To the Members,
The Board of Directors ( "Board" ) are pleased to present the Seventh
Annual Report of Aarti Surfactants Limited ( "ASL" or "Company"
or "your Company" ) together with Company's Audited Financial
Statements (Standalone and Consolidated) for the financial year ended March 31, 2025.
1. FINANCIAL PERFORMANCE AND SUMMARY
The Company's Financial performance for the year ended March 31, 2025, is summarised
below:
(H in Lakhs)
|
Standalone |
Consolidated |
| Particulars |
|
|
|
|
|
2024-2025 |
2023-2024 |
2024-2025 |
2023-2024 |
| Revenue from Operations |
65,908.54 |
58,985.74 |
65,908.54 |
58,985.74 |
| Other Income |
347.88 |
13.31 |
347.89 |
13.31 |
| Profit/loss before Depreciation, Finance Costs, |
4,561.29 |
6,314.26 |
4,539.71 |
6,226.00 |
| Exceptional items and Tax Expense |
|
|
|
|
| Less: Depreciation/Amortisation |
1,711.65 |
1,598.02 |
1,734.60 |
1,603.75 |
| Profit/loss before Finance Costs, Exceptional |
2,849.64 |
4,716.24 |
2,805.11 |
4,622.25 |
| items and Tax Expense |
|
|
|
|
| Less: Finance Costs |
1,155.15 |
1,403.36 |
1,155.15 |
1,403.36 |
| Profit/loss before Exceptional items and |
1,694.49 |
3,312.88 |
1,649.96 |
3,218.89 |
| Tax Expense |
|
|
|
|
| Add/(less): Exceptional items |
420.25 |
- |
420.25 |
- |
| Profit/loss before Tax Expense |
2,114.74 |
3,312.88 |
2,070.21 |
3,218.89 |
| Less: Tax Expense (Current & Deferred) |
615.74 |
1,086.19 |
615.74 |
1,086.19 |
| Profit/loss for the year (1) |
1,499.00 |
2,226.69 |
1,454.47 |
2,132.70 |
| Other Comprehensive Income/loss (2) |
(21.05) |
(11.37) |
(21.05) |
(11.37) |
| Total (1+2) |
1,477.95 |
2,215.32 |
1,433.42 |
2,121.33 |
Your Company remains committed to sustainable growth, operational excellence, and
delivering long-term value to stakeholders, while continuing to navigate dynamic market
conditions with resilience and strategic agility.
The state of the Company's affairs is given in the Management Discussion and Analysis,
which forms part of this Annual Report.
2. CONSOLIDATED FINANCIAL STATEMENTS
The Board is pleased to present the Consolidated Financial Statements of the Company,
prepared in accordance with the applicable provisions of the Companies Act, 2013,
including Section 129(3), and Regulations 33 and 34 of the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015.
The Consolidated Financial Statements have been drawn up in compliance with the Indian
Accounting Standards (Ind AS) as prescribed under the Companies Act, 2013, thereby
ensuring consistency, transparency, and comparability in the Company's financial
reporting.
46
3. TRANSFER TO RESERVES
The Company has not transferred any amount to the reserves for the financial year ended
March 31, 2025. The entire profit for the year has been retained in the Surplus Account of
the Statement of Profit and Loss.
4. DIVIDEND
Your Board of Directors recommended a Dividend of 1.00/- (@10%) per share subject to
approval of the Shareholders at the ensuing 7 th AGM, for the year 2024-2025, resulting in
a total payout of H 84,58,495
(Rupees Eighty-Four Lakhs Fifty-Eight Thousand Four Hundred and Ninety-Five only).
The Dividend payout is in accordance with the Dividend Distribution Policy which is
available on the website of the Company. The Dividend Distribution Policy, in terms of
Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015 is available on the Company's website at www.aarti-surfactants.com/policies.htm
5. CAPITAL & FINANCE
Share Capital
Your Company's Equity Share Capital is as follows:
|
As of |
As of |
| Issued, Subscribed & Paid up |
March 31, 2025 |
March 31, 2024 |
|
( J in lakhs) |
( J in lakhs) |
| 84,58,495 Equity Shares of H 10/- each fully paid up |
845.85 |
847.68 |
| Less: Calls unpaid 18,273 Equity Shares |
- |
(1.10) |
| Amount paid-up on 18,273 Equity Shares of H 10 each forfeited
|
0.73 |
- |
| TOTAL |
846.58 |
846.58 |
The Company had issued 8,92,291 equity shares of face value H 10 each on a rights basis
('Rights Equity
Shares'). In accordance with the terms of issue, H 222 per Rights Equity Share, i.e.,
40% of the Issue Price, was received from the allottees on application, and the shares
were allotted. The Board made the First and Final call of H 333 per Rights Equity Share
(including a premium of H 327 per share) in January 2024. As of March 31, 2024, an
aggregate amount of H 60.85 lakhs were unpaid on 18,273 partly paid-up Rights Shares. The
Board of Directors, at its meeting held on June 5, 2024, approved the forfeiture of all
18,273 partly paid-up equity shares of face value H 10 each, on which the First and Final
Call amount was not received, in accordance with the requirements of SEBI (Issue of
Capital and Disclosure Requirements) Regulations, 2018. The Company has intimated both
stock exchanges and filed the necessary forms with the MCA.
The equity shares so allotted rank pari passu with the existing equity shares of the
Company. Except as stated herein, there was no other change in the share capital of the
Company.
In terms of Regulation 32 of SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015, there was no deviation or variation in utilization of issue proceeds,
received in the form of 'first and final call money' from conversion of 8,74,018 partly
paid-up equity shares into fully paid-up equity shares of face value H10/- each, during
the period ended March 31, 2024 and same was filed with Stock Exchanges on May 10, 2024.
The said conversion and utilization of Issue Proceeds was in accordance with the Letter of
Offer dated January 18, 2023 pertaining to Company's Rights Issue. The necessary details
with respect to the utilization of issue proceeds is available on the Company's website at
https://www. aarti-surfactants.com/material-and-recent-news.
Borrowings and Credit Rating
Total *long-term borrowings of the Holding Company and its Subsidiary stood at H
2,760.27 as on March 31, 2025 as against H 4,793.43 lakhs as on
March 31, 2024. Short term borrowings were H 8,112.99 as on March 31, 2025 as against H
4,929.12 lakhs as on March 31, 2024.
*The long term borrowings includes 0% Non-Convertible Redeemable Preference Shares of
face value of H 10/- each.
The Company has not defaulted on payment of any dues to the financial lenders.
The Company's borrowing programmes have received the credit ratings from CARE Ratings
Limited, details of which is given in the Corporate Governance Report forming part of this
Annual Report and is also available on the website of the Company.
During FY2024-2025, the Company's outlay towards capex was H 1,993.31 lakhs for the
standalone and
H 2,023.58 lakhs at the consolidated level.
6. DETAILS OF SUBSIDIARY / ASSOCIATE / JOINT VENTURE COMPANIES
As on March 31, 2025, the Company has one (1) wholly-owned subsidiary , namely Aarti
HPC Limited . The subsidiary company is yet to commence its operations.
The Company does not have any material subsidiary whose net worth or turnover exceeds
10% of the consolidated net worth or turnover, respectively, of the Company in the
immediately preceding accounting year. The Policy on Determining Material Subsidiaries has
been formulated and is available on the Company's website at
https://www.aarti-surfactants.com/policies.htm.
In accordance with Section 129(3) of the Companies Act, 2013, the Company has prepared
Consolidated Financial Statements of the Company and its subsidiary in compliance with the
applicable accounting standards, which forms part of this Annual Report.
Pursuant to Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies
(Accounts) Rules, 2014, the salient features of the financial statements of the subsidiary
in the prescribed format AOC?€“1 are annexed to this Report as ' Annexure
A ' and form an integral part thereof.
Further, in compliance with Section 136 of the Companies Act, 2013, the Annual Report,
Audited Financial Statements, and other related documents have been made available on the
Company's website at www.aarti-surfactants.com/disclosures-regulation-46. These documents
are available for inspection during business hours until the date of the forthcoming AGM
at the Company's Registered Office and also in electronic form. Members who wish to
inspect the same may write to the Company Secretary at investors@aarti-surfactants.com.
It may further be noted that the Company does not have any associate company, joint
venture, or holding company relationship.
7. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
The details of loans, guarantees, and investments made by the Company, as required
under Section 186 of the Companies Act, 2013 and Schedule V of the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015, are disclosed in the notes to
the financial statements forming part of this Annual Report.
8. MANAGEMENT DISCUSSION AND ANALYSIS
A report on the Management Discussion and Analysis for the year under review, as
stipulated under Regulation 34 of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015, is presented in a separate section forming an integral
part of this Annual Report.
9. DIRECTORS & KEY MANAGERIAL PERSONNEL (KMP)
Your Company actively seeks to adopt global best practices for an effective functioning
of the Board and believes in having a truly diverse Board whose wisdom and strength can be
leveraged for creating greater stakeholder value, protection of their interests and better
corporate governance. The Company's Board comprises eminent persons with proven competence
and integrity, who bring in vast experience and expertise, strategic guidance and
leadership qualities.
The Board of Directors ("Board") of the Company is carefully structured to
achieve an optimal balance, consisting of Executive and Non-Executive Directors, including
an Independent Woman Director. This composition adheres strictly to the current provisions
of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 ensuring compliance with governance standards.
In accordance with the prevailing provisions of the Section 149 of the Companies Act,
2013 read with Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015, as amended from time to time, as on March 31, 2025, the Board of
Directors, comprises of Six Directors (with Two Executive Directors, Two Non-Executive
Non- Independent Directors and Two Independent Directors).
The Board is proactive in providing strategic guidance and fulfills its fiduciary
responsibilities with a steadfast commitment to safeguarding the interests of the Company
and its stakeholders.
Additionally, all Directors of the Company have confirmed that there are no
disqualifications against them for appointment as directors, in accordance with Section
164 of the Companies Act, 2013.
Independent Directors
The Company has received requisite declarations from all the Independent Directors of
the Company confirming that they meet the criteria of independence prescribed under
Section 149(6) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment
and Qualification of Directors) Rules, 2014 and Regulation 16(1)(b) of the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015. The Independent Directors have
also confirmed that they are not aware of any circumstance or situation that exists or may
be reasonably anticipated that could impair or impact their ability to discharge their
duties with an objective independent judgment and without any external influence. These
declarations include confirmations that they are not barred from holding the office of
director by any SEBI order or any other authoritative body. In the opinion of the Board,
all the Independent Directors satisfy the criteria of independence as defined under the
Act, rules framed thereunder and the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015, and that they are independent of the Management of the
Company. Furthermore, they have affirmed their adherence to the Code of Conduct outlined
in Schedule IV of the Companies Act, 2013.
In the opinion of the Board, all Independent Directors (including those appointed
during the year) possess requisite qualifications, experience, expertise, proficiency and
hold high standards of integrity for the purpose of Rule 8(5)(iii)(a) of the Companies
(Accounts) Rules, 2014. In terms of the requirements under the SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015, the Board has identified list of key
skills, expertise and core competencies of the Board, including the Independent Directors,
details of which are provided as part of the Corporate Governance Report.
As required under Rule 6 of the Companies (Appointment and Qualification of Directors)
Rules, 2014, all the Independent Directors (including those re-appointed during the year)
have registered themselves with the Independent Directors Databank and also completed the
online proficiency test conducted by the Indian Institute of Corporate Affairs, wherever
required.
Independent Directors' Review Meeting
Separate meetings of the Independent Directors were convened to assess the performance
of Non-Independent Directors and the effectiveness of the Board and its committees
collectively. During this session, a comprehensive questionnaire designed to probe various
aspects of Board operations was distributed among the Directors. The evaluation
criteriaforIndependentDirectorsencompassedtheir level of engagement in meetings,
interpersonal skills, understanding of the business and its subsidiaries, capacity for
independent judgment, expertise, and adherence to the compliance framework.
Changes in Directors and Key Managerial Personnel
I. Appointment / Re-appointment of Directors
In terms of the Company's Policy on Nomination and Remuneration Committee ("NRC
Policy"), the Board at its meeting held on April 22, 2024, based on the
recommendation of Nomination and Remuneration Committee and evaluation of the balance of
skills, knowledge, experience and expertise on the Board and that of the respective
Director, approved and recommended to the members the following matter relating to
re-appointment of Independent Director, who is not liable to retire by rotation:
1) Re-appointment of Mrs. Misha B. Gala (DIN: 08523865) as an Independent Director for
a second term of five years with effect from August 20, 2024 upto August 19, 2029, based
on the positive outcome of her performance evaluation and contributions during her first
term as Independent Director.
Subsequently, the Members approved the aforesaid re-appointment vide special resolution
at the 6 th Annual General Meeting (AGM) of the Company held on August 14, 2024.
The Board at its meeting held on August 05, 2025, based on the recommendation of
Nomination and Remuneration Committee, approved the below matters subject to approval of
Members at the 7 th Annual General Meeting:
1) Appointment of Mr. Parimal H. Desai (DIN:00009272), as a Non-Executive Director of
the Company who has attained the age of 75 years, with effect from October 01, 2025.
2) Appointment of Mrs. Nisha B. Shah (DIN:10049176), as an Independent Director of the
Company for a period of three (3) years with effect from October 01, 2025.
Directors Retiring by Rotation
In line with Section 152 of the Companies Act, 2013 the Companies (Management &
Administration) Rules, 2014, and the Articles of Association of the Company, Mr. Santosh
M. Kakade (DIN: 08505234), an Executive Director, is liable to retire by rotation at the
ensuing Annual General Meeting. Mr. Kakade, being eligible, has offered himself for
re-appointment. The Board of Directors recommends his re-appointment, acknowledging his
invaluable contributions to the board and the Company at large.
Pursuant to Regulation 36 of the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 read with Secretarial
Standard-2 on General Meetings, a brief profile of the Directors proposed to be
appointed / re-appointed is made available, as a part of the Notice convening 7 th AGM.
II. Key Managerial Personnel
As of the date of this report, the Key Managerial Personnel of the Company, in
accordance with the provisions of Section 2(51) and Section 203 of the Companies Act 2013,
include Mr. Nikhil P. Desai, serving as Chief Executive Officer & Managing Director,
Mr. Nitesh H. Medh as Chief Financial Officer and Mrs. Priyanka A. Chaurasia as Company
Secretary & Compliance Officer.
Familiarisation Programme for Independent Directors / Non-Executive Directors
The Members of the Board of the Company are afforded many opportunities to familiarise
themselves with the Company, its Management and its operations. The Directors are provided
with all the documents to enable them to have a better understanding of the Company, its
various operations and the industry in which it operates.
All the Independent Directors of the Company are made aware of their roles and
responsibilities at the time of their appointment through a formal letter of appointment,
which also stipulates various terms and conditions of their engagement.
Executive Directors provide an overview of the operations and familiarize the new
Non-Executive Directors on matters related to the Company's values and commitments. They
are also introduced to the organization structure, constitution of various committees,
board procedures, risk management strategies, etc.
Pursuant to Regulation 25(7) of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015, the Company imparted various familiarisation programmes
for its Directors including periodic review of Investments of the Company at Finance
Investment Committee Meetings, Regulatory updates, Industry Outlook, Business Strategy at
the Board Meetings and changes with respect to the Companies Act, Taxation and other
matters, SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015,
Framework for Related Party Transactions, etc. at the Audit Committee Meetings, Economic
Environment & Global Scenario, Frontier Risks, Business Entity Risks, etc. at the Risk
Management Committee Meetings, Products Launch and their Showcase etc. The details as
required under Regulation 46 of the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 are available on the website of your Company at
https://www.aarti-surfactants.com/ independent-directors.htm.
Meetings of Board & Committees
The details of the Board of Directors and Committees along with their composition,
number of meetings held and attendance at the meetings during the FY2024-2025 are provided
in the Corporate Governance Report which forms part of this Annual Report. The intervening
gap between the Board/Committee's Meetings was within the period prescribed under the
Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015.
Directors' Responsibility Statement
Pursuant to the provisions of Section 134(3)(c) and 134(5) of the Companies Act, 2013
the Directors, to the best of their knowledge and ability, confirm that for the year ended
March 31, 2025 that;
a) in the preparation of the annual financial statements for the year ended March 31,
2025, theapplicableaccountingstandardshavebeen followed and there are no material
departures;
b) they have selected such accounting policies and applied them consistently and made
judgments and estimates that are reasonable and prudent so as to give a true and fair view
of the state of affairs of the Company at the end of the Financial Year and of the profit
of the Company for that period;
c) they have 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) they have prepared the annual accounts on a going concern basis;
e) they have laid down internal financial controls to be followed by the Company and
that such internal financial controls are adequate and were operating effectively; and
f) they have devised proper systems to ensure compliance with the provisions of all
applicable laws and that such systems were adequate and operating effectively.
10. ANNUAL PERFORMANCE EVALUATION
The Company has a structured assessment process, wherein the Nomination and
Remuneration Committee of the Company has laid down the criteria of performance evaluation
of the Board, its Committees and the Directors, including the Chairman. The evaluations
are carried out in a confidential manner and each member of the Board provides his/her
feedback by rating based on various metrics. Feedback is collected through a structured
questionnaire.
Under the two layers evaluation process, Independent Directors evaluate the performance
of the Board of Directors, Non-independent Directors and the Chairman of the Company.
Later the Board of Directors evaluate performance of the Board itself, its Committees and
the Board members.
The performance evaluation during the year highlighted an overall better rating in
areas such as Board procedure, participation, and leadership. The Board demonstrated
strong independence and integrity, with full participation in the evaluation process.
Improvements were noted in Board Committees, particularly in risk management and ESG
compliance, with effective communication between executive and non-executive members.
Suggestions for further enhancement included a focus on emerging risks (digital, cyber,
and geopolitical), more frequent formal communication regarding budget impacts, and
additional training sessions to keep Directors updated on industry developments. The Board
and Management are committed to implementing these measures to enhance governance
effectiveness in the current financial year.
11. AUDIT COMMITTEE
The details of the composition of the Audit Committee, their terms of reference,
meetings held, etc. are provided in the Corporate Governance Report, which forms part of
this Report. During the year, there were no cases where the Board had not accepted any
recommendation of the Audit Committee.
12. AUDITORS
Statutory Auditor and their Report
Pursuant to the provisions of Section 139 of the Companies Act, 2013, the Members at
the 1 st Annual General Meeting ("AGM") of the Company held on October 21, 2019,
appointed Gokhale & Sathe,
Chartered Accountants (Firm Registration No. 103264W) as the Statutory Auditors of the
Company for a term of five (5) years. Accordingly, their first term concluded at the 6 th
AGM.
Based on the recommendation of the Audit Committee, the Board of Directors, at its
meeting held on April 22, 2024, approved the re-appointment of Gokhale & Sathe,
Chartered Accountants (Firm Registration No. 103264W) as the Statutory Auditors of the
Company for a second term of five (5) years, commencing from the conclusion of the 6 th
AGM up to the conclusion of the 11 th AGM to be held in the year 2029. The said
re-appointment was subsequently approved by the Members at the 6 th AGM held on August 14,
2024.
Gokhale & Sathe have consented to act as Statutory Auditors and confirmed their
eligibility for re-appointment in terms of Section 141 and other applicable provisions of
the Companies Act, 2013. The Audit Committee and the Board recommended their
re-appointment after reviewing their performance during the first term, and considering
factors such as independence, industry experience, professional expertise, and the quality
of audit. The Audit Committee periodically reviews the independence of the Statutory
Auditors through quarterly affirmations, monitoring of non-audit services, and internal
checks and balances designed to mitigate any potential conflict of interest.
The Auditor's Report on the financial statements of the Company for the financial year
ended March 31, 2025 forms part of the Annual Report. The said report was issued by the
Statutory Auditors with an unmodified opinion and does not contain any qualifications,
reservations or adverse remarks.
During the year under review, the Auditors have not reported any fraud under Section
143(12) of the Companies Act, 2013 and therefore disclosure of details under Section
134(3)(ca) of the Companies Act, 2013 is not applicable.
Cost Auditor and their Report
In terms of Section 148 of the Act read with the Companies (Cost Records and Audit)
Rules, 2014, the Company is required to maintain cost accounting records and have them
audited every year. Accordingly, the Board at its meeting held on May 12, 2025, based on
the recommendation of the Audit Committee, appointed M/s. PHS & Associates, Cost
Accountant (firm registration no.: 101038), as the Cost Auditor of the Company to conduct
audit of the cost records for the financial year ending
March 31, 2025. A remuneration of H 1,00,000/- (Rupees One Lakh only) plus applicable
taxes and out of pocket expenses, has been fixed for the Cost Auditor, subject to the
ratification of such fees by the Members at the 7 th AGM. Accordingly, the matter relating
to ratification of the remuneration payable to the Cost Auditor for the financial year
ending March 31, 2025 forms part of the Notice of the 7 th AGM. The Company has received
requisite consent and certificate of eligibility from PHS & Associates.
During the year under review, the Cost Auditor has not reported any fraud under Section
143(12) of the Companies Act, 2013 and therefore disclosure of details under Section
134(3)(ca) of the Companies Act, 2013 is not applicable.
The Company has maintained cost records as specified under section 148(1) of the Act.
Secretarial Auditor and 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 SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the
Secretarial Audit Report for the Financial Year ended March 31, 2025 issued by CS Sunil M.
Dedhia (COP No. 2031), 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.
Pursuant to the amendments to the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015, the Board, on the recommendation of the Audit Committee,
has approved and recommended to the Members the appointment of M/s. Parikh &
Associates (Firm's Registration no: P1988MH009800) (PR No. 6556/2025), as the Secretarial
Auditor of the Company, for a period of five consecutive years commencing from April 1,
2025 to March 31, 2030.
Brief details as required under the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015, are provided in the Notice of 7 th AGM. The Directors
recommend the same for approval by the Members.
13. STRATEGIC RISK MANAGEMENT
Managing risk is not just a compliance requirement, it is a strategic priority that
underpins our governance and long-term sustainability. A well-defined framework enables us
to identify potential threats, implement effective controls, and ensure operational
continuity. By fostering a culture of risk awareness across all levels, we strengthen our
ability to deliver consistent value to our stakeholders.
We are committed to leveraging technology to enhance risk responsiveness and process
efficiency. Through the continuous review of business operations, adoption of modern
digital tools, and process digitization?€”with strong internal
controls?€”we ensure smooth integration with our customers, consumers, and
stakeholders, thereby improving agility and resilience. The Company has implemented a
comprehensive cybersecurity strategy based on the principles of Identify, Protect, Detect,
Respond, and Recover. These measures are designed to safeguard digital assets and data
from evolving cyber threats and security breaches.
To oversee and strengthen our risk management practices, the Company has constituted a
dedicated Risk Management Committee. The Committee supports the Board by evaluating the
effectiveness of risk management systems and ensuring alignment with regulatory
requirements, including those specified under the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015. Details regarding the composition, roles, and meeting
attendance of the Committee are provided in the Corporate Governance Report.
In terms of the applicable provisions of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015, your Board has adopted a Risk Management Policy, which is
available on the Company's website at https://www.aarti-surfactants.com/policies.htm.
14. INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS
The Company has established a robust system of internal financial controls commensurate
with its size and the nature of its operations. These controls are designed to provide
reasonable assurance regarding the accuracy and reliability of financial and operational
information, compliance with applicable accounting standards and statutory requirements,
safeguarding of assets against unauthorized use or disposition, proper authorization of
transactions, and adherence to corporate policies and procedures.
The Internal Auditor prepares an annual audit plan in consultation with the Management
and the Audit Committee, prioritizing audit activities based on the criticality of system
and process gaps. Reviews are conducted on an ongoing basis under a comprehensive
risk-based audit plan, which is approved by the Audit Committee at the beginning of each
financial year. The Internal Audit team reports to the Management and the Audit Committee
on compliance with internal controls, efficiency and effectiveness of operations, and key
process risks.
The Audit Committee meets on a quarterly basis to
reviewInternalAuditreports,monitorimplementation of action plans for significant audit
findings, and ensure adherence to the approved audit plan.
The Statutory Auditors' Report on Internal Financial Controls, as required under Clause
(i) of sub-section 3 of Section 143 of the Companies Act, 2013, forms part of the
Independent Auditors' Report annexed to this Annual Report.
15. RELATED PARTY TRANSACTIONS
The Company has a Policy on Materiality of Related Party Transactions and dealing with
Related Party Transactions which is uploaded on the Company's website at
https://www.aarti-surfactants.com/policies.htm.
All the transactions with the related parties carried out during the FY 2024-2025 are
in ordinary course of business and on an arm's length basis. There are no materially
significant related party transactions made by the Company with Promoters, Directors, Key
Managerial Personnel or their relatives which may have potential conflict of interest with
the Company at large.
The related party transactions are approved by the Audit Committee. Omnibus approval is
obtained for the transactions that are foreseen and repetitive in nature. A statement of
related party transactions is presented before the Audit Committee on a quarterly basis,
specifying the nature, value and terms and conditions of transactions. The details of
related party transactions are provided in the accompanying financial statements.
In terms of Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015, the Company submits details of related party transactions on a
consolidated basis as per the specified format to stock exchanges on a half yearly basis.
Particulars of contracts or arrangements made with related parties
During the year under review, there were no transactions for which consent of the Board
was required to be taken in terms of Section 188(1) of the Companies Act, 2013 and
accordingly, no disclosure is required in respect of the related party transactions in
Form AOC-2 under Section 134(3)(h) of the Companies Act, 2013 and rules framed thereunder.
Further, there were no material related party transactions in terms of the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015 requiring approval of the
Members.
. VIGIL MECHANISM / WHISTLE BLOWER POLICY
Pursuant to Section 177 of the Companies Act, 2013 and Regulation 22 of the SEBI
(Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has
established a Vigil Mechanism, also referred to as the Whistle-Blower Policy. This
mechanism provides a secure and confidential platform for employees, directors, and
stakeholders to report genuine concerns relating to unethical behaviour, actual or
suspected fraud, violation of the Company's Code of Conduct, leak or suspected leak of
Unpublished Price Sensitive Information (UPSI), bribery, corruption, or any other form of
misconduct, without fear of retaliation or victimization.
The policy lays down procedures for addressing such disclosures and ensures that all
matters are investigatedinafairandobjectivemanner.Adequate safeguards are in place to
protect whistle-blowers against unfair treatment or disciplinary action. Further,
employees and stakeholders have direct access to the Chairman of the Audit Committee for
reporting concerns.
The Audit Committee periodically reviews the functioning of the Vigil Mechanism to
ensure its effectiveness and alignment with best corporate governance practices. It is
also responsible for monitoring complaints received and ensuring appropriate action is
taken for their resolution.
During the financial year under review, no complaints or disclosures were received
under the Vigil Mechanism, reaffirming the Company's strong commitment to ethical conduct,
transparency, and accountability in all its operations.
The Vigil Mechanism / Whistle-Blower Policy is available on the Company's website at
https:// www.aarti-surfactants.com/policies.htm.
17. NOMINATION AND REMUNERATION COMMITTEE
Your Company has constituted a Nomination and Remuneration Committee (NRC) of the
Board, which performs its functions in accordance with the provisions of the Companies
Act, 2013, the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015,
and such other responsibilities as may be entrusted by the Board from time to time. The
composition of the Committee, details of meetings held, and attendance of Members are
provided in the Corporate Governance Report forming part of this Annual Report.
The Company has formulated a comprehensive Nomination and Remuneration Policy in
accordance with the provisions of Section 178 of the Companies Act, 2013 and Regulation 19
of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The
Policy outlines the criteria for appointment and qualification of Directors, Key
Managerial Personnel (KMP), and Senior Management, as well as their remuneration
structure, evaluation, and succession planning. The policy is available on the Company's
website at https://www.aartisurfactants. com/policies.htm.
In addition, the Committee has formulated a separate Policy on Board Diversity, which
is also available on the Company's website at the same link.
18. AARTI SURFACTANTS LIMITED EMPLOYEE STOCK OPTION PLAN 2024 ('ESOP 2024'/''Plan')
Your Company has implemented the Aarti Surfactants Limited Employee Stock Option Plan
2024 ('ESOP 2024'/''Plan'), which is administered by the Nomination and Remuneration
Committee. The Plan provides for the grant of stock options to eligible employees, in
compliance with the provisions of the SEBI (Share Based Employee Benefits and Sweat
Equity) Regulations, 2021.
Your Company has received a certificate from CS Sunil M. Dedhia (COP No. 2031), of
Sunil M. Dedhia
& Co. Company Secretary in Practice that ESOP 2024 has been implemented in
accordance with the provisions of the SEBI (Share Based Employee Benefits and Sweat
Equity) Regulations, 2021 and the resolution passed by the Shareholders. Any request for
inspection of the said Certificate may please be sent to investors@aarti-surfactants.com.
19. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
The information required under Section 197(12) of the Companies Act, 2013 read with
Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014 forms part of this Report and annexed as ' Annexure C '.
As per first proviso to Section 136(1) of the Act and second proviso of Rule 5(2) of
the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the
report and financial statements are being sent to the members of the Company excluding the
statement of particulars of employees under Rule 5(2) to ensure confidentiality and
compliance with applicable provisions. These documents are available for inspection during
business hours until the date of the forthcoming AGM at the Company's Registered Office
and also in electronic form. Members who wish to inspect the same may write to the Company
Secretary at investors@aarti-surfactants.com.
20. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT, INCLUDING
NUMBER OF PEOPLE EMPLOYED
The Company firmly believes that employees are its most valuable asset and a key source
of competitive advantage. In line with this philosophy, we continue to strengthen our
employee engagement practices aimed at fostering a culture of trust, collaboration, and
inclusiveness. Our engagement initiatives are designed to create a sense of belonging and
shared purpose while enhancing the overall employee experience.
We actively invest in capability building through structured training and leadership
development programs, ensuring that employees are well-prepared to meet evolving business
challenges. Continuous communication and feedback mechanisms provide employees with
opportunities to participate in decision-making processes, thereby reinforcing a culture
of openness and transparency. Furthermore, our wellness and work-life balance programs
support holistic growth and help employees align their professional aspirations with
personal well-being.
Through these initiatives, the Company seeks to nurture a motivated, committed, and
future-ready workforce, recognizing that organizational growth is directly linked to the
growth and engagement of its people.
Recognition and Reward
Our employees play a pivotal role in the Company's sustained success. By nurturing
talent, fostering innovation, and appropriately recognizing contributions, we encourage
our people to deliver their best. We remain committed to creating a culture of safety,
well-being, and engagement through various structured initiatives:
a) National Safety Day and Week includes a series of activities such as lighting the
ceremonial lamp (deep prajwalan), displaying banners, pinning safety badges, awarding the
best department for housekeeping and safety norms etc, making safety pledges, and
explaining the National Safety Day theme. These activities underscore our commitment to
safety and create a sense of community and shared responsibility.
b) Competitions related to safety, including safety belt wearing contests, poster,
slogan, poem, and essay contests, quizzes and safety skid competitions. These competitions
not only engage employees but also raise awareness about safety practices and encourage
proactive safety measures.
c) Our on-job safety training sessions cover crucial topics such as the use of personal
protective equipment (PPE), emergency evacuation procedures, material handling, electrical
safety, housekeeping, and basic firefighting. These training sessions equip our employees
with the necessary skills and knowledge to maintain a safe working environment.
d) Engaged workforce is the most productive source for the organisation in their
success, delivering the best of their abilities with greater sense of belongingness and
commitment at their jobs. We at ASL believe every small step contributes value to
employees' Work-Life-Balance. Celebrating employees' special moments (Birthdays/
Anniversary/ Regional Festivals), extending support to foster intellectual growth through
various Learning and Development initiatives to nurture conviviality and happiness culture
at workplace.
Through these comprehensive initiatives, we aim to create a workplace where employees
feel recognized, valued, and motivated to contribute to our collective success. By
investing in our employees and fostering a positive work environment, we ensure that ASL
remains a dynamic, innovative, and successful organization.
As on March 31, 2025, the Company had 374 permanent employees on the rolls.
21. CORPORATE GOVERNANCE
Your Company believes that effective leadership, robust policies, processes and systems
and a rich legacy of values form the hallmark of our best corporate governance framework.
The Board, in conjunction with the management, sets values of your Company and drives the
Company's business with these principles. These ethics and values are reflected in
Company's culture, business practices, disclosure policies and relationship with its
stakeholders. These ethics and values is practiced by Company, which is at par with best
international standards and good corporate conduct.
Pursuant to Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015, a Report on Corporate Governance is annexed hereto forming part of this
report. The requisite certificate from M/s Gokhale & Sathe, Chartered Accountants is
attached to the Report on Corporate Governance.
22. ENVIRONMENT HEALTH AND SAFETY
At Aarti Surfactants Limited, we accord the highest priority to Environment, Health,
and Safety (EHS) across all operations. We are committed to regulatory compliance,
sustainable practices, and the well-being of our workforce, stakeholders, and the
communities in which we operate.
During the year, we strengthened our EHS framework through regular risk assessments,
hazard identification, and mitigation measures. Comprehensive training programs were
conducted to instill a culture of safety, while investments in advanced technologies and
state-of-the-art equipment further enhanced workplace safety and environmental
stewardship.
Our proactive approach includes periodic audits, robust emergency preparedness plans,
and continuous improvement initiatives driven by performance metrics and stakeholder
feedback. By focusing on employee well-being, minimizing environmental impact, and
fostering transparency, the Company remains committed to upholding the highest standards
of EHS and industry-leading practices.
23. SUSTAINABILITY
At ASL, sustainability is central to our corporate strategy and operational philosophy.
We are committed to advancing sustainable practices across our value chain through
innovation, responsible sourcing, and resource efficiency. Our approach goes beyond
regulatory compliance, focusing on reducing environmental impact while creating long-term
value for stakeholders.
Key initiatives include optimizing manufacturing processes to lower energy consumption
and emissions, implementing robust waste management protocols, and promoting circular
economy principles through strategic partnerships. By embedding sustainability into our
business model, we enhance operational resilience and reinforce our position as a
responsible corporate citizen.
Guided by a long-term vision, we remain committed to transparency and accountability in
our sustainability journey, recognizing that today's actions shape tomorrow's
opportunities. Together with our stakeholders, we aim to drive positive change and set new
benchmarks for sustainability within the specialty surfactants industry.
24. BUSINESS RESPONSIBILITY & SUSTAINABILITY REPORTING (BRSR)
The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, stipulate
that the top 1000 listed companies by market capitalization must include a Business
Responsibility & Sustainability Report (BRSR) in their Annual Report. This requirement
aims to enhance transparency and accountability regarding the environmental, social and
governance (ESG) practices of these companies. However, your Company is not ranked amongst
the top 1000 listed entities for the fiscal year 2024-2025. Consequently, we are not
required to include the BRSR in our Annual Report for this period.
25. THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND
REDRESSAL) ACT, 2013
The Company believes that every woman employee should have the opportunity to work in
an environment free from any conduct which can be considered as Sexual Harassment. The
Company has Zero Tolerance towards sexual harassment at the workplace.
The Company is committed to treating every employee with dignity and respect. The
Company has formulated a policy on 'Protection of Women's Rights at Workplace' as per the
provisions of 'The Sexual Harassment of Women at Workplace (Prevention, Prohibition &
Redressal) Act, 2013 and Rules, 2013' (POSH Act and rules). This Policy is available on
the website of the Company at www. aarti-surfactants.com/policies.htm. The POSH Policy is
gender inclusive and the framework ensures complete anonymity and confidentiality.
This policy, supported by an Internal Complaint Committee, is structured in accordance
with Section 4 of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and
Redressal) Act, 2013. It underscores our proactive stance in addressing and mitigating
issues of sexual harassment, ensuring a safe and supportive atmosphere for all employees.
Reflective of the efficacy of these measures, it is noteworthy that during the year
under review, there were no cases filed pursuant to the Sexual Harassment of Women at
Workplace Act, 2013. This underscores our ongoing commitment to maintaining a respectful
and secure work environment.
During the year, the Company organised sensitization and awareness programs vide
inductions for new joiners, e-learning modules for all employees, trainees, associates
including sending emailers etc. to sensitise all employees to conduct themselves in a
professional manner.
26. COMPLIANCE UNDER MATERNITY BENEFIT ACT, 1961
Your Company has complied with the applicable provisions of the Maternity Benefit Act,
1961. All eligible women employees have been extended the benefits as prescribed under the
Act. The Company remains committed to supporting working mothers and promoting a gender
inclusive workspace.
27. CORPORATE SOCIAL RESPONSIBILITY
The Company has constituted a Corporate Social Responsibility (CSR) Committee in terms
of the requirements of Section 135 of the Companies Act, 2013 read with the rules made
thereunder. The composition, detailed terms of reference of the CSR Committee, attendance
at its meetings and other details have been provided in the Corporate Governance Report.
The primary role of this committee is to approve the CSR activities to be undertaken,
allocate the necessary expenditure and oversee the execution and effectiveness of these
initiatives.
The Board of Directors, along with the CSR Committee, actively reviews and monitors the
CSR activities implemented by the Company. During the year under review, our CSR
initiatives were executed in accordance with the annual action plan previously approved by
the Board. These activities, which are distinctly separate from our normal business
operations, focus on pivotal and relevant areas such as livelihood and financial
inclusion, animal welfare, agriculture, community development, education, and healthcare.
Our aim is to continue focusing on these areas to achieve meaningful and positive outcomes
that contribute to the Sustainable Development Goals.
Your Company's CSR philosophy is anchored on this core purpose of making a difference
to the lives of all its stakeholders to help them achieve their full potential. Your
Company believes that economic value and social value are inter-linked, and it has a
commitment towards the inter-dependent ecosystem consisting of various stakeholders.
Furthermore, our CSR policy outlines the guidelines and processes for undertaking CSR
activities and the same is available on the Company's website at
www.aarti-surfactants.com/policies.htm ensuring transparency and accessibility in how we
approach our social responsibilities.
The disclosures required to be given under Section 135 of the Act read with Rule 8(1)
of the Companies (Corporate Social Responsibility Policy) Rules, 2014 are given in ' Annexure
D ' forming part of this Board Report.
28. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND
OUTGO
The particulars relating to conservation of energy, technology absorption, and foreign
exchange earnings and outgo, as required under Section 134(3) (m) of the Companies Act,
2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014, are provided in ' Annexure
E ' forming part of this Board's Report.
29. SECRETARIAL STANDARDS
The applicable Secretarial Standards, i.e. SS-1 and SS-2, relating to 'Meetings of the
Board of Directors' and 'General Meetings' respectively issued by the Institute of Company
Secretaries of India and notified by the Ministry of Corporate Affairs, have been duly
complied by your Company.
30. DETAILS OF DEPOSITS
During the year under review, your Company has neither invited nor accepted any
deposits from the public falling within the ambit of Section 73 of the Companies Act, 2013
and the rules framed thereunder. The requisite return with respect to amount(s) not
considered as deposits has been filed with Registrar of Companies.
31. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS
During the year under review, no significant or material orders were passed by
Regulators, Courts, or Tribunals which could impact the Company's going concern status or
its future operations. However, Members' attention is invited to the Statement on
Contingent Liabilities and Commitments appearing in the Notes to the financial statements.
32. ANNUAL RETURN
Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return as
on March 31, 2025 is available on the Company's website at https://www.
aarti-surfactants.com/annual-return.htm.
33. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
There is no amount due, to be transferred to the IEPF account.
34. COMPLIANCE MANAGEMENT SYSTEM
In pursuit of strengthening our governance framework and ensuring a proactive approach
to regulatory adherence, the Company has a Compliance Management Tool as part of its
enterprise-wide risk management initiative.
This digital tool is designed to systematize and
streamlinecompliancetrackingacrossallapplicable laws, regulations, and industry mandates.
It enables real-time monitoring, timely alerts, and seamless documentation, significantly
reducing the chances of inadvertent non-compliance.
By automating compliance processes and integrating accountability at various levels,
the tool acts as a strategic 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 to institutionalizing compliance,
minimizing exposure to penalties or reputational damage, and upholding the highest
standards of corporate governance.
35. STATUTORY INFORMATION AND OTHER
DISCLOSURES
Neither the CEO & Managing Director nor the Executive Director received any
remuneration or commission from the subsidiary of your Company.
Your Directors state that no disclosure or reporting is required in respect of the
following items as there were no transactions / events on these items during the year
under review:
1) Issue of equity shares with differential rights as to dividend, voting or otherwise.
2) Issue of Shares (including Sweat Equity Shares) to employees of the Company under
any Scheme.
3) Voting rights which are not directly exercised by the employees in respect of shares
for the subscription / purchase of which loan was given by the Company (as there is no
scheme pursuant to which such persons can beneficially hold shares as envisaged under
section 67(3) (c) of the Companies Act, 2013).
4) There are no material changes and commitments affecting the financial position of
your Company, which have occurred between the end of FY25 and the date of this report.
5) There has been no change in the nature of business of your Company.
6) There was no application made and proceeding initiated / pending by any Financial
and/or Operational Creditors against your Company under the Insolvency and Bankruptcy
Code, 2016.
7) The Company has not made any one-time settlement for loans taken from the Banks or
Financial Institutions, and hence the details of difference between amount of the
valuation done at the time of one-time settlement and the valuation done while taking loan
from the Banks or Financial Institutions along with the reasons thereof is not applicable.
8) There was no revision of financial statements and Board's Report of your Company
during the year under review.
36. ACKNOWLEDGEMENT
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.
By order of the Board of Directors
Mulesh M. Savla
Chairman Mumbai / August 05, 2025 DIN: 07474847
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