Summary

Your Company reported gross total Income at 18,079
Crores as against 16,984 Crores for FY 2023-24.
Similarly, the export during the year was reported at
14,369 Crores for FY 2024-25 as against 13,642 Crores
for FY 2023-24.

Likewise, the consolidated gross total income
from operations for FY2024-25 was at
18,046 Crores compared to 17,011 Crores for
FY 2023-24 and export for FY 2024-25 was reported
at 14,337 Crores as against 13,668 Crores for
FY 2023-24.

Consolidated Financial Statements

In accordance with the provisions of Companies
Act, 2013, Regulation 33 of the Listing Regulations,
and applicable Accounting Standards, the Audited

Consolidated Financial Statements of the Company
for the FY 2024-25, together with the Auditors' Report,
form part of this Annual Report.

2. DIVIDEND

Your Board of Directors recommend a Dividend of
11.00/- (@ 20%) per share subject to approval of the
Shareholders at the ensuing 42^nd AGM, for the year
2024-25, resulting in a total payout of 136.25 Crores
(Previous Year: 136.25 Crores).

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 Securities and Exchange
Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015 ("SEBI Listing
Regulations”) is available on the Company's website at :

https://www.aarti-industries.com/investors/
GetReport?strcont id=b22bcY6v1CAOIQL33MM

3. TRANSFER TO RESERVES

Your Company has transferred 134 Crores to the General
Reserve (Previous Year: 142 Crores).

4. SUBSIDIARY/ JOINT VENTURES/ ASSOCIATE
COMPANIES

As on March 31, 2025, the Company has 7 (Seven)
direct subsidiaries, namely, Aarti Corporate Services
Limited, Innovative Envirocare Jhagadia Limited, Aarti
Polychem Private Limited, Aarti Bharuch Limited, Aarti
Circularity Limited (Formerly known Aarti Spechem
Limited), Alchemie (Europe) Limited and Aarti Chemical
Trading - FZCO and 2 (two) indirect subsidiary namely
Shanti Intermediates Private Limited (through its
Holding Company: Aarti Corporate Services Limited)
and Aarti Chem Trading USA Inc (w.e.f. October 09,
2024) (through its Holding Company: Aarti Chemical
Trading - FZCO).

During the year on July 22, 2024, Augene Chemical Private
Limited ceased to be a subsidiary of Company. The
following 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 Aarti
Corporate Services Limited, ceased to be Subsidiary of
the Company on September 30, 2024.

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. A policy on determining 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 statements of our Subsidiaries and Joint
Ventures in the prescribed format AOC-1 is included in
the Report as Annexure- A and forms an integral part of
this Report.

5. SHARE CAPITAL

During the year 2024-25, there was no change in the
authorised share capital of the Company. However,
during the year, the Company allotted 15,875 (Fifteen
Thousand Eight Hundred and Seventy Five) Equity
Shares of face value of 15 (Five) each aggregating to
179,375 (Seventy Nine Thousand Three Hundred and
Seventy Five) to its Employees in accordance with the
terms of 'Aarti Industries Limited Performance Stock
Option Plan 2022' ("PSOP 2022”). The new equity
shares issued, rank pari passu with the existing equity
shares of the Company in all respects.

6. STATE OF AFFAIRS

The Company's State of Affairs is given in the
Management Discussion and Analysis, which forms
part of this Annual Report.

7. 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, 2025, the
Board of Directors, comprises of Fourteen Directors
(with Six Executive Directors, One Non-Executive
Non- Independent Director and Seven Independent
Directors).

As part of ongoing commitment to strengthening
corporate governance and aligning with global
best practices, during the year Company inducted
a professional Chief Executive Officer (CEO) and
Executive Director, Shri Suyog Kalyanji Kotecha
(DIN: 10634964) w.e.f. June 17, 2024 to lead the
Company into its next phase of growth. The CEO brings
with him a wealth of experience, domain expertise, and
a proven track record of strategic leadership in dynamic
business environments.

I n parallel, during the year, the Board was further
strengthened with the appointment of four accomplished
Independent Directors:

• Shri Belur Krishna Murthy Sethuram (DIN: 03498701)
- appointed with effect from June 1, 2024.

• Shri Ashok Kumar Barat (DIN: 00492930), Shri Nikhil
Jaysinh Bhatia (DIN: 00414281) and Smt. Rupa Devi
Singh (DIN: 02191943) - all appointed with effect
from September 15, 2024.

Each Independent Director brings a diverse set of
skills, industry expertise, and strategic insights. Their
inclusion, alongside existing Independent Directors
Shri Lalitkumar Shantaram Naik (DIN: 02943588), Shri
Shekhar Shreedhar Khanolkar (DIN: 02202839), and
Prof. Aniruddha Bhalchandra Pandit (DIN: 02471158),
reinforces the Company's commitment to transparency,
stakeholder alignment, and enhanced board oversight.

During the year, Executive Director; Shri Parimal
Hasmukhlal Desai (DIN: 00009272) ceased to the
director w.e.f. August 2, 2024. Further upon completion
of 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 Company
with effect from September 23, 2024 and Smt. Natasha
Treasurywala (DIN:07049212) ceased to be Independent
Director of the Company with effect from October 13,
2024. The Board placed on record its appreciation for
their invaluable contribution and guidance.

Shri Renil Rajendra Gogri (DIN: 01582147) and Shri
Manoj Mulji Chheda (DIN: 00022699) retire by rotation
and being eligible, offers themselves for re-appointment.
A resolution seeking members approval for their re¬
appointment along with other required details forms
part of the Notice of Annual General Meeting.

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 appointed
is made available, as an Annexure to the Notice of the
Annual General Meeting.

Pursuant to the provisions of Regulation 34(3) read
with Schedule V to the Listing Regulations, the
Company has obtained a Certificate from CS Sunil
M. Dedhia (COP No. 2031), of Sunil M. Dedhia & Co.
Company Secretary in Practice, certifying that none
of the Directors of the Company have been debarred
or disqualified from being appointed or continuing as
Directors of Companies by the Securities and Exchange
Board of India or by the Ministry of Corporate Affairs
or by any such statutory authority. The said Certificate
is annexed to the Corporate Governance Report of the
Company for the Financial Year 2024-25.

Key Managerial Personnel

During the year under review, Shri Suyog Kalyanji
Kotecha (DIN: 10634964), CEO & Executive Director
was appointed as Key Managerial Personnel with effect
from June 17, 2024.

Declaration from Independent Directors

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 prescribed under Section 149(6) of the Companies
Act, 2013 and Regulation 16(1)(b) of the Listing
Regulations. In terms of Regulation 25(8) of the SEBI
Listing Regulations, they have confirmed that they
are not aware of any circumstance or situation which
exists or may be reasonably anticipated, that could
impair or impact their ability to discharge their duties
with an objective independent judgement and without
any external influence. The Board of Directors of the
Company has taken on record the declaration and
confirmation submitted by the Independent Directors
after undertaking due assessment of the veracity of
the same.

In the opinion of the Board of Directors, the Independent
Directors fulfil the conditions specified in the Companies
Act, 2013 read with the rules made thereunder as well
as Listing Regulations and are independent from
Management, hold the highest degree of integrity
and possess expertise in their respective fields with
enormous experience.

All the Independent Directors have complied with the
Code for Independent Directors prescribed in Schedule
IV to the Companies Act, 2013.

All the Independent Directors of the Company have
enrolled their names in the 'Independent Directors Data
Bank' maintained by Indian Institute of Corporate Affairs
("IICA").

Familiarisation Programme for Directors

Company implemented a comprehensive Directors
Familiarisation Programme aimed at ensuring that
its Board members, including newly appointed
Independent Directors, acquire a thorough
understanding of the company's strategic initiatives,
operational capabilities, and governance framework.

Programme Overview

• Strategic Orientation: Directors were acquainted
with the company's vision, mission, values, and
strategic priorities, encompassing areas such as

sustainability efforts, technological advancements,
expansion plans, business development strategies,
and overall strategic direction.

• Operational Immersion: The programme included
visits to manufacturing plants, primarily located
in the State of Gujarat, and tours of Research and
Development centres. These visits provided first hand
exposure to the company's operational capabilities,
manufacturing processes, and technological
innovations, facilitating a deeper understanding of
the company's core functions.

• Interactive Engagement: One-to-one interactive
sessions with the senior management team, business,
and functional heads were conducted, fostering open
communication and alignment on strategic goals.

• Ongoing Awareness: Periodic presentations during
Board and Committee meetings covered various
aspects such as business models, new business
strategies and initiatives by business leaders, risk
minimization procedures, changes in domestic and
overseas industry scenarios, digital transformation
and the regulatory regime affecting the company.

• Knowledge Dissemination: Regular newsletters
circulated to keep Directors informed about the
developments happening in the Company, Industry
Scenario, Sustainability, Governance Initiatives etc.

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/authpdf/Familiarisation-Programme-
FY-2024-25.pdf.

8. DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134(3)(c) and
134(5) of the Act, 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, the applicable
accounting standards have been 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. t hey 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.

9. MEETINGS

During the Financial Year under review Eight (8) Board
Meetings were held. The details of the number of
meetings of the Board and its Committees held during
the Financial Year 2024-25 and the attendance of each
Director/member at these meetings are provided in
the Corporate Governance Report forming part of the
Annual Report.

The attendance at Board meetings during the year
was nearly 100%, reflecting your Directors' active
engagement and commitment to the Company's
governance and strategic oversight. More than 80%
of the Board includes members who hold four or less
external directorships (Public Companies), ensuring
they can give adequate time and attention to the
Company's matters.

The intervening gap between the Board meetings was
within the period prescribed under the Companies Act,
2013 and the Listing Regulations.

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 financiacial year.

11. NOMINATION AND REMUNERATION POLICY

Pursuant to Section 178 of the Companies Act, 2013 and
Regulation 19 of the Listing Regulations, your Company
has in place a Nomination and Remuneration Policy
which lays down a framework in relation to criteria and
qualification for Nomination & Appointment of Directors,
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 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=pTvbr0JryL0OIQL33MM

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

12. CORPORATE SOCIAL RESPONSIBILITY

Your Company through its CSR arms - Aarti Foundation
and Dhanvallabh Charitable Trust - undertakes
community interventions to enhance the lives of the
communities. Besides our direct involvement, we
partner with numerous implementing agencies to carry
out 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 Citizen
Welfare etc)

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=rQxVNvkXxIkOIQL33MM

A brief note on various CSR initiatives undertaken during
the year is presented in this Annual report. The details of
the composition of the Corporate Social Responsibility
Committee, their terms of reference, meetings held, etc.
are provided in the Corporate Governance Report, which
forms part of this Report.

Detailed CSR report is annexed as Annexure - B and
forms an integral part of this Report.

13. 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.

14. VIGIL MECHANISM/WHISTLE BLOWER
POLICY

The Company has established a Vigil Mechanism
and Whistleblower Policy to facilitate the reporting
of concerns related to unethical conduct, actual or
suspected fraud, potential or confirmed leakage of
Unpublished Price Sensitive Information (UPSI), and
any violations of the Company's Code of Conduct.

This mechanism provides a secure and confidential
platform for Directors and Employees to voice their
concerns, ensuring stringent safeguards are in place to
protect whistleblowers against any form of retaliation
or victimisation. The policy also allows for direct
access to the Chairperson of the Audit Committee, in
exceptional cases.

To ensure organization-wide awareness and adherence,
the Company has integrated this policy into its
onboarding and compliance training framework. All
employees are required to complete the Aarti Online
Training Module (ATOMs) upon joining, which provides
comprehensive guidance on the Company's critical

policies and codes, thereby reinforcing the culture of
transparency, accountability, and ethical governance.

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.

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 the web- link given below:
https://www.aarti-industries.com/investors/
GetReport?strcont id=TNJu6Gnbr7sOIQL33MM

All the transactions with the related parties carried out
during the FY 2024-25 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 with interest of 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. 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.

In terms of Regulation 23 of Listing Regulations, 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.

Further during the financial year 2024-25, the Company
organized a deep-dive session for the Audit Committee
members to raise awareness of evolving regulatory
requirements, particularly regarding Related Party
Transactions (RPTs). The session covered key
regulatory changes in RPT regulations over the last three

financial years, the introduction of RPT Information
Sharing Format (ISF) Standards, and their rationale.
Additionally, recent SEBI rulings on RPTs involving
reputed companies were discussed, providing valuable
insights into enforcement trends and regulatory
expectations. This initiative reinforced the Company's
commitment to enhancing governance and ensuring
the Audit Committee is well-equipped to oversee
compliance in an evolving regulatory landscape.

Particulars of contracts or arrangements made
with related parties

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

16. CREDIT RATING

Below are the details of Credit Ratings as on March

31 9095

17. DEPOSITS

Your Company has not accepted any deposits covered
under Chapter V of the Companies Act, 2013 [(i.e.,
deposits within the meaning of Rule 2(1)(c) of the
Companies (Acceptance of Deposits) Rules, 2014)],
during the Financial Year 2024-25. Accordingly, no
amount pertaining to principal or interest on deposits
from public was outstanding as on March 31, 2025.

18. PARTICULARS OF LOANS, GUARANTEES,
INVESTMENTS

Particulars of loans given, investments made,
guarantees given 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 financial statements forming part of the
Annual Report.

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).
However, these are available for inspection during
business hours up to the date of the forthcoming AGM
at the registered office of the Company. Any member
interested in obtaining a copy of the said statement
may write to the Company Secretary at the Registered
Office address of the Company.

20. MATERIAL DEVELOPMENTS IN HUMAN
RESOURCES/INDUSTRIAL RELATIONS FRONT,
INCLUDING NUMBER OF PEOPLE EMPLOYED

Employee wellbeing remains a top priority, with a strong
focus on inclusivity. This year, the Culture Survey
extended participation to Associate families, fostering
deeper engagement. The Engagement Survey achieved
100% participation in just 8 days with a rise in scores as
well as percentiles at both the India and Global levels.

Leadership excellence was evident, with 293 out of 475
people managers placed in the top quartile (4.71 - 5.0).
Employee engagement initiatives also saw impressive
participation. The Holistic Wellbeing Umbrella
Intervention, "Nirvana,” recorded 16,826 participants
in FY 2024-25, representing a notable 39.62% increase
from 12,052 in FY 2023-24.

AIL has embedded a robust listening culture throughout
the organisation, initiating structured Conversations
between people managers and their teams, facilitating
Buddy Meets for peer-to-peer sharing, and organising
shop-floor listening tours where leadership engages
directly with employees on the ground.

AIL devised the Metamorphosis program as a
tailored cultural transformation initiative for early-
career professionals, equipping them with AIL's
high-performance vocabulary, core values, and the
Aarti engaging leadership framework, while actively
addressing unworkabilities in their work environment.

In FY 2024-25, Aarti Industries advanced its workforce
development with over 215,000 training hours. Key
initiatives included the Progressio program, which
achieved a 99% success rate with 197 trainees,
and the Meraki mentorship program, where 60
mentors maintained an 83% meeting adherence
rate. The Eklavya initiative had a 45% success rate,

while competency-based learning engaged 1,600
participants. Training hours were distributed across
functional (73,464), behavioural (37,920), system
(35,600), and sustainability (54,142) areas. Compliance
training totalled 11,445 hours, reaching 80% ATC
compliance across categories.

Learning Management System, offering over 100 micro¬
learning modules and gamified content

21. AARTI INDUSTRIES LIMITED PERFORMANCE
STOCK OPTION PLAN 2022

Your Company has implemented and through the
Nomination and Remuneration Committee, administers
the Aarti Industries Limited Performance Stock Option
Plan 2022 ("PSOP 2022”), under which stock options
are granted to the 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 PSOP 2022 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 investorrelations@
aarti-industries.com.

22. 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

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.

23. 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 and claimed by
the Shareholders for seven consecutive years or more

shall be transferred to the Demat account of the IEPF
Authority. Accordingly, during the year, the Company
has transferred the unclaimed and unpaid dividend of
17,63,366/- Further 62,426 corresponding shares were
transferred 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 in
form MGT- 7 as on March 31, 2025 is available on the
Company's website on www.aarti-industries.com

25. 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 M/s
Gokhale & Sathe, Chartered Accountants is attached
to the Report on Corporate Governance.

26. MANAGEMENT'S DISCUSSION AND ANALYSIS
REPORT

Pursuant to Regulation 34 read with Schedule V to the
Listing Regulations, Management's Discussion and
Analysis for the year under review is presented in a
separate section forming part of the Annual Report.

27. BUSINESS RESPONSIBILITY &

SUSTAINABILITY REPORTING (BRSR)

BRSR for the year under review, as stipulated under
Regulation 34 (f) of Listing Regulations is in a separate
section forming part of the Annual Report.

28. RISK MANAGEMENT

As part of our ongoing efforts to enhance organizational
resilience and sustainable performance, the
Company has adopted a robust Enterprise-wide Risk
Management (ERM) Framework, integrating both Top-
Down and Bottom-Up approaches to risk identification
and mitigation.

This hybrid methodology enables a comprehensive
understanding of risks at both strategic and
operational levels:

• The Top-Down approach ensures that key business
risks - as viewed by the Board and senior leadership
- are identified, prioritized, and aligned with the
Company's strategic objectives.

• Simultaneously, the Bottom-Up approach facilitates
the capture of emerging and process-level risks
through active involvement of departmental heads
and frontline teams, thereby enabling timely
responses to ground-level vulnerabilities.

By combining these perspectives, the ERM Framework
offers a holistic view of the Company's risk landscape,
allowing Company to:

• Proactively identify and manage critical risks,

• Strengthen risk ownership and accountability across
functions,

• Enhance decision-making through risk-informed
strategies, and

• Build a risk-aware culture throughout the organization.

This framework is further supported by periodic risk
assessments, a centralized risk register, and regular
reviews by the Risk Management Committee to ensure
relevance, responsiveness, and compliance with
regulatory expectations.

The Risk Management policy has been posted on the
website of the Company and the web link thereto is:
aarti-industries.com/investors/GetReport?strcont
id = dCIEPn8aX6wOIQL33MM

29. 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
streamline compliance tracking across all applicable
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.

30. HEALTH AND SAFETY:

At AIL, safety is not merely a policy; it is an integral
part of our culture and essence, shaping every process,
decision, and action. Our safety journey has evolved
through initiatives like "Besafe” and "Besafe (Dil
se...).” While "Besafe” established a strong foundation
in process safety, "Besafe (Dil Se.)” is elevating
safety further, emphasizing culture, leadership,
and governance. AIL's partnership with dss for the
"Besafe (Dil se..)” initiative aims to enhance AIL's
safety journey.

Besafe (Dil se.) initiative has enhanced the BBSO tool
and introduced new tools such as Condition Listening
(CL), Safety Action Meetings (SAM), and Personal Safety
Action Plans (PSAP). Through these tools, we're actively
involving our shop floor teams and further strengthening
our safety culture.

Unsafe situations have been identified and rectified
through BBSO, while SAM has enabled shop floor
teams to resolve recurring unsafe acts by promoting
engagement. The Condition Listening program is
improving plant upkeep and eliminating unsafe
conditions. Additionally, PSAPs are fostering a personal
commitment to safety among managers, leaders and
senior Leaders.

Our ambitious digital transformation journey, Unnati
2.0, is improving digital tools for safety. BBSO and
GPC tools have been successfully migrated to a new
platform with significant value additions and receiving
positive feedback from users, representing a pivotal
leap in our commitment to innovation, growth, and
excellence as we propel into the future of work.

AIL's unwavering commitment to safety is evident in
its continuous efforts to elevate safety standards.
Despite Global business challenges, FY 2024-25 saw AIL
foster a culture of safety by promoting awareness and
adherence to best practices at all organizational levels.

To further enhance our safety measures, AIL has
strengthened leading indicators during FY 2024-25,
which include:

• Senior Leadership Engagement: Senior Leadership
is spending time on the shop floor through Safety
Workdays and Apex Sustainability Councils on a
monthly and quarterly basis..

• Knowledge Capsules: Over 200 Knowledge Capsules
shared via email by the Corporate Safety and
Compliance Head to provide regular updates on
safety topics

• Learning from Incident sessions: More than 50
Learning from Incidents (LFI) sessions conducted
on monthly basis, each lasting for 1 hour, to share
key insights from both internal and external incidents
with 300 participants

• Behavior Based Safety Observation (BBSO) rounds:

Over 4000 BBSO rounds, reflecting an increase from
2000 per month, due to the Besafe Dil Se initiative,
which has strengthened our focus on BBSO

• Safety Action Meeting (SAM): 150 Employees are
performing one SAM per month to enable shop floor
team in eliminating recurring unsafe actions

• General Plant Conditions(GPC) rounds: More than
2000 internal inspections conducted each month
across the organization using to detect and rectify
unsafe conditions

• Work Permit Audits: Over 1500 work permit audits
performed monthly to ensure compliance with work
permit conditions

• Monthly gate meetings organized on the 4^th day of
every month in all Factories (divisions) to acknowledge
the safety efforts of on-roll and contract employees

• Monthly Safety Theme: 12 Monthly Safety Themes
implemented annually to focus on specific safety
topics and raise awareness on the shop floor

• Monthly Safety video competition: Over 2000
participants in monthly safety video competitions to
encourage active employee involvement and promote
learning from incidents

• Celebrations and observances of Road Safety
Week, National Safety Week, Fire Services Week
and Process Safety Week across all organizations
to encourage participation from all levels

• Capability Building: Sessions on Scaffolding Safety,
Rigging and Lifting Safety, Process Hazard Analysis,
First Aid, and Incident Investigation were conducted
across the organization.

Process safety is paramount, and AIL has implemented

robust measures through Barrier Management to ensure

its effectiveness. By consolidating risks and prioritizing
preventive and mitigative barriers, AIL ensures the
adequacy and reliability of controls. This approach has
resulted in Risk-Based Process Safety, robust control
of high risks, and an enhanced understanding of risks
at the shop floor level. A comprehensive process safety
dashboard tracks the status of various initiatives,
and progress is reviewed through platforms like the
Operations Group Review, Process Safety Council, Zone
Sustainability Sub-Council, and Apex Sustainability
Council. This structured approach, combined with risk
sensitization and proactive emergency preparedness,
has led to significant improvements in process safety
at the shop floor level.

To further strengthen our commitment to safety, we
are implementing and enhancing our Process Safety
initiatives. These initiatives include cyclic HAZOPs,
QRAs, LOPAs, SIL studies, and PHA champion
development. AIL has also developed a world-class
Process Safety lab enabling process safety studies like
Chemical reaction hazards, thermal degradation studies,
powder safety analysis. The data developed through
this lab creates a strong process safety information
foundation for building a safe and scalable process.

The company also has developed a Robust Fire
Prevention & Protection program with well-trained Fire
Safety teams, world-class fire tenders and Emergency
Response vehicles. AIL has also on boarded a business
partner for availing emergency support services during
chemical transport emergencies while in transit.

World class OHCs, well qualified & trained Factory
Medical Officers and supporting Staff ensures the
health of the employees is taken care of. Additionally,
we are providing 24/7 ambulances with advanced
life support systems. AIL has also implemented a
Workplace Monitoring System for health and hygiene,
and organised programs on occupational and non¬
occupational health issues.

Our commitment extends to the surrounding community
in the form of training, awareness programs, emergency
support, and handholding other MSMEs/industries to
develop safety management systems.

I CC granted AIL permission to use the RC Logo for
three years, from April 2025 to March 2028, following a
successful Responsible Care Audit during Feb-2025.

This permission was granted following a recent audit
conducted by a team of three highly experienced

auditors from ICC, who spent five days at our factories
and Emerald office, Vadodara from February 17^th to
21^st, 2025. During the audit, the auditors meticulously
examined our Aarti management system, interacted
with employees, and verified system implementation.

This achievement is a testament to our collective
commitment to the Responsible Care Ethos and its
principles. It showcases our dedication to sustainable
practices and ethical conduct across all our operations.

31. ENVIRONMENT

As a responsible organization, we have focussed
approach towards environmental compliance,
circular economy, efficient resource utilization, waste
minimization, water stewardship, climate action
and reduction of GHG gases. AIL has implemented
Environment Management System (EMS) ISO -14001:
2015 at all our manufacturing locations. 50% of our sites
are Zero Waste to landfill certified. AIL has published
and implemented comprehensive guidelines for the
Waste management and Environmental Management
system. Efficient usage of water, effective effluent
management, waste management, climate actions is
imperative to us, making them high priority material
topics. A considerable number of Environmental
Projects have been successfully implemented, and
we are beginning to see the benefits, such as effluent
reduction and enhancement in effluent quality, waste
reduction, waste recycling and use in manufacturing
of valuable products, cost reduction and CO₂
Emission Reduction.

Environment - Water Management

Towards reducing our water footprint, we are focussing
on 3R (Reduce, Reuse & Recycle) and strategizing to
achieve zero-liquid discharge (ZLD) for our facilities.
During FY 2024-25, AIL has taken various initiatives
for water conservation by enhancing water harvesting
system's capacity, increased steam condensate
recovery, increased MEE condensate recovery, STP
treated water recycling and RO permeate recycling,
different process initiatives for recycling washing
water etc. Eight manufacturing facilities are Zero Liquid
Discharge (ZLD) compliant, three are ZLD-ready, and
the rest are progressing toward ZLD readiness. Out of
the total effluent generation about 81% effluent is being
recycled back into process through the ZLD system and
19% treated effluent is being sent to CETP for further
treatment and discharge to deep sea. As part of water
conservation, Out of the total water recycled 75% is
utility water. We have adopted a proactive approach

for ZLD and incorporated it in the conceptualisation &
designing phase of new projects. ETP final discharge
parameters are connected to CPCB and SPCB portals
for real time monitoring.

Environment - Air Management

AIL has provided adequate Air pollution control
measures to control process and flue gas emissions like
wet scrubbers, dust collectors, Bag filters, Electrostatic
Precipitators (ESP) etc. AIL has implemented a dry
scrubber concept (lime dosing along with solid fuel)
to control SO2 emissions significantly. AlL have
implemented LDAR programs to detect and control
fugitive emissions, VOC's etc. AIL has provided online
sensors for detection and measurement of hazardous
gases. AIL has phased out ODS substances in all our
manufacturing divisions and offices. We have provided
an effective emission monitoring of continuous on¬
line stack monitors. All our manufacturing locations
are carrying out ambient air quality monitoring as per
NAAQS. Online stack monitoring systems (OCEMS)
have been connected to CPCB and SPCB portals for
real time monitoring. AIL has verified that none of
the Persistent Organic Pollutants (POPs) listed by
Stockholm convention is emitted from our operations.

Environment - Waste Management

Our waste management approach is systematically
divided into three priorities depending upon the various
operating conditions and type of waste generated.
First priority is to reduce waste, second priority is 4Rs
(Reuse, Recycle, Recover, Reprocess), third priority
is treatment and responsible disposal in scientific
manner. AIL being a responsible organisation ensures
utilisation of the hazardous waste and prioritize co¬
processing over landfilling and incineration.

We are also conducting audits of the end users and TSDF
sites responsible for reusing processing and disposal of
waste. During FY 2024-25, We have improved Hazardous
waste management by taking many initiatives like
Waste management guideline were implemented with
digital monitoring of hazardous waste from generation
to disposal, introduction of compressive checklist for
all HW vehicles, all the HW vehicles are connected
to 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 manufacturing
divisions ZWL certified by 2028. We have diverted 94%
of hazardous waste from landfilling and 6% is disposed
off responsibly.

32. SUSTAINABILITY GOVERNANCE

Aarti Industries embeds sustainability within its
business strategy across four key dimensions:
Sustainability, People Well-being, Partner Delight, and
Prosperity. Each dimension has specific goals, executed
through the Aarti Management System. The company
has conducted ESG and climate risk assessments
to identify and address key risks and opportunities,
developing mitigation and action plans with input
from relevant stakeholders. Sustainability efforts are
overseen by the CEO-led council, supported by zonal
sub-councils reporting to the Apex Sustainability
Council. The following highlights demonstrate our
progress on this journey.

Responsible Care:

AIL has been a Responsible Care Logo holder company
since April 2022. As a responsible, sustainable and
value driven chemical manufacturing company, AIL is
focusing continuously to enhance performance with
respect to the indicators of Responsible Care codes.

EcoVadis

Our significant efforts in improving our ESG
performance has led to sustaining a gold medal fourth
year in a row in EcoVadis CSR assessment, our score
has improved from 72 to 78. Placing AIL among the top
5 percentile of companies assessed by EcoVadis.

CDP Rating

AIL has received Leadership band "A” in CDP Climate
Change, and "A-” in CDP water security disclosure
indicating coordinated actions towards climate issues
and water security by AIL. AIL is also listed in Climate
CDP A list 2024

S&P Global Rating

Accomplished CSA score of 62 and ESG score of
64 in S&P global disclosure, We were included in
Sustainability yearbook published by S&P global.

International Sustainability and Carbon Certification
(ISCC)

We have obtained ISCC for one of our products
manufactured at Zone 3, ISCC is an international
certification system covering all kinds of bio based
feedstocks and renewables catering to the chemical
sector. This certification paves way for manufacturing
certified green products.

33. RELIABILITY

We have initiated an Operational Excellence journey
with focus to improve reliability. Different initiatives
by involvement of everyone in the manufacturing are
implemented as below (few of them) -

• OEE (Overall Equipment Effectiveness)
improvement

OEE measurement for all the products provide
insights on various improvement opportunity areas
in manufacturing to focus on. In the past, OEE has
improved year on year.

• Model Plant Initiative

Under the Model Plant Initiative, 5S has been
launched across organizations for effective workplace
management to improve upon the working efficiency
and workplace safety. It's creating a positive impact
to improve the way we work at the workplace in a
better manner.

• Quality Circles

This is the tool wherein shop floor teams become
part of critical problem solvers and contribute to
the organizational goals. The best implemented
teams participate in local, state, national and
international forums.

• Kaizen Idea

We launched this Kaizen Idea program to capture
the brilliant improvement ideas specifically from the
associate family members in the areas of safety,
production, quality and cost etc. This is beneficial in
both tangible and in-tangible ways.

34. STATUTORY AUDITORS & AUDITORS' REPORT

In accordance with the provisions of Section 139 of
the Companies Act, 2013, Gokhale & Sathe, Chartered
Accountants (Firm Registration No.: 103264W) were
appointed as Statutory Auditor of your Company at the
39^th Annual General Meeting for a term of 5 years, to
hold office from that meeting till the conclusion of 44^th
Annual General Meeting to be held in 2027.

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.

35. COST AUDITORS & RECORDS

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 cost
accounting 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. The
remuneration payable to the Cost Auditor is required
to be placed before the Members in a General Meeting
for their approval. Accordingly, a resolution for seeking
Member's approval for the remuneration payable to
Ketaki D. Visariya, Cost Accountants, is included in
the Notice convening the Annual General Meeting in
terms of Rule 14 of the Companies (Audit & Auditors)
Rules, 2014.

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

36. SECRETARIAL AUDITOR & 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, 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- D 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 Listing Regulations
the Board, on the recommendation of the Audit
Committee, has approved and recommended to the
Members 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 from
April 1, 2025 to March 31, 2030.

Brief details as required under the Listing Regulations,
are provided in the Notice of 42^nd AGM. The Directors
recommend the same for approval by the Members.

37. INTERNAL CONTROL SYSTEMS AND THEIR
ADEQUACY

The Company has an in-house internal audit department
with a team of qualified professionals. The internal
audit department prepares an annual audit plan and
prioritises audit activities based on the criticality of
system/ process gaps.

Reviews are conducted on an ongoing basis based
on a comprehensive risk-based audit plan, which is
approved by the Audit Committee at the beginning of
each year. The Internal Audit team reviews and reports
to the management and the Audit Committee about
compliance with internal controls, and the efficiency
and effectiveness of operations as well as the key
process risks.

The Audit Committee meets every quarter to review and
discuss the various Internal Audit reports, and follow
up on action plans of past significant audit issues and
compliance with the audit plan

Internal financial control systems of the Company
are commensurate with its size and the nature of its
operations. These have been designed to provide
reasonable assurance with regard to recording
and providing reliable financial and operational
information, complying with applicable accounting
standards and relevant statutes, safeguarding assets
from unauthorised use, executing transactions with
proper authorisation and ensuring compliance of
corporate policies.

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

38. 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.

39. NUMBER OF CASES FILED, IF ANY, AND
THEIR DISPOSAL UNDER SECTION 22 OF
THE SEXUAL HARASSMENT OF WOMEN AT
WORKPLACE (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.

The Company has complied with the provisions relating
to the constitution of Internal Complaints Committee
("ICC”) under the Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal)
Act, 2013. ICC have been set up to redress complaints
received regarding sexual harassment.

The status of the Complaints during the FY 2024-25 is
as follows:

40. CONSERVATION OF ENERGY, TECHNOLOGY
ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO

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-E to this report.

41. SIGNIFICANT AND MATERIAL ORDERS
PASSED BY THE REGULATORS OR COURTS

During the period under review there has been no
such significant and material orders passed by the
regulators or courts or tribunals impacting the going
concern status and Company's operations in future.

42. DETAILS OF APPLICATION MADE OR
ANY PROCEEDING PENDING UNDER THE
INSOLVENCY AND BANKRUPTCY CODE, 2016
DURING THE FINANCIAL YEAR ALONGWITH
THEIR STATUS AS AT THE END OF THE
FINANCIAL YEAR

During the Financial Year 2024-25, 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 ("the Code”).

Further, there is no application or proceeding pending
against your Company under the Code.

43. DETAILS OF DIFFERENCE BETWEEN THE
AMOUNT OF VALUATION AT THE TIME OF ONE
TIME SETTLEMENT AND THE VALUATION DONE
AT THE TIME OF TAKING A LOAN FROM THE
BANKS OR FINANCIAL INSTITUTIONS ALONG
WITH THE REASONS THEREOF
During the Financial Year 2024-25, the Company has
not 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 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.

For and on behalf of the Board

Rajendra V. Gogri

Chairman and Managing Director
DIN :00061003
Mumbai/ July 11, 2025