Aries Agro Limited
Your Directors have pleasure in presenting their 47th Annual Report on theoperations of the Company together with the Audited Financial Statements for the FinancialYear ended 31st March 2017.
Pursuant to the notification dated 16th February 2015 issued by theMinistry of Corporate Affairs the Company has voluntarily adopted the Indian AccountingStandards(Ind AS) notified under the Companies(Indian Accounting Standards) Rules 2015with effect from 1st April 2016. Financial Statements for the year ended andas at 31st March 2016 have been restated to conform to Ind AS. Note No. 2 tothe Financial Statement provides further explanation on the transition to Ind AS.
| || || |
(Rupees in Lakhs unless stated otherwise)
|Particulars ||Standalone ||Consolidated |
| ||Year Ended 31st March 2017 ||Year Ended 31st March 2016 ||Year Ended 31st March 2017 ||Year Ended 31st March 2016 |
|Total Revenue (including Other Income) ||23117.35 ||21426.05 ||26842.24 ||26939.44 |
|Profit Before Tax Interest & Depreciation ||4139.06 ||3287.68 ||4200.91 ||4743.11 |
|Less :- Finance Costs ||2119.40 ||2071.65 ||2337.06 ||2467.57 |
|Depreciation & Amortisation Expense ||185.29 ||175.63 ||668.93 ||1058.04 |
| ||2304.70 ||2247.29 ||3005.98 ||3525.61 |
|Profit Before Tax ||1834.36 ||1040.39 ||1194.92 ||1217.50 |
|Less :- Current Tax ||651.00 ||365.00 ||651.00 ||365.00 |
|Adjustment of Tax relating to earlier periods ||5.29 ||21.61 ||5.29 ||21.61 |
|Deferred Tax ||(6.27) ||14.11 ||(6.27) ||14.11 |
| ||650.01 ||400.71 ||650.01 ||400.71 |
|Profit for the year ||1184.35 ||639.68 ||544.91 ||816.79 |
|Less :- Non-Controlling Interest ||- ||- ||(161.18) ||93.71 |
|Profit for the year attributable to Owners of the Parent ||1184.35 ||639.68 ||706.09 ||723.07 |
|Balance brought forward ||5366.71 ||5090.37 ||8985.67 ||8508.04 |
|Amount available for Appropriation ||6551.06 ||5730.05 ||9691.75 ||9231.11 |
|Less :- Transferred to General Reserve ||- ||50.00 ||- ||50.00 |
|Transferred to Legal Reserve ||- ||- ||13.68 ||35.61 |
|Transferred to Foreign Currency Translation Reserve ||- ||- ||246.93 ||(153.50) |
|Dividend paid ||195.07 ||260.09 ||195.07 ||260.09 |
|Tax on Dividend Proposed ||39.71 ||53.25 ||39.71 ||53.25 |
|Ind AS Impact ||(38.62) ||- ||(38.62) ||- |
| ||196.15 ||363.34 ||456.76 ||245.45 |
|Surplus carried forward to Balance Sheet ||6354.90 ||5366.71 ||9234.99 ||8985.67 |
During the year under review the Earnings Before Interest Depreciation and Tax was18.02 % of Net Sales compared to 15.45 % of Net Sales in the previous year. The TotalRevenue (excluding Other Income) for the year net of discount / rebates was Rs. 22964.73Lakhs as against Rs. 21283.46 Lakhs in the previous year. Profit after tax for the yearwas 5.16 % of Net Sales the previous year.
CONSOLIDATED FINANCIAL STATEMENT
In accordance with the Indian Accounting Standard (Ind-AS) 110 on ConsolidatedFinancial Statements the Audited Consolidated Financial Statement is provided in theAnnual Report.
The Consolidated Profit Before Interest Depreciation Exceptional Items and Taxes(EBITDA) of the Group was Rs. 4200.91 Lakhs in the Financial Year 2016-17 compared to Rs.4743.11 Lakhs in the previous year. Consequently the Consolidated Profit ExceptionalItems and Taxes (PBT) was Rs. 1194.92 Lakhs in the Financial Year 2016-17 compared to Rs.1217.50 Lakhs in the previous year.
The profitability from operations in India improved due to cost management and improvedoperational efficiency. However during the second half of the year additional discountswere passed on to improve cash flow post demonetization. It was felt prudent to do sosince there was limited cash flow available in the market and collecting funds at thistime was difficult without such additional cost. Demand in the southern markets especiallyTamil Nadu was lower than expected.
With the collective support of staff and Aries customers the Company was able toimprove its revenue from Indian operations by 18.15 percentage with an increase inprofitability with 85.15% in comparison with the previous year.
The global operations were closed and reinstallation with fresh identical machinery inIndia. Therefore revenue from overseas were lower and a one time loss on sale ofmachinery impacted profitability of the consolidated operations.
After considering earnings requirement for funds and with the objective of rewardingthe Shareholders the Directors have recommended a Dividend of 20% being Rs. 2.00 perEquity Share of Rs. 10/- each which is 21.96% of Net Profit for the year ended 31 stMarch 2017 (previous year 15% being Rs. 1.50 per Equity Share of Rs. 10/- each which is30.52% of Net Profit) subject to your approval at the ensuing Annual General Meeting. TheDividend if approved will result in an outflow of Rs. 313.03 Lakhs including DividendDistribution Tax.
TRANSFER TO RESERVES
Your Directors do not propose to transfer any amount to the General Reserve out of thecurrent year's profit and the balance aggregating to Rs. 6354.90 Lakhs is proposed to beretained in the Profit and
The Company has annual booking bazaars held at notable locations during 2017 April.This led to an order book of Rs.305.88 Crores and we expect conversion of 75%. In additionthere will be regular orders which come in from time to time from customers who have notparticipated in the pre-season booking process. During the current year 1250dealers/distributors participated in the booking bazaar and flash sale as against 900 lastyear.
The Company is introducing 7 new products in the plant nutrition sector and these willbe launched in August and October 2017 which will support growth in the top line andbottom line.
The Company also has identifiedthree areas of future focus namely
i) Increase penetration in Acquaculture especially in states like Andhra PradeshWest Bengal and Chhattisgarh .
ii) Increase exports in Asian region.
iii) Launch of granular soil application products.
The above plans combined with good monsoon and El nino conditions only projected postSeptember the revenue growth in the current Financial Year is expected to besatisfactory.
With regard to taxation on the basis of information available till date GST appearsbeneficial for our industry as effective tax rate is either constant or lower than in theprevious tax regime. Moreover input tax credit will assist passing on correspondingbenefit customers thereby possible gain as a boost to demand.
The Company's financial discipline is reflected in the credit ratings ascribed byrating Agency as given below:
CARE RATINGS: Long Term CARE BBB+(Triple B Plus) (Reaffirmed)and Short Term CAREA2(Reaffirmed). There was no change in the Credit Rating of the Company during theyear.
CHANGES IN NATURE OF BUSINESS AND REVISION IN THE BOARD'S REPORT
There is no change in the nature of business of the Company during the year. There isno revision made in the Board's Report and whatever submitted herewith is the final Report
SAFETY AND HEALTH
The health and safety of the employees across its operations remains the highestpriority for the Group. All endeavours are being taken to enhance safety standards andprocesses towards minimising safety risks in all operations in the Company.
USE OF IPO PROCEEDS
Your Company made its . IPO in January 2008 for the purposes as stated in theProspectus dated 26th December 2007. The IPO proceeds have been utilized inaccordance with the schedule of the Prospectus and variation approved by the shareholdersat their Annual General Meeting held on 29th September 2009 by passing aSpecial Resolution. However the renovation/extension of existing OfficeBuilding at Mumbaiis under progress and once it is completed the Company will approach the shareholders forrequisite approval as regards to utilization of IPO proceed.
The Company has not accepted any deposits from the Public within the meaning of Section73 of the Companies Act 2013 and Members (other than Directors) during the year underreview and as such no amount on account of Principal or Interest on Deposits from Publicand Members (other than Directors) was outstanding as on 31st March 2017.
SUBSIDIARIES & ASSOCIATE COMPANIES
Your Company has five Subsidiaries out of which three non-material Indian Subsidiariesviz Aries Agro Care Private Limited Aries Agro Equipments Private Limited Aries AgroProduce Private Limited and two foreign subsidiaries namely Golden Harvest Middle East FZCand a Step Down Subsidiary viz Amarak Chemicals FZC at UAE.
The operations of Aries Agro Care Pvt. Ltd. commenced in the Financial Year 2008-09 butdiscontinued the activity in the financial year 2012-13 and had no business activity inthe financial year 2016-17. The Company incurred expenses to the tune of Rs. 0.33 Lakhs.
The business operations of Aries Agro Equipments Pvt. Ltd. commenced in the year2009-10 in agricultural sprayers but discontinued the activity in the financial year2013-14. During the Financial Year 2016-17 the Company did not have any Income andincurred expenses of Rs. 0.30 Lakhs.
The above two Companies are Wholly Owned Subsidiaries of the Company.
There was no business activity in other Subsidiary namely Aries Agro Produce Pvt. Ltd.During the Financial Year 2016-17 the Company has incurred expenses of Rs. 0.27 Lakhs.
Since the Company has divested 6000 Equity Shares of Rs. 10/- each from its totalholding of 7500 Equity Shares of Rs. 10/- each on 03.04.2017 thereby reducing itsholding to 15% Aries Agro Produce Pvt. Ltd. Ceased to be either a Subsidiary or andAssociate w.e.f. 04.04.2017.
As regards the overseas subsidiary M/S. Golden Harvest Middle East FZC with aninstalled capacity of 10800 MT p.a. in their Eighth Year of operation has generated atotal sale of AED 10.14 Lakhs(INR 181.03 Lakhs) with a Loss of AED 45.82 Lakhs(INR817.81 Lakhs) for the year 2016-17.
M/s. Amarak Chemicals FZC which is a Step Down Subsidiary of Aries Agro Limited withan installed capacity of 60000 MT p.a. in their Fourth Full Year of operation hasgenerated a total sale of AED 201.64 Lakhs(INR 3599.19 Lakhs)withaprofitof AED9.65 Lakhs(INR 172.24 Lakhs) for the year 2016-17.
Your Company has four Group Companies viz Aries East-West Nutrients Private LimitedAries Marketing Limited Blossoms International Limited and Sreeni Agro Chemicals Limited.There were no business activities in any of these Companies during the Financial Year2016-17.
As required under Section 129(3) of The Companies Act 2013 annexed hereto are theAudited Financial Statements for the Year ended 31st March 2017 of GoldenHarvest Middle East FZC. Amarak Chemicals FZC.Aries Agro Care Private Limited AriesAgro Equipments Private Limited and Aries Agro Produce Private Limited.
A Statement in Form AOC-1 of Subsidiary Companies as prescribed under Section 129(3) ofThe Companies Act 2013 read with Rule 5 of Companies(Accounts) Rules 2014 is annexedand is forming part of the Annual Report.
Apart from the above statement a list of Subsidiary & Group Companies is given inNote No. 38 of the Notes to Accounts is forming part of the Annual Report.
The Financial Statements of the Subsidiary Companies and related information shall beuploaded on the website of your Company which can be accessed using the linkhttp://www.ariesagro.com and the same are available for inspection by the members at theRegistered Office of your Company during business hours on all working days exceptSaturdays and Sundays upto the date of the Annual General Meeting as required underSection 136 of the Act. Any Member desirous of obtaining a copy of the said FinancialStatements may write to the Company Secretary at the Registered Office
All the above Indian Subsidiary and Group Companies are un-listed and non-materialCompanies as defined under Listing Regulations.
All properties and assets of your Company are adequately insured covering allconceivable risks.
DIRECTORS & KEY MANAGERIAL PERSONNEL
There is no change in the Composition of the Board of Directors during the year underreview.
Pursuant to the provisions of Section 152(6) of the Companies Act 2013 Dr. JimmyMirchandani Director retires by rotation and being eligible offers himself forre-appointment. Accordingly his re-appointment forms part of the Notice of ensuing AnnualGeneral Meeting.
All the Independent Directors have submitted declarations to the effect that each ofthem meets the criteria of Independence as provided in Section 149(6) of the CompaniesAct 2013 and Listing Regulations and there has been no change in the circumstances whichmay affect their status as Independent Director during the year.
During the year the Non-Executive Directors of the Company had no pecuniaryrelationship of transactions with the Company.
Familiarisation Programme for Independent Directors---- Though there is no formalPolicy for familiarization but the Company in order to familiarize the IndependentDirectors with the business of the Company presentation was made by the Chief FinancialOfficer covering nature and scope of business nature of industry in which
Company operates profitability and future plans. Regularly at meetings updates aregiven to the Board. Directors are also taken for the Factory visits and they also attendedthe Annual Sales Meet. House Journal as and when published is also sent to all theDirectors and their feedback are considered.
KEY MANAGERIAL PERSONNEL
Dr. Jimmy Mirchandani resigned from the Chairman and Managing Directorship of theCompany w.e.f. 3rd April 2017. The Board placed on record its sincere and deepgratitude and appreciation for the services rendered during his term of nearly 41 yearsand making the Company to grow from strength to strength and reach at its present height.
Upon recommendation of the Nomination and Remuneration Committee and the AuditCommittee looking at the experience and exposure of Dr. Jimmy Mirchandani to theInternational Market and the interest of the Company the Board of Directors in theirMeeting held on 3rd April 2017 decided to avail professional services of Dr.Jimmy Mirchandani as an Advisor for a period of 5 Years with effect from 4thApril 2017 in terms of Section 197(4) of the Companies Act 2013 and the said servicesto be provided by Dr. Jimmy Mirchandani from out of India. The Services rendered by Dr.Jimmy Mirchandani are of a professional nature and that the Director is professionallyqualified as a Veterinarian & Law Major backed by more than 41 years of experience inthe relevant field.
Dr. Rahul Mirchandani was elevated as the Managing Director of the Company w.e.f. 4thApril 2017 for remaining period of his current term i.e. upto 30th September2018 at the same remuneration and terms and conditions as per his appointment asthe Executive Director in the Meeting of the Board of Directors held on 3 rdApril 2017. In partial modification of the resolution passed in the Board Meeting held on3rd April 2017 the Board in their Meeting held on 27th April 2017appointed Dr. Rahul Mirchandani as Managing Director for a period of 5(Five) Years andrevised the remuneration for a period of 3(three) Years with effect from 4thApril 2017.
Accordingly appointment of Dr. Rahul Mirchandani as Managing Director forms part ofthe Agenda and the proposed Resolution is set out at item No. 5 of the Notice.
There was no other change in the Key Managerial Personnel during the year under review.All the Key Managerial Personnel have submitted disclosures and declaration required underthe Companies Act 2013 and Listing Regulations.
MEETINGS OF BOARD
Four Meetings of the Board of Directors were held during the year. For further detailsplease refer Report on Corporate Governance of this Annual Report.
The Audit Committee was re-constituted on 3rd April 2017. It now comprisesShri. B. V. Dholakia(Independent Director) as Chairman Prof. R. S. S. Mani (IndependentDirector) as Member and Mrs. Nitya Mirchandani as Members. Dr. Rahul Mirchandani ceased tobe a Member of the Committee on 3rd April 2017 on his elevation as theManaging Director.
All the recommendations made by the Audit Committee were accepted by the Board duringthe year under review.
The CSR Committee comprises Dr. Rahu Mirchandani(Chairman-w.e.f. 03.04.2017) Dr. JimmyMirchandani and Shri. B. V. Dholakia as other Members. For further details please referReport on Corporate Governance of this Annual Report.
The Board of Directors have carried out an Annual Evaluation of its own performance andindividual Directors pursuant to provisions of the Act and Corporate Governancerequirements as prescribed by Regulation 17(10) of the SEBI(LODR) Regulations 2015.
The performance of the Board was evaluated by the Board after seeking inputs from allthe Directors on the basis of criteria such as the Board Composition and StructureEffectiveness of Board Process Information and Functioning etc.
In a separate Meeting of the Independent Directors performance of Non-IndependentDirectors Performance of the Board as a whole and performance of the Chairman wasevaluated taking into account the views of Executive Directors and Non-ExecutiveDirectors.
POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION AND OTHER DETAILS
The Policy on Directors Appointment and Remuneration including criteria for determiningqualifications positive attributes independence of Director and also Remuneration forKey Managerial Personnel and other Employees are contained in the Nomination andRemuneration Policy which is hosted at the web site of the Company www.ariesagro.com andthe same is re-produced in the Report on Corporate Governance.
DIRECTORS' RESPONSIBILITY STATEMENTS
Pursuant to the requirements of Section 134(5) of the Companies Act 2013 the Board ofDirectors to the best of their knowledge and ability confirm that:
1. in preparation of the Annual Accounts applicable Accounting Standards have beenfollowed and that there are no material departures;
2. they have selected such Accounting Policies and applied them consistently and madejudgements and estimates that are reasonable and prudent so as to give a true and fairview of the State of the Affairs of the Company at the end of the financial year and ofthe profit of the Company for that year;
3. they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
4. they have prepared the Annual Accounts on a going concern' basis;
5. they have laid down Internal Financial Controls to be followed by the Company andsuch Internal Financial Controls are adequate and operating effectively;
6. they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
PARTICULARS OF EMPLOYEES & RELATED DISCLOSURES
The information required under Section 197 of the Companies Act 2013 read with Rule5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014are as under:
1. The ratio of the remuneration of each Director to the median remuneration ofthe employees of the Company for the financial year;
|Non-Executive Directors ||Ratio to median Remunerations ||Directors Remuneration / Sitting Fees |
| || ||Rs. Lakhs |
|Mrs . Nitya Mirchandani ||0.44 ||1.20 |
|Prof R. S. S. Mani ||0.77 ||2.10 |
|Mr. Chakradhar Bharat Chhaya ||0.74 ||2.03 |
|Mr. Bhumitra Vinodchandra Dholakia ||0.88 ||2.40 |
|Executive Directors || || |
|Dr. Jimmy Mirchandani ||36.76 ||100.60 |
|Dr. Rahul Mirchandani ||38.69 ||105.90 |
2. The percentage increase in remuneration of each Director Chief FinancialOfficer Company Secretary or Manager if any in the financial year;
|Directors Chief Financial Officer Company Secretary ||% Increase in Remuneration in the Financial Year |
|Dr. Jimmy Mirchandani ||67.30 |
|Dr. Rahul Mirchandani ||65.42 |
|Mr. S. Ramamurthy Chief Financial Officer ||20.31 |
|Mr. Qaiser P. Ansari Company Secretary ||4.01 |
3. The percentage increase in the median remuneration of employees in thefinancial year;0.37 %
4. The number of permanent employees on the rolls of Company; 822
5. Average percentile increase already made in the salaries of employees otherthan the managerial personnel in the last financial year and its comparison with thepercentile increase in the managerial remuneration and justification thereof and point outif there are any exceptional circumstances for increase in the managerial remuneration;
The average annual increase was around 12.68% after accounting for promotions and otherevent based compensation revision. Though the Chairman & Managing Director and theExecutive Director were re-appointed for a term of 3 years each their Remunerationremained 5% of the Profit as calculate as per the Companies Act 2013..
6. Affirmation that the remuneration is as per the Remuneration Policy of theCompany.
The Company affirms that the remuneration is as per the Remuneration Policy of theCompany.
The Statement containing Particular of Employees as required under Section 197(12) ofthe Companies Act 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 drawing remuneration in excess of thelimits set out in the said Rules are provided in the Annual Report.
Information in accordance with the provisions of Section 197(12) of the Companies Act2013 ("Act") read with Rule 5(2) and 5(3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are as under:
TOP 10 EMPLOYEES IN TERMS OF REMUNERATION DRAWN DURING THE YEAR 2016-17
|Sr. No. ||NAME ||DESGINATION ||REMUNERATION RECEIVED ||NATURE OF EMPLOYMENT ||OTHER TERMS & CONDI- TIONS ||NATURE OF DUTY ||QUALIFICATION & EXPERIENCE ||DATE OF COMMENCEMENT ||AGE ||Last Employment held ||% of Equity Shares held as on 31.03.2017 ||Whether relative of any Director or Manager and the name of such Director or Manager |
|1 ||DR. JIMMY MIRCHANDANI ||CHAIRMAN & MANAGING DIRECTOR ||10060000 ||CONTRACTUAL ||N.A. ||MANAGING THE AFFAIRS OF THE COMPANY ||B V Sc. (Vet); LLB ||15.01.1976 ||61 ||N.A. ||27.11 ||Brother of Dr. Rahul Mirchandani & Brother-in-Law of Mrs. Nitya Mirchandani |
|2 ||DR. RAHUL MIRCHANDANI ||EXECUTIVE DIRECTOR ||10589920 ||CONTRA CTUAL ||N.A. ||MANAGING THE AFFAIRS OF THE COMPANY ||B. Com; CFA; MBA; Ph.D ||02.02.1994 ||40 ||N.A. ||20.17 ||Brother of Dr. Jimmy Mirchandani & Husband of Mrs. Nitya Mirchandani |
|3 ||MR. P.K. JAISWAL ||CHIEF MARKETING CONTROLLER ||9786601 ||FULL TIME EMPLOYEE ||N.A. ||MANAGING THE MARKET ING ACTIVITIES FOR W.R. N.R. & C.R. ||B.Sc. ||26.01.1982 ||59 ||N.A. ||0.01 ||N.A. |
|4 ||MR. S. RAMAMURTHY ||CHIEF FINANCIAL OFFICER ||4229808 ||FULL TIME EMPLOYEE ||N.A. ||FINANCIAL MANAGEMENT OF THE COMPANY ||B. Com. C.A. ||16.10.1995 ||63 ||M/s. Micro Plantae Ltd. Desgn- VP (Finance & Accounts) ||NIL ||N.A. |
|5 ||MR. QAISER PARVEZ ANSARI ||COMPANY SECRETARY & SENIOR VP (LEGAL) ||2462302 ||FULL TIME EMPLOYEE ||N.A. ||COMPANY SECRE TARY ||B. Com. LLB CS ||02.06.2008 ||54 ||M/s. Sabero Organics Gujrat Ltd. Desgn- CS & Dy. Gen. Manager(Legal & Taxation) ||0.00 ||N.A. |
|6 ||MR. B.R.PANDEY ||VICE PRESIDENT (ADMN.) ||2124961 ||FULL TIME EMPLOYEE ||N.A. ||HR & ADMIN ||B.Sc. DPMIR ||18.01.1982 ||55 ||M/s. R. B. Vaidya & Co. Desgn- General Assistant ||0.01 ||N.A. |
|7 ||MR. N.E.MOORTHY ||VICE PRESIDENT (TREASURY) ||2049498 ||FULL TIME EMPLOYEE ||N.A. ||FINANCE ||B. Com. (CA Ent.) ||22.09.1983 ||56 ||M/s. Kolatkar & Dandekar CA Desgn- Articleship Trainee ||0.002 ||N.A. |
|8 ||MR. JAYAPRADEEP SUBRAMA NIAN ||BUSINESS HEAD (SOUTH CENTRAL REGION) ||1925176 ||FULL TIME EMPLOYEE ||N.A. ||MARKET ING & EXTEN SION ACTIVITIES FOR Southern Region ||M.Sc. MBA ||15.11.2013 ||34 ||M/s. Tata Consultancy Services Desgn- IT ||0.00 ||N.A. |
|9 ||MR. BIPLOB CHATTERJEE ||VICE PRESIDENT (PRODUC TION) ||1786075 ||FULL TIME EMPLOYEE ||N.A. ||OVER ALL PRODUC TION ||B.Sc. ||08.12.2009 ||49 ||M/s. Jaysynth Dye Chem Desgn- Production Officer ||0.00 ||N.A. |
|10 ||MR. D. RAVINDRA NATH ||ASST. VICE PRESIDENT (PRODUC TION) ||1559820 ||FULL TIME EMPLOYEE ||N.A. ||PRODUC TION FOR PASHAMYLARAM UNIT ||M.Sc. ||25.10.1979 ||63 ||M/s. Beekay Pestisides Pvt. Ltd. Desgn- Supervisor Cum Chemist ||0.15 ||N.A. |
PARTICULARS OF EMPLOYEES IN TERMS OF SECTION 197(12) OF THE COMPANIES ACT 2013 READWITH RULE 5(2) AND 5(3) OF THE COMPANIES(APPOINTMENT AND REMUNERATION OF MANAGERIALPERSONNEL) RULES 2014 DRAWING REMUNERATION NOT LESS THAN Rs. 1.02 Crores p.a./Rs. EightLakhs Fifty Thousand p.m. DURING THE YEAR 2016-17
|SR. No. ||NAME ||DESGINATION ||REMUNERATION RECEIVED ||NATURE OF EMPLOYMENT ||OTHER TERMS & CONDITIONS ||NATURE OF DUTY ||QUALIFICATION & EXPERIENCE ||DATE OF COMMENCEMENT ||AGE ||Last Employment held ||% of Equity Shares held as on 31.03.2017 ||Whether relative of any Director or Manager and the name of such Director or Manager |
|1 ||DR. RAHUL MIRCHANDANI ||EXECU TIVE DIREC TOR ||10589920 ||CONTRA CTUAL ||N.A. ||MANAGING THE AFFAIRS OF THE COMPANY ||B. Com; CFA; MBA; Ph.D ||02.02.1994 ||40 ||N.A. ||20.17 ||Brother of Dr. Jimmy Mirchandani & Husband of Mrs. Nitya Mirchandani |
The Company has not offered any ESOPS scheme to its Employees or Directors.
RISK MANAGEMENT AND INTERNAL FINANCIAL CONTROLS
Your Company has elaborate Risk Management Procedure which is based on three Pillars.Business Risk Assessment Operational Controls Assessment and Policy Compliance processes.Major Risks identified by the Business and Functions are systematically addressed throughmitigating actions on continuing basis. The Key risks are also discussed at the AuditCommittee.
The Company's Internal Financial Control Systems are commensurate with the nature ofits business and the size and complexity of its operations. These are routinely tested andcertified by the Statutory as well as Internal Auditors covering all Offices Factoriesand Key Business areas. Significant Audit Observations and Follow Up Actions thereon arereported to Audit Committee. The Audit Committee reviews adequacy and effectiveness of theCompany's Internal Control environment and monitors the implementation of the auditrecommendations.
Based on the framework of Internal Financial Controls and Compliance Systemsestablished and maintained by the Company work performed by the Internal Statutory andSecretarial Auditors and review performed by the Management and the relevant BoardCommittees including the Audit Committee the Board is of the opinion that the Company'sInternal Financial Controls were adequate and effective during the Financial Year 2016-17.
Pursuant to Sections 101 and 136 of the Companies Act 2013 the Company will be sendingAnnual Report through electronic mode(email) to all the shareholders who have registeredtheir email addresses with the Company or with the Depository to receive the Annual Reportthrough electronic mode and initiated steps to reduce consumption of paper.
Humans are considered as one of the most critical resources in the business which canbe continuously smoothened to maximize the effectiveness of the Organization. Humanresources build the Enterprise and the sense of belonging would inculcate the spirit ofdedication and loyalty amongst them towards strengthening the Company's Polices andSystems. All personnel continue to have healthy cordial and harmonious approach therebyenhancing the contributory value of the Company.
The Equity Shares of the Company are listed at BSE Limited (BSE) and National StockExchange of India Limited(NSE).
The Company has made all the compliances of Listing Regulations including payment ofAnnual Listing Fees upto 31st March 2018 to both the Stock Exchanges.
The Company has complied with the various requirements under the Corporate Governancereporting system. A detailed Compliance Report on Corporate Governance is annexed to thisReport as required by the Listing Regulations. The Auditors' Certificate on Compliancewith the conditions of Corporate Governance is also annexed to this report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management's Discussion and Analysis Report for the year under review as stipulatedunder Listing Regulations with the Stock Exchanges is also annexed to this report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING & OUTGO
Particulars in respect of Conservation of Energy Technology Absorption and ForeignExchange Earnings and Outgo as required to be disclosed by the Companies(Accounts) Rules2014 and forming a part of the Directors Report are as under: -
I. Conservation of energy
The Company accords great importance to conservation of energy. The main focus of theCompany during the year was:
a. Energy Conservation measures taken:-
i. Close monitoring of consumption of electricity LPG Diesel and water.
ii. Optimum use of Energy by Switching off Machines Lights Fans Air Conditioners andExhaust Systems whenever not required.
iii. Creating awareness among Workmen to conserve energy.
iv. Aries continues power generation through it Solar Power Generation System at itsmanufacturing unit in Hyderabad.
Impact of measures taken for reduction of energy consumption and consequent impact onthe cost of production of goods
- There is marginal increase in the cost due to increase in consumption. b. Totalenergy consumption and energy consumption per unit of production
Form for disclosure of Particulars with respect to Conservation of Energy.
|Sr. No. Particulars ||Current Year ||Previous Year |
| ||2016-2017 ||2015-2016 |
|(a) Purchased:- || || |
|I. Electricity || || |
|(i) Unit (KWH) ||908208 ||862373 |
|(ii) Total Amount (Rs) ||8918395 ||8422432 |
|(iii) Rate/Unit (Rs.) ||9.82 ||9.77 |
|II Piped Gas || || |
|(i) Unit(M3) ||324908 ||275063 |
|(ii) Total Amount (Rs) ||10165698 ||10067553 |
|(iii) Rate/Unit (Rs.) ||31.28 ||36.60 |
|(b) Own Generation || || |
|(i) Coal ||Not Applicable ||Not Applicable |
|(ii) Furnace Oil - KI ||4607 ||3422 |
|(iii) Internal Generation ||19482 ||12996 |
|Units(Generator) || || |
|(iv) Solar System Units ||68622 ||104667 |
II. Form for disclosure of particulars with respect to Technology Absorption Researchand Development
(A) RESEARCH AND DEVELOPMENT:
1. Specific Areas in which Research and Development was carried out by theCompany.
There is a continuous focus on University research on specialty plant nutritionwhich continues across India.
Our team of extension officers conducts continuous field demonstrations andextension work including large scale soil sampling which provides constant updates ondeficiency levels across all states in India.
The Company's R&D at Mumbai is ISO 9001 certified and works on new productdevelopment and continuous quality checks. The manufacturing unit at Hyderabad has beenequipped with a state of art laboratory to keep pace with the Company's expansion in thatregion.
Innovate and develop products ideally suited for sustainable agriculture
Develop new production processes to improve the cost effectiveness of itsproducts as well as their agronomical efficiency.
Develop production processes that utilize renewable and are pollution free.
Ensure continuous updation of in house knowledge required to develop productsand services for the company.
Source worldwide information related to product development and agriculture bestpractices
Develop new age environmental friendly crop management techniques
3. Benefits derived as a result of the above efforts.
Improvement in productivity/quality and reduction in cost of production ofCompany's Plants and at Customer's end.
Cost reduction import substitution safer environment and strategic resourcemanagement.
Meeting the statutory requirements.
4. Future Plan of Action :
Identifying customized formulations for new states where Aries is entering tosell their product range.
Identify products from the existing Aries crop nutrition range which can beadopted in aquaculture.
Conducting scientific research and studies pilot scale development trial andtesting for development of new products new process development improvement in theexisting production process etc
Customized micronutrient fertilizers for export
Granulation of MM mixtures for soil application.
Coffee and Tea specific formulations
Developing new assay method for antibacterial agents.
Modification of manufacturing process to make it pollution free
Hydroponics as a technology
Crop specific formulations of micronutrient fertilizer
5. Expenditure on R & D
|Description ||For the year ended 31st March 2017 ||For the year ended 31st March 2016 |
| ||(Rupees) ||(Rupees) |
|(I) Capital ||47522 ||332799 |
|(II) Recurring ||4645418 ||4171522 |
|(III) TOTAL ||4692940 ||4504321 |
|(IV) Total R & D expenditure as a % of || || |
|a. Gross Revenue ||0.17 ||0.19 |
|b. Net Revenue ||0.20 ||0.21 |
1. B1. Technology Absorption Adaptation and Innovation
The Management has focused on productivity and Total Quality Management [TQM] in orderto optimize manufacturing costs.
This has helped in achieving optimum manufacturing costs improved quality of productsand consequently enhanced customer satisfaction. The Company uses indigenous technology.
B3. The Company has not imported any technology during the year under review.
C. Foreign Exchange Earnings and Outgo
1. Activities relating to exports initiatives taken to increase exportsdevelopment of new export markets for products and services and export plans:
International clients are located in Bangladesh Ghana Kenya Nepal Vietnam andTaiwan. Sales were booked for Ghana Kenya Nepal Vietnam Taiwan and Bangladesh.Distributors in Nepal and Vietnam have invested in branding and promotion of our range ofproducts in their respective countries. The total exports and global sales constituted12.50 % of our group revenue during the Financial 2016-17.
2. Total Foreign Exchange used and earned:
Used : Rs. 255898223/-
Earned: Rs. 13113165/-
3. Initiative for Exports
Following import substitution and commencement of manufacturing of certain products inthe Indian factories previously being produced in our UAE facilities the Company hasapplied for the required export license to enable direct export of such products fromIndia to the existing global buyers. This will ensure that every customer is servicedeffectively.
Export development from India in addition to from the UAE factories shall furtherboost prospects in international business.
As regards the items of the Notice of the AGM relating to Special Business theresolutions incorporated in the Notice and the Explanatory Statement relating theretofully indicate the reasons for seeking the approvals of members to those proposals. Yourattention is drawn to these items and Explanatory Statement annexed to the Notice.
The Vigil Mechanism of the Company which also incorporates a Whistle Blower Policy interms of the Listing Regulations is in place. Protected disclosures can be made by aWhistle Blower in writing or through an e-mail to the Chairman/Member of the AuditCommittee.
The Policy on Vigil Mechanism and Whistle Blower Policy may be accessed on theCompany's website www.ariesagro.com.
PARTICULARS OF LOANS GIVEN INVESTMENTS MADE GUARANTEES GIVEN & SECURITIESPROVIDED
Particulars of Loans given Investments made Guarantees given and Securities providedalong with the purpose for which the Loan or Guarantee or Security is proposed to beutilized by the recipient are provided in the Standalone Financial Statements.
CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
None of the transactions with Related Parties falls under the scope of Section 188(1)of the Companies Act 2013. Information on transactions with Related parties pursuant toSection 134(3) (h) of the Companies Act 2013 read with Rule 8(2) of theCompanies(Accounts) Rule 2014 are given in Annexure-I in Form AOC-2 and the sameforms part of this Report.
CORPORATE SOCIAL RESPONSIBILITY
The brief outline of the Corporate Social Responsibility (CSR) Policy of the Companyand the initiatives undertaken by the Company on CSR activities during the year are setout in Annexure-II of this Report in the format prescribed in theCompanies(Corporate Social Responsibility Policy) Rules 2014. The Policy is available onthe Web-Site of the Company.
Your Company continues to demonstrate a strong commitment towards providing productswhich do not hamper the soil and crop eco systems.
EXTRACTS OF ANNUAL RETURN
As provided under Section 92(3) of the Companies Act 2013 the Extract of the AnnualReturn is given in Annexure-III in prescribed Format MGT-9 which forms part ofthis Report.
AUDITORS & AUDITORS REPORTS
M/s. Kirti D. Shah & Associates Chartered Accountants Mumbai the StatutoryAuditors of the Company would be completing their maximum term permitted under Section139 of the Companies Act 2013 and rules framed thereunder and accordingly will holdOffice till the conclusion of the ensuing Annual General Meeting. The Board has placed onrecord its appreciation for their long association and contributing to the growth of theCompany.
The Board has recommended the appointment of M/S Sandeep Sheth & AssociatesChartered Accountants (Membership No. 101903 and having Peer Review Certificate issuedby the Institute of Chartered Accountants of India) as the Statutory Auditors of theCompany in place of M/s. Kirti D. Shah & Associates Chartered Accountants Mumbaifor a term of 5(Five) consecutive years from conclusion of the 47th AnnualGeneral Meeting of the Company scheduled to be held in the year 2017 till the conclusionof the 52nd Annual General Meeting to be held in the year 2022 for approval ofShare Holders of the Company based on the recommendation of the Audit Committee subjectto ratification subject to ratification by Share Holders at every Annual General Meeting.
Accordingly appointment of Statutory Auditor and the proposed Resolution is set out atitem No. 4 of the Notice.
The Statutory Auditors' Report both with respect to the Standalone and ConsolidatedFinancial Statements do not contain any qualification reservation or adverse remark.Further that there was no fraud reported by Auditors under sub-section (2) of Section 143of the Companies Act 2013 other than those reportable to the Central Government.
The Company had appointed M/s. R. Nanabhoy & Co. Cost Accountants to conduct theAudit of Cost Accounting Records of its products for the financial year 2015-2016.
The due date for filing the Cost Audit Reports in XBRL mode for the financial yearended March 31 2016 was originally 27th September 2016. The Cost AuditReports were filed by the Cost Auditor on 9th September 2016 within the duedate.
Further M/s. R. Nanabhoy & Co. Cost Auditors were re-appointed as the Cost Auditorof the Company for the year ending 31st March 2017 by the Board of Directorsat their meeting held on 30th May 2016 after ensuring their eligibility andobtaining the letter of eligibility from them.
The Company's Cost Audit for the Financial Year 2016-17 is under process and theCompany will file the Cost Audit Report within 180 days of the end of the FinancialYear-2016-17 i.e. on or before 27th September 2017.
The Board has appointed Mr. A. Sekar Practising Company Secretary to conductSecretarial Audit for the financialyear 2016-17. The Secretarial Audit Report for thefinancial year ended March 31 2017 is annexed herewith marked as Annexure-IV tothis Report.
The Secretarial Audit Report does not contain any qualification reservation or adverseremark.
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:
1. Details relating to deposits covered under Chapter V of the Act.
2. Issue of Equity Shares with differential rights as to dividend voting or otherwise.
3. Issue of Shares (including Sweat Equity Shares) to employees of the Company underany scheme.
4. Buy Back of shares of the Company during the year under review.
5. Neither the Managing Director nor the Whole-time Directors of the Company receiveany remuneration or commission from any of its Subsidiaries.
6. No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Company's operations in future.
7. The Company is not required to submit Business Responsibility Report in pursuance ofRegulation 34(2)(f) SEBI(LODR) Regulations 2015.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION& REDRESSAL) ACT 2013.
The Company has set up an Internal Complaints Committee (ICC) for providing a RedressalMechanism pertaining to Sexual Harassment of Women employees at workplace. There was nocomplaint received during the year under review.
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY WHICH HAVE OCCURRED BETWEEN THE FINANCIAL YEAR END OF THE COMPANY TO WHICHFINANCIAL RESULTS RELATE
Except as disclosed elsewhere in this report no material changes and commitments whichcould affect the Company's financial position have occurred between the end of thefinancial year of the Company and date of this report.
MATERIAL ORDERS PASSED
No material Orders have been passed by any Authorities in respect of any matters withregards to the business of the Company during the Financial Year. However following Orderwas passed after the end of the Financial and before the date of this Report.
In the Notes to Accounts under para d' we had referred on the Classification ofMicronutrients under Central Excise and also about the Circular dtd. 06/04/2016 clarifyingthat Micronutrient Fertilizers are not classifiable as Plant Growth Regulators underChapter Heading No. 3808 of the Central Excise Act. an appeal The Departmental Authoritiesat Hyderabad has filed before the Central Excise and Service Tax Appellate Tribunal. Thesaid appeal was decided by the Tribunal's Hyderabad Regional Bench on 20/06/2017 upholdingthe Commissioner of Central Excise order that the Micronutrients are classifiable underChapter Heading No. 3105 and not as Plant Growth Regulators under Chapter Heading No.3808.
Similar orders are expected from other Appellate tribunals namely Mumbai and Ahmedabad.
None of the Directors of your Company are disqualified as per provisions of Section164(2) of the Companies Act 2013. Your
Directors have made necessary Disclosures as required under various provisions of theCompanies Act 2013 and the SEBI(Listing Obligations and Disclosure Requirements)Regulations 2015.
We would like to acknowledge with gratitude the support and co-operation extended byShareholders Vendors Media and Banks and look forward to their continued support. Weappreciate continued co-operation received from various regulatory authorities includingDepartment of Agriculture Department of Corporate Affairs Registrar of CompaniesReserve Bank of India Securities and Exchange Board of India Stock ExchangesDepositories Central Government and respective State Governments. We also recognize andappreciate the sincere hard work loyalty and efforts of the employees and look forward totheir continued support.
| ||For and on behalf of the Board |
| ||Dr. Rahul Mirchandani |
|Place: Mumbai ||Chairman & Managing Director |
|Date: 9th August 2017 ||DIN-00239057 |