TO THE MEMBERS,
Your directors have the pleasure of presenting the thirty-fourth annual
report of your Company together with the audited financial statements for the financial
year ended 31st March 2026.
FINANCIAL SUMMARY OR HIGHLIGHTS OR THE PERFORMANCE OF THE COMPANY ( in
Lacs)
|
Standalone |
Consolidated |
| Particulars |
2025-26 |
2024-25 |
2025-26 |
| Total Income |
27625.30 |
25294.60 |
27625.30 |
| Profit before Deprecation, |
|
|
|
| Finance Cost, Tax and |
2856.53 |
2611.03 |
2857.91 |
| Exceptional items |
|
|
|
| Depreciation and amortization expenses |
602.16 |
520.92 |
602.16 |
| Finance cost |
560.70 |
486.96 |
496.21 |
| Exceptional Items |
54.80 |
NIL |
54.80 |
| Profit before Tax |
1638.87 |
1603.14 |
1759.54 |
| Less: Tax expenses |
1170.57 |
428.04 |
1185.75 |
| Profit for the year |
468.30 |
1175.10 |
518.99 |
| Other comprehensive income for the year |
(43.41) |
(38.38) |
(43.41) |
| Total comprehensive income for the year |
424.89 |
1136.71 |
475.58 |
DIVIDEND
Your directors do not recommend payment of dividend on equity shares.
TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION
FUND
The provisions of Section 125(2) of The Companies Act, 2013 do not
apply as there was no dividend declared and paid in the last seven years.
MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL
POSITION OF THE COMPANY OCCURRED BETWEEN THE ENDS OF THE FINANCIAL
YEAR TO WHICH THIS FINANCIAL STATEMENT RELATE AND THE DATE OF THE
REPORT
No such material changes occurred, which affected the financial
position of the company.
SHARE CAPITAL
The paid-up capital of the company as on 31st March 2026 was INR 8
Crore. During the year under review the Company has not altered its share capital,
consequently there has been no change in the capital structure since previous year.
DETAILS OF POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON ITS
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
As per the rule of the Companies Act, 2013 CSR is applicable on our
company, and the Company has made an annual CSR contribution of Rs. 34 Lakhs to Rukmani
Devi Shivchand Ram Foundation.
MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis of financial condition and of
operations of the Company for the year under review as required under Regulation 34 of
SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 with the Stock
Exchanges is given in the part on Corporate Governance elsewhere in the Annual Report
marked as "Annexure A".
FINANCE
1.1. PUBLIC DEPOSIT
The Company has not accepted any deposit falling within the ambit of
Section 73 of the Companies Act, 2013 read with The Companies (Acceptance of Deposits)
Rules, 2014.
PARTICULARS OF LOAN AND INVESTMENT AND GUARANTEE SECURITY
The company has not given any loan under this section except making
investments in, giving loans and guarantees to and providing securities in connection with
loans to its wholly owned subsidiaries from time to time, in compliance with the
applicable provisions of the Act.
INTERNAL FINANCIAL CONTROL
The Company has formulated and implemented comprehensive guidelines to
establish and maintain robust internal financial controls. These controls are embedded
across various levels of operations and encompass both manual processes and automated
systems, including Enterprise Resource Planning (ERP) applications. The ERP systems are
configured to ensure that all financial transactions are appropriately authorized,
accurately recorded, and systematically reported. These controls are tailored to suit the
specific nature of operations conducted at different business locations and across various
functional domains, thereby ensuring relevance and effectiveness in internal governance.
The framework is designed to provide reasonable assurance regarding the reliability of
financial reporting, safeguarding of assets, prevention and detection of frauds and
errors, accuracy and completeness of accounting records, and timely preparation of
financial statements. To ensure the adequacy and operational effectiveness of these
internal financial controls, periodic evaluations are conducted. The Internal Auditors
carry out detailed assessments as part of their audit plan, and their findings are
regularly reviewed by the management and the Audit Committee. In addition, the Statutory
Auditors independently evaluate the internal financial controls over financial reporting
as part of their audit procedures.
SUBSIDIARY COMPANY, JOINT VENTURE & ASSOCIATE COMPANY
As on 31st March 2026 your Company has 7 Wholly owned
Subsidiary Companies: -
a) Yocnex Chemicals Private Limited
b) Suksess Chemicals Private Limited
c) Nocnex Chemicals Private Limited
d) Ocilim Advisory Services Private Limited
e) Wide Range Merchants Private Limited
f) Allied Maritime & Infra Engineering Private Limited
g) ARCL Petrochemicals Limited
In Compliance with IND AS-110, your Company has prepared its
consolidated financial statements which forms part of its Annual Report. Pursuant to the
provisions of Section 129(3) of Companies Act, 2013, the salient features of the
subsidiary Company in the prescribed form AOC-1 is a part of the consolidated financial
statements.
Your Company does not have any associates, holding or joint ventures as
on 31st March, 2026.
YEAR IN RETROSPECT AND FUTURE OUTLOOK:
The specialty chemicals and broader chemicals industry continued to
play a vital role in supporting key sectors such as agriculture, construction, automotive,
electronics, pharmaceuticals, textiles and consumer goods during FY 2025 26. The
industry operated in a dynamic environment characterised by geopolitical developments,
supply-chain realignments, raw-material price volatility, evolving environmental
regulations and changing global trade conditions. Despite these challenges, the sector
demonstrated resilience, supported by steady demand from key end-user industries,
increasing focus on value-added specialty chemicals, technological advancement and growing
emphasis on sustainability.
Market Overview
The global specialty chemicals industry continued to benefit from
demand for application-specific and high-performance chemical products. According to the
latest sector analysis published by NITI Aayog, based on CRISIL Intelligence and
company reports, the international specialty chemicals market was estimated at
approximately 52,277 billion, with growth expected at a CAGR of around 4 6%.
The domestic specialty chemicals market was estimated at approximately 3,064 billion,
with a projected CAGR of 6 8% through FY 2030.
Regional Overview
Asia-Pacific continued to remain a key region for the specialty
chemicals industry, supported by manufacturing expansion, infrastructure development and
growing demand from end-user industries. Europe continued to focus on sustainable
manufacturing, green chemistry, energy efficiency and regulatory compliance. North
America remained an important market, supported by manufacturing investments,
supply-chain diversification and demand for high-value specialty chemical products.
Globally, chemical manufacturers continued to focus on higher-value, innovation-driven
products, process efficiency, sustainability and application-specific solutions.
Outlook for FY 2026 27
The outlook for the specialty chemicals industry remains positive,
although global uncertainties, raw-material price volatility, geopolitical developments
and competitive pressures may continue to influence margins and demand. India's specialty
chemicals sector is expected to benefit from increasing domestic consumption,
manufacturing investments, export opportunities, supply-chain diversification and the
continued "China Plus One" strategy.
India's relatively strong domestic demand, expanding manufacturing
capabilities and policy support are expected to provide opportunities for Indian specialty
chemical manufacturers to increase their global presence and move towards higher-value
products. Accordingly, the Company remains focused on strengthening its manufacturing
capabilities, improving operational efficiency, expanding its product portfolio and
serving the evolving requirements of its customers across domestic and international
markets.
LISTING OF THE SECURITIES OF THE COMPANY
Equity shares of the Company got listed on 29th September
2023 on BSE and the listing Fees for the Financial year 2025 2026 have been paid on
30.04.2026 and 72.74% of the Equity Share Capital of the Company is in Dematerialization
form.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the requirement under section 134(3)(c) of the Companies
Act, 2013 with respect to Directors' Responsibility Statement, it is hereby confirmed
that:
(a) In the preparation of the Annual Accounts the applicable accounting
standards have been followed along with proper explanation relating to material
departures.
(b) The directors have selected such accounting policies and applied
them consistently and made judgment 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 the profit and loss of the company for that period.
(c) The directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the provision of this act
for safeguarding the assets of the company and for preventing and detecting fraud and
other irregularities.
(d) The directors have prepared the annual accounts on a going concern
basis.
(e) The directors, have laid down internal financial control to be
followed by the company and that such internal financial control are adequate and were
operating effectively, and
(f) The directors have devised proper systems to ensure compliance with
the provision of all applicable laws and that such system were adequate and operating
effectively.
RELATED PARTY TRANSACTIONS
There are no materially significant related party transactions made by
the Company with Promoters, Directors, Key Managerial Personnel or other designated
persons which may have a potential conflict with the interest of the Company at large. All
Related Party Transactions are placed before the Audit Committee as also the Board for
approval. Prior omnibus approval of the Audit Committee is obtained on a yearly basis for
the transactions which are foreseen and are of repetitive nature. The transactions entered
into pursuant to the omnibus approval so granted are of audited and a statement giving
details of all related party transactions is placed before the Audit Committee and the
Board of Directors for their approval on a yearly basis. The policy on Related Party
Transactions as approved by the Board is uploaded on the Company's website
www.arclorganics.com.
VIGIL MECHANISM FOR DIRECTORS AND EMPLOYEES
The Company has a Vigil Mechanism to deal with instance of fraud and
mismanagement, if any. The details of the Vigil Mechanism is explained in the Corporate
Governance Report and also posted on the website of the Company www.arclorganics.com.
CORPORATE GOVERNANCE
ARCL Organics Ltd is committed to upholding the highest standards of
corporate governance. The principles of good governance are deeply embedded in the
Company's culture and extend to all stakeholders, influencing every business
decision. The Company places paramount importance on accuracy in financial reporting,
integrity, transparency, legal compliance in both letter and spirit, and the empowerment
of individuals at all levels. The Corporate Governance Report, along with a Certificate
from the Secretarial Auditors affirming compliance with the prescribed corporate
governance norms, is annexed and forms an integral part of the Directors' Report.
The Company makes a conscious and continuous effort to ensure that the
core values articulated in the Codes of Conduct for Directors, Senior Management
Personnel, and Employees are upheld across the organization. These values are not only
documented but are also practiced in spirit, fostering a culture of accountability,
ethical conduct, and responsible leadership at all levels.
ANNUAL RETURN
Pursuant to section 92(3) read with section 134(3)(a) of the Act, the
Annual Return as on 31st March 2025 may be accessed on the Company's website at
the www.arclorganics.com.
DISCLOSURE OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION,
PROHIBITION, REDRESSAL) ACT, 2013
In accordance with The Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013 to provide for the effective enforcement
of the basic human right of gender equality and guarantee against sexual harassment and
abuse, more particularly against sexual harassment at work place, your Company has a
Policy on Prevention of Sexual Harassment at the
Workplace duly approved by the Board of Directors and posted on the
website of the Company www.arclorganics.com. During the year, no complaint was reported
under The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal)
Act, 2013.
DIRECTORS
Composition of the Board of Directors of your Company fulfills the
criteria fixed by Regulation 17 (1) (a) of SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 with fifty per cent of the Directors being Non-Executive
Director with at least one-women independent director. Your Board comprises of (Six)
directors out of which 3 (Three) are independent directors and it includes one-woman
independent director. Mr. Mukesh Mundhra is Executive Director, retires by rotation in
accordance with the requirements of Companies Act, 2013 and Articles of Association of the
Company. He being eligible offers himself for reappointment. Brief resume of Mr. Mukesh
Mundhra, nature of his expertise in specific functional areas, names of companies in which
he holds directorships and/or memberships/chairmanships of committees of Board, his
shareholdings are furnished in section on "Corporate Governance" elsewhere
in the Annual Report. Further, as declared by them, none of the Directors of the Company
is disqualified from being appointed as a Director, as specified in section 164(2) of the
Companies Act, 2013 and rule 14(1) of the Companies (Appointment and Qualification of
Directors) Rules 2014 or is debarred or disqualified from being appointed or continuing as
Director of companies by the SEBI/Ministry of Corporate Affairs or any such statutory
authority. All Independent Directors have given declarations that they meet the criteria
of independence as laid down under Section 149(6) of the Companies Act, 2013 and SEBI
(Listing Obligations and Disclosure Requirements) Regulations, 2015.
ANNUAL PERFORMANCE EVALUATION OF THE BOARD
Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out an
annual performance evaluation of its own performance, the directors individually, Key
Managerial Personnel (KMP), Senior Management as well as the evaluation of the working of
its Audit Committee, Nomination & Remuneration Committee and Stakeholders Relationship
Committee. The manner in which the evaluation has been carried out has been explained in
the Corporate Governance Report. Pursuant to the provisions of Section 134(3)(n) of the
Companies Act, 2013, the Company has developed and implemented a Risk Management
Policy for identifying, assessing, monitoring and mitigating key business and operational
risks. The Board periodically reviews the risk management framework and the measures taken
to mitigate such risks. In the opinion of the Board, there are no risks which may threaten
the existence of the Company.
NOMINATION & REMUNERATION POLICY
The Board has, on the recommendation of the Nomination &
Remuneration Committee framed a policy for selection and appointment of Directors, Senior
Management and their remuneration the contents of which are placed on the website of the
Company at www.arclorganics.com.
MEETINGS
During the year four (04) Board Meetings and Four (04) Audit Committee
Meetings were convened and held, the details of which are given in the "Corporate
Governance Report". The intervening gap between the Meetings was within the period
prescribed under the Companies Act, 2013.
AUDITORS
17.1. STATUTORY AUDITORS
The Member had appointed M/s L. B. Jha & Co, Chartered Accountants
(Firm Registration No 301088E) as the statutory auditor of the Company at the 31st
Annual General Meeting, to hold office as such, for a term of 5 years till the conclusion
of 36th Annual General Meeting. M/s L.B. Jha & Co. continues to be the
auditor of the Company for the financial year 2025 2026. The observations made in the
Auditor's Report are self-explanatory and therefore, do not call for any further
comments under Section 134(3)(f) of the Act.
SECRETARIAL AUDIT
Pursuant to the provisions of Section 204 of the Companies Act, 2013
and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the
Company had appointed M/s. KSN & Co, Practicing Company Secretaries, to conduct
Secretarial Audit of the Company for the Financial year 2025 - 2026. The Secretarial Audit
Report is annexed herewith as "Annexure B".
The Report does not contain any qualification, reservation or adverse
remark.
AUDITORS' QUALIFICATION
(i) STATUTORY AUDITORS' QUALIFICATIONS
There are no qualifications. Qualifications contained in the
Auditors' Report if any have been dealt with in the Notes to financial statements and
are self-explanatory.
SECRETARIAL AUDITORS' QUALIFICATIONS
There are no qualifications. Qualifications contained in the
Secretarial Auditors' Report if any have been dealt with in the Notes to Form MR-3
and are self-explanatory.
FRAUD REPORTING
During the year under the review the Statutory Auditor, Secretarial
Auditor, Cost Auditor and Internal Auditor has not reported any instances of fraud
committed in the company by its directors or officers or employees to the Audit Committee
under section 143(12) of the Companies Act, 2013, therefore no detail is required to be
disclosed under Section 134 (3) (ca) of the Act.
COST AUDITORS
Pursuant to section 148 of the Act, the Board has appointed M/s. Amit
Khetan & Co (Firm Registration No. - 102559), to conduct the audit of cost records of
the Company for the Financial Year 2026 2027.
SECRETARIAL COMPLIANCE REPORT
The Company has undertaken an audit for the Financial Year ended March
31, 2026, for all applicable compliances as per the Securities and Exchange Board of India
Regulations and Circulars/Guidelines issued thereunder. The Annual Secretarial Compliance
Report issued by M/s KSN & Co., Practicing Company Secretaries, has been submitted to
the Stock Exchanges on 29.05.2026 which is within 60 days from the end of the Financial
Year.
INTERNAL AUDITOR
The Board of Directors of the Company has appointed M/s. MIB & Co.
as Internal Auditors to carry out extensive Internal Audit of the Company for the
Financial Year ended March 31, 2026.
PARTICULARS OF EMPLOYEES
The information required pursuant to Section 197 read with Rule 5 of
The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in
respect of employees of the Company, is given in "Annexure C".
TAXES AND DUTIES
Your Company has contributed Rs.38,43,16,229/-to the Central and State
Exchequer by way of Taxes and duties.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNING AND OUTGO
Information as required under section 134(3)(m) of the companies act
2013 read with Rule 8(3) of Companies (Accounts) rules, 2014):
Conservation of Energy
Energy Conservation Measures Taken:
Improvisation and continuous monitoring of Power Factor and replacement
of weak capacitors by conducting periodical checking of capacitors.
Installation of isolating valve in main airline for preventing air
loss.
The Company has relentlessly aimed at optimising the use of energy
resources and taken adequate measures to avoid wastage and use latest technology and
equipments.
Impact of the above Measures:
Opportunity to compete in International Markets
Technology up-gradation
Development of new designs in products
Attaining accreditation of our products from Internationally recognized
Organizations
Total Energy Consumption and Energy Consumption per Unit of Production:
Power & Fuel Consumption
| I. Electricity |
Values |
| Purchased Units (KWH in lacs) |
85.29 |
| Total Amount (in Lacs) |
731.50 |
| Monthly average (Rs. In Lacs) |
60.95 |
| Rate (Rs/KWH) |
8.57 |
| II Fuel Consumption |
|
| LDO/Fuel Consumption (in KL) |
765.56 |
| Total Amount (Rs. In Lacs) |
258.44 |
| Monthly average (Rs. Lacs) |
21.53 |
| Rate (Rs/Lacs) |
56.36 |
Technology Absorption:
Research and Development (R & D):
The current success, and our future success, is largely dependent on
our ability to develop new products and processes and to improve the features of existing
products. The research activity includes-
a) Low emission formaldehyde E0/E1 in plywood application.
b) Slow-Release Nitrogen crude protein in cattle field application, M
PRO.
c) Import Substitution cross linker HMMM.
Expenditure on R & D:
| No. Particulars |
2025-26 (Rs.) |
| I. Capital Expenses |
1949361 |
| II. Revenue Expenses |
1,04,63,750 |
| III. Total |
1,24,13,111 |
Government recognition of our R & D
It's a matter of great pride that company got recognition by
Government of India approving our in-house laboratory as DSIR certified. There are many
funds received from all over the world with Government of India for R&D works. They
gave these funds to DSIR recognized laboratory only. This will give us an opportunity to
get such funds and do real great R&D, helping world and society with innovations. We
are pretty sure under the leadership of our talented R&D chief, ARCL will achieve lot
of recognition & do real innovative research benefiting the industry & society.
Foreign Exchange Earnings and Outgo:
a) Expenditure in Foreign Currency - Rs. 58,11,431/-
b) Earnings in Foreign Currency- Rs. 103,48,73,939/-
INDEBTEDNESS OF THE COMPANY INCLUDING INTEREST OUTSTANDING / ACCRUED
BUT NOT DUE FOR PAYMENT
(Rs. In lakhs)
| Particulars |
Secured Loan Excluding Deposits |
Unsecured Loans |
Deposits |
Total Indebtedness |
| Indebtedness at the beginning of the financial year |
|
|
|
|
| i) Principal Amount |
1080.41 |
2429.21 |
|
3509.62 |
| ii) Interest due but not paid |
- |
- |
|
- - |
| iii) Interest accrued but not due |
- |
- |
|
- - |
| Total (i+ii+iii) |
1080.41 |
2429.21 |
.00 |
3509.62 |
| Change in Indebtedness during the financial year |
|
|
|
|
| Additions |
5382.88 |
1798.33 |
|
7181.21 |
| Reduction |
-968.06 |
-1760.16 |
|
-2728.22 |
| Net Change |
4414.82 |
38.17 |
.00 |
4452.99 |
| Indebtedness at the end of the financial year |
5495.22 |
2467.38 |
.00 |
7962.61 |
| i) Principal Amount |
- |
- |
- |
- |
| ii) Interest due but not paid |
- |
- |
- |
- |
| iii) Interest accrued but not due |
- |
- |
- |
- |
| Total (i+ii+iii) |
5495.22 |
2467.38 |
.00 |
7962.61 |
MATERNITY BENEFIT
The Company continues to comply with the provisions of the Maternity
Benefit Act, 1961. Eligible female employees are provided maternity leave and benefits as
per statutory norms. Maternity leave of up to 26 weeks is granted for the first two
children and 12 weeks for subsequent childbirths, along with full pay during the leave
period. The Company remains committed to supporting the health and well-being of its
employees and fostering a conducive work environment for working mothers.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant or material orders passed by any Regulator,
Court or Tribunal impacting the going concern status or future operations of the Company.
Further, pursuant to Rule 8(5)(xi) and (xii) of the Companies (Accounts) Rules, 2014,
no one-time settlement with any Bank or Financial Institution was entered into and no
application was made or proceeding was pending against the Company under the Insolvency
and Bankruptcy Code, 2016 during the year. Accordingly, no valuation difference
disclosure arises.
ACKNOWLEDGEMENTS
Your directors express their sincere appreciation of the co-operation
and assistance received from the shareholders, bankers, regulatory bodies and other
business constituents during the year under review.
Regd. Office:
Rampur Budge Budge Trunk Road, Kolkata 700 141 12th Day of
August 2026
| For and on behalf of the Board of Directors |
| Suraj Ratan Mundhra |
| Chairman and Managing Director |
| (DIN No. 00681223) |
