP) etc. AIL has implemented a dryscrubber concept (lime dosing along with solid fuel)to control SO2 emissions significantly. AlL haveimplemented LDAR programs to detect and controlfugitive emissions, VOC's etc. AIL has provided onlinesensors for detection and measurement of hazardousgases. AIL has phased out ODS substances in all ourmanufacturing divisions and offices. We have providedan effective emission monitoring of continuous on¬line stack monitors. All our manufacturing locationsare carrying out ambient air quality monitoring as perNAAQS. Online stack monitoring systems (OCEMS)have been connected to CPCB and SPCB portals forreal time monitoring. AIL has verified that none ofthe Persistent Organic Pollutants (POPs) listed byStockholm convention is emitted from our operations.
Our waste management approach is systematicallydivided into three priorities depending upon the variousoperating conditions and type of waste generated.First priority is to reduce waste, second priority is 4Rs(Reuse, Recycle, Recover, Reprocess), third priorityis treatment and responsible disposal in scientificmanner. AIL being a responsible organisation ensuresutilisation of the hazardous waste and prioritize co¬processing over landfilling and incineration.
We are also conducting audits of the end users and TSDFsites responsible for reusing processing and disposal ofwaste. During FY 2024-25, We have improved Hazardouswaste management by taking many initiatives likeWaste management guideline were implemented withdigital monitoring of hazardous waste from generationto disposal, introduction of compressive checklist forall HW vehicles, all the HW vehicles are connectedto Aarti Logistic Control centre and monitored 24*7.50% of our divisions are now Zero Waste to Landfill(ZWL) certified. We aspire to get all our manufacturingdivisions ZWL certified by 2028. We have diverted 94%of hazardous waste from landfilling and 6% is disposedoff responsibly.
Aarti Industries embeds sustainability within itsbusiness strategy across four key dimensions:Sustainability, People Well-being, Partner Delight, andProsperity. Each dimension has specific goals, executedthrough the Aarti Management System. The companyhas conducted ESG and climate risk assessmentsto identify and address key risks and opportunities,developing mitigation and action plans with inputfrom relevant stakeholders. Sustainability efforts areoverseen by the CEO-led council, supported by zonalsub-councils reporting to the Apex SustainabilityCouncil. The following highlights demonstrate ourprogress on this journey.
Responsible Care:
AIL has been a Responsible Care Logo holder companysince April 2022. As a responsible, sustainable andvalue driven chemical manufacturing company, AIL isfocusing continuously to enhance performance withrespect to the indicators of Responsible Care codes.
EcoVadis
Our significant efforts in improving our ESGperformance has led to sustaining a gold medal fourthyear in a row in EcoVadis CSR assessment, our scorehas improved from 72 to 78. Placing AIL among the top5 percentile of companies assessed by EcoVadis.
CDP Rating
AIL has received Leadership band "A” in CDP ClimateChange, and "A-” in CDP water security disclosureindicating coordinated actions towards climate issuesand water security by AIL. AIL is also listed in ClimateCDP A list 2024
S&P Global Rating
Accomplished CSA score of 62 and ESG score of64 in S&P global disclosure, We were included inSustainability yearbook published by S&P global.
International Sustainability and Carbon Certification(ISCC)
We have obtained ISCC for one of our productsmanufactured at Zone 3, ISCC is an internationalcertification system covering all kinds of bio basedfeedstocks and renewables catering to the chemicalsector. This certification paves way for manufacturingcertified green products.
We have initiated an Operational Excellence journeywith focus to improve reliability. Different initiativesby involvement of everyone in the manufacturing areimplemented as below (few of them) -
OEE measurement for all the products provideinsights on various improvement opportunity areasin manufacturing to focus on. In the past, OEE hasimproved year on year.
Under the Model Plant Initiative, 5S has beenlaunched across organizations for effective workplacemanagement to improve upon the working efficiencyand workplace safety. It's creating a positive impactto improve the way we work at the workplace in abetter manner.
This is the tool wherein shop floor teams becomepart of critical problem solvers and contribute tothe organizational goals. The best implementedteams participate in local, state, national andinternational forums.
We launched this Kaizen Idea program to capturethe brilliant improvement ideas specifically from theassociate family members in the areas of safety,production, quality and cost etc. This is beneficial inboth tangible and in-tangible ways.
In accordance with the provisions of Section 139 ofthe Companies Act, 2013, Gokhale & Sathe, CharteredAccountants (Firm Registration No.: 103264W) wereappointed as Statutory Auditor of your Company at the39th Annual General Meeting for a term of 5 years, tohold office from that meeting till the conclusion of 44thAnnual General Meeting to be held in 2027.
There are no qualifications, reservations or adverseremarks or disclaimer made by the Auditor in theirreport. The Auditors of the Company have not reportedany instances of fraud committed against the Companyby its officers or employees as specified under Section143(12) of the Companies Act, 2013.
I n terms of the Section 148 of the Companies Act,2013 read with the Companies (Cost Record and Audit)Rules, 2014, the Company is required to maintain costaccounting records and have them audited every year.
The Board accordingly, has appointed Ketaki D. Visariya,Cost Accountants, (Membership No.16028) as the"Cost Auditors” of the Company for FY 2025-26. Theremuneration payable to the Cost Auditor is requiredto be placed before the Members in a General Meetingfor their approval. Accordingly, a resolution for seekingMember's approval for the remuneration payable toKetaki D. Visariya, Cost Accountants, is included inthe Notice convening the Annual General Meeting interms of Rule 14 of the Companies (Audit & Auditors)Rules, 2014.
The Company has maintained cost records as specifiedunder section 148(1) of the Act.
Pursuant to the provisions of Section 204 of theCompanies Act, 2013 and rules made thereunder, theCompany had appointed CS Sunil M. Dedhia (COP No.2031), Proprietor of Sunil M. Dedhia & Co., CompanySecretary in Practice to undertake the Secretarial Auditof the Company.
Pursuant to provisions of Section 204(1) of theCompanies Act, 2013 and Regulation 24A of theListing Regulations, the Secretarial Audit Report forthe Financial Year ended March 31, 2025 issued by CSSunil M. Dedhia (COP No. 2031), of Sunil M. Dedhia &Co. Company Secretary in Practice and the SecretarialAuditor of the Company is annexed as Annexure- D andforms an integral part of this Report. During the yearunder review, the Secretarial Auditor had not reportedany fraud under Section 143(12) of the Act.
There is no qualification, reservation or adverse remarkor disclaimer made by the Auditor in their report.
Pursuant to the amendments to the Listing Regulationsthe Board, on the recommendation of the AuditCommittee, has approved and recommended to theMembers the appointment of M/s. BNP & Associates(Firm Registration No. P2014MH037400) (PR No.6316/2024), as the Secretarial Auditor of the Company,for a period of five consecutive years commencing fromApril 1, 2025 to March 31, 2030.
Brief details as required under the Listing Regulations,are provided in the Notice of 42nd AGM. The Directorsrecommend the same for approval by the Members.
37. INTERNAL CONTROL SYSTEMS AND THEIRADEQUACY
The Company has an in-house internal audit departmentwith a team of qualified professionals. The internalaudit department prepares an annual audit plan andprioritises audit activities based on the criticality ofsystem/ process gaps.
Reviews are conducted on an ongoing basis basedon a comprehensive risk-based audit plan, which isapproved by the Audit Committee at the beginning ofeach year. The Internal Audit team reviews and reportsto the management and the Audit Committee aboutcompliance with internal controls, and the efficiencyand effectiveness of operations as well as the keyprocess risks.
The Audit Committee meets every quarter to review anddiscuss the various Internal Audit reports, and followup on action plans of past significant audit issues andcompliance with the audit plan
Internal financial control systems of the Companyare commensurate with its size and the nature of itsoperations. These have been designed to providereasonable assurance with regard to recordingand providing reliable financial and operationalinformation, complying with applicable accountingstandards and relevant statutes, safeguarding assetsfrom unauthorised use, executing transactions withproper authorisation and ensuring compliance ofcorporate policies.
Statutory Auditors Report on Internal Financial Controlsas required under Clause (i) of sub-section 3 of Section143 of the Companies Act, 2013 is annexed with theIndependent Auditors' Report.
38. SECRETARIAL STANDARDS COMPLIANCE
During the year under review, the Company hascomplied with all the applicable Secretarial Standardsissued by the Institute of Company Secretaries of Indiaand approved by the Central Government pursuant toSection 118 of the Companies Act, 2013.
39. NUMBER OF CASES FILED, IF ANY, ANDTHEIR DISPOSAL UNDER SECTION 22 OFTHE SEXUAL HARASSMENT OF WOMEN ATWORKPLACE (PREVENTION, PROHIBITIONAND REDRESSAL) ACT, 2013
Your Company is fully committed to uphold and maintainthe dignity of every woman working with the Company.The Company has Zero tolerance towards any action onthe part of any one which may fall under the ambit of'Sexual Harassment at workplace'. The Policy framedby the Company in this regard provides for protectionagainst sexual harassment of women at workplace andfor prevention and redressal of such complaints.
The Company has complied with the provisions relatingto the constitution of Internal Complaints Committee("ICC”) under the Sexual Harassment of Women atWorkplace (Prevention, Prohibition and Redressal)Act, 2013. ICC have been set up to redress complaintsreceived regarding sexual harassment.
The status of the Complaints during the FY 2024-25 isas follows:
No. ofComplaints
Number of Complaints pending as onbeginning of the Financial Year
0
Number of Complaints filed and resolvedduring the Financial Year
Number of Complaints pending as on theend of the Financial Year
40. CONSERVATION OF ENERGY, TECHNOLOGYABSORPTION, FOREIGN EXCHANGEEARNINGS AND OUTGO
Particulars relating to conservation of energy,technology absorption, foreign exchange earningsand outgo required under Section 134(3)(m) of theCompanies Act, 2013, read with Rule 8(3) of theCompanies (Accounts) Rules, 2014, as amended fromtime to time, are provided in Annexure-E to this report.
41. SIGNIFICANT AND MATERIAL ORDERSPASSED BY THE REGULATORS OR COURTS
During the period under review there has been nosuch significant and material orders passed by theregulators or courts or tribunals impacting the goingconcern status and Company's operations in future.
42. DETAILS OF APPLICATION MADE ORANY PROCEEDING PENDING UNDER THEINSOLVENCY AND BANKRUPTCY CODE, 2016DURING THE FINANCIAL YEAR ALONGWITHTHEIR STATUS AS AT THE END OF THEFINANCIAL YEAR
During the Financial Year 2024-25, there was noapplication made and proceeding initiated / pendingby any Financial and/or Operational Creditors againstyour Company under the Insolvency and BankruptcyCode, 2016 ("the Code”).
Further, there is no application or proceeding pendingagainst your Company under the Code.
43. DETAILS OF DIFFERENCE BETWEEN THEAMOUNT OF VALUATION AT THE TIME OF ONETIME SETTLEMENT AND THE VALUATION DONEAT THE TIME OF TAKING A LOAN FROM THEBANKS OR FINANCIAL INSTITUTIONS ALONGWITH THE REASONS THEREOFDuring the Financial Year 2024-25, the Company hasnot made any settlement with its bankers for any loan/facility availed or/and still in existence.
Acknowledgement
The Board of Directors places on record its sincereappreciation for the dedicated services rendered by theemployees of the Company at all levels and the constructivecooperation extended by them. Your Directors would liketo express their grateful appreciation for the assistanceand support by all Shareholders, Government Authorities,Auditors, Financial Institutions, Customers, Employees,Suppliers, other business associates and variousother stakeholders.
For and on behalf of the Board
Rajendra V. Gogri
Chairman and Managing DirectorDIN :00061003Mumbai/ July 11, 2025