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Aarti Industries Ltd
Industry :  Chemicals
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ISIN Demat
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As on: Jul 01, 2022 08:17 PM


the Members of


Your Board of Directors ("Board") are pleased to present this Thirty Eighth Annual Report of your Company ("the Company" or "Aarti Industries Limited") together with the Audited Statement of the Company for the Financial year ended March 31, 2021.

Financial Results

Rs.' in Crores

2020-21 2019-20 2020-21 2019-20
Total Income from Operations (Gross) 4,808 4,408 5,023 4,621
EBIDTA 935 930 982 977
Depreciation & Amortisation 218 173 231 185
Profit from Operations before Other Income, Finance Costs and Exceptional Items 716 757 750 792
Other Income 2 11 1 9
Profit before Finance Costs 718 768 751 801
Finance Costs 86 122 86 125
Profit before Tax 632 646 665 676
Total Tax Expenses 119 123 129 129
Non-controlling Interest - - (12) (11)
Net Profit for the period 514 523 523 536
Other Comprehensive Income (net of taxes) 40 (56) 48 (57)
Total Comprehensive income for the year 554 467 571 479
Earnings Per Share (Rs.) (Basic & Diluted) 29.47 30.04 30.04 30.77
Book Value Per Share (Rs.) 196 167 202 176

Financial Performance

Your Company reported Gross Total Income at ' 4,808 Crores for FY 2020-21 as against ' 4,408 Crores for FY 2019-20. Similarly the exports for the year were at ' 2,004 Crores for FY 2020-21 as against ' 1,841 Crores for FY 2019-20.

Your Company's Earnings Before Interest Depreciation and Taxes stood at ' 935 Crores in FY 2020-21 as compared to ' 930 Crores in FY 2019-20, registering a growth of 0.54%. Likewise Profit Before Tax stood at ' 632 Crores in FY 2020-21 as compared to ' 646 Crores in FY 2019-20.

Likewise, Net Profit after Tax & Deferred Tax stood at ' 514 Crores in FY 2020-21 as compared to ' 523 Crores in Financial Year 2019-20.

Likewise the Consolidated Total income for FY 2020-21 was at ' 5,023 Crores as compared to ' 4,621 Crores for FY 2019- 20 and exports for FY 2020-21 was ' 2,188 Crores v/s ' 1,966 Crores for FY 2019-20.

On a Consolidated basis, your Company's Earnings Before Interest Depreciation and Taxes stood at ' 982 Crores in FY 2020-21 as compared to ' 977 Crores in FY 2019-20, registering a growth of 0.51%. Similarly, Net Profit after consolidation stood at ' 523 Crores in FY 2020-21 as compared to ' 536 Crores in FY 2019-20.


During the year, the Company has paid an Interim Dividend of ' 1.50 (@ 30%) per share.

Your Directors recommend a final Dividend of ' 1.50 (@ 30%) per share, aggregating to a total Dividend of ' 3.00 (@ 60%) per share (of ' 5 each) for the financial year 2020-21, resulting a total payout ' 80.51 Crores (Previous Year: ' 60.98 Crores).

The dividend payout is in accordance with the Dividend Distribution Policy which is available on the website of the Company.

Dividend Distribution Policy

As per Regulation 43A of the Listing Regulations, the top 1000 listed companies shall formulate a dividend distribution policy. Accordingly, the policy was adopted to set out the parameters and circumstances that will be taken into account by the Board in determining the distribution of dividend to its shareholders and/or retaining profits earned by the company. A policy is available on the website of the Company and the web link thereto is: https://www.aarti-industries.com/investors/ GetReport?strcont id=b22bcY6v1CAOIQI 33MM

Transfer to Reserves

Your Company has transferred ' 51.50 Crores to General Reserve (Previous Year: ' 52.50 Crores).

Change in Share Capital

During the year 2020-21, there was no change in the authorised and paid up share capital of the Company.

Authorized Share Capital

Pursuant to an approval of the members given during the Extra- Ordinary General Meeting held on June 14, 2021, the authorised share capital was increased from '1,15,07,51,600 (Rupees One Hundred Fifteen Crores Seven Lakhs Fifty One Thousand and Six Hundred) to ' 3,00,00,00,000/- (Rupees Three Hundred Crores Only) by creation of additional 36,98,49,680 (Thirty Six Crore Ninety Eight Lakhs Forty Nine Thousand Six Hundred Eighty) equity shares of ' 5/- each.

As on the date of this report the Authorised Share Capital of the Company stands at ' 300,00,00,000 (Rupees Three Hundred Crores Only) divided into 60,00,00,000 (Sixty Crores) equity shares of ' 5/-each.

Paid Up Share Capital Bonus Shares @ 1:1

The Company on June 24, 2021, has allotted 17,42,34,474 nos. of fully paid up Equity Shares of ' 5/- each in the proportion of 1:1 [i.e. One Bonus Equity Share(s) of nominal value ' 5/- each for every 1 (One) Equity Share(s) of nominal value of ' 5/- each held by the Shareholders as on record date (i.e. June 23, 2021)]. Pursuant to the said allotment of Equity Shares, the paid-up share capital of the Company increased from ' 87,11,72,370 consisting of 17,42,34,474 Equity Shares to ' 1,74,23,44,740 consisting of 34,84,68,948 Equity Shares.

Qualified Institution Placement @ ' 855 per share

The Company on June 30, 2021, has allotted 1,40,35,087 nos. of fully paid up Equity Shares of ' 5/- each at a premium of ' 850 per Share, through Qualified Institution Placement (QIP). Pursuant to the allotment of said Equity Shares, the paid-up equity share capital of the Company increased from ' 1,74,23,44,740 consisting of 34,84,68,948 Equity Shares to ' 1,81,25,20,175 consisting of 36,25,04,035 Equity Shares.

Apart from the above, there was no change in the Share Capital.

The Company has neither issued shares with differential rights as to the dividend, voting or otherwise nor issued sweat equity shares. There is no scheme for employee stock option or provision of money for shares to the Employees or Directors of the Company.

Corporate Social Responsibility

Your Company through, Aarti Foundation and Dhanvallabh Charitable Trust - Our CSR arms undertake community interventions to enhance the lives of the communities. Besides our direct involvement, we partner with numerous implementing agencies to carryout need assessment and make impactful interventions. Our Focus areas during the year has been;

• Cluster & Rural Development

• Education & Skill Development

• Childcare & Healthcare Facilities

• Women Empowerment & Livelihood Opportunities

• Disaster Relief & Rehabilitation

• Eradication of Hunger & Poverty

• Water Conservation & Environment

• Research & Development work for upliftment of Society

The detailed policy on Corporate Social Responsibility is available on the website of the Company on the web link thereto is: https://www.aarti-industries.com/investors/ GetReport?strcont id=rQxVNykXxIkOIQL33MM

A brief note on various CSR initiatives undertaken during the year is presented in this Annual report. CSR annual report is annexed as Annexure-A and forms an integral part of the Report.

Related Party Transactions

The Company has a Policy on Materiality of Related Party Transaction and dealing with Related Party Transaction which is uploaded on the Company's website at the web- link given below:


https://www.aarti-industries.com/investors/ GetReport?strcont id=TNJu6Gnbr7sOIQI 33MM

All related party transactions that were entered into during the FY 2020-21 were on arm's length basis and were carried out in the ordinary course of the business. There are no materially significant related party transactions made by the Company with Promoters, Key Managerial Personnel or other Designated Persons which may have potential conflict with interest of the Company at large.

The related party transactions are approved by the Audit Committee. Omnibus approval is obtained for the transactions which are foreseen and repetitive in nature. A statement of related party transactions is presented before the Audit Committee on quarterly basis, specifying the nature, value and terms and conditions of transactions. A report of factual findings arising out of the accepted procedures carried out in regard to transactions with Related Parties is given by the Statutory Auditors on quarterly basis and the same is placed before the Audit Committee.

The details of related party transactions are provided in the accompanying financial statements.

Since all related party transactions entered into by the Company were in ordinary course of business and were on an arm's length's basis, Form AOC-2 is not applicable to Company.


The Company has not accepted any deposits from the public and as such, no amount on account of principal or interest on deposits from the public was outstanding as on the date of Balance Sheet.

The Company does not have any deposits which are not in compliance with the requirements of Chapter V of the Companies Act, 2013.

Particulars of Loans, Guarantees, Investments and Securities

Particulars of loans given, investments made, guarantees given and securities provided during the year under review and as covered under the provisions of Section 186 of the Companies Act, 2013 have been disclosed in the notes to the standalone financial statements forming part of the Annual Report.

Material Developments in Human Resources/Industrial Relations Front, including number of people Employed

It was a year of letting go of the age-old traditional methods of doing businesses and managing people in exchange of embracing a new and technologically advanced approach. Year 2020-21 thus presented a completely new opportunity to overhaul the existing system within organisations and implement modern value-based systems.

At Aarti, nurturing talent is one of our cultural attributes. We are committed to help our employees identify their strengths and development areas and guide them in reaching their maximum potential. Aarti's Talent Management Framework focuses on identifying, nurturing and developing the talent in the organisation and helping them fulfil their potential. The framework equips them with the knowledge, skills, and abilities to contribute in the company's business objectives and grow in the bargain. During the year various developments were undertaken, a few of them includes;

Aayam: Expanding Horizons

An unique organisational transformation and leadership development initiative, has helped to create unimaginable breakthroughs, elevate leadership and strengthen organisational values. We have also created new robust processes, resolved issues, and built an environment for high performance.

Gurukul - leaders create leaders' is an initiative which was started with the objective of creating the future leaders for the organisation; leaders who will lead the organisation towards unimaginable breakthroughs.

VOICE Co-create, Drive Change

One of the dimensions of Aarti Engaging Leader Framework is 'Listening & Speaking Powerfully'. 'Voice - Co-create, Drive Change' is yet another endeavour to enable this by providing a mechanism through which the voice of all employees can be heard.

Gyan Sandhi and Aarti TALKS

Aarti Industries Limited believes in knowledge sharing and shared learning as it helps in developing collaboration among the peers, helps in synthesising multiple viewpoints and also learning from peer's experiences.

Pehal (Town hall Meeting)

A town hall meeting is an organisation-wide meeting in which the management keeps their team updated about important information. It helps in promoting teamwork and collaborations.

Industrial Relations have been Cordial during the year through benchmarked people policies and practices to ensure high employees' morale. As on March 31, 2021, the Company had 7,111 permanent employees at the manufacturing facilities and administrative offices.

Particulars of Employees

The statement containing particulars of employees as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given in an Annexure and forms part of this report.

In terms of Section 136(1) of the Companies Act, 2013, the Report and the Accounts are being sent to the Members excluding the aforesaid Annexure. Any Member interested in obtaining a copy of the Annexure may write to the Company Secretary at the Registered Office of the Company for a copy of it.

Material changes and commitment if any affecting the financial position of the company occurred between the end of the financial year to which this financial statements relate and the date of the report

Except the change in Share Capital as stated above in this report, there are no other material changes and commitments affecting the financial position of the Company occurred between the end of the Financial Year to which these financial statements relate and the date of the report.

Consolidated Financial Statements

In accordance with the provisions of Companies Act, 2013 (hereinafter referred to as "the Act"), Regulation 33 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as "Listing Regulations") and applicable Accounting Standards, the Audited Consolidated Financial Statements of the Company for the FY 2020-21, together with the Auditors' Report, form part of this Annual Report.

Investor Education and Protection Fund (IEPF)

Pursuant to the applicable provisions of the Companies act, 2013 read with IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ('the Rules') all unpaid or unclaimed dividends are required to be transferred by the Company to the IEPF established by the government of India, after the Completion of seven years. Further, according to the rules, the shares on which Dividend has not been paid or claimed by the Shareholders for seven consecutive years or more shall be transferred to the Demat account of the IEPF Authority. Accordingly the Company has transferred the unclaimed and unpaid dividends of ' 36,86,098/-. Further 27445 corresponding shares were transferred as per the requirement of the I EPF Rules.

Annual Return

Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return as on March 31, 2021 is available in prescribed format on the Company's website on www.aarti- industries.com

Subsidiary Companies

As on March 31, 2021, the Company has 9 (Nine) direct subsidiaries, namely, Aarti Corporate Services Limited, Innovative Envirocare Jhagadia Limited, Aarti Polychem Private Limited, Aarti Organics Limited, Aarti Bharuch Limited, Aarti Spechem Limited, Aarti Pharmachem Limited, Aarti USA Inc. and Alchemie (Europe) Limited, and 2 (Two) indirect subsidiaries namely Shanti Intermediates Private Limited, Nascent Chemical Industries Limited both hold through Aarti Corporate Services Limited.

During the year under review, Ganesh Polychem Limited ceased to be Subsidiary of the Company w.e.f March 17, 2021 and became a jointly controlled entity with 50% Shareholding.

The Company does not have any material subsidiary whose net worth exceeds 10% of the consolidated net worth of the Company in the immediately preceding accounting year or has generated 10% of the consolidated income of the Company during the previous Financial Year. A policy on material subsidiaries had been formulated and is available on the website of the Company and the web link thereto is: https:// www.aarti-industries.com/investors/GetReport?strcont id=A8DuSuG1AT8OIQL33MM

During the year, the Board of Directors reviewed the affairs of the subsidiaries. In accordance with Section 129(3) of the Companies Act, 2013, we have prepared consolidated financial statements of the Company and all its subsidiaries, which form part of the Annual Report.

Further a statement containing salient features of the financial statement of our Subsidiaries/Jointly controlled entity in the prescribed format AOC-1 is included in the Report as Annexure-C and forms an integral part of this Report.

Directors and Key Managerial Personnel (KMP)

In accordance with the prevailing provisions of the Section 149 of the Companies Act, 2013 read with Regulation 17 of the Listing Regulations, as amended from time to time, as on March 31, 2021, the Board of Directors, comprises of Sixteen Directors (with Eight Executive Directors and Eight Independent Directors).

Shri Ramdas M. Gandhi, Independent Director of the Company left for heavenly abode on July 16, 2021. He was on the Board of the Company since January 29, 1990. The Company places on record appreciation for his guidance, mentoring and contribution to the growth of the Company throughout his tenure.

At 37th AGM held on September 21,2020, Shri Narendra J. Salvi (DIN: 00299202) has been appointed as the Executive Director for a period of five years w.e.f. April 1, 2020.

In accordance with the provisions of Section 152 of Companies Act, 2013, Shri Parimal H. Desai (DIN: 00009272) and Smt. Hetal Gogri Gala (DIN: 00005499) Executive Directors of the Company are liable to retire by rotation at the ensuing Annual General Meeting and, being eligible, offer themselves for re- appointment. The Board recommends their re-appointment for the consideration of the Members.

The existing term of the Managing Director Shri Rashesh C. Gogri (DIN: 00066291) will come to an end on June 8, 2022. Based upon the performance evaluation rating, merits and recommendation of Nomination and Remuneration Committee of the Board, your Directors recommend his re-appointment for a further period of Five years effective from June 9, 2022.

Pursuant to Regulation 36 of the Listing Regulations read with Secretarial Standard-2 on General Meetings, a brief profile of the Directors proposed to be Re-appointed is made available, as an Annexure to the Notice of the Annual General Meeting.

None of the Directors of the Company are disqualified or as per SEBI order debarred from being appointed / re-appointed / holding position as Directors of the Company.

Independent Directors

Statement on declaration given by independent directors under sub-section (6) of section 149

In accordance with Section 149 (7) of the Companies Act, 2013, all Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16 of the Listing Regulations.

In the opinion of the Board, Independent Directors fulfill the conditions specified in Companies Act, 2013 read with the Schedules and Rules issued thereunder as well as Listing Regulations and are independent from Management and hold the highest degree of integrity and are individuals who are experts in their respective fields with enormous experience.

All the Independent Directors of the Company have enrolled their names in the online database of Independent Directors by Indian Institute of Corporate Affairs in terms of the recently introduced regulatory requirements.

Familiarisation Programme for Independent Directors

The Company has a Familiarisation programme for its Independent Director which is imparted at the time of appointment of an Independent Director on Board as well as annually. During the year, the Independent Directors of the Company were familiarised and the details of familiarisation programmes imparted to them are placed on the website of the Company and the web link thereto is: https://www.aarti-industries.com/Upload/PDF/Fmiliarisation- Programme-FY-7070-71.pdf

Key Managerial Personnel

During the year under review, there was no change in the Key Managerial Personnel of the Company.

Directors' Responsibility Statement

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013:

a. That in the preparation of the annual financial statements for the year ended March 31, 2021, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b. That the Directors had 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 at the end of the Financial Year and of the profit and loss of the company for that period;

c. That the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the Assets of the Company and for preventing and detecting fraud and other irregularities;

d. That Directors have prepared the annual accounts on a going concern basis;

e. 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;

f. 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.

Corporate Governance

Corporate Governance essentially involves balancing the interests of a Company's stakeholders. The Company continues to nurture a culture of good governance practices across functions, offices and manufacturing facilities.

Your Company has complied with the mandatory Corporate Governance requirements stipulated under the Listing Regulations. The separate Report on Corporate Governance is annexed hereto forming part of this report. The requisite certificate from Kirtane & Pandit LLP, Chartered Accountants is attached to the Report on Corporate Governance.

Management's Discussion and Analysis Report

Pursuant to Regulation 34 read with Schedule V to the Securities and Exchange Board of India (LODR) Regulations, 2015 ("Listing Regulations"), Management's Discussion and Analysis for the year under review is presented in a separate section forming part of the Annual Report.

Business Responsibility Reporting (BRR)

The Listing Regulations mandate the inclusion of the BRR as part of the Annual Report for top 1000 listed entities based on market capitalisation. Business Responsibility Reporting for the year under review, as stipulated under Regulation 34 (f) of Listing Regulations read with SEBI Circular No. CIR/CfD/ CMD/10/2015 dated November 4, 2015 is in a separate section forming part of the Annual Report.


The Board of Directors met Five(5) times during the financial year under review. The details of the number of meetings of the Board held during the Financial Year 2020-21 and the details of attendance of each Director at these meetings are provided in the Corporate Governance Report forming part of the Annual Report. The Maximum Gap between two meetings did not exceed 120 days, as prescribed in the Companies Act, 2013.

Annual Board Evaluation

Pursuant to the provisions of Companies Act, 2013 and the Listing Regulations, a structured questionnaire was prepared after taking into consideration, various aspects of the Board's functioning, composition of the Board and its Committees, culture, execution and performance of specific duties, obligations and governance.

The performance of the Committees and Independent Directors were evaluated by the entire Board of Directors except for the Director being evaluated. The performance evaluation of the Chairman, Non-Independent Directors and Board as a whole was carried out by the Independent Directors. The Board of Directors expressed their satisfaction with the outcome of evaluation and the process followed thereof.

Nomination and Remuneration Policy

Your Company has in place a nomination and remuneration policy which lays down a framework in relation to remuneration of Directors, Key Managerial Personnel and Senior Management of the Company. The policy also lays down criteria for selection and appointment of Board Members.

The details of this policy are given in the Corporate Governance Report.

Risk Management

In compliance with Regulation 21 of Listing Regulations, Your Company has a Risk Management Committee consisting of Shri Rajendra Gogri (Chairman), Shri Rashesh Gogri, Shri Bhavesh R. Vora, Smt. Hetal Gogri Gala, Shri Renil Gogri, Shri Narendra J. Salvi, Shri Chetan Gandhi and Shri Ajaykumar Gupta. The Committee through its dynamic risk management framework continuously identifies, evaluates and takes appropriate measures to mitigate/minimize various elements of risks.

Safety, Health and Environment

Being a responsible organization, we at Aarti Industries Limited (AIL), are committed to maintain the world-class standards of health, safety, security, human rights, environment protection, product quality and processes while conducting all our business operations, services, and expansion activities. To enable this, AIL has created a culture of Aarti Engaging Leaders, committed to live by Aarti Values of Care, Integrity and Excellence and empowering everyone in the hierarchy to speak powerfully. Further to have better implementation of our strategy, we have realigned the structure of organization into Pillar / Vertical / Group structure.

During FY 2020-21, We have implemented various elements under our flagship initiative "By Employees Sustainability Assurance for Employees (BE SAFE)", a mega initiative with objectives of 'Assurance on Complete Health Check of the Plants' and 'Zero-Harm'. With help of these, we have succeeded in bringing behavioural change amongst our people.

Furthermore, we have developed and implemented several Process Initiative Common (PICs) with specific objectives. Some of the focus areas are elimination of exposure to hazardous chemicals, reduction of electrical incidents to zero, achievement of zero leakage status, etc. In addition to PICs we have also designed and adopted guidelines and Standard Operating Procedures (SOPs) to minimize discretionary actions which may lead to accidents and hazards. Such standardizations have strengthened our efforts towards environment, health & safety.

Responsible Care

Our robust performance on EH&S has led to our success in getting Responsible Care (RC) logo. RC is a global chemical manufacturing industry's environmental, health, safety and security performance initiative. RC logo is not only an endorsement of our exemplary EH&S practices but also it shall help us in improving our environmental, health, safety and security (EHS&S) performance for facilities, processes and products throughout the entire operating system through its guiding principles.


Our significant efforts in improving our ESG performance has led to achieving gold medal in EcoVadis CSR assessment, placing AIL among the top 5 percent of companies assessed by EcoVadis.

Compliance Management System

At AIL we are committed to achieve 100% compliance. We have adopted a third-party managed IT-based Compliance Management System. It has a repository of all applicable regulations and requisite compliances. It has an in-built alert system that intimates concerned personnel about upcoming compliances. Last year, we added a module on 'License Management' into our compliance management system. Newly added license management system helps us in tracking the validity and renewal process of all applicable licenses. We initiate the license renewal process 90 days in advance to avoid any delays.

Zero Liquid Discharge

As a responsible organization, we are committed to protect and prevent the environment. Efficient usage of water is of high priority to us, making it a high material topic for us and our delighted stakeholders. Towards reducing our water footprint, we are focussing on 3R (Reduce, Reuse & Recycle) and strategizing to achieve zero-liquid discharge (ZLD) for our facilities. Currently, 14 of our manufacturing sites have ZLD facilities. Further we have planned to achieve 100% ZLD status within the next 3 years. We have adopted a proactive approach for ZLD and incorporated it in the conceptualisation & designing phase of new projects.

COVID Management

Continuation of plant activities during COVID-19 pandemic was a challenging task. We adopted new norms of social distancing, workplace hygiene, and shift management to eliminate exposure and spread of COVID-19. We undertook several initiatives to manage the pandemic situation; some of these are mentioned below:

• Commitment for abiding with COVID-19 precautions by incorporating it in Safety Pledge

• Arrangement of shelter and food for workers and their families

• Dedicated panel of doctors along with one specialist doctor for providing medical aid to all employees

• Assuring Emotional & Mental well-being of employees through "ANAHATA" initiative

• Intensive COVID-19 testing for our employees

• Periodical sanitization of workplace

• Provision of immunity boosters to our workers and employees

• Providing all possible supports to employees with COVID-19 disease

• Providing transport facilities to employees and workers

In addition to these, we have developed COVID-19 management plans for various scenarios segregated into L-1, L-2, and L-3 levels. Based on our robust preparedness and responsiveness we successfully ensured business continuity during COVID-19 pandemic.


We have initiated an Operational Excellence journey with focus to improve reliability. Initiatives like OEE (Overall Equipment Effectiveness) improvement, Quality Circles, Autonomous maintenance and through investigation of T-IHC (Throughput- Incident of High Consequence) deviation have resulted in improvement in reliability through involvement of the associate family and in turn benefited in achieving our safety and sustainability objectives.

Some of the initiatives in this regard as briefed below:

Vigil Mechanism/Whistle Blower Policy

The Company has established a Vigil Mechanism and Whistle Blower Policy for its Directors and employees to report concerns about unethical behaviour, actual or suspected fraud, actual or suspected leak of UPSI or violation of Company's Code of Conduct. It also provides for adequate safeguards against the victimisation of employees and allows direct access to the chairperson of the audit committee in exceptional cases The said policy has been posted on the website of the Company and the web link thereto is: https:// www.aarti-industries.com/investors/GetReport?strcont id=ZMPluse33MMnrACtosYOIQL33MM

The Company affirms that no person has been denied access to the Audit Committee Chairman.

Statutory Auditors

In accordance with the provisions of Section 139 of the Companies Act, 2013, Kirtane & Pandit LLP. Chartered Accountants (Firm Registration No: 105215W/W100057) were appointed as Statutory Auditor of your Company at the 35th Annual General Meeting for a term of 4 years, to hold office from that meeting till the conclusion of 39th Annual General Meeting to be held in 2022. As per the provisions of Section 139 of the Act, they have confirmed that they are not disqualified from continuing as Auditors of the Company.

Auditors' Report

There are no qualifications, reservations or adverse remarks or disclaimer made by the Auditor in their report. The Auditors of the Company have not reported any instances of fraud committed against the Company by its officers or employees as specified under Section 143(12) of the Companies Act, 2013.

Cost Auditors

In 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 cost accounting records and have them audited every year.

The Board has appointed Ketaki D. Visariya, Cost Accountants, (Membership No.16028) as the Cost Auditors of the Company for FY 2021-22 under Section 148 and all other applicable provisions of the Act.

The remuneration payable to the Cost Auditor is required to be placed before the Members in a General Meeting for their ratification. Accordingly, a resolution for seeking Member's ratification for the remuneration payable to Ketaki D. Visariya, Cost Accountants, is included at Item No. 7 of the notice convening the Annual General Meeting.

The Company has maintained cost records as specified under section 148(1) of the Act.

Secretarial Auditor & their Report

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and rules made thereunder, the Company had appointed CS Sunil M. Dedhia (COP No. 2031), Proprietor of Sunil M. Dedhia & Co., Company Secretary in Practice to undertake the Secretarial Audit of the Company.

Pursuant to provisions of Section 204(1) of the Companies Act, 2013 and Regulation 24A of the Listing Regulations, the Secretarial Audit Report for the financial year ended March 31, 2021 issued by CS Sunil M. Dedhia (COP No. 2031), Proprietor of Sunil M. Dedhia & Co. Company Secretary in Practice and the Secretarial Auditor of the Company is annexed as Annexure - B and forms an integral part of this Report. During the year under review, the Secretarial Auditor had not reported any fraud under Section 143(12) of the Act.

There is no qualification, reservation or adverse remark or disclaimer made by the Auditor in their report. As regards the observations of the Secretarial Auditor in their Report, the same is self explanatory and need no further clarifications.

Internal Control Systems and their adequacy

Your Company has clearly laid down policies, guidelines and procedures that form part of internal control systems, which provide for automatic checks and balances. Your Company has maintained a proper and adequate system of internal controls. The Company has appointed Shri Rakesh Pandey as an Internal Auditor who periodically audits the adequacy and effectiveness of the internal controls laid down by the management and suggests improvements. This ensures that all Assets are safeguarded and protected against loss from unauthorised use or disposition and that the transactions are authorised, recorded and reported diligently. Your Company's internal control systems commensurate with the nature and size of its business operations. Internal Financial Controls are evaluated and Internal Auditors' Reports are regularly reviewed by the Audit Committee of the Board.

Statutory Auditors Report on Internal Financial Controls as required under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act") is annexed with the Independent Auditors' Report.

Secretarial Standards Compliance

During the year under review, the Company has complied with all the applicable Secretarial Standards issued by the Institute of Company Secretaries of India and approved by the Central Government pursuant to Section 118 of the Companies Act, 2013.

Number of cases filed, if any, and their disposal under section 22 of the sexual harassment of women at work place (prevention, prohibition and redressal) act, 2013

Your Company is fully committed to uphold and maintain the dignity of every woman working with the Company. The Company has Zero tolerance towards any action on the part of any one which may fall under the ambit of 'Sexual Harassment at workplace. The Policy framed by the Company in this regard provides for protection against sexual harassment of women at workplace and for prevention and redressal of such complaints.

Internal Complaints Committees (ICC) have been set up to redress complaints received regarding sexual harassment. Details of Internal Complaints Committee.

Status of the Complaints during the FY 2020-21 is as follows:

Particulars No. of Complaints
Number of Complaints pending as on beginning of the Financial Year NIL
Number of Complaints filed and resolved during the Financial Year NIL
Number of Complaints pending as on the end of the Financial Year NIL

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

Conservation of energy, technology absorption, foreign exchange earnings and outgo

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo required under Section 134(3)(m) of the Companies Act, 2013, read with Rule 8(3) of the Companies (Accounts) Rules, 2014, as amended from time to time, are provided in Annexure-D to this report.

Significant and material orders passed by the regulators or courts

There are no significant material orders passed by the Regulators/Courts which would impact the going concern status of the Company and its future operations.


The Board of Directors places on record its sincere appreciation for the dedicated services rendered by the employees of the Company at all levels and the constructive cooperation extended by them. Your Directors would like to express their grateful appreciation for the assistance and support by all Shareholders, Government Authorities, Auditors, financial institutions, Customers, employees, suppliers, other business associates and various other stakeholders.