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Aarti Industries Ltd.

BSE: 524208 Sector: Industrials
NSE: AARTIIND ISIN Code: INE769A01020
BSE 00:00 | 24 Apr Aarti Industries Ltd
NSE 05:30 | 01 Jan Aarti Industries Ltd
OPEN 938.00
PREVIOUS CLOSE 936.55
VOLUME 5595
52-Week high 1093.25
52-Week low 662.05
P/E 29.87
Mkt Cap.(Rs cr) 16,156
Buy Price 927.00
Buy Qty 1.00
Sell Price 927.25
Sell Qty 90.00
OPEN 938.00
CLOSE 936.55
VOLUME 5595
52-Week high 1093.25
52-Week low 662.05
P/E 29.87
Mkt Cap.(Rs cr) 16,156
Buy Price 927.00
Buy Qty 1.00
Sell Price 927.25
Sell Qty 90.00

Aarti Industries Ltd. (AARTIIND) - Director Report

Company director report

To

The Members of AARTI INDUSTRIES LIMITED

Your Directors are pleased to present this Thirty Sixth Annual Report and the AuditedStatement of Accounts for the year ended March 312019.

Financial Results

(Figures in Rs. Crores)

STANDALONE

CONSOLIDATED

2018-19 2017-18 2018-19 2017-18
Total Income from Operations (Gross) 4548 3699 4706 3806
EBIDTA 917 657 965 699
Depreciation & Amortization 151 136 163 146
Profit/(Loss) from Operations before Other Income Finance Costs and Exceptional Items 766 521 802 553
Other Income/Exceptional Items 4 2 2 8
Profit/(Loss) before Finance Costs 770 523 804 561
Finance Costs 179 131 182 132
Profit/(Loss) before Tax 591 392 622 429
Total Tax Expenses 110 76 118 83
Non-controlling Interest - - (12) (13)
Net Profit/(Loss) after consolidation 481 316 492 333
Earnings Per Share (?) 59 39 60 41
Book Value Per Share (?) 295 186 313 204

Note:

During the year under review the Company has proposed a Scheme of Arrangement fordemerger of its Home & Personal Care undertaking into the Aarti Surfactants Limitedand merger of manufacturing undertaking of its step down subsidiary Nascent ChemicalIndustries Limited into Aarti Industries Limited.

The said Scheme was approved by the Honorable National Company Law Tribunal (NCLT)Ahmedabad Bench vide its order dated 10th June 2019 and this become effective from theappointed date of 1st April 2018.

The financials for FY 2018-19 are presented after incorporating the changes pursuant tothe said Scheme and hence to this extent the figures are not comparable with that ofprevious years.

Financial Performance

Your Company reported Gross Total Income at Rs. 4548 Crores for FY 2018-19 as againstRs. 3699 Crores for FY 2017-18. Similarly the exports for the year were at Rs. 1833Crores for FY 2018-19 v/s Rs. 1593 Crores for FY 2017-18.

Your Company's Earnings Before Interest Depreciation and Taxes stood at Rs. 917 Croresin FY 2018-19 as compared to Rs. 657 Crores in FY 2017-18 registering a growth of 40%.Likewise Net Profit Before Tax rose by 51% to Rs. 591 Crores in FY 2018-19 as compared toRs. 392 Crores in FY 2017-18.

Likewise Net Profit after Tax & Deferred Tax also grew by 52% to Rs. 481 Crores inFY 2018-19 as compared to Rs. 316 Crores in Financial Year 2017-18.

Likewise the Consolidated Total income for FY 2018-19 was at Rs. 4706 Crores ascompared to Rs. 3806 Crores for FY 2017-18 and exports for FY 2018-19 was Rs. 1977 v/sRs. 1691 Crores for FY 2017-18.

On a Consolidated basis your Company's Earnings Before Interest Depreciation and Taxesstood at Rs. 965 Crores in FY 2018-19 as compared to Rs. 699 Crores in FY 2017-18registering a growth of 38%. Similarly Net Profit after consolidation grew by 48% to Rs.492 Crore in FY 2018-19 as compared to Rs. 333 Crores in FY 2017-18. LikewiseConsolidated EPS surged by about 46% at Rs. 60.39 for FY 2018-19 as compared to Rs. 40.95for FY 2017-18.

Dividend

Your Company had declared and paid Interim Dividends of Rs. 4/- (@ 80%) per share (ofRs. 5/- each). Your Directors are pleased to recommend a Final Dividend of Rs. 7/- (@140%) per share (of Rs. 5/- each) for the FY 2018-19 aggregating to the Total Dividend ofRs. 11/- (@ 220%) per share (of Rs. 5/- each) for the FY 2018-19. The total amount ofDividend pay-out for the year would be Rs. 93.50 Crores (Previous Year: Rs. 8.13 Crores).

Transfer to Reserves

Your Company has transferred Rs. 47 Crores to General Reserve (Previous Year: Rs. 32Crores).

Share Capital

During the year pursuant to the approval of the members of the Company the FundRaising Committee of the Board in its meeting held on March 23 2019 approved theallotment of 5368647 Equity Shares of Rs. 5 at a premium of Rs. 1392 through QualifiedInstitutional Placement. Pursuant to the allotment of Equity Shares the paid-up equityshare capital of the Company has increased from Rs. 40.65 Crores comprising of 81300000Equity Shares to Rs. 43.33 Crores comprising of 86668647 Equity Shares.

Apart from the above there were no changes in the Share Capital during the FinancialYear under review. The paid-up share Capital of the Company as on March 31 2019 stood toRs. 433343235/-.

Corporate Social Responsibility

Our company through Aarti Foundation & Dhanvallabh Charitable Trust and variousother NGOs has been doing work in following Segments:

Cluster & Rural Development

Education & Skill Development

Childcare & Healthcare Facilities

Women Empowerment & Livelihood Opportunities

Disaster Relief & Rehabilitation

Eradication of Hunger & Poverty

Water Conservation & Environment

Research & Development work for upliftment of Society

Rural Education Water Conservation Tribal Welfare Agriculture Animal HusbandryHealth and Hygiene Disaster Relief and Rehabilitation are the main areas of focus in thesocial welfare plans of our CSR Activities. Many of our Pilot projects had beenappreciated by various NGO's and Other Corporate Houses who have also started adoptingthose models thereby multiplying the magnitude of the reach of these social activities forthe benefit of the Society at large.

The detailed policy on Corporate Social Responsibility is available on the website ofthe Company on the weblinkhttp://www.aarti-industries.com/media/investors/corporate_governance/1494923336_Corporate_Social_Responsibility_ CSR_Policy.pdf

A brief note on various CSR initiatives undertaken during the year is presented earlierat page no.58 of this Annual report.

CSR annual report is annexed as Annexure-A and forms an integral part of theReport.

Material developments in human resources / industrial relations front including numberof people employed.

The Company enjoyed excellent relationship with workers and staff during the year underreview.The Company care for their people Customers suppliers and community whichreflects in company's policy programs and development efforts. Your Company is committedto build and strengthen our human capital by defining policies that support their growthgoals and help them achieve excellence. As on March 31 2019 the Company had 5280permanent employees at its manufacturing plants and administrative office.

Remuneration and nomination policy

The Board of Directors has framed a policy which lays down a framework in relation toremuneration of Directors Key Managerial Personnel and Senior Management of the Company.The policy also lays down criteria for selection and appointment of Board Members.

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

Personnel

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

In terms of Section 136(1) of the Companies Act 2013 the Report and the Accounts arebeing sent to the Members excluding the aforesaid Annexure. Any Member interested inobtaining a copy of the Annexure may write to the Company Secretary at the RegisteredOffice of the Company for a copy of it.

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

There are no other material changes and commitment affecting the financial position ofthe company occurred between the end of the Financial Year to which this financialstatements relate and the date of the report.

However during the year under review there was a material change in the Share Capitalpursuant to the Composite scheme of arrangement between Aarti Industries Limited ArtiSurfactants Limited and Nascent Chemical Industries Limited. The details of which arementioned under the head Share Capital of this report.

Meetings

The Board met 8 times during the financial year. The details of the number of meetingsof the Board held during the Financial Year 2018-19 forms part of the Corporate GovernanceReport. The Maximum Gap between two meetings did not exceed 120 days as prescribed in theCompanies Act 2013.

Risk Management

Risk Management Committee through its dynamic risk management framework continuouslyidentifies evaluates and takes appropriate measures to mitigate various elements ofrisks.

Internal control systems and their adequacy

Your Company has clearly laid down policies guidelines and procedures that form partof internal control systems which provide for automatic checks and balances. Your Companyhas maintained a proper and adequate system of internal controls. This ensures that allAssets are safeguarded and protected against loss from unauthorized use or disposition andthat the transactions are authorised recorded and reported diligently. Your Company'sinternal control systems commensurate with the nature and size of its business operations.Internal Financial Controls are evaluated and Internal Auditors' Reports are regularlyreviewed by the Audit Committee of the Board.

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

Management's Discussion and Analysis Report

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

Business Responsibility Reporting

Business Responsibility Reporting for the year under review as stipulated underRegulation 34 read with SEBI Circular No CIR/CFD/CMD/10/2015 dated 4th November 2015 isin a separate section forming part of Annual Report.

Investor education and protection fund (IEPF)

Pursuant to the applicable provisions of the Companies act 2013 read with IEPFAuthority (Accounting Audit Transfer and Refund) Rules 2016 ('the Rules') all unpaid orunclaimed dividends are required to be transferred by the Company to the IEPF establishedby the government of India after the Completion of seven years. Further according to therules the shares on which Dividend has not been paid or claimed by the Shareholders forseven consecutive years or more shall be transferred to the Demat account of the IEPFAuthority. Accordingly the Company has transferred the unclaimed and unpaid dividends ofRs. 2367763.25/- Further 31906 corresponding shares were transferred as per therequirement

Directors' Responsibility Statement

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

a. That in the preparation of the annual financial statements for the year ended March31 2019 the applicable accounting standards have been followed along with properexplanation relating to material departures if any;

b. That the directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the company at the end of theFinancial Year and of the profit and loss of the company for that period;

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

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

e. The directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively;

f. The directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.

Related Party Transactions

All related party transactions that were entered into during the Financial Year were onarm's length basis and were in the ordinary course of the business. There are nomaterially significant related party transactions made by the Company with Promoters KeyManagerial Personnel or other designated persons which may have potential conflict withinterest of the Company at large.

All related party Transactions are presented to the Audit Committee. Omnibus approvalis obtained for the transactions which are foreseen and repetitive in nature. A statementof all related party transactions is presented before the Audit Committee on quarterlybasis specifying the nature value and terms and conditions of transactions.

The related party transactions policy is uploaded on the Company's website at theweb-link given below :

http://www.aarti-industries.com/media/investors/corporate_governance/1496727334_Related_Party_T ransaction_ Policy.pdf

The details of Related party transactions are provided in the accompanying financialstatements.

Since all related party transactions entered into by the Company were in ordinarycourse of business and were on an arms length's basis Form AOC-2 is not applicable toCompany.

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

All Independent Directors have given declarations in the prescribed format that theymeet the criteria of independence as laid down under Section 149(6) of the Companies Act2013 and Regulation 16 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015.

Corporate Governance

Corporate Governance essentially involves balancing the interests of a Company'sstakeholders. Corporate Governance practices of our Company are a reflection of ourvalues polices and relationship with our stakeholders. Your Company has complied with themandatory Corporate Governance requirements stipulated under Regulation 34(3) of theListing Agreement. Report on Corporate Governance is annexed hereto forming part of thisreport.

Consolidated Financial Statement

Your Directors have pleasure in presenting Consolidated Financial Statements which formpart of the Annual Report and Accounts.

Annual Return

The details forming part of the extract of Annual Return in the Form MGT-9 as requiredunder Section 92 of the Companies Act 2013 is included in the report as Annexure-B andforms an integral part of the report.

Deposits

The Company did not have any deposits at the beginning of the year under review. TheCompany has neither accepted nor renewed any deposits during the year under review.

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

Particulars of loans guarantees or investments

Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the Notes to the financial statements.

Board Evaluation

Pursuant to the provisions of Companies Act 2013 and the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 a structured questionnaire was prepared aftertaking into consideration various aspects of the Board's functioning composition of theBoard and its Committees culture execution and performance of specific dutiesobligations and governance.

The performance evaluation of the Independent Directors was completed. The performanceevaluation of the Chairman and Non-Independent Directors was carried out by theIndependent Directors. The Board of Directors expressed their satisfaction with theevaluation process.

Subsidiary Companies

The Company has 6 (Six) direct subsidiaries namely Aarti Corporate Services LimitedAlchemie Europe Limited Innovative Envirocare Jhagadia Limited Ganesh Polychem LimitedAarti USA Inc. Aarti Polychem Private Limited and 2 (Two) indirect subsidiaries namelyShanti Intermediates Private Limited Nascent Chemical Industries Limited both holdthrough Aarti Corporate Services Limited.

During the year the Board of Directors reviewed the affairs of the subsidiaries. Inaccordance with Section 129(3) of the Companies Act 2013 we have prepared consolidatedfinancial statements of the Company and all its subsidiaries which form part of theAnnual Report.

Further a statement containing salient features of the financial statement of ourSubsidiaries in the prescribed format AOC-1 is included in the Report as Annexure-C andforms an integral part of this Report. The statement also provides the details ofperformance financial position of each of the Subsidiaries.

Directors / Key Managerial Personnel (KMP)

Shri Renil R. Gogri (DIN: 01582147) and Smt. Hetal Gogri Gala (DIN: 00005499) Wholetime Directors of the Company shall retire by rotation at the ensuing Annual GeneralMeeting and being eligible offers themselves for re appointment.

Shri Vinay Gopal Nayak (Din No: 02577389) was appointed as an additional Director inthe category of Independent Director by the Board of Directors effective from December 182018. The Brief resume regarding his appointment at the ensuing Annual General Meeting isgiven in the Notice convening Annual General Meeting.

Shri Lalitkumar Naik (Din No: 02943588) was appointed as an additional Director in thecategory of Independent Director by the Board of Directors effective from May 21 2019.The Brief resume regarding his appointment at the ensuing Annual General Meeting is givenin the Notice convening Annual General Meeting.

Present Term of Shri KVS Shyam Sunder (DIN: 00502621) Shri PA. Sethi (DIN: 00004038)and Shri Bhavesh R. Vora (DIN: 00267604) Independent Directors of the Company will expireon September 23 2019. Your Director proposes their candidature for re-appointment asIndependent Directors.

Significant and material orders passed by the regulators or courts

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

Environmental Safety and Health

Your Company is committed to ensure a sound Safety Health and Environment (SHE)performance related to its activities products and services. Your Company had beencontinuously taking various steps to develop and adopt Safer Process technologies and unitoperations. Your Company has been investing heavily in areas such as Process Automationfor increased safety and reduction of human error element Enhanced level of training onProcess and Behaviour based safety adoption of safe & environmental friendlyproduction process Installation of Bioreactors Chemical ROs Multiple effect evaporatorand Incinerator etc to reduce the discharge of effluents commissioning of Waste Heatrecovery systems and so on to ensure the Reduction Recovery and Reuse of effluents &other utilities. Monitoring and periodic review of the designed SHE Management System aredone on a continuous basis.

Some of the initiatives in this regard as briefed below:

Introducing Aarti Management System: An in-house developed framework of 32 elementsdetailing procedures and processes catering to all Plant Related Activities - 3 elementsnamely MOC (to manage change) BBS (major root causes of incidents are due to behaviour)and Permit Systems catering to reduce SHE related risks had been launched and beingimplemented at various levels of operations. Other elements are being developed andreviewed and would be adopted in due course

Review Existing Process Safety Parameters: Structured & regular HAZOP meetingsare being carried out as per scheduled HAZOP calendar to further strengthen process safetyof existing processes. Also HIRA (Hazard Identification and Risk Assessment) forprocedures and practices are being initiated for some of the units and would be graduallyimplemented across various units.

Maintenance element with purpose to achieve rated performance of assets throughoutrated life is being launched.

Standardisation of maintenance practices are under progress. Also the Plant Maintenancemodule (an IT enabled solution) are also being implemented with an objective to map andmonitor all maintenance activities through the IT enabled system. This would help to haveonline reporting and tracking of various scheduled and unscheduled maintenance breakdownactivities.

Systematic and well documented scale up procedure including risk assessment and processsafety study at each stage of development from R&D to Pilot to Commercial Scaleto ensure inherently safe processes has been developed.

With these and various other initiatives your Company firmly places the SHE at the topof its goals and aims to provide a workplace which is safer and healthier for the societyat large.

Whistle Blower Policy

The Company has a whistle blower policy to report genuine concerns or grievances. TheWhistle Blower policy has been posted on the website of the Company and the web linkthereto is http://www.aarti-industries.com/media/ investors/corporate_governance/1494923104_Whistle_ Blower_Policy_Ammended.pdf

Material Subsidiary

The Company does not have any material subsidiary whose net worth exceeds 20% of theconsolidated net worth of the Company in the immediately preceding accounting year or hasgenerated 20% of the consolidated income of the Company during the previous FinancialYear. A policy on material subsidiaries had been formulated and is available on thewebsite of the Company and the web link thereto is http://www.aarti-industries.com/media/investors/corporate_governance/1 494923210_ MATERIALITY_POLICY.pdf

Familiarisation programme for independent directors.

The Independent Directors of the Company were familiarised and the details offamiliarisation programmes imparted to them are placed on the website of the Company andthe web link thereto is http://aarti-industries.com/media/investors/corporate_governance/1 518592706_ Familiarisation_Programme_for_ID.pdf

Dividend Distribution Policy

As per Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the top 500 listed companies shall formulate a dividend distributionpolicy. Accordingly the policy was adopted to set out the parameter and circumstancesthat will be taken in to account by the Board in determining the distribution of dividendto its shareholders and/ or retaining profits earned by the company. A policy is availableon the website of the Company and the web link thereto is http://www.aarti-industries.com/media/investors/corporate_governance/1494923066_ Dividend_Distribution_Policy.pdf

Statutory Auditors

M/s Kirtane & Pandit LLP Chartered Accountants (Firm Registration No: 105215W/W100057) shall continue to act as statutory Auditors of the Company.

Auditors' Report

There are no qualification reservation or adverse remark or disclaimer made by theAuditor in their report.

Cost Auditors

The Cost Auditor Ms. Ketki D. Visariya (Fellowship No.16028) Cost Accountantre-appointed by the Company under provisions of Section 148(5) read with Section 141 ofthe Companies Act 2013 attend the Audit Committee Meeting where cost audit reports arediscussed.

The due date for filing the Cost Audit Reports in XBRL mode for the Financial Yearended March 31 2018 was September 27 2018 and the Cost Audit Reports were filed by theCost Auditor on September 28 2018. The due date for filing the Cost Audit Reports for theFinancial Year ended March 31 2019 is September 27 2019.

The Company is seeking the ratification from the Shareholders for the Remuneration ofMs. Ketki D. Visariya Cost Auditor of the Company for the Financial Year ending March312019 vide resolution no. 11 of the Notice of AGM.

Secretarial Auditor & Their Report

Pursuant to the provisions of Section 204 of the Companies Act 2013 and rules madethereunder the Company has appointed CS Sunil M. Dedhia (COP No. 2031) Proprietor ofSunil M. Dedhia & Co. Company Secretary in Practice to undertake the SecretarialAudit of the Company. The Secretarial Audit Report is included as Annexure D andforms an integral part of this Report.

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

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

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

Conservation of energy technology absorption foreign exchange earnings and outgo

Information required under Section 134(3)(m) of the Companies Act 2013 read with Rule8(3) of the Companies (Accounts) Rules 2014 as amended from time to time forms a partof this in Annexure-E.

Compliance with Secretarial Standards on Board and General Meetings

During the Financial Year your Company has complied with the applicable SecretarialStandards issued by the Institute of Company Secretaries of India (ICSI)

Reporting of Frauds by Auditors

During the year under review neither the Statutory Auditors Secretarial Auditor northe Cost Auditors has reported to the Audit Committee under Section 143 (12) of theCompanies Act 2013 any instances of fraud committed against the Company by its officersor employees the details of which needs to be mentioned in the Board's Report.

Acknowledgement

The Board of Directors places on record its sincere appreciation for the dedicatedservices rendered by the employees of the Company at all levels and the constructiveco-operation extended by them. Your Directors would like to express their gratefulappreciation for the assistance and support by all Shareholders Government AuthoritiesAuditors financial institutions Customers employees suppliers other businessassociates and various other stakeholders.

For and on behalf of the Board
Rajendra V. Gogri
Chairman and Managing Director
Place: Mumbai
Date: July 08 2019

FORM AOC-1

Salient Features of Financial Statements of Subsidiary / Associates / Joint Ventures asper Companies Act 2013. PART "A": Subsidiaries

Sr. No. Name of Subsidiary Company Reporting Currency Share Capital Reverse & Surplus Total Assets Total Liabilities Investments Turnover/ Total Income Profit Before Taxation Provision for Taxation Profit After Taxation Proposed Dividend %0f Shai holding
1 Aarti Corporate Services Ltd. INR 2.02 21.43 23.46 0.01 18.30 1.34 1.24 0.10 1.14 - 100.00
2 Nascent Chemical Industries Ltd. INR 0.60 0.62 1.67 0.45 - 15.46 -0.13 - -0.13 - 50.49
3 Shanti Intermediates Pvt. Ltd. INR 0.07 0.33 4.05 3.65 0.01 14.07 0.26 -0.02 0.28 - 100.00
4 Innovative Envirocare Jhagadia Ltd. INR 0.35 -0.16 0.19 - - - -0.10 - -0.10 - 100.00
5 Ganesh Polychem Ltd. INR 6.17 148.54 255.97 101.26 - 241.02 32.92 7.92 25.00 - 50.24
6 Aarti Polychem Pvt. Ltd. INR - - 0.05 0.05 - - - - - - 50.24
7 Alchemie (Europe) Ltd. GBP 0.01 - 0.94 0.93 - 1.42 - - - - 88.89
INR 0.92 0.31 86.00 84.77 - 130.14 -0.60 - -0.60 -
8 Aarti USA Inc. USD 0.01 -0.03 0.21 0.23 0.06 0.27 - - - -
INR 0.66 -1.72 14.60 15.66 4.15 18.51 -0.16 0.01 -0.17 -

The Financial Statement of Alchemie (Europe) Limited and Aarti USA INC. Whose reportingcurrency is other than I NR are converted into Indian Rupees on the basis of appropriateexchange rate as per the applicable Accounting Standard. As at 31 st March 2019 GBP 1 = INR 90.50 and USD 1 = I NR 69.15.

Annexure 'E'

Details of conservation of energy technology absorption and foreign exchange earningsand outgo

(A) Conservation for Energy

The Steps Taken or Impact on Conservation of Energy;

The energy efficiency project at Zone 1 has resulted in saving of more than 6 BillionKWh per year which is equivalent to saving of INR 5.3 Crore. During 2018-19 the Companyundertook nearly 125 energy efficiency related projects. Total investment in theseprojects was INR 3.4 Crore whereas saving potential is more than INR 5 Crore.

The Company has been operating various captive Coal based Power plants and Solar powerplant. The synchronizing of power between the captive power plant and state power grid hasresulted in significant savings in the consumption of natural resources/fuel and alsoreduces the cost of Energy substantially.

The company is purchasing excess steam available at neighbouring sister company therebysaving the consumption of natural resources by optimizing its utilization.

The company has commissioned SAC plant which runs on recovered steam for recovery ofwaste acids thereby saving substantially on the energy required to produce the sameamount of product.

The company has successfully completed the project of a generation of low-pressuresteam from the waste heat available at the column overhead condenser thereby reducingconsumption of natural resources.

Additional Investments & Proposals if any being implemented for Reduction ofConsumption of Energy:

The company is upgrading its technology thereby converting its batch nitration tocontinuous nitration which shall result in reduction in energy consumption.

Further the company has raised proposal for VAM installation on recovered steamthereby saving in additional used of energy.

The company has few projects in design stage that will enable them to debottleneckcertain equipment and enhance productivity thereby saving in additional energy required tomanufacture them.

The Capital Investment on Environment & Greenfield Projects.

Your Company has invested about Rs. 58.15 Crores during FY 18-19 into Environment &Greenfield Projects.

(B) Technology absorption adaptation and innovation Efforts made towards TechnologyAbsorption

Adaptation and Innovation:

Forward Integration for downstream products and expansion also with in-housetechnology.

Continuous endeavour to improve product quality and process yields.

Efforts are made to recover products from the effluents and reducing impurities in byproducts.

Benefits derived as a result of above efforts:

Lower project costs for expansion

Reduction of carbon emissions waste and effluents Value addition

Exports of higher value-added products resulting in increased foreign exchangeearnings.

Enhancing sustainability

Information regarding technology imported during the last 3 years: NIL

Expenditure incurred on research and development:

(Rs. in Crores)
2018-19 2017-18
Revenue 21.87 14.74
Capital 18.65 33.18
Total 40.52 47.92

(C) Total foreign exchange earnings and outgo

The Foreign Exchange Earnings and outgo were Rs. 1832.74 Crores and Rs. 645.99 Croresrespectively (previous year Rs. 1592.72 Crores and Rs. 630.53 Crores respectively).

For and on behalf of the Board
Rajendra V. Gogri
Chairman and Managing Director
Place: Mumbai
Date: July 8 2019