The Directors have pleasure in presenting their 40th Annual Report on
the operations of the Company together with the Audited Statements of
Accounts for the Financial Year ended 31st March, 2010.
FINANCIAL RESULTS
PARTICULARS AS AT 31.03.2010 AS AT 31.03.2009
Turnover 13,974.61 11,044.42
Profit Before Tax Interest 2,921.57 1,182.07
& Depreciation
Less: Interest 867.62 581.31
Depreciation 159.83 1,027.45 97.03 678.34
Profit Before Tax 1,894.12 503.73
Provision for Taxation 535.00 113.00
Deferred Tax 103.09 638.09 79.96 192.96
Profit After Tax 1,256.03 310.77
Balance Brought Forward 2,556.10 2,428.14
Prior Period Expense 132.12 -
Exceptional Items 9.82 141.94 182.81 182.81
Amount available for 3,670.19 2,556.10
appropriation
General Reserve 150.00 -
Proposed (Final) Dividend 195.06 -
Tax on Proposed Dividend 32.40 -
Surplus Carried Forward 3,292.73 2,556.10
to Balance Sheet
OPERATIONS
During the year under review, the earnings before Interest,
Depreciation and Tax was Rs. 2,921.57 Lakhs compared to Rs 1,182.07
Lakhs in the previous year. As at March2010, the Gross Fixed Asset is
Rs. 4,060.74 Lakhs compared to Rs. 3,576.55 Lakhs in the previous year.
The Turn Over for the year was Rs. 13,974.61 Lakhs as against Rs.
11,044.42 Lakhs in the previous year reflecting a growth of 27 %.
Profit after tax for the year was Rs. 1,256.03 compared to Rs. 310.77
Lakhs in the previous year.
The Company is a major manufacturer and supplier of Chelated
micronutrients, value added secondary nutrient fertilizers and also
water soluble NPK fertilizers. In addition, we also have a growing
range of farm sprayers and plant protection chemicals, including
pesticides, insecticides, fungicides and herbicides in our product
portfolio. In total, Aries has 76 brands. For detailed discussion
please refer to the Management Discussion Analysis forming part of this
report.
DIVIDEND
After considering the performance of your Company and need for
conservation of resources, your Directors are pleased to recommend a
dividend of 15 % being Rs. 1.50/- per Equity Share of Rs. 10/- each
subject to your approval at the ensuing Annual General Meeting. The
dividend, if approved, will result in an outflow of Rs. 2,27,46,299/-
lakhs including dividend tax.
FUTURE PROSPECTS
The Company is ready to launch an additional 6 new products, in phases
during 2010-11. This will include further specialty plant nutrients,
farm equipment and plant protection products, adding on to our already
extensive range of 76 brands. We believe that adding throughput through
our distribution network will increase our share of the farmers wallet
and provide a comprehensive range of nutrition solutions to choose
from. For detailed discussion please refer to the Management Discussion
Analysis forming part of this report.
The Unit namely M/s. Amarak Chemicals FZC, set up by M/s. Golden
Harvest Middle East FZC, will commence production of Sulphur Bentonite
in Fujairah by end July 2010. We believe that about half of the total
capacity of 60,000 MT will be utilized in the first year itself, with
sales taking place through Ariess own distribution network in India
and also through new buyers in the Middle East and SAARC Region.
Our other overseas subsidiary, Golden Harvest Middle East FZC, is now
in its third year of manufacturing operations of Chelated
micronutrients. It has added during the year 2009- 10, an additional
product to its portfolio, viz., 20% soluble Boron. Golden Harvest is
already working at full capacity utilization and has significantly
increased its sales to Aries in India, as well as to customers in
Bangladesh, Nepal, the Middle East and Africa. The acceptance of Golden
Harvest Chelates and Boron based products as cost effective and world
class gives us the confidence that the future of our International
foray with specialty nutrients is very bright and exciting.
The Company has also appointed distributors and commenced negotiations
for increasing global business in key markets. We firmly believe that,
these export markets, as well as servicing of our institutional clients
in India, will open up new opportunities for the Company.
USE OF IPO PROCEEDS
Your Company had come out with its maiden IPO in January 2008 for the
purposes as stated in the Prospectus dated 26th December, 2007 and as
amended by the members at their Annual General Meeting held on 29th
September, 2009. Accordingly the Company has utilized the IPO funds
for the purposes for which it was raised.
DEPOSITS
The Company has not accepted any deposits from the Public within the
meaning of Section 58A of the Companies Act, 1956.
SUBSIDIARIES
The Company has four subsidiaries, Aries Agro Care Private Limited,
Aries Agro Equipments Private Limited, Aries Agro Produce Private
Limited and Golden Harvest Middle East, FZC.
The operations of Aries Agro Care Pvt. Ltd. commenced in the Financial
Year 2008-09 and during the Financial Year 2009-10 the Company has
ended with a total revenue of Rs. 80.05 Lakhs which has resulted in Rs.
4.67 Lakhs as profit after tax.
The business operations of Aries Agro Equipments Pvt. Ltd. commenced
in the year ended 31st March, 2010 in agricultural sprayers generating
a Sale of Rs. 139.90 Lakhs with profit after tax of Rs. 13.06 Lakhs.
The above two Companies are Wholly Owned Subsidiaries of the Company.
No business activity took place in other Subsidiary namely Aries Agro
Produce Pvt. Ltd.
As regards the overseas subsidiary M/S. Golden Harvest Middle East FZC
with an installed capacity of 10,800 MT p.a., in their second full year
of operation, has generated a total sale of AED 2,00,66,528/- with a
profit of AED 35,12,532/-.
M/s. Amarak Chemicals FZC, is in the process of allotting shares to
M/S. Golden Harvest Middle East FZC. On completion of allotment M/s.
Amarak Chemicals FZC will become a Subsidiary of M/S. Golden Harvest
Middle East FZC, consequently M/s. Amarak Chemicals FZC will become a
step down Subsidiary of Aries Agro Limited.
As required under Section 212 of The Companies Act, 1956, annexed
hereto are the Audited Statement of accounts, the
Reports of the Board of Directors and Auditors Reports for the year
ended 31st March, 2010 of Aries Agro Care Private Limited, Aries Agro
Equipments Private Limited, Aries Agro Produce Private Limited and
Golden Harvest Middle East FZC.
A Statement of Subsidiary Companies as prescribed under Section 212 of
the Companies Act, 1956, is annexed and is forming part of the Annual
Report.
Apart from the above statement a list of Subsidiary Companies is given
in Note No. 10- A of the Notes to Accounts forming part of the Annual
Report.
All the above subsidiary Companies are non-material, non- listed
Companies as defined under Clause 49 of the Listing Agreement with the
Stock Exchanges.
INSURANCE
All properties and assets of your Company are adequately insured
covering all conceivable risks attributable to the Industry.
DIRECTORS
In accordance with the Companies Act, 1956 and the Articles of
Association of the Company, Dr. Rahul Mirchandani and Dr. D. S. Jadhav
retire by rotation at the ensuing Annual General Meeting and being
eligible, offer themselves for re- appointment. Accordingly their
re-appointment forms part of the notice of ensuing Annual General
Meeting.
Mr. Chakradhar Bharat Chhaya was appointed as an Additional Director on
the Board of Directors of the Company with effect from 29th October,
2009 as an Independent Director. He ceases to be a Director on the date
of the 40th Annual General Meeting. Notice under Section 257 of the
Companies Act, 1956 has been received in respect of his appointment as
Director on the Board and accordingly his appointment is proposed as a
Director at the ensuing Annual General Meeting.
DIRECTORS REPLY TO OBSERVATIONS / REMARKS MADE IN AUDITORS REPORT
(Para III(d) of the Auditors Report)
The Auditors have in their Audit Report commented that the Company has
not provided for Leave Encashment as per Accounting Standard 15. The
Leave Encashment pertains only to Managerial Staff and is accounted on
cash basis. It has been decided that provisions for Leave Encashment
will be made during this year .
APPOINTMENT OF AUDITORS
M/s. Kirti D. Shah & Associates(Membership No. 32371), the Auditors of
the Company retire at the ensuing Annual General Meeting and being
eligible and holding Peer Review
Certificate issued by the Institute of Chartered Accountants of India,
offer themselves for re-appointment.
DIRECTORS RESPONSIBILITY STATEMENTS
Pursuant to the requirements of Section 217 (2AA) of the Companies Act,
1956 with respect to the Directors responsibility statement, it is
hereby confirmed that:
1. In preparation of the Annual Accounts, applicable Accounting
Standards have been followed and that there are no material departures
2. The Directors 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 period;
3. The Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities; and
4. Annual Accounts have been prepared on a ‘going concern basis.
PARTICULARS OF EMPLOYEES
Information in accordance with the provisions of Section 217(2A) of the
Companies Act, 1956 (“Act) read with the Companies (Particulars of
Employees) Rules, 1975, as amended, are as under:
PARTICULARS OF EMPLOYEES IN TERMS OF SECTION 217(2-A) OF THE COMPANIES
ACT, 1956 DRAWING REMUNERATION NOT LESS THAN RS. 24 LAKHS P.A./RS. TWO
LAKHS P.M. DURING THE YEAR 2009-10
SR. DESGINATION REMUNERATION NATURE OF OTHER NATURE
No. NAME RECEIVED EMPLOYMENT TERMS & OF DUTY
CONDITIONS
1 DR. JIMMY
MIRCHANDANI CHAIRMAN 70,17,663 CONTRACTUAL N.A. MANAGING
AND THE
MANAGING AFFAIRS
DIRECTOR OF THE
COMPANY
2 DR. RAHUL
MIRCHANDANI EXECUTIVE 63,50,032 CONTRACTUAL N.A. MANAGING
DIRECTOR THE
AFFAIRS
OF THE
COMPANY
3 MR. P. K.
JAISWAL CHIEF 25,09,014 CONFIRMED N.A. MARKETING
MARKETING EMPLOYEE HEAD FOR
CONTROLLER
CENTRAL
AND
WESTERN
REGION
SR NAME QUALIFICATION DATE OF AGE Last % of
NO. & EXPERIENCE APPOINTMENT Employment Equity
held Shares
held as on
31.03.2010
1 DR. JIMMY B. Sc.
MIRCHANDANI (Vet); LLB 15.01.1976 54 N.A. 14.05
2 DR. RAHUL
MIRCHANDANI B. Com; CFA; 02.02.1994 34 N.A. 5.10
MBA; Ph.D
3 MR. P. K.
JAISWAL B. Sc. 25.01.1982 52 N.A. 0.02
LISTING
The Equity Shares of the Company are listed at Bombay Stock Exchange
Limited(BSE) and National Stock Exchange of India Limited(NSE).
The Company has made all the compliances of Listing Agreement including
payment of Annual Listing Fees upto 31st March, 2011 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. The Auditors certificate on compliance with the
conditions of Corporate Governance under clause 49 of the Listing
Agreement 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
under Section 217(1) (e) of the Companies Act, 1956 read with the
Companies {Disclosure of Particulars in the Report of the Board of
Directors} Rules, 1988 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. Optimum use of Energy by Switching off Machines, Lights, Fans, Air
Conditioners and Exhaust Systems whenever not required.
iii. Creating awareness among Workmen to conserve energy.
b. Additional investments and proposals, if any, being implemented for
reduction of consumption of energy;
i. installation of energy efficient lights in the office and factory
ii. installation of LED lights.
c. Impact of measures of (a) and (b) above for reduction of energy
consumption and consequent impact on the cost of production of goods:
i. Due to measures taken as described above, the overall power and fuel
oil consumption at plants and office has reduced and reduction in the
cost of production is achieved.
d. Total energy consumption and energy consumption per unit of
production
Form - A
Form for disclosure of Particulars with respect to Conservation of
Energy.
Current Previous
Year Year
2009-2010 2008-2009
(a) Purchased: -
(i) Unit (KWH) 7,33,592 9,41,514
(ii) Total Amount 50,42,998 56,35,214
(Rs.)
(iii) Rate/Unit 6.87 5.99
(Rs.)
(b) Own Generation: -
(i) Coal Not Not
Applicable Applicable
(ii) Furnace Oil - Kl 7,145 8,436
(iii) Internal 23,864 28,176
Generation - Units
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 Bombay is ISO 9001 certified and works on new
product development and continuous quality checks. The new
manufacturing unit at Hyderabad has been equipped with a state of art
laboratory to keep pace with the Companys expansion in that region.
- Our ISO 9001 certification has now been upgraded from the ISO
9001:1998 standard to the latest ISO 9001:2008 standards.
2. Benefits derived as a result o 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.
3. Future Plan of Action :
- Evaluation of potential Customized Crop Specific combinations for
enhancement of nutrients.
- Design of secondary packaging automation for chelamin and other
brands.
4. Expenditure on R & D
Description For the For the
year year
ended ended
31st March, 31st March,
2010 2009
(Rupees) (Rupees)
(I) Capital 2,84,540 11,41,736
(II) Recurring 24,44,030 19,09,921
(III) TOTAL 27,28,570 30,51,657
(IV) Total R & D
expenditure
as a % of
a. Gross 0.20 0.28
Turnover
b. Net 0.20 0.28
Turnover
B1. Technology Absorption, Adaptation and Innovation
The Management has focused on productivity and Total Quality Management
[TQM] in order to optimize manufacturing costs.
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:
The Company has also appointed distributors and commenced negotiations
for increasing global business in key markets.. We firmly believe that,
these export markets, as well as servicing of our institutional clients
in India, will open up new opportunities for the Company.
2. Total Foreign Exchange used and earned:
Used : Rs. 30,18,13,507/- Earned : Rs. 4,14,95,891/-
SPECIAL BUSINESS
As regards 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.
GENERAL
Notes forming part of the Accounts are self-explanatory. As required
under the VAT Acts of various States, Company has appointed a VAT
Auditor to conduct the VAT Audit. The Companys Building, Machineries,
Stores and Stocks in Trade etc. are fully covered against all insurance
risks.
GROUP
The List of persons constituting “Group (within the meaning as defined
in the Monopolies and Restrictive Trade Practices Act, 1969) for the
purpose of availing exemption from applicability of the provisions of
Regulations 10 to 12 of the Securities Exchange Board of India
(Substantial Acquisition of shares and Takeovers) Regulations 1997 as
provided in Clause 3(1)(i) of the said Regulations is given in the
Report on the Corporate Governance.
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 and Depositories. 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 of Directors
Dr. Jimmy Mirchandani
Place: Mumbai Chairman &
Date: 21st July, 2010 Managing Director
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