Based on the recommendation of the Audit Committee and the Committee of Independent Directors, the Board of Directors of Aarti Industries Limited at its meeting held today, i.e. August 19, 2021 has considered and approved to restructure the business of the Demerged Company by way of a Scheme of Arrangement ("Scheme") whereby the Pharma Business and allied activities of Aarti Industries Limited ("Demerged Company") will be demerged into Aarti Pharmalabs Limited (Formerly known as Aarti Organics Limited), a wholly owned subsidiary Company of Aarti Industries Limited ("the Resulting Company'), as a going concern basis with effect from the Appointed Date i.e. July 1, 2021. The transaction is proposed through a Scheme of Arrangement under Section 230 - 232 read with applicable provisions of the Companies Act, 2013.

The said Scheme would be subject to requisite approvals of the National Company Law Tribunal, BSE Limited, National Stock Exchange of India Limited, Securities and Exchange Board of India and other statutory / regulatory authorities, including those from the shareholders of the Demerged Company.

The demerged company has two business segments: specialty chemicals business and pharma business.

The demerged dompany would demerge its pharma business and allied activities including assets, investments, liabilities, rights, benefits, interests and obligations, into the resulting company. Demerged undertaking also includes a part of Specialty Chemical Business, which is a backward integrated facility providing feeding material to the pharma pusiness. This part of specialty chemical business accounts for less than 3% of the revenues of the speciality chemical business. The demerged company would continue to run and operate the remaining of specialty chemical business.

The shareholders of Aarti Industries Limited, pursuant to the demerger, will get Equity Shares of Resultant Company for the value of Business Transferred in the manner set out under this Scheme.

The demerger will also result in Aarti Industries Limited and Aarti Pharmalabs Limited achieving operational efficiencies by streamlining of the relevant businesses.

By demerger of the Demerged Undertaking into the Resulting Company (Aarti Pharmalabs Limited), the financial resources will be conveniently raised in accordance with the requirement of the business. 

The demerger will enable the Aarti Pharmalabs Limited to expand its presence in the fast moving Pharma Business in India and abroad.

The demerger will result into two dedicated and focused business segments i.e speciality shemical and pharma without any risk or overlap of one business over the other.

As consideration for the demerger, the equity shares of resulting company will be issued on a proportionate basis to the member of Demerged Company whose name is registered on the register of member as on the Record Date, in the ratio of 1(one) fully paid up equity share of Rs. 5 each in 'Aarti Pharmalabs Limited' (formerly known as 'Aarti Organics Limited') for every 4 fully paid up equity shares of Rs.5 each held in Aarti Industries Limited. ("Demerged Company")

The resulting company will make an application with the BSE Limited and the National Stock Exchange of India Limited for listing of its equity shares.