Aries Agro Ltd Management Discussions.


This report contains forward looking statements, which may be identified by their use of words like ‘plans, ‘expects, ‘will, ‘anticipates, ‘believes, ‘intends, ‘projects, ‘estimates, or other words of similar meaning. All statements that address expectations or projections about the future, including but not limited to statements about the Companys strategy for growth, product development, market position, expenditures and financial results, are forward looking statements. These forward looking statements, which may include statements relating to future results of operations, financial condition, business prospects, plans and objectives, are based on the current beliefs, assumptions, expectations, estimates, and projections of the Directors and Management of the Company, about the business, industry and markets in which the Company operates. These statements are not guarantees of future performance, and are subject to known and unknown risks, uncertainties, and other factors, many of which are beyond Companys control and difficult to predict, that could alter actual results, performance or achievements to differ materially from those in the forward looking statements. Such statements are not, and should not be construed, as a representation as to future performance or achievements of the Company. In particular, such statements should not be regarded as a projection of future performance of the Company. It should be noted that the actual performance or achievements of the Company may vary significantly from such statements.



The Company is part of the growing specialty plant nutrition industry which is a niche sector within the crop nutrition segment of agricultural inputs. During the year under review the monsoon recorded below normal rainfall to the tune of 95% of the LPA (Long Period Average). However, July and August witnessed some of the worst floods in Gujarat, South Rajasthan, Assam, Bihar, parts of Uttar Pradesh and Odisha. This was followed by a long prolonged dry spell in September across India during the first half of the month. Post this, rain picked up only in South India and remaining part of the country remained dry. Despite good start cumulative rainfall was deficient by 29% in Uttar Pradesh followed by 26% in Haryana and 22% in Punjab. Eastern India also remained deficient by almost 25 - 33%. The tremendously erratic weather conditions led to the Company needing to continuously modify and align sales strategies to ensure growth in all regions. With these efforts the company managed to increase its revenue (gross) by 15.40 % from Rs.277/- Crores to Rs.320/- Crores. On a consolidated basis, international sales were limited due to suspension of manufacturing in UAE facilities and installation of like manufacturing capacities in India.


The total capacity utilization currently stands at 61% of the total installed capacity of 95,400 MT p.a. in India. During the year under review with the expanded manufacturing capacity in Hyderabad and Chhatral facilities due to reinstallation of similar machineries like the UAE units, the import substitution led to a significant improvement in manufacturing cost efficiency.

The manufacturing unit at Fujairah, UAE continued to have suspended operations due to continued lack of power and movement restrictions in key raw material inputs. A final decision on similar shifting of this Unit to an alternate location in India shall be done in 2018-19. In the meanwhile, fixed costs have been reduced to the bare minimum in UAE. Increased focus on the strengthening of Indian manufacturing base has been extremely beneficial to improve the profitability of the Company.



Financial Year 2017-18 was characterized by erratic demand scenario with significant monthly changes in growth patterns. However, the quarterly growth in revenue is as under:

Particulars Percentage Share in Annual Revenue Percentage Growth V/s. Previous Year
Q 1 21.11 7.46
Q 2 30.05 25.38
H 1 51.16 17.31
Q 3 32.04 29.50
Q 4 16.80 (8.19)
H 2 48.84 13.47
Annual 100 15.40

Cost control measures strengthened along with continued focus on domestic manufacturing increase in profitability (PAT) by 19.47 percentage.

The Company continued to create a healthy order book during the month of April and May by conducting regional flash sales and booking bazaars. This resulted in order book of Rs.398/- Crores being created before the onset of kharif season. The conversion expected is 75 to 80% of this order book and expect to achieve total gross revenue of Rs.350/- Crores.

Seven New Products namely Borocan, Boromag, Zincbor, Teamin, Coffeemin, Knight and Antox were introduced during the Financial year. Some of the products introduced in the past are as follows:

Name of the product Introduced Year Revenue growth over the introduced years
Crackguard 2016-17 73.23 %
Tracemin 2016-17 14.70 %
K-phonic 2016-17 5.26 %
Calcomag 2015-16 18.33 %

Orders received during these booking bazaars resulted in better working capital management with 4 days reduction in debtors and inventory combined.

On a consolidated basis despite the restructuring of international operations consolidated P&L showed an increase of 48.48% in PAT in comparison with the previous Financial Year.


The following were key events during the year;

1) Flash sales were conducted at Delhi, Amritsar, Goa, Bhubaneshwar, Guntur, Vishakhapatnam and Kolkata. This resulted in 1250 number of dealers and distributors from 23 states participating in the booking bazaars leading to 305.88 Crores of order booked for FY 2017-18.

2) All India planning meeting was conducted at Jaipur with top management, region and state heads and strategic partners to finalize plans for 2017-18.

3) The Largest training programme spread over 4 days for extension and market development with dealers and distributors from across India was held at the ITM University campus at Warangal from 15th to 18th June, 2017. 410 Nos. of staff participated in a series of 71 sessions conducted by 19 Nos. of faculty on topics including technical and commercial training .

4) The Company had several training programmes for GST transition and made transition to taxation system within a record 72 hours with minimal impact on sales and dispatches.

5) Cardamom Planters Meeting was conducted in Kerala to introduce range of specialized products for tea plantation in July 2017.

6) The Company was selected to be part of the Agricultural Task Force put together by the Champions of Change initiative of NITI Aayog and the Prime Ministers office. Over the course of deliberations on the 21st and 22nd of August extensive inputs were provided on behalf of the specialty plant nutrition industry and policy enablers to grow our industry. These were presented to the Honble Prime Minister and council of Ministers in Delhi.

7) Second booking bazaar was conducted for the eastern region in September 2017 followed by road shows in Pune, Patna, Ranchi, Indore and Ahmedabad.

8) In the month of October technical training and market development activities took place in Vietnam and Nepal. These were extremely well received by these importing markets.

9) On 27th November Aries Agro Limited celebrated its Foundation Day with a series of CSR activities across India.

10) During February 2018 the Company conducted series of focused group meetings with progressive farmers and young growers from across India to involve them in good agricultural practice development for key crops.

11) On 8th March, 2018 Aries had industry interactive session on “Impact Assessment of CSR Interventions” with MBA students from Georgetown Universitys McDonough School of Business, USA.


> Aries was awarded with an appreciation Certificate for excellence in “Sustainable Environmental Initiatives” by the Bombay Chamber of Commerce & Industry.

> For Thirteen consecutive years Aries Quality Management System was audited and certified as NS-EN ISO 9001:2015 with zero non-compliance report showing complete adherence to international quality standards.


Aries has sourced 25.31% of its total raw materials from overseas suppliers located in Taiwan, UAE, China, Belgium, Malaysia and UK. Imports constitute 21.36% of our total purchases and our Company has identified a pool of reliable overseas suppliers.


Though trade scheme as a percentage of sales increased by 0.16%, overall profitability stood at 5.35% of Net sales, PAT increased by 19.47% compared to the previous Financial Year. 4.42% of Gross Sales margins (EBIDTA) improved from 18.02% to 18.41%, an increase of 17.67% over the previous year.


The total Man Power of the Company increased from 822 to 868 during the year under review. Stringent norms has been set for performance appraisals and manpower costs were in line with pre-sanctioned budgets and funds are released only based on the progress of the season.


International clients are located in Bangladesh, Nepal, Vietnam & Taiwan. 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 Year 2017-18.


2018 monsoons are expected to be normal and the Company is hopeful of achieving good growth in revenues and profitability. The Company conducted its digital flash sale first time this year with “App only” bookings leading to participation of 1400 Nos. of dealers/distributors from all states with a total booking of Rs.398/- crores for 2018-19. This marks the introduction of successful digital sales promotion techniques by the Company. The current year also began by re-launching Arisil, Plantex- CN, Hydropro gold, Magmix, Orgabor, Aquacal, Zincmag, Agromin soil plus, Chelamin gold agricultural agricultural products in specially designed aqua culture branding. The urban farming facility using hydroponics also became fully operational during the current year with two harvests being successfully undertaken for a variety of crops including varieties of Basil, Pokchoi, Cherry Tomatoes, Lettuce, Coloured Capsicum and Micro Greens. The R&D team also created specially designed nutrition solutions for soil free farming and this have been used in our own research facilities as well as in some commercial hydroponic farms. The Company has also introduced Coffeemin and Teamin specially designed for the requirements of these plantations and is keen to introduce similar customized nutrition products progressively.


As the Companys business activity falls within a single primary business segment, the disclosure requirements of Accounting Standard (Ind AS-108) “ Operating Segments “, are not applicable.

risk management & internal controls


The Company has a Risk Management Policy.

The Company manages, monitors and reports on the principal risks and uncertainties that can impact its ability to achieve its strategic objectives. The Companys management systems, organizational structures, processes, standards, code of conduct and behaviours together form the Aries Risk Management Systems (ARMS) that governs how the Company conducts its business and manages associated risks.

The Company has in place adequate Internal Financial Controls with reference to Financial Statements. During the year, such controls were tested and no reportable material weakness in the design or operations were observed.


The Company has an extensive system of internal controls to ensure optimal utilization of resources and accurate reporting of financial transactions and strict compliance with applicable laws and regulations. The Company has put in place sufficient systems to ensure that assets are safeguarded against loss from unauthorized use or disposition, and that transactions are authorized, recorded and reported correctly.


The external factors which could serve as possible threat to the business would include erratic spread of the rainfall and water availability in the reservoirs, fluctuations in oil and gas prices, foreign exchange rate fluctuations, shortages of key raw materials, pricing pressure, indirect and direct substitutes, etc.

Opportunities would include growth in product range as well as expansion into unserved markets in India and abroad. Increasing awareness levels amongst existing customers on balanced nutrition will increase number of products the farmers purchase from the Aries range.


The Companys Sales Turnover for the financial year ended March 31, 2018 increased to Rs. 31,988.68 Lakhs from Rs. 27,719.13 Lakhs in the previous year, reflecting an increase of 15.40%.

Total expenses for the year was Rs. 24,683.70 Lakhs as against Rs. 21,282.99 Lakhs in the previous year.

Profit Before Tax increased to Rs. 2,177.29 Lakhs during the year as against Rs. 1,834.36 Lakhs in the previous year.

Tax provision for the year was Rs. 762.40 Lakhs as against Rs. 650.01 Lakhs in the previous year which translates to 2.88 % on FY 17-18 Sales.

Profit After Tax for the year was Rs. 1,414.89 Lakhs as against Rs. 1,184.35 Lakhs in the previous year which is 5.35 % of FY 17-18 Sales.


As on March 31, 2018, the net worth of the Company stood at Rs. 14,619.29 Lakhs as against Rs.13,510.21 Lakhs.

As on March 31, 2018, the Company had a Debt / Equity ratio of 1.02. The Company has not raised any Deposits from the public.


As at the end of the financial year there were 868 employees under the permanent rolls and 224 plus under contract. We have an ongoing arrangement with few labour supplier organizations for our various locations.

We have 129 workers in our permanent employment and sizeable numbers on contract, working in our factories. The detailed breakup of the same is as under:

Particular Employees
1. Skilled 24
2. Semi-Skilled 6
3. Unskilled 99
Sub- Total 129
4. Contract Labour 224

The Department wise breakup of our manpower is as under:

Name of the Department No. of Staff
1. Directors 01
2. Accounts, Personnel & Administration, Legal & Secretarial 147
3. Production(Staff and Workers), R&D and Spray Dryer Operators 195
4. Sales 525



• The Company promotes “Balanced Nutrition as a National Imperative”, building resistance of crops to pests and diseases and hence lowering the usage of harmful and expensive pesticides


• The Solar Power Generation System at its manufacturing unit in Hyderabad has generated 66532 units of power during the Financial Year 2017-18, of which 58,441 units were consumed by the facility and the balanced of 8091 units were sold to the grid.

• All Aries products are based on the philosophy of “Use less chemicals and use safe chemicals” - low doses of chemically inert and cost effective nutrient complexes

• The entire range of Aries Chelates are environmentally safe


• All Aries factories have zero effluents and produce no harmful emissions