Aries Agro Limited
Your Directors have pleasure in presenting their 49th Annual Report on theoperations of the Company together with the Audited Financial Statements for the FinancialYear ended 31st March 2019.
|Particulars || |
| ||Year Ended 31st March 2019 ||Year Ended 31st March 2018 ||Year Ended 31st March 2019 ||Year Ended 31st March 2018 |
|Revenue from Operations ||32030.91 ||31988.68 ||32030.91 ||35011.55 |
|Less :- Discount / Rebates ||5499.26 ||5538.69 ||5499.26 ||5538.69 |
| ||26531.65 ||26449.99 ||26531.65 ||29472.87 |
|Other Income ||751.42 ||410.99 ||331.58 ||199.28 |
|Total Revenue (including Other Income) ||27283.07 ||26860.98 ||26863.23 ||29672.14 |
|Profit Before Tax Interest & Depreciation ||5254.86 ||4870.58 ||4690.11 ||4786.32 |
|Less :- Finance Costs ||2740.21 ||2471.48 ||2894.48 ||2888.73 |
|Depreciation & Amortisation Expense ||240.68 ||221.81 ||241.52 ||226.35 |
| ||2980.88 ||2693.29 ||3136.00 ||3115.08 |
|Profit Before Tax ||2273.98 ||2177.29 ||1554.11 ||1671.24 |
|Less :- Current Tax ||809.00 ||687.00 ||809.00 ||687.00 |
|Adjustment of Tax relating to earlier periods ||3.72 ||9.70 ||3.72 ||9.70 |
|Deferred Tax ||(28.53) ||65.70 ||(28.53) ||65.70 |
| ||784.18 ||762.40 ||784.18 ||762.40 |
|Profit for the year ||1489.80 ||1414.89 ||769.93 ||908.84 |
|Less :- Non-Controlling Interest ||- ||- ||(218.32) ||(139.52) |
|Profit for the year attributable to Owners of the Parent ||1489.80 ||1414.89 ||988.25 ||1048.36 |
|Balance brought forward ||7456.76 ||6354.90 ||9970.32 ||9234.99 |
|Amount available for Appropriation ||8946.56 ||7769.79 ||10958.57 ||10283.36 |
|Less :- Dividend Paid ||299.11 ||260.09 ||299.11 ||260.09 |
|Tax on Dividend Proposed ||60.89 ||52.95 ||60.89 ||52.95 |
|Provision for Doubtful Debts ||- ||- ||258.35 ||- |
| ||360.00 ||313.03 ||618.35 ||313.03 |
|Surplus carried forward to Balance Sheet ||8586.56 ||7456.76 ||10340.22 ||9970.32 |
During the year under review the Earnings Before Interest Depreciation and Tax was19.81% compared to 18.41% in the previous year. The Total Revenue (excluding Other Income)for the year net of discount / rebates was Rs. 26531.65 Lakhs as against Rs. 26449.99Lakhs in the previous year. Profit after tax for the year was 5.62% compared to 5.35% inthe 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. 4690.11 Lakhs in the Financial Year 2018-19 compared to Rs.4786.32 Lakhs in the previous year. Consequently the Consolidated Profit BeforeExceptional Items and Taxes (PBT) was Rs. 1554.11 Lakhs in the Financial Year 2018-19compared to Rs. 1671.24 Lakhs in the previous year.
With the collective support of staff and Aries Customers the Company was able toimprove its revenue from Indian operations by 0.13 % with an increase in profitabilitybefore tax by 0.34% in comparison with the previous year.
The global operations remained suspended till date and raw materials and finished goodson hand were sold. A further plan of action is being worked out in the best interests ofthe Company's profitability. Please refer to the discussion made in the Management andDiscussion Analysis Report forming part of this Report.
After considering earnings requirement for funds and with the objective of suitablyrewarding the Shareholders the Directors have recommended a Dividend of 18% being Rs.1.80 per Equity Share of Rs. 10/- each which is 18.94% of Net Profit for the year ended 31stMarch 2019 (previous year 23% being Rs. 2.30 per Equity Share of Rs. 10/- eachwhich is 21.14% of Net Profit) subject to your approval at the ensuing Annual GeneralMeeting. The Dividend if approved will result in an outflow of Rs. 282.19 Lakhsincluding Dividend Distribution Tax.
TRANSFER TO RESERVES
The Board of Directors has decided to retain the entire amount of Profit for FinancialYear 2018-19 in the Statement of Profit and Loss..
The Company had annual booking bazaars using its Digital App for the second year duringApril & May 2019. This led to an Order Book of Rs.510/- Crores and we expectconversion of 75 to 80% of the Order Book into Turnover of the Company. In addition therewill be regular orders which would be received from Customers who have not participated inthe pre-season booking process. During the current year 1431 Dealers/Distributorsparticipated in the booking bazaar and flash sale. As we prepare for the future we willremain at the cutting edge of crop nutrition soon introducing nanotechnology for cropnutrition artificial intelligence based information delivery systems for our farmers andcreating a much larger global distribution footprint.
The Company is introducing New Specialty Products in the agri-nutrients sector andthese will be launched in phases during 2019-20 which will support growth in the top lineand bottom line.
The Company will focus namely on
i) Increase penetration in Aquaculture especially in states like Andhra PradeshTelangana West Bengal and Chhattisgarh
ii) Increase exports in Asian region and beyond.
iii) Customized crop specific formulations of nutrients
The above plans combined with good monsoon the revenue growth in the current FinancialYear is expected to be satisfactory.
The Company's Credit during the year under review continued to be as under:
|Facilities ||Rating |
|Long Term Bank Facilities (Fund Based) ||CARE BBB+; Stable (Triple B Plus; Outlook: Stable) |
|Short Term Bank Facilities(Non Fund Based) ||CARE A3+(A Three Plus) |
The Rating agency M/S CARE Ratings have on 10th June 2019 reassignedthe Credit Rating as under:
|Facilities ||Rating |
|Long Term Bank Facilities (Fund Based) ||CARE BBB-; Stable (Triple B Minus; Outlook: Stable) |
|Short Term Bank Facilities (Non Fund Based) ||CARE A3(A Three) |
The rating revision reflect weaker than envisaged financial performance for FinancialYear 2018-19 and stretched liquidity due to suspended operations of the UAE Subsidiaries.
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 finalReport.
SAFETY AND HEALTH
The health and safety of the employees across its operations remains the highestpriority for the Group. All endeavours are being made to enhance safety standards andprocesses towards minimising safety risks in all operations in the Company. There was noaccident or mishap in any of its four factories.
USE OF IPO PROCEEDS
The Members in the 39th Annual General Meeting held on 29th September2009 approved variation by passing a Special Resolution wherein the funds set out fordeployment for the Additional unit in Maharashtra was approved for utilization for meetingWorking Capital requirement of the Company.
In the course of working towards the objective set out by the Company the Managementwas seriously exploring the Renovation of existing Office Building and Addition to theOffice Building and in the course have paid advance for obtaining various rights/mobilization of the said extension. However due to high escalation in material and otherrelated costs coupled with rearrangement of existing Office space the Management is ofthe opinion that it is not prudent to invest in the said Renovation/Expansion and hastherefore decided to call back the money so paid which on receipt would be used forWorking Capital Requirement of the Company. The Company expects to receive the monies sopaid by March 2020.
Section 27 of the Companies Act 2013 requires Shareholder's consent or authority byway of Special Resolution varying the terms and conditions specified in the Prospectusissued by the Company.
The Company is seeking approval of the Members for deviation in the utilization of theIPO funds and the same is included in the Notice and Agenda for the ensuing Annual GeneralMeeting.
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 2019.
SUBSIDIARIES & ASSOCIATE COMPANIES
Your Company has four Subsidiaries out of which two are nonmaterial Indian Subsidiariesviz Aries Agro Care Private Limited and Aries Agro Equipments Private Limited and twoforeign subsidiaries namely Golden Harvest Middle East FZC and a Step Down Subsidiary vizAmarak 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 due to extremely volatile natureof seeds business and had no business activity in the financial year 2018-19 . The Companyincurred expenses to the tune of Rs. 2.42 Lakhs for the Financial Year.
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 due to lack of appropriate distribution network for Farm Equipments and had nobusiness activity in the financial year 2018-19. The Company incurred expenses to the tuneof Rs. 0.54 Lakhs for the Financial Year.
The above two Companies are Wholly Owned Subsidiaries of the Company.
As regards the overseas subsidiary M/S. Golden Harvest Middle East FZC a TradingEntity in their Tenth Year of operation has not generated any sale and has incurred Lossof AED 27.80 Lakhs (INR 508.41 Lakhs) for the year 2018-19 since trading revenue did notmaterialize for licencing reasons.
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 Sixth Full Year of operation has notgenerated any sale and has incurred Loss of AED 11.40 Lakhs(INR 208.49 Lakhs)) for theyear 2018-19 since the manufacturing has been temporarily suspended until Power andMolten Sulphur availability is confirmed.
As required under S. 129(3) of The Companies Act 2013 annexed hereto are the AuditedFinancial Statements for the Year ended 31st March 2019 of Golden HarvestMiddle East FZC. Amarak Chemicals FZC.Aries Agro Care Private Limited and Aries AgroEquipments 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. 37 of the Notes to Accounts and is forming part of the Annual Report.
All the above Indian Subsidiary and Group Companies are un-listed and non-materialCompanies as defined under Listing Regulations. There is no Associate or Joint VentureCompanies other than as listed above.
All properties and assets of your Company are adequately insured covering allconceivable risks.
DIRECTORS & KEY MANAGERIAL PERSONNEL DIRECTORS
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 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 an Independent Director during the year.
The tenure of Prof. R. S. S. Mani (DIN 00527270) and Mr. Bhumitra Vinodchandra Dholakia(DIN 01871816) as Independent Directors is due to expire on 25th September2019.
Section 149(10) of the Act provides that an Independent Director shall hold office fora term of five consecutive years on the Board and shall be eligible for re-appointment onpassing a Special Resolution by the Company and disclosure of such appointment shall bemade in its Board's Report. Section 149(11) provides that an Independent Director may holdoffice for up to two consecutive terms.
Both Prof. R. S. S. Mani (DIN 00527270) and Mr. Bhumitra Vinodchandra Dholakia (DIN01871816) are maintaining a good physical health and have attended all the Meetings of theBoard and Committees and contributed in the proceedings. They both attended the previousAnnual General Meeting.
Pursuant to the recommendation of the Nomination and Remuneration the Boardre-appointed Prof. R. S. S. Mani (DIN 00527270) and Mr. Bhumitra Vinodchandra Dholakia(DIN 01871816) at its Meeting held on 8th August 2019 subject to the approvalof the Shareholders as Independent Directors of the Company not liable to retire byrotation and to hold office for a second term of 5 (five) consecutive years commencingfrom 26th September 2019 upto 25th September 2024 on the Board ofthe Company.
The Company has received a Notice in writing from a Member under Section 160(1) of theCompanies Act 2013 proposing their candidature for the office of Independent Directors.
Accordingly re-appointment of Prof. R. S. S. Mani and Mr. Bhumitra VinodchandraDholakia as Independent Directors forms part of the Agenda and the proposed Resolution isset out at item No. 4 & 5 of the Notice.
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 Functional Headscovering Operations of the Company at every Quarterly board meeting and nature and scopeof business nature of industry in which Company operates profitability and future plans.Regularly at meetings updates are given to the Board. House Journal as and when publishedis also sent to all the Directors and their feedback are considered. Action Taken Reportand Legal Updates are also being placed at every meeting of the Board and Audit Committeejust to keep the Directors updated with the latest amendments and Action Taken by theManagement.
KEY MANAGERIAL PERSONNEL
There was no change in the Key Managerial Personnel during the year under review. Allthe Key Managerial Personnel have submitted disclosures and declaration required under theCompanies Act 2013 and Listing Regulations.
MEETINGS OF BOARD
Five Meetings of the Board of Directors were held during the year. For further detailsplease refer Report on Corporate Governance of this Annual Report.
There was no change in the Audit Committee during the year under review. However theAudit Committee was re-constituted with effect from 16th May 2019 by inductingMr. C. B. Chhaya in the Committee.
All the recommendations made by the Audit Committee were accepted by the Board duringthe year under review.
The CSR Committee was re-constituted with effect from 13th February 2019 byinducting Mrs. Nitya Mirchandani in place of Dr. Jimmy Mirchandani. The Committeecomprises of Dr. Rahul Mirchandani(Chairman) Shri. B. V. Dholakia and Mrs. NityaMirchandani. For further details please refer Report on Corporate Governance of thisAnnual Report.
STAKE HOLDERS RELATIONSHIP COMMITTEE
The Stake Holders Relationship Committee was re-constituted with effect from 13thFebruary 2019 by inducting Mrs. Nitya Mirchandani in place of Dr. Jimmy Mirchandani. TheCommittee comprises of Mr. C. B. Chhaya(Chairman) Dr. Rahul Mirchandani and Mrs. NityaMirchandani. For further details please refer Report on Corporate Governance of thisAnnual Report.
The Board of Directors have carried out an Annual Evaluation of its own performance andindividual Directors themselves pursuant to the provisions of the Act and CorporateGovernance requirements as prescribed by Regulation 17(10) of the SEBI(LODR) Regulations2015.
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 of theemployees of the Company for the financial year;
|Non-Executive Directors ||Ratio to median Remunerations ||Directors Remuneration / Sitting Fees Rs. Lakhs |
|Dr. Jimmy Mirchandani ||0.21 ||0.68 |
|Mrs . Nitya Mirchandani ||1.06 ||3.40 |
|Prof R. S. S. Mani ||0.89 ||2.85 |
|Mr. Chakradhar Bharat Chhaya ||0.94 ||3.03 |
|Mr. Bhumitra Vinodchandra Dholakia ||0.93 ||3.00 |
|Executive Directors || || |
|Dr. Rahul Mirchandani ||54.85 ||176.58 |
2. The percentage increase in remuneration of each Director Chief Financial OfficerCompany Secretary or Manager if any in the financial year;
|Directors Chief Financial Officer Company Secretary ||% Increase in Remuneration in the Financial Year |
|Dr. Rahul Mirchandani CMD ||0.50 |
|Mr. S. Ramamurthy President & Chief Financial Officer ||18.21 |
|Mr. Qaiser P. Ansari Company Secretary & Sr. VP (Legal) ||9.04 |
3. The percentage increase in the median remuneration of employees in the financialyear; 18.89 %
4. The number of permanent employees on the rolls of Company; 924
5. Average percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration;
The average annual increase was around 6.67% after accounting for promotions and otherevent based compensation revision.
6. Affirmation that the remuneration is as per the Remuneration Policy of the Company.
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 2018-19
|NAME ||DESGINATION ||REMUNERATION RECEIVED ||NATURE OF EMPLOYMENT ||OTHER TERMS & CONDITIONS ||NATURE OF DUTY ||QUALIFICATION & EXPERIENCE ||DATE OF COMMENCE- MENT ||AGE ||Last Employment held ||% of Equity Shares held as on 31.03. 2019 ||Whether relative of any Director or Manager and the name of such Director or Manager |
|1 DR.RAHUL MIRCHANDANI ||CHAIRMAN & MANAGING DIRECTOR ||17658000 ||CONTRACTUAL ||N.A. ||MANAGING THE AFFAIRS OF THE COMPANY ||B. Com; CFA; MBA; Ph.D ||02.02.1994 ||44 ||N.A. ||21.56 ||Brother of Dr. Jimmy Mirchandani & Husband of Mrs. Nitya Mirchandani |
|2 MR. P.K. JAISWAL ||SR. VICE PRESIDENT MARKETING ||5899590 ||FULL TIME EMPLOYEE ||N.A. ||MANAGING THE MARKETING ACTIVITIES FOR W.R. N.R. & C.R. ||B.Sc. ||26.01.1982 ||61 ||N.A. ||0.01 ||N.A. |
|3 MR. S. RAMAMURTHY ||PRESIDENT & CHIEF FINANCIAL OFFICER ||5550220 ||FULL TIME EMPLOYEE ||N.A. ||FINANCIAL MANAGEMENT OF THE COMPANY ||B. Com. C.A. ||16.10.1995 ||66 ||M/s Micro Plantae Ltd. Desgn - VP (Finance & Accounts) ||0.00 ||N.A. |
|4 MR. QAISER PARVEZ ANSARI ||COMPANY SECRETARY & SENIOR VICE PRESIDENT (LEGAL) ||2944813 ||FULL TIME EMPLOYEE ||N.A. ||COMPANY SECRETARY ||B. Com. LLB ACS ||02.06.2008 ||56 ||M/s Sabero Organics Gujarat Ltd. Desgn - CS & Dy.Gen. Manager (Legal & Taxation) ||0.00 ||N.A. |
|5 MR. N.E.MOORTHY ||SR. VICE PRESIDENT (TREASURY) ||2698852 ||FULL TIME EMPLOYEE ||N.A. ||FINANCE ||B. Com. (CA Ent.) ||22.09.1983 ||59 ||M/s Kolatkar & Dan- dekar CA Desgn - Articleship Trainee ||0.002 ||N.A. |
|6 MR. JAYAPRADEEP SUBRAMANIAN ||ASST. VICE PRESIDENT (MARKETING) SOUTHERN REGION ||2694203 ||FULL TIME EMPLOYEE ||N.A. ||MARKETING & EXTENSION ACTIVITIES FOR SOUTHERN REGION ||M.Sc. MBA ||15.11.2013 ||36 ||M/s Tata Consultancy Services Desgn - IT Analyst ||0.00 ||N.A. |
|7 MR. B.R.PANDEY ||SR. VICE PRESIDENT (HR& PERSONNEL) ||2568707 ||FULL TIME EMPLOYEE ||N.A. ||HR & ADMIN ||B.Sc. DPMIR ||18.01.1982 ||57 ||M/s R. B. Vaidya & Co. Desgn - Gen. Assistant ||0.01 ||N.A. |
|8 MR. ARUN K. TIWARI ||REGIONAL CONTROLLER ||2378388 ||FULL TIME EMPLOYEE ||N.A. ||MANAGING THE MARKETING ACTIVITIES OF NORTHERN REGION ||B. Sc ||01.12.1992 ||51 ||N.A. ||0.01 ||N.A. |
|9 MR.SANTOSH KUMAR PANDEY ||JUNIOR REGIONAL CONTROLLER ||2279570 ||FULL TIME EMPLOYEE ||N.A. ||MANAGING THE MARKETING ACTIVITIES OF MAHARASHTRA NIPANI DIVISION ||M. Sc(Ag) ||26.05.2004 ||45 ||N.A. ||0.00 ||N.A. |
|10 MR. BIPLOB CHATTERJEE ||SR. VICE PRESIDENT (PRODUCTION) ||2265148 ||FULL TIME EMPLOYEE ||N.A. ||OVER ALL PRODUCTION ||B.Sc. ||08.12.2009 ||50 ||M/s Jaysynth Dye Chem Desgn - Production Officer ||0.00 ||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 2018-19
|NAME ||DESGINATION ||REMUNERATION RECEIVED ||NATURE OF EMPLOYMENT ||OTHER TERMS & CONDITIONS ||NATURE OF DUTY ||QUALIFICATION & EXPERIENCE ||DATE OF COMMENCE- MENT ||AGE ||Last Em ploy- ment held ||% of Equity Shares held as on 31.03.2019 ||Whether relative of any Director or Manager and the name of such Director or Manager |
|1 DR. RAHUL MIRCHANDANI ||CHAIRMAN & MANAGING DIRECTOR ||17658000 ||CONTRACTUAL ||N.A. ||MANAGING THE AFFAIRS OF THE COMPANY ||B. Com; CFA; MBA; Ph.D ||02.02.1994 ||44 ||N.A. ||21.56 ||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 System is commensurate with the nature of itsbusiness 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 System establishedand maintained by the Company work performed by the Internal Statutory and SecretarialAuditors and review performed by the Management and the relevant Board Committeesincluding the Audit Committee the Board is of the opinion that the Company's InternalFinancial Controls were adequate and effective during the Financial Year 2018-19.
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 2020 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. Creating awareness among Workmen to conserve energy.
iii. Aries continues power generation through its Solar Power Generation System atits manufacturing unit in Hyderabad.
iv. Conversion of boilers in Hyderabad Unit from diesel to solid briquette basedfuel.
v. Exclusive use of CNG for manufacturing at Chhatral Unit
vi. Optimum use of Energy by Switching off Machines Lights Fans Air Conditionersand Exhaust Systems whenever not required
Impact of measures taken for reduction of energy consumption and consequent impact onthe cost of production of goods
b. Total energy 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 |
| ||2018-2019 ||2017-18 |
|(a) Purchased:- || || |
|I. Electricity || || |
|(i) Unit (KWH) ||988848 ||993775 |
|(ii) Total Amount (Rs) ||9236994 ||9483040 |
|(iii) Rate/Unit (Rs.) ||9.34 ||9.54 |
| || || |
|II Piped Gas || || |
|(i) Unit(M3) ||334148 ||358193 |
|(ii) Total Amount (Rs) ||14844779 ||13402009 |
|(iii) Rate/Unit (Rs.) ||44.43 ||37.42 |
| || || |
|(b) Own Generation || || |
|(i) Coal ||Not Applicable ||Not Applicable |
|(ii) Furnace Oil - KI ||1274 ||2329 |
|(iii) Internal Generation Units(Generator) ||173 ||262 |
|(iv) Solar System Units ||55685 ||66532 |
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 the Company.
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 NS-EN ISO 9001:2015 certified and works onnew product development and continuous quality checks. The manufacturing unit at Hyderabadhas been equipped with a state of art laboratory to keep pace with the Company's expansionin that region.
Hydroponic/ Soilless Cultivation has been taken up on the rooftop as a new agemethod of cultivation in urban set ups
Looking out for green options in the field of Aquaculture
Develop new markets in the Protected Cultivation sector
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.
Demonstration of a Sustainable urban farm set up to address the issue ofpesticide free healthy food
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.
Modification of manufacturing process to make it pollution free
Develop markets for crop specific formulations of micronutrient fertilizer incrops like Soybean Sugarcane Grapes and other Horticultural crops.
To launch existing micronutrient formulations in new forms (tablets briquetteswater soluble pouches etc.)
Setting up of Boric acid plant
Efforts to develop India GAP on commercial crops and try establishing a linkagebetween farmers and the industry
Initial work on nano fertilizers
5. Expenditure on R & D
|Sr. No. Description ||For the Year ended 31st March 2019 (Amt. in Rs.) ||For the Year ended 31st March 2018 (Amt. in Rs.) |
|I) Capital ||204500 ||3620027 |
|II) Recurring ||15310055 ||4633750 |
|Total ||15514555 ||8253777 |
|Total R&D expenditure as a % of || || |
|a) Gross Turnover ||0.48 ||0.26 |
|b) Net Turnover ||0.58 ||0.31 |
B1. Technology Absorption Adaptation and Innovation
The Management has focused on productivity and Total Quality Management [TQM] in orderto optimize manufacturing costs. The Company continues to be NS-EN ISO 9001:2015certified.
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 Nepal and Taiwan. Sales were booked for Nepal andTaiwan. Distributors in Nepal have put up their own manufacturing unit to support andincrease sales and distribution network throughout Nepal. The total exports and globalsales constituted 0.03 % of our group revenue during the Financial Year 2018-19.
2. Total Foreign Exchange used and earned:
Used : Rs. 271882752/- Earned: Rs. 42903805/-
As regard to 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 the Companies(Accounts) Rule 2014 are given in Annexure-I in Form AOC-2 and the same forms partof 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 the Companies(Corporate Social Responsibility Policy) Rules 2014. The Policy is available on theWeb-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. The said Extract of the Annual Report is available at the web site of theCompany at www.ariesagro.com.
AUDITORS & AUDITORS REPORTS
M/s. Sandeep Sheth & Associates Chartered Accountants Mumbai(Membership No.101903 and having Peer Review Certificate issued by the Institute of Chartered Accountantsof India) were appointed as the Statutory Auditors of the Company for a period of 5(five)years at the Forty Seventh Annual General Meeting of the Company held on 28thSeptember 2017 and being eligible continue to be the Statutory Auditors.
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 has appointed M/s. R. Nanabhoy & Co. Cost Accountants to conduct theAudit of Cost Accounting Records of its products for the financial year 2017-2018.
The due date for filing the Cost Audit Reports in XBRL mode for the financial yearended March 31 2018 was 20th October 2018. The Cost Audit Reports were filedby the Cost Auditor on 18th October 2018 within the due date.
Further M/s. R. Nanabhoy & Co. Cost Auditors were re-appointed as the Cost Auditorof the Company for the year ending 31st March 2019 by the Board of Directorsat their meeting held on 23rd May 2018 after ensuring their eligibility andobtaining the letter of eligibility from them.
The Company's Cost Audit for the Financial Year 2018-19 is under process and theCompany will have the Audit completed within 180 days of the end of the FinancialYear-2018-19 i.e. on or before 27th September 2019 and file the Report within30 days of the Board Meeting approving the Report.
The Board appointed Mr. A. Sekar Practising Company Secretary to conduct SecretarialAudit for the financial year 2018-19. The Secretarial Audit Report for the financial yearended March 312019 is annexed herewith and marked as Annexure-IV to this Report.
The Secretarial Audit Report does not contain any qualification reservation or adverseremark.
The Company has in place proper systems to ensure compliance with the provisions of theapplicable Secretarial Standards issued by The Institute of Company Secretaries of Indiaand such systems are adequate and operating effectively.
ANNUAL SECRETARIAL COMPLIANCE REPORT
Pursuant to Regulation 24A of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 (Listing Regulations) theCompany obtained the Annual Secretarial Compliance Report for the Financial Year 2018-19from Mr. A. Sekar Practising Company Secretary the Secretarial Auditor of the Companyand the same has been filed with the BSE Limited and the National Stock Exchange of IndiaLimited on 29th May 2019. The Secretarial Auditor has not reported anynon-compliance.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (PREVENTION PROHIBITION& REDRESSAL) ACT 2013.
The Company has zero tolerance towards sexual harassment at the workplace. The Companyhas adopted a Policy on Prevention Prohibition and Redressal of Sexual Harassment atWorkplace in line with the provisions of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 and the Rules thereunder.
The Company has complied with the provisions relating to the constitution of theInternal Complaints Committee as per the Sexual Harassment of Women at WorkplacePrevention Prohibition and Redressal) Act 2013.
There was no complaint 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 Authority in respect of any matters withregard to the business of the Company during the Financial Year.
Referring to the Previous Year's Board's Report classification of Micronutrientsrelating to the Sanand Unit in the state of Gujarat is pending before Customs Excise andService Tax Appellate Tribunal(CESTAT) at Ahmedabad and Order is awaited.
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. The Managing Director of the Company does not receive any remuneration or commissionfrom 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.
None of the Directors of your Company is disqualified as per provisions of Section164(2) of the Companies Act 2013. Your Directors have made necessary Disclosures asrequired under various provisions of the Companies Act 2013 and the SEBI(ListingObligations and Disclosure Requirements) Regulations 2015.
We would like to acknowledge with gratitude the support and co-operation extended byShareholders Vendors Media Registrar and Share Transfer Agent and Banks and lookforward to their continued support. We appreciate continued cooperation received fromvarious regulatory authorities including Department of Agriculture Department ofCorporate Affairs Registrar of Companies Reserve Bank of India Securities and ExchangeBoard of India Stock Exchanges Depositories Central Government and respective StateGovernments. We also recognize and appreciate the sincere hard work loyalty and effortsof the employees and look forward to their continued support.
| ||For and on behalf of the Board |
|Place: Mumbai || |
|Date: 8th August 2019 ||Dr. Rahul Mirchandani |
| ||Chairman & Managing Director |
| ||DIN-00239057 |