Aries Agro Ltd Directors Report.

To

The Members,

Aries Agro Limited

Your Directors have pleasure in presenting their 48th Annual Report on the operations of the Company together with the Audited Financial Statements for the Financial Year ended 31st March, 2018.

financial performance

Particulars

Standalone

Consolidated

Year Ended 31st March, 2018

Year Ended 31st March, 2017

Year Ended 31st March, 2018

Year Ended 31st March, 2017

Revenue from Operations 31,988.68 27,719.13 35,011.55 31,290.52
Less :- Discount / Rebates 5,538.69 4,754.40 5,538.69 4,754.40
26,449.99 22,964.73 29,472.87 26,536.12
Other Income 410.99 152.62 199.28 306.12
Total Revenue (including Other Income) 26,860.98 23,117.35 29,672.14 26,842.24
Profit Before Tax, Interest & Depreciation 4,870.58 4,139.06 4,786.32 4,200.91
Less :- Finance Costs 2,471.48 2,119.40 2,888.73 2,337.06
Depreciation & Amortisation Expense 221.81 185.29 226.35 668.93
2,693.29 2,304.70 3,115.08 3,005.98
Profit Before Tax 2,177.29 1,834.36 1,671.24 1,194.92
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 1,414.89 1,184.35 908.84 544.91
Less :- Non-Controlling Interest - - (139.52) (161.18)
Profit for the year attributable to Owners of the Parent 1,414.89 1,184.35 1,048.36 706.09
Balance brought forward 6,354.90 5,366.71 9,234.99 8,985.67
Amount available for Appropriation 7,769.79 6,551.06 10,283.36 9,691.75
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 7,456.76 6,354.90 9,970.32 9,234.99

OPERATIONS STANDALONE

During the year under review, the Earnings Before Interest, Depreciation and Tax was 18.41% compared to 18.02% in the previous year. The Total Revenue (excluding Other Income) for the year net of discount / rebates was Rs. 26,449.99 Lakhs as against Rs. 22,964.73 Lakhs in the previous year. Profit after tax for the year was 5.35% compared to 5.16% in the previous year.

CONSOLIDATED FINANCIAL STATEMENT

In accordance with the Indian Accounting Standard (Ind-AS) 110 on Consolidated Financial Statements, the Audited Consolidated Financial Statement is provided in the Annual Report.

The Consolidated Profit Before Interest, Depreciation, Exceptional Items and Taxes (EBITDA) of the Group was Rs. 4,786.32 Lakhs in the Financial Year 2017-18 compared to Rs. 4,200.91 Lakhs in the previous year. Consequently, the Consolidated Profit Before Exceptional Items and Taxes (PBT) was Rs. 1,671.24 Lakhs in the Financial Year 2017-18 compared to Rs. 1,194.92 Lakhs in the previous year.

FINANCIAL REVIEW

With the collective support of staff and Aries customers the Company was able to improve its revenue from Indian operations by15.40 % with an increase in profitability before tax by18.70% in comparison with the previous year.

The global operations were suspended in August 2017 and raw materials and finished goods on hand were sold. A further plan of action is being worked out in the best interests of the Companys profitability. Therefore, revenue from overseas were lower and cost savings due to reduced overheads impacted profitability of the consolidated operations. Please refer to the discussion made in the Management Discussion and Analysis Report forming part of this Report.

DIVIDEND

After considering earnings, requirement for funds and with the objective of rewarding the Shareholders, the Directors have recommended a Dividend of 23% being Rs. 2.30 per Equity Share of Rs. 10/- each which is 21.14% of Net Profit for the year ended 31st March, 2018 (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. The Dividend, if approved, will result in an outflow of Rs. 359.99 Lakhs including Dividend Distribution Tax.

TRANSFER TO RESERVES

Your Directors do not propose to transfer any amount to the General Reserve out of the current years profit and the balance aggregating to Rs. 7,456.76 Lakhs is proposed to be retained in the Profit and Loss Account.

future prospects:

The Company had annual booking bazaars using its digital app for the first ever time during April & May 2018. This led to an order book of Rs.398 Crores and we expect conversion of 75 to 80% of the order book into turnover of the Company. In addition there will be regular orders which would be received from customers who have not participated in the pre-season booking process. During the current year 1,400 dealers/distributors participated in the booking bazaar and flash sale as against 1,250 last year.

The Company is introducing 9 new products in the aquaculture sector and these will be launched in October, 2018 which will support growth in the top line and bottom line. No new production line or additional raw material is required

The Company will focus namely on

i) Increase penetration in Aquaculture especially in states like Andhra Pradesh, Telangana, West Bengal and Chhattisgarh

ii) Increase exports in Asian region.

The above plans combined with good monsoon, the revenue growth in the current Financial Year is expected to be satisfactory.

CREDIT RATING

The Companys financial discipline is reflected in the credit ratings ascribed by rating 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 however, the Short Term Rating was revised during the year.

CHANGES IN NATURE OF BUSINESS AND REVISION IN THE BOARDS REPORT

There is no change in the nature of business of the Company during the year. There is no revision made in the Boards Report and whatever submitted herewith is the final Report.

SAFETY AND HEALTH

The health and safety of the employees across its operations remains the highest priority for the Group. All endeavours are being made to enhance safety standards and processes 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 the Prospectus dated 26th December, 2007. The IPO proceeds have been utilized in accordance with the schedule of the Prospectus and variation approved by the shareholders at their Annual General Meeting held on 29th September, 2009 by passing a Special Resolution. However, the renovation/extension of existing Office Building at Mumbai is under progress and once it is completed the Company will approach the shareholders for requisite approval as regards to utilization of IPO proceed.

public deposits

The Company has not accepted any deposits from the Public within the meaning of Section 73 of the Companies Act, 2013 and Members (other than Directors) during the year under review and as such, no amount on account of Principal or Interest on Deposits from Public and 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 Subsidiaries viz Aries Agro Care Private Limited and Aries Agro Equipments Private Limited and two foreign subsidiaries namely Golden Harvest Middle East FZC and a Step Down Subsidiary viz Amarak Chemicals FZC at UAE.

Aries Agro Produce Private Limited ceased to be a Subsidiary of the Company during the Financial 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 but discontinued the activity in the financial year 2012-13 and had no business activity in the 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 year 2009-10 in agricultural sprayers but discontinued the activity in the financial year 2013-14. During the Financial Year 2017-18 the Company earned Income Rs. 0.34 Lakhs and incurred 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 Trading Entity, in their Ninth Year of operation, has not generated any sale and has incurred Loss of 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 with an installed capacity of 60,000 MT p.a., in their Fifth Full Year of operation, has generated a total sale of AED 170.78 Lakhs (INR 3022.87 Lakhs) with a loss of AED 3.95 Lakhs(INR 69.97 Lakhs) for the year 2017-18.

As required under S. 129(3) of The Companies Act, 2013, annexed hereto are the Audited Financial Statements for the Year ended 31st March, 2018 of Golden Harvest Middle East FZC., Amarak Chemicals FZC,.Aries Agro Care Private Limited and Aries Agro Equipments Private Limited.

A Statement in Form AOC-1 of Subsidiary Companies as prescribed under Section 129(3) of The Companies Act, 2013 read with Rule 5 of Companies(Accounts) Rules, 2014, is annexed and is forming part of the Annual Report.

Apart from the above statement a list of Subsidiary & Group Companies is given in 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-material Companies as defined under Listing Regulations.

INSURANCE

All properties and assets of your Company are adequately insured covering all conceivable risks.

directors & key managerial personnel

DIRECTORS

There is no change in the Composition of the Board of Directors during the year under review.

Pursuant to the provisions of Section 152(6) of the Companies Act, 2013, Mrs. Nitya Mirchandani, Director retires by rotation and being eligible, offers herself for re-appointment. Accordingly, her re-appointment forms part of the Notice of ensuing Annual General Meeting.

All the Independent Directors have submitted declarations to the effect that each of them meets the criteria of Independence as provided in Section 149(6) of the Companies Act, 2013 and Listing Regulations and there has been no change in the circumstances which may affect their status as an Independent Director during the year.

Pursuant to newly inserted Regulation 17(1A) in the SEBI (Listing Obligation and Disclosure Requirements)(Amendment) Regulations, 2018; no listed entity can appoint or continue the directorship of any person as non executive director who has attained the age of seventy five years unless a Special Resolution is passed to that effect. This regulation shall come into effect from April 1, 2019. Also Section 149(10) of the Act provides that an Independent Director shall hold office for a term of five consecutive years on the Board and shall be eligible for re-appointment on passing a Special Resolution by the Company and disclosure of such appointment shall be made in its Boards Report. Section 149(11) provides that an Independent Director may hold office for up to two consecutive terms.

Shri Chakradhar Bharat Chhaya (DIN: 00968966) would be attaining age of 75 years on 9th November, 2018 and he is maintaining a good physical health. He has attended most of the Meetings of the Board and Committees and contributed in the proceedings. He has attended previous Annual General Meeting.

Pursuant to the recommendation of the Nomination and Remuneration, the Board proposes to re-appoint Shri Chakradhar Bharat Chhaya (DIN: 00968966); as an Independent Director of the 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 Director forms part of the Agenda and the proposed Resolution is set out at item No. 5 of the Notice.

During the year, the Non-Executive Directors of the Company had no pecuniary relationship of transactions with the Company.

Familiarisation Programme for Independent Directors— Though there is no formal Policy for familiarization but the Company in order to familiarize the Independent Directors with the business of the Company presentation was made by the Functional Heads covering Operation of the Company at Board Meetings and nature and scope of business, nature of industry in which Company operates, profitability and future plans. Regularly at meetings updates are given to the Board. Directors were also taken for the Factory visits and they also attended the Annual Sales Meet at Ahmedabad. House Journal as and when published 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 Managing Directorship of the Company w.e.f. 3rd April, 2017 and appointment of Dr. Rahul Mirchandani as Chairman and Managing Director for a period of 5(Five) Years with effect from 4th April, 2017(reported in the Boards Report for the Financial Year 2016-17), 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 under the Companies Act, 2013 and Listing Regulations.

MEETINGS OF BOARD

Seven Meetings of the Board of Directors were held during the year. For further details, please refer Report on Corporate Governance of this Annual Report.

AUDIT COMMITTEE

Apart from the re-constitution of the Audit Committee with effect from 3rd April, 2017(reported in the Boards Report for the Financial Year 2016-17), there was no other change in the Audit Committee.

All the recommendations made by the Audit Committee were accepted by the Board during the year under review.

CSR COMMITTEE

The CSR Committee comprises Dr. Rahu Mirchandani(Chairman), Dr. Jimmy Mirchandani and Shri. B. V. Dholakia. For further details, please refer Report on Corporate Governance of this Annual Report.

BOARD EVALUATION

The Board of Directors have carried out an Annual Evaluation of its own performance and individual Directors themselves pursuant to the provisions of the Act and Corporate Governance requirements 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 all the Directors on the basis of criteria such as the Board Composition and Structure, Effectiveness of Board Process, Information and Functioning etc.

In a separate Meeting of the Independent Directors, performance of Non-Independent Directors, Performance of the Board as a whole and performance of the Chairman was evaluated, taking into account the views of Executive Directors and Non-Executive Directors.

POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION AND OTHER DETAILS

The Policy on Directors Appointment and Remuneration including criteria for determining qualifications, positive attributes, independence of Director and also Remuneration for Key Managerial Personnel and other Employees are contained in the Nomination and Remuneration Policy which is hosted at the web site of the Company www.ariesagro.com and the 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 of Directors, to the best of their knowledge and ability, confirm that:

1. in preparation of the Annual Accounts, applicable Accounting Standards have been followed and that there are no material departures;

2. they have selected such Accounting Policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the State of the Affairs of the Company at the end of the financial year and of the profit of the Company for that year;

3. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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 and such Internal Financial Controls are adequate and operating effectively;

6. they have devised proper systems to ensure compliance with the provisions of all applicable 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 Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are as under:

1. The ratio of the remuneration of each Director to the median remuneration of the employees 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

1.44

3.90

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 role to-shouldering the responsibility of Managing Director. The post of Executive Director has been kept vacant.

3. The percentage increase in the median remuneration of employees in the financial year; -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 the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration;

The average annual increase was around 11.26% after accounting for promotions and other event 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 the Company.

The Statement containing Particular of Employees as required under Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, drawing remuneration in excess of the limits 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 Act, 2013 (“Act”) read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration 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 17,570,571 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 6,409.976 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 4,695,144 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) 2,700,659 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) 2,625,621 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 2,473,884 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) 2,277,651 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 2,263,039 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) 2,252,076 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 2,248,561 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) 1,786,075 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 READ WITH RULE 5(2) AND 5(3) OF THE COMPANIES(APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014 DRAWING REMUNERATION NOT LESS THAN Rs. 1.02 Crores p.a./Rs. Eight Lakhs 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 17,570,571 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

ESOPS

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 through mitigating actions on continuing basis. The Key risks are also discussed at the Audit Committee.

The Companys Internal Financial Control Systems are commensurate with the nature of its business and the size and complexity of its operations. These are routinely tested and certified by the Statutory as well as Internal Auditors covering all Offices, Factories and Key Business areas. Significant Audit Observations and Follow Up Actions thereon are reported to Audit Committee. The Audit Committee reviews adequacy and effectiveness of the Companys Internal Control environment and monitors the implementation of the audit recommendations.

Based on the framework of Internal Financial Controls and Compliance Systems established and maintained by the Company, work performed by the Internal, Statutory and Secretarial Auditors and review performed by the Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Companys Internal Financial Controls were adequate and effective during the Financial Year 2017-18.

GREEN INITIATIVES

Pursuant to Sections 101 and 136 of the Companies Act, 2013 the Company will be sending Annual Report through electronic mode(email) to all the shareholders who have registered their email addresses with the Company or with the Depository to receive the Annual Report through electronic mode and initiated steps to reduce consumption of paper.

HUMAN RESOURCES

Humans are considered as one of the most critical resources in the business which can be continuously smoothened to maximize the effectiveness of the Organization. Human resources build the Enterprise and the sense of belonging would inculcate the spirit of dedication and loyalty amongst them towards strengthening the Companys Polices and Systems. All personnel continue to have healthy, cordial and harmonious approach thereby enhancing the contributory value of the Company.

LISTING

The Equity Shares of the Company are listed at BSE Limited (BSE) and National Stock Exchange of India Limited(NSE).

The Company has made all the compliances of Listing Regulations including payment of Annual Listing Fees upto 31st March, 2019 to both the Stock Exchanges.

corporate governance

The Company has complied with the various requirements under the Corporate Governance reporting system. A detailed Compliance Report on Corporate Governance is annexed to this Report as required by the Listing Regulations. The Auditors Certificate on Compliance with the conditions of Corporate Governance is also annexed to this report.

management discussion and analysis report

Managements Discussion and Analysis Report for the year under review, as stipulated under 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 Foreign Exchange Earnings and Outgo, as required to be disclosed by the Companies(Accounts) Rules, 2014 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 the Company 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 its manufacturing 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 and Exhaust Systems whenever not required

Impact of measures taken for reduction of energy consumption and consequent impact on the cost of production of goods

b. Total energy consumption and energy consumption per unit of production

Form -A

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) 993,775 908,208
(ii) Total Amount (Rs) 9,483,040 8,918,395
(iii) Rate/Unit (Rs.) 9.54 9.82
II Piped Gas
(i) Unit(M3) 358,193 324,908
(ii) Total Amount (Rs) 13,402,009 10,165,698
(iii) Rate/Unit (Rs.) 37.42 31.29
(b) Own Generation
(i) Coal Not Applicable Not Applicable
(ii) Furnace Oil - KI 262 4,607
(iii) Internal Generation Units(Generator) 2,329 19,482
(iv) Solar System Units 66,532 68,622

II. Form for disclosure of particulars with respect to Technology Absorption, Research and 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 nutrition which continues across India.

• Our team of extension officers conducts continuous field demonstrations and extension work including large scale soil sampling, which provides constant updates on deficiency levels across all states in India.

• The Companys R&D at Mumbai is ISO 9001:2015 certified and works on new product development and continuous quality checks. The manufacturing unit at Hyderabad has been equipped with a state of art laboratory to keep pace with the Companys expansion in that region.

2. Objectives

• Innovate and develop products ideally suited for sustainable agriculture

• Develop new production processes to improve the cost effectiveness of its products 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 products and services for the company.

• Source worldwide information related to product development and agriculture best practices

• 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 of Companys Plants and at Customers end.

• Cost reduction, import substitution, safer environment and strategic resource management.

• Meeting the statutory requirements.

4. Future Plan of Action :

• Identifying customized formulations for new states where Aries is entering to sell their product range.

• Identify products from the existing Aries crop nutrition range which can be adopted in aquaculture.

• Conducting scientific research and studies, pilot scale development, trial and testing for development of new products, new process development, improvement in the existing 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

• Bio Fertilizers

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 3,620,027 47,522
II) Recurring 4,633,750 4,645,418
Total 8,253,777 4,692,940
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 order to optimize manufacturing costs. The Company is now ISO 9001:2015 certified.

B2. Benefits

This has helped in achieving optimum manufacturing costs, improved quality of products and 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, development of new export markets for products and services and export plans:

International clients are located in Bangladesh, Nepal, Vietnam and Taiwan. Sales were booked for Nepal, Vietnam, Taiwan and Bangladesh. Distributors in Nepal and Vietnam have invested 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 the Financial 2017-18.

2. Total Foreign Exchange used and earned:

Used : Rs. 29,20,37,128/- Earned: Rs. 3,10,01,660/- SPECIAL BUSINESS

As regard to the items of the Notice of the AGM relating to Special Business, the resolutions incorporated in the Notice and the Explanatory Statement relating thereto, fully indicate the reasons for seeking the approvals of members to those proposals. Your attention is drawn to these items and Explanatory Statement annexed to the Notice.

VIGIL MECHANISM

The Vigil Mechanism of the Company, which also incorporates a Whistle Blower Policy in terms of the Listing Regulations is in place. Protected disclosures can be made by a Whistle Blower in writing or through an e-mail, to the Chairman/Member of the Audit Committee.

The Policy on Vigil Mechanism and Whistle Blower Policy may be accessed on the Companys website www.ariesagro.com.

PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN & SECURITIES PROVIDED

Particulars of Loans given, Investments made, Guarantees given and Securities provided along with the purpose for which the Loan or Guarantee or Security is proposed to be utilized 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 to Section 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 of this Report.

CORPORATE SOCIAL RESPONSIBILITY

The brief outline of the Corporate Social Responsibility (CSR) Policy of the Company and the initiatives undertaken by the Company on CSR activities during the year are set out in Annexure-II of this Report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014. The Policy is available on the Web-Site of the Company.

Your Company continues to demonstrate a strong commitment towards providing products which 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 Annual Return is given in Annexure-III in prescribed Format MGT-9, which forms part of this Report. The said Extract of the Annual Report is available at the web site of the Company at 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 Accountants of 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 28th September, 2017 subject to ratification of their appointment at every Annual General Meeting.

Pursuant to the enforcement of first proviso and explanation to Section 139 of the Companies Act, 2013 read with Rule 3(7) of the Companies (Audit and Auditors) Rules, 2014 the requirement for ratification of the Appointment of the Statutory Auditor at every Annual General Meeting has been deleted from the statute book. Since the approval of the members for appointment of the auditors was obtained at a previous annual general meeting held on 28th September, 2017, a resolution is proposed to obtain the approval waiving the requirement of ratification of the appointment of the auditors at an every Annual 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 Consolidated Financial 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 143 of the Companies Act, 2013 other than those reportable to the Central Government.

Cost Auditors

The Company had appointed M/s. R. Nanabhoy & Co., Cost Accountants, to conduct the Audit 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 year ended March 31, 2017 was 14th October, 2017. The Cost Audit Reports were filed by 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 Auditor of 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 from them.

The Companys Cost Audit for the Financial Year 2017-18 is under process and the Company will have the Audit completed within 180 days of the end of the Financial Year-2017-18 i.e. on or before 27th September, 2018 and file the Report within 30 days of the Board Meeting approving the Report.

Secretarial Auditors

The Board has appointed Mr. A. Sekar, Practising Company Secretary, to conduct Secretarial Audit for the financial year 2017-18. The Secretarial Audit Report for the financial 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 adverse remark.

SECRETARIAL STANDARDS

It is hereby confirmed that the Company has complied with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

GENERAL DISCLOSURES

Your Directors state that no disclosure or reporting is required in respect of the following 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 under any 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 receive any remuneration or commission from any of its Subsidiaries.

6. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Companys operations in future.

7. The Company is not required to submit Business Responsibility Report in pursuance of Regulation 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 Redressal Mechanism pertaining to Sexual Harassment of Women employees at workplace. There was no complaint received during the year under review.

MATERIAL CHANGES AND COMMITMENTS, IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE FINANCIAL YEAR END OF THE COMPANY TO WHICH FINANCIAL RESULTS RELATE

Except as disclosed elsewhere in this report, no material changes and commitments which could affect the Companys financial position have occurred between the end of the financial 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 with regards to the business of the Company during the Financial Year. However, following Order was 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 of Micronutrients under Central Excise and also about the Circular dtd. 06/04/2016 clarifying that Micronutrient Fertilizers are not classifiable as Plant Growth Regulators under Chapter Heading No. 3808 of the Central Excise Act.

The Mumbai Bench of the Central Excise and Service Tax Appellate Tribunal upheld Mumbai Commissionerates Order on classification

of micronutrients as fertilizers under Chapter Heading No. 3105 and not as plant growth regulators under Chapter Heading No. 3808 of the Central Excise Tariff vide their order bearing 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 Section 164(2) of the Companies Act, 2013. Your Directors have made necessary Disclosures, as required under various provisions of the Companies Act, 2013 and the SEBI(Listing Obligations and Disclosure Requirements) Regulations, 2015.

acknowledgement

We would like to acknowledge with gratitude, the support and co-operation extended by Shareholders, Vendors, Media and Banks and look forward to their continued support. We appreciate continued co-operation received from various regulatory authorities including Department of Agriculture, Department of Corporate Affairs, Registrar of Companies, Reserve Bank of India, Securities and Exchange Board of India, Stock Exchanges , Depositories, Central Government and respective State Governments. We also recognize and appreciate the sincere hard work, loyalty and efforts of the employees and look forward to their continued support.

For and on behalf of the Board,

Dr. Rahul Mirchandani
Place: Mumbai Chairman & Managing Director
Date: 13th August, 2018 DIN-00239057