CH-3 FINANCE DEPARTMENT

COMPANY NAME:- AARTI INDUSTRIES LTD (AIL)

1. PROFIT & LOSS STATEMENT OF AARTI

INDUSTRIES LTD:-
Rs.(in crores)

  Mar'21 Mar'20 Mar'19 Mar'18 Mar'17

  12Months 12Months 12Months 12Months 12Months

INCOME:

Sales Turnover 4316.71 4408.19 4547.82 3699.31 3050.22

Excise Duty .00 413.78 .00 .00 .00

NET SALES 4316.71 3994.41 4547.82 3699.31 3050.22

Other Income 1.9500 10.5100 4.5300 2.1300 2.5100

TOTAL INCOME 4318.66 4004.92 4552.35 3701.44 3052.73

EXPENDITURE:

Manufacturing Expenses .00 719.21 681.42 640.87 519.33

Material Consumed 2043.22 1830.04 2479.79 2006.13 1609.87

Personal Expenses 358.28 292.34 230.71 176.80 140.17

Selling Expenses .00 6.05 5.78 .00 .00

Administrative Expenses 980.69 217.23 233.42 218.78 172.44

Expenses Capitalised .00 .00 .00 .00 .00

Provisions Made .00 .00 .00 .00 .00

TOTAL EXPENDITURE 3382.19 3064.87 3631.12 3042.58 2441.81

Operating Profit 934.52 929.54 916.70 656.73 608.41

EBITDA 936.47 940.05 921.23 658.86 610.92

Depreciation 218.31 172.64 151.03 135.77 114.80

Other Write-offs .00 .00 .00 .00 .00

EBIT 718.16 767.41 770.20 523.09 496.12

Interest 86.16 121.55 179.15 130.74 117.38

EBT 632.00 645.86 591.05 392.35 378.74

Taxes 118.50 122.50 109.77 75.91 72.06

Profit and Loss for the Year 513.50 523.36 481.28 316.44 306.68

2. BALANCE SHEET OF AARTI INDUSTRIES LTD:-

Rs (in crores)

Particulars Mar'21 Mar'20 Mar'19 Mar'18 Mar'17

12 12 12 12 12
Liabilities Months Months Months Months Months

Share Capital 87.12 87.12 43.55 40.65 41.06

Reserves & Surplus 3324.62 2814.69 2517.08 1474.52 1269.03

Net Worth 3411.74 2901.81 2560.63 1515.17 1310.09

Secured Loan 2487.34 1789.00 2070.26 1884.26 1329.48

Unsecured Loan .00 .00 .00 .00 88.46

TOTAL LIABILITIES 5899.08 4690.81 4630.89 3399.43 2728.03

Assets

Gross Block 4808.68 3561.90 3098.80 2850.36 2437.92

(-) Acc. Depreciation .00 1260.27 1119.34 1006.09 871.35

Net Block 4808.68 2301.63 1979.46 1844.27 1566.57

Capital Work in Progress .00 1417.65 794.57 431.18 266.79

Investments 36.26 37.16 33.36 55.90 61.70

Inventories 901.46 781.48 700.91 686.75 546.59

Sundry Debtors 819.08 782.47 806.05 639.23 547.37

Cash and Bank 405.99 233.37 797.08 23.93 21.64

Loans and Advances 542.26 535.46 516.44 436.24 330.23

Total Current Assets 2668.79 2332.78 2820.48 1786.15 1445.83

Current Liabilities 1577.61 1361.66 959.09 690.58 589.08

Provisions 37.04 36.75 37.89 27.49 23.78

Total Current Liabilities 1614.65 1398.41 996.98 718.07 612.86

NET CURRENT ASSETS 1054.14 934.37 1823.50 1068.08 832.97

Misc. Expenses .00 .00 .00 .00 .00

TOTAL
ASSETS(A+B+C+D+E) 5899.08 4690.81 4630.89 3399.43 2728.03

3. RATIOS AND THEIR INTERPRETATION:-

(A) CURRENT RATIO:-
Current Ratio = Current Assets / Current Liabilities

2021= 26,68,00,00,000/16,14,00,00,000=1.65
2020=23,32,00,00,000/13,98,00,00,000=1.67

 INTERPRETATION:
 A current ratio establishes the relationship between total current assets and current
liabilities. A current ratio of 2:1 is considered ideal as a rule of thumb. The ratio of
AIL is 1.65:1, indicating a very comfortable liquid position.

(B) RETURN ON EQUITY:-

Return on equity ratio = Net income / Shareholder’s equity
2021=5,130,000,000 / 87
=5.89%
 INTERPRETATION:
The return on equity ratio measures how efficiently a company is using its
equity to generate profit.

(C) NET PROFIT RATIO:-

Net profit Ratio = Net profit *100 / Sales
2021=5,130,000,000*100/43,16,00,00,000=11.89%
2020=5,230,000,000*100/44,08,00,00,000=11.86%

 INTERPRETATION:
It expresses the relationship between net profit and sales. This ratio shows a better
profitability of the firm as compared to the whole industry. This suggests a
satisfactory position.
(D) FIXED ASSESTS TURNOVER RATIO:-
Fixed Assets Turnover ratio = Net sales / Net Block
2021=43,16,00,00,000/48,08,00,00,000=0.90
2020=39,94,00,00,000/23,01,00,00,000=1.74

 INTERPRETATION:
The ratio establishes a relationship between the fixed assets and sales. The standard
fixed turnover ratio is 5 times. A high ratio indicates better utilization of fixed assets.
A low ratio indicated under utilization of fixed assets. So the company’s ratio
indicates under-utilization of fixed assets.
4. FINANCIAL STATEMENT ANALYSIS:-
 Financial statements are records that provide an indication of the
organization’s financial status. It quantitatively describes the financial health
of the company. It helps in the evaluation of company’s prospects and risks for
the purpose of making business decisions.There are four basic types of
financial statements: balance sheet, income statements, cash flow statements,
and statements of retained earnings.

Revenue Performance (Consolidated)

 The Consolidated Total Income of Rs.5,023 Crores for FY 2020-21 as

compared to Rs.3,163 Crores for FY 2016-17. Similarly the exports for the
year were of Rs. 2,186 Crores for FY 2020-21 as compared to Rs. 1,523
Crores for FY 2016-17.
 The company posted a CAGR growth of 12 per cent over 5 years.
 EBIT Performance (Consolidated)

 On a Consolidated basis, Company’s Earnings Before Interest and Taxes stood at Rs.
957 Crores for FY 2020-21 as compared to Rs. 615 Crores for FY 2016-17,
registering a CAGR growth of 12%.

Financials – (Consolidated)
DEBT TO EQUITY RATIO:

 This is the fundamental Ratio which any Banker will follow while granting loan.
 A good debt to equity ratio is around 1 to 1.5.
 However, the ideal debt to equity ratio will vary depending on the industry because
some industries use more debt financing than others.

PROFIT AFTER TAX (NET PROFIT):

 Net Profit after tax grew by a CAGR of 13%.

 Company PAT has grown from Rs. 316 Crores for FY2016-17 vs. Rs. 524 Crores for
FY 2020-21. 

Growth Estimates By (AIL)

 5. ACCOUNTING PROCEDURES:

An accounting procedure is a standardized process that is used to perform a function within

the accounting department. Examples of accounting procedures are:

 Issue billings to customers

 Pay invoices from suppliers

 Calculate payroll for employees

 Calculate depreciation for fixed assests

 Conduct a bank reconciliation

 SOME DETAILS OF ACCOUNTING PROCEDURES:-

1.COLLECTION OF FINANCIAL INFORMATION:-

It begins with the collection of financial documents. The information collected may be logged
and maintained through physical mode or electrical mode. The cash register tapes, incoming
bills, receipts, records of salaries, travel receipts, and forms along with invoices are examples
of financial documents.

2.ACCOUNT RECONCILIATION AND VERIFICATION:-

Once logged into the system, the accountants verify the financial information with the
available evidence. Account reconciliation and internal as well as external reporting are
performed as per the established accounting procedures. These procedures should be
designed and constructed in such a manner that it records valid, objective, and accurate
information. The procedures should be consistent and comparable.

6. CSR AND EXPENSES:

 Since inception, Aarti Industries Limited (AIL) has strived to fulfil its role as a
responsible corporate citizen. Our passion for developing unique solutions for the
speciality chemicals and pharmaceutical industries also extends to undertaking life-
changing community initiatives. Through Aarti Foundation, we undertake a wide
range of programmes and initiatives for touching and enhancing the lives of
communities around us.
 Our CSR philosophy stems from the belief of one of India’s greatest scientists and
India’s former President, late Dr. A.P.J. Abdul Kalam – “Nearly 260 million people
below the poverty line have to join the mainstream for a good life.” We have been
tenaciously marching towards this goal by pioneering several community-based
programmes across the following areas.
HIGHLIGHTS:

 Morali Education Society - AIL has provided financial support for the construction
and redevelopment of classrooms. The school accommodates 650-700 children from
economically weaker sections and tribal backgrounds.
 NFBM (National Federation of the Blind, Maharashtra) Jagriti School for Blind
Girls - AIL has provided financial support to the institution located at Khed in Pune,
Maharashtra for construction of the girls' hostel.
 We have been organising blood donation drives for over 20 years in Vapi, Gujarat.
 Aarti Foundation has partnered with BPNI, which aims to create awareness and
counsel mothers on the benefits of breastfeeding. We offer training and awareness
services to several institutional and peripheral hospitals in Mumbai.
7. Yes, AARTI INDUSTRIES LTD is listed on both BSE
and NSE. Since, 12 October,1990.