Aries Agro Limited
Your Directors have pleasure in presenting their 48th Annual Report on theoperations of the Company together with the Audited Financial Statements for the FinancialYear ended 31st March 2018.
|Particulars || |
| || |
Year Ended 31st March 2018
Year Ended 31st March 2017
Year Ended 31st March 2018
Year Ended 31st March 2017
|Revenue from Operations || ||31988.68 || ||27719.13 || ||35011.55 || ||31290.52 |
|Less :- Discount / Rebates || ||5538.69 || ||4754.40 || ||5538.69 || ||4754.40 |
| || ||26449.99 || ||22964.73 || ||29472.87 || ||26536.12 |
|Other Income || ||410.99 || ||152.62 || ||199.28 || ||306.12 |
|Total Revenue (including Other Income) || ||26860.98 || ||23117.35 || ||29672.14 || ||26842.24 |
|Profit Before Tax Interest & Depreciation || ||4870.58 || ||4139.06 || ||4786.32 || ||4200.91 |
|Less :- Finance Costs ||2471.48 || ||2119.40 || ||2888.73 || ||2337.06 || |
|Depreciation & Amortisation Expense ||221.81 || ||185.29 || ||226.35 || ||668.93 || |
| || ||2693.29 || ||2304.70 || ||3115.08 || ||3005.98 |
|Profit Before Tax || ||2177.29 || ||1834.36 || ||1671.24 || ||1194.92 |
|Less :- Current Tax ||687.00 || ||651.00 || ||687.00 || ||651.00 || |
|Adjustment of Tax relating to earlier periods ||9.70 || ||5.29 || ||9.70 || ||5.29 || |
|Deferred Tax ||65.70 || ||(6.27) || ||65.70 || ||(6.27) || |
| || ||762.40 || ||650.01 || ||762.40 || ||650.01 |
|Profit for the year || ||1414.89 || ||1184.35 || ||908.84 || ||544.91 |
|Less :- Non-Controlling Interest || ||- || ||- || ||(139.52) || ||(161.18) |
|Profit for the year attributable to Owners of the Parent || ||1414.89 || ||1184.35 || ||1048.36 || ||706.09 |
|Balance brought forward || ||6354.90 || ||5366.71 || ||9234.99 || ||8985.67 |
|Amount available for Appropriation || ||7769.79 || ||6551.06 || ||10283.36 || ||9691.75 |
|Less :- Transferred to Legal ||- || ||- || ||- || ||13.68 || |
|Reserve || || || || || || || || |
|Transferred to Foreign Currency ||- || ||- || ||- || ||246.93 || |
|Translation Reserve || || || || || || || || |
|Dividend paid ||260.09 || ||195.07 || ||260.09 || ||195.07 || |
|Tax on Dividend Proposed ||52.95 || ||39.71 || ||52.95 || ||39.71 || |
|Ind AS Impact on Defined Benefit Plans ||- || ||(38.62) || ||- || ||(38.62) || |
| || ||313.03 || ||196.15 || ||313.03 || ||456.76 |
|Surplus carried forward to Balance Sheet || ||7456.76 || ||6354.90 || ||9970.32 || ||9234.99 |
During the year under review the Earnings Before Interest Depreciation and Tax was18.41% compared to 18.02% in the previous year. The Total Revenue (excluding Other Income)for the year net of discount / rebates was Rs. 26449.99 Lakhs as against Rs. 22964.73Lakhs in the previous year. Profit after tax for the year was 5.35% compared to 5.16% 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. 4786.32 Lakhs in the Financial Year 2017-18 compared to Rs.4200.91 Lakhs in the previous year. Consequently the Consolidated Profit BeforeExceptional Items and Taxes (PBT) was Rs. 1671.24 Lakhs in the Financial Year 2017-18compared to Rs. 1194.92 Lakhs in the previous year.
With the collective support of staff and Aries customers the Company was able toimprove its revenue from Indian operations by15.40 % with an increase in profitabilitybefore tax by18.70% in comparison with the previous year.
The global operations were suspended in August 2017 and raw materials and finishedgoods on hand were sold. A further plan of action is being worked out in the bestinterests of the Company's profitability. Therefore revenue from overseas were lower andcost savings due to reduced overheads impacted profitability of the consolidatedoperations. Please refer to the discussion made in the Management Discussion and AnalysisReport forming part of this Report.
After considering earnings requirement for funds and with the objective of rewardingthe Shareholders the Directors have recommended a Dividend of 23% being Rs. 2.30 perEquity Share of Rs. 10/- each which is 21.14% of Net Profit for the year ended 31st March2018 (previous year 20% being Rs. 2.00 per Equity Share of Rs. 10/- each which is 21.96%of Net Profit) subject to your approval at the ensuing Annual General Meeting. TheDividend if approved will result in an outflow of Rs. 359.99 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. 7456.76 Lakhs is proposed to beretained in the Profit and Loss Account.
The Company had annual booking bazaars using its digital app for the first ever timeduring April & May 2018. This led to an order book of Rs.398 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 1400 dealers/distributorsparticipated in the booking bazaar and flash sale as against 1250 last year.
The Company is introducing 9 new products in the aquaculture sector and these will belaunched in October 2018 which will support growth in the top line and bottom line. Nonew production line or additional raw material is required
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.
The above plans combined with good monsoon the revenue growth in the current FinancialYear is expected to be satisfactory.
The Company's financial discipline is reflected in the credit ratings ascribed byrating Agency as given below:
Long Term Bank Facilities(Fund Based)-CARE BBB+; Stable (Triple B Plus; Outlook:Stable) (Reaffirmed) and Short Term Bank Facilities(Non Fund Based)-CARE A3+(A Three Plus)Revised from CARE A2(A Two). There was no change in the Long Term Credit Rating howeverthe Short Term Rating was revised during the year.
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.
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 Office Building atMumbai is under progress and once it is completed the Company will approach theshareholders for requisite 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 2018.
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.
Aries Agro Produce Private Limited ceased to be a Subsidiary of the Company during theFinancial Year 2017-18. It is neither a Subsidiary nor an Associate of the Company.
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 201718 . The Company incurred expenses to the tune of Rs. 0.45 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 2017-18 the Company earned Income Rs. 0.34 Lakhs andincurred expenses of Rs. 0.35 Lakhs.
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 Ninth Year of operation has not generated any sale and has incurred Lossof AED 24.61 Lakhs (INR 435.59 Lakhs) for the year 2017-18.
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 Fifth Full Year of operation hasgenerated a total sale of AED 170.78 Lakhs (INR 3022.87 Lakhs) with a loss of AED 3.95Lakhs(INR 69.97 Lakhs) for the year 2017-18.
As required under S. 129(3) of The Companies Act 2013 annexed hereto are the AuditedFinancial Statements for the Year ended 31st March 2018 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 inNo. 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.
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 Mrs. NityaMirchandani Director retires by rotation and being eligible offers herself forre-appointment. Accordingly her 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.
Pursuant to newly inserted Regulation 17(1A) in the SEBI (Listing Obligation andDisclosure Requirements)(Amendment) Regulations 2018; no listed entity can appoint orcontinue the directorship of any person as non executive director who has attained the ageof seventy five years unless a Special Resolution is passed to that effect. Thisregulation shall come into effect from April 1 2019. Also Section 149(10) of the Actprovides that an Independent Director shall hold office for a term of five consecutiveyears on the Board and shall be eligible for re-appointment on passing a SpecialResolution by the Company and disclosure of such appointment shall be made in its Board'sReport. Section 149(11) provides that an Independent Director may hold office for up totwo consecutive terms.
Shri Chakradhar Bharat Chhaya (DIN: 00968966) would be attaining age of 75 years on 9thNovember 2018 and he is maintaining a good physical health. He has attended most of theMeetings of the Board and Committees and contributed in the proceedings. He has attendedprevious Annual General Meeting.
Pursuant to the recommendation of the Nomination and Remuneration the Board proposesto re-appoint Shri Chakradhar Bharat Chhaya (DIN: 00968966); as an Independent Director ofthe Company not liable to retire by rotation and to hold office for a second term of 5(five) consecutive years commencing from 01-042019 on the Board of the Company.
Accordingly re-appointment of Shri Chakradhar Bharat Chhaya as an Independent Directorforms part of the Agenda and the proposed Resolution is set out at item No. 5 of theNotice.
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 Operation of the Company at Board Meetings and nature and scope of businessnature of industry in which Company operates profitability and future plans. Regularly atmeetings updates are given to the Board. Directors were also taken for the Factory visitsand they also attended the Annual Sales Meet at Ahmedabad. House Journal as and whenpublished is also sent to all the Directors and their feedback are considered.
KEY MANAGERIAL PERSONNEL
Apart from the resignation of Dr. Jimmy Mirchandani from the Chairman and ManagingDirectorship of the Company w.e.f. 3rd April 2017 and appointment of Dr. RahulMirchandani as Chairman and Managing Director for a period of 5(Five) Years with effectfrom 4th April 2017(reported in the Board's Report for the Financial Year2016-17) there was no other change in the Key Managerial Personnel during the year underreview. All the Key Managerial Personnel have submitted disclosures and declarationrequired under the Companies Act 2013 and Listing Regulations.
MEETINGS OF BOARD
Seven Meetings of the Board of Directors were held during the year. For furtherdetails please refer Report on Corporate Governance of this Annual Report.
Apart from the re-constitution of the Audit Committee with effect from 3rdApril 2017(reported in the Board's Report for the Financial Year 2016-17) there was noother change in the Audit Committee.
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) Dr. Jimmy Mirchandani andShri. B. V. Dholakia. For further details please refer Report on Corporate Governance ofthis Annual 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 ||0.11 ||0.30 |
|Mrs . Nitya Mirchandani ||0.89 ||2.40 |
|Prof R. S. S. Mani ||1.38 ||3.75 |
|Mr. Chakradhar Bharat Chhaya ||1.08 ||2.93 |
|Mr. Bhumitra || |
|Vinodchandra Dholakia |
|Executive Directors || || |
|Dr. Rahul Mirchandani ||64.89 ||175.71 |
2. The percentage increase in remuneration of each Director Chief Financial Officer
Company 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* ||65.92 |
|Mr. S. Ramamurthy Chief Financial Officer ||11.00 |
|Mr. Qaiser P. Ansari Company Secretary ||9.68 |
*Higher responsibility was cast upon him-from Executive Director - limited roleto-shouldering the responsibility of Managing Director. The post of Executive Director hasbeen kept vacant.
3. The percentage increase in the median remuneration of employees in the financialyear; -1.08 %
4. The number of permanent employees on the rolls of Company; 868
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 11.26% 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 2017-18
|. NAME ||DESGINATION ||REMUNERATION RECEIVED ||NATURE OF EMPLOYMENT ||OTHER TERMS & CONDI TIONS ||NATURE OF DUTY ||QUALIFICATION & EXPERIENCE ||DATE OF COMMENCE- MENT ||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 ||CHAIRMAN AND MANAGING DIRECTOR ||17570571 ||CONTRACTUAL ||N.A. ||MANAGING THE AFFAIRS OF THE COMPANY ||B. Com; CFA; MBA; Ph.D ||02.02.1994 ||43 ||N.A. ||20.86 ||Brother of Dr. Jimmy Mirchandani & Husband of Mrs. Nitya Mirchandani |
|2 MR. P.K. JAISWAL ||SENIOR VICE PRESIDENTMARKETING ||6409.976 ||FULL TIME EMPLOYEE ||N.A. ||MANAGING THE MARKET ING ACTIVITIES FOR W.R. N.R. & C.R. ||B.Sc. ||26.01.1982 ||60 ||N.A. ||0.01 ||N.A. |
|3 MR. S. RAMAMURTHY ||PRESIDENT AND CHIEF FINANCIAL OFFICER ||4695144 ||FULL TIME EMPLOYEE ||N.A. ||FINANCIAL MANAGEMENT OF THE COMPANY ||B. Com. C.A. ||16.10.1995 ||65 ||M/s. Micro Plantae Ltd. Desgn- VP (Finance & Accounts) ||NIL ||N.A. |
|4 MR. QAISER PARVEZ ANSARI ||COMPANY SECRETARY & SENIOR VP (LEGAL) ||2700659 ||FULL TIME EMPLOYEE ||N.A. ||COMPANYSECRE TARY ||B. Com. LLB CS ||02.06.2008 ||55 ||M/s. Sabero Organics Gujrat Ltd. Desgn- CS & Dy. Gen. Manager(Legal & Taxation) ||0.00 ||N.A. |
|5 MR. D. RAVINDRA NATH ||ASST. VICE PRESIDENT (PRODUC TION) ||2625621 ||FULL TIME EMPLOYEE ||N.A. ||PRODUC TION FOR PASHAMYLARAM UNIT ||M.Sc. ||25.10.1979 ||65 ||M/s. Beekay Pestisides Pvt. Ltd. Desgn- Supervisor Cum Chemist ||0.15 ||N.A. |
|6 MR. JAYAPRADEEP SUBRAMA NIAN ||ASST. VICE PRESIDENT (MARKETING) SOUTHERN REGION ||2473884 ||FULL TIME EMPLOYEE ||N.A. ||MARKET ING & EXTEN SION ACTIVITIES FOR Southern Region ||M.Sc. MBA ||15.11.2013 ||35 ||M/s. Tata Consultancy Services Desgn- IT Analyst ||0.00 ||N.A. |
|7 MR. B.R.PANDEY ||SENIOR VICE PRESIDENT (HR AND PERSONNEL) ||2277651 ||FULL TIME EMPLOYEE ||N.A. ||HR & ADMIN ||B.Sc. DPMIR ||18.01.1982 ||56 ||M/s. R. B. Vaidya & Co. Desgn- General Assistant ||0.01 ||N.A. |
|8 ARUN K. TIWARI ||REGIONAL CONTROLLER ||2263039 ||FULL TIME EMPLOYEE ||N.A. ||MANAGING THE MARKET ING ACTIVITIES OF NORTHERN REGION ||B.Sc. ||01.12.1992 ||50 ||N.A. ||0.01 || |
|9 MR. N.E.MOORTHY ||SENIOR VICE PRESIDENT (TREASURY) ||2252076 ||FULL TIME EMPLOYEE ||N.A. ||FINANCE ||B. Com. (CA Ent.) ||22.09.1983 ||58 ||M/s. Kolatkar & Dandekar CA Desgn- Articleship Trainee ||0.002 ||N.A. |
|10 MR.SANTOSH KUMAR PANDEY ||JUNIOR REGIONAL CONTROLLER ||2248561 ||FULL TIME EMPLOYEE ||N.A. ||MARKET ING ACTIVITIES OF MAHARASHTRA NIPANI DIVISION ||M. Sc.(Ag) ||26.05.2004 ||44 ||N.A. ||NIL ||N.A. |
|11 MR. BIPLOB CHATTERJEE ||VICE PRESIDENT (PRODUC TION) ||1786075 ||FULL TIME EMPLOYEE ||N.A. ||OVER ALLPRODUC TION ||B.Sc. ||08.12.2009 ||49 ||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 2017-18
|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 31.03.2017 ||Whether relative of any Director or Manager and the name of such Director or Manager |
|1 DR. RAHUL MIRCHANDANI ||CHAIRMAN AND MANAGING DIRECTOR ||17570571 ||CONTRACTUAL ||N.A. ||MANAGING THE AFFAIRS OF THE COMPANY ||B. Com; CFA; MBA; Ph.D ||02.02.1994 ||43 ||N.A. ||20.86 ||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 2017-18.
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 2019 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 at itsmanufacturing unit in Hyderabad.
iv. Conversion of boilers in Hyderabad Unit from diesel to solid briquette based fuel.
v. Exclusive use of CNG for manufacturing at Chhatral Unit
vi. Optimum use of Energy by Switching off Machines Lights Fans Air Conditioners andExhaust 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.
|. Particulars ||Current Year ||Previous Year |
|2017-2018 ||2016-17 |
|(a) Purchased:- || || |
|I. Electricity || || |
|(i) Unit (KWH) ||993775 ||908208 |
|(ii) Total Amount (Rs) ||9483040 ||8918395 |
|(iii) Rate/Unit (Rs.) ||9.54 ||9.82 |
| || || |
|II Piped Gas || || |
|(i) Unit(M3) ||358193 ||324908 |
|(ii) Total Amount (Rs) ||13402009 ||10165698 |
|(iii) Rate/Unit (Rs.) ||37.42 ||31.29 |
| || || |
|(b) Own Generation || || |
|(i) Coal ||Not Applicable ||Not Applicable |
|(ii) Furnace Oil - KI ||262 ||4607 |
|(iii) Internal Generation Units(Generator) ||2329 ||19482 |
|(iv) Solar System Units ||66532 ||68622 |
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 ISO 9001:2015 certified and works on newproduct development and continuous quality checks. The manufacturing unit at Hyderabad hasbeen equipped with a state of art laboratory to keep pace with the Company's expansion inthat region.
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 2018 (Amt. in Rs.) ||For the Year ended 31st March 2017 (Amt. in Rs.) |
|I) Capital ||3620027 ||47522 |
|II) Recurring ||4633750 ||4645418 |
|Total ||8253777 ||4692940 |
|Total R&D expenditure as a % of || || |
|a) Gross Turnover ||0.26 ||0.17 |
|b) Net Turnover ||0.31 ||0.20 |
B1. Technology Absorption Adaptation and Innovation
The Management has focused on productivity and Total Quality Management [TQM] in orderto optimize manufacturing costs. The Company is now ISO 9001:2015 certified.
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 exports developmentof new export markets for products and services and export plans:
International clients are located in Bangladesh Nepal Vietnam and Taiwan. Sales werebooked for Nepal Vietnam Taiwan and Bangladesh. Distributors in Nepal and Vietnam haveinvested in branding and promotion of our range of products in their respective countries.The total exports and global sales constituted 8.89 % of our group revenue during theFinancial 2017-18.
2. Total Foreign Exchange used and earned:
Used : Rs. 292037128/- Earned: Rs. 31001660/- SPECIAL BUSINESS
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 part ofthis 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 (CorporateSocial Responsibility Policy) Rules 2014. The Policy is available on the Web-Site of theCompany.
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 of thisReport. The said Extract of the Annual Report is available at the web site of the Companyat www.ariesagro.com.
AUDITORS & AUDITORS REPORTS Statutory Auditors
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 subject to ratification of their appointment at every Annual GeneralMeeting.
Pursuant to the enforcement of first proviso and explanation to Section 139 of theCompanies Act 2013 read with Rule 3(7) of the Companies (Audit and Auditors) Rules 2014the requirement for ratification of the Appointment of the Statutory Auditor at everyAnnual General Meeting has been deleted from the statute book. Since the approval of themembers for appointment of the auditors was obtained at a previous annual general meetingheld on 28th September 2017 a resolution is proposed to obtain the approvalwaiving the requirement of ratification of the appointment of the auditors at an everyAnnual General Meeting. The proposed Resolution set out at item 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 2016-2017.
The due date for filing the Cost Audit Reports in XBRL mode for the financial yearended March 31 2017 was 14th October 2017. The Cost Audit Reports were filedby the Cost Auditor on 3rd October
2017 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
2018 by the Board of Directors at their meeting held on 30th May
2017 after ensuring their eligibility and obtaining the letter of eligibility fromthem.
The Company's Cost Audit for the Financial Year 2017-18 is under process and theCompany will have the Audit completed within 180 days of the end of the FinancialYear-2017-18 i.e. on or before 27th September 2018 and file the Report within30 days of the Board Meeting approving the Report.
The Board has appointed Mr. A. Sekar Practising Company Secretary to conductSecretarial Audit for the financial year 2017-18. The Secretarial Audit Report for thefinancial year ended March 31
2018 is annexed herewith marked as Annexure-IV to this Report.
The Secretarial Audit Report does not contain any qualification reservation or adverseremark.
It is hereby confirmed that the Company has complied with the provisions of allapplicable Secretarial Standards issued by the Institute of Company Secretaries of India.
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 Authority 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 Year and before the date of this Report.
In the Notes to Accounts under para 38(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.
The Mumbai Bench of the Central Excise and Service Tax Appellate Tribunal upheld MumbaiCommissionerate's Order on classification
of micronutrients as fertilizers under Chapter Heading No. 3105 and not as plant growthregulators under Chapter Heading No. 3808 of the Central Excise Tariff vide their orderbearing No. A/86615/2018 dated 31/05/2018.
Similar order is expected from the Ahmedabad Appellate Tribunal. STATUTORY DISCLOSURES
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 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 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 Exchanges Depositories 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: 13th August 2018 ||DIN-00239057 |