R) Provisions, Contingent Liabilities and Contingent Assets :
A Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is
probable that an outflow of economic benefits will be required to settle the obligation, and a reliable estimate can be made of the
amount of the obligation.
The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end
of the reporting period, taking into account the risks and uncertainties surrounding the obligation.
These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates. If the effect of the time value
of money is material, provisions are discounted. The discount rate used to determine the present value is a pre-tax rate that reflects
current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the
passage of time is recognised as interest expense.
Contingent liabilities exist when there is a possible obligation arising from past events, the existence of which will be confirmed
only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company,
or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required or
the amount cannot be reliably estimated. Contingent liabilities are appropriately disclosed unless the possibility of an outflow of
resources embodying economic benefits is remote.
A contingent asset is a possible asset arising from past events, the existence of which will be confirmed only by the occurrence
or nonoccurrence of one or more uncertain future events not wholly within the control of the Company. Contingent assets are not
recognised till the realisation of the income is virtually certain. However, the same are disclosed in the financial statements where
an inflow of economic benefit is possible.
S) Government Grants:
Government grants including any non-monetary grants are recognised where there is reasonable assurance that the grant will be
received, and all attached conditions will be complied with. Government grants are recognised in the Statement of Profit and Loss
on a systematic basis over the periods in which the related costs, for which the grants are intended to compensate, are recognised
as expenses. Government grants related to property, plant and equipment are presented at fair value and grants are recognised as
deferred income.
T) Research & Development Expenditure:
Revenue expenditure pertaining to research is charged to statement of profit and loss. Development costs of products are charged
to the statement of Profit and loss unless a product's technological and commercial feasibility has been established, in which case
such expenditure is capitalized.
6.1 Aries Agro Care Pvt. Ltd. has been incorporated as a wholly owned subsidiary on 5th January, 2007 with the Registrar of Companies,
Maharashtra, Mumbai. to carry on the business in all branches of agro protection, agro care, etc. The Registered Office of the Company
is located at “Aries House, Plot no 24, Deonar, Govandi (E), Mumbai - 400 043”. During the previous year, upon filing of the Application
in Form STK-2 for Strike Off with MCA, the Wholly Owned Subsidiary M/s Aries Agro Care Private Limited has been Struck Off with
effect from 27th July, 2024.
Accordingly, M/s Aries Agro Care Private Limited ceases to be a Subsidiary of the Company w.e.f. 27th July, 2024.
6.2 Aries Agro Equipments Pvt. Ltd. has been incorporated as a wholly owned subsidiary on 12th January, 2007 with the Registrar of
Companies, Maharashtra, Mumbai. to carry on the business of manufacturing, repair, etc. of all types of rural and farm equipments,
machinery, etc. The Registered Office of the Company is located at “Aries House, Plot no 24, Deonar, Govandi (E), Mumbai - 400 043”.
6.3 Mirabelle Agro Manufacturing Pvt. Ltd. has been incorporated as a wholly owned subsidiary on 26th December, 2019 with the Registrar
of Companies, Maharashtra, Mumbai. to carry on the business of manufacturing, Producing and Dealing in Mineral Feed Supplements.
The Registered Office of the Company is located at “Aries House, Plot no 24, Deonar, Govandi (E), Mumbai - 400 043”.
6.4 Golden Harvest Middle East FZC was incorporated on 31st December, 2004 as a Free Zone Company with limited liability to carry
on the activities of manufacturing Chemical Fertilizer and exporting all the necessary, material and acts related to its natural work or
needed to the above mentioned works. In the year 2008 it became 75% subsidiary of the Company, Aries Agro Limited which increased
to 88.14% upon conversion of Current Account Balance / Share Application Money to Capital Account.The Registered Office of the
Company is located at “ SAIF Zone ( Emirates of Sharjah ) “UAE”. The licence has since been converted into a trading licence effective
from 7th December, 2016.
6.5 Aries Agro Produce Pvt. Ltd. has been incorporated on 20th June, 2008 with the Registrar of Companies, Maharashtra, Mumbai. to carry
out the business of all kinds of Farming, agriculture, horticulture etc. and to plant, grow, cultivate and in any other way deal in farming
and agricultural produce. The registered office of the Company is located at “Aries House, Plot no 24, Deonar, Govandi (E), Mumbai -
400 043”. The said Company passed special resolution to get its name struck off. However the application is not accepted by the MCA,
hence the Company continues to be active and the Investment value written off.
16 Other Equity
16.1 Securities Premium Reserve : represents the amount received in excess of par value of securities i.e equity shares. Premium on
redemption of securities is accounted in security premium available. Where security premium is not available, premium on redemption
of securities is accounted in statement of profit and loss. Section 52 of Companies Act, 2013 specify restriction and utilisation of security
premium.
16.2 General Reserve : represents the statutory reserve, this is in accordance with Indian Corporate law wherein a portion of profit is
apportioned to general reserve. Under Companies Act, 1956 it was mandatory to transfer amount before a Company can declare
dividend, however under Companies Act, 2013 transfer of any amount to General reserve is at the discretion of the Company.
16.3 Retained Earnings : represent the undistributed profits of the Company
16.4 Other Comprehensive Income Reserve : represent the balance in equity for items to be accounted in Other Comprehensive Income.
Other Comprehensive Income is classified into i) items that will not be reclassified to profit and loss, ii) items that will be reclassified to
profit and loss.
42. Contingent Liability not provided for in the accounts:, (Rupees in Lakhs unless stated otherwise)
a) Letters of credit / guarantees given / Bills discounting Rs. 1,626.71 Lakhs..
b) Claims against company not acknowledged as debts Rs. 5,699.98 Lakhs which includes tax dues disputed as Rs. 23.55 Lakhs
towards sales Tax, Rs. 1,025.84 Lakhs towards Income Tax , Rs. 528.42 Lakhs towards Goods & Service Tax and Rs. 4,122.17
Lakhs towards central excise & customs.
c) 1) The Commissioner of Central Excise, Mumbai had issued Show Cause-Cum-Demand Notices for levy of Excise Duty
on clearances of Micronutrients by proposing to classify the same as Plant Growth Regulators under Chapter Heading
No. 3808 of Central Excise Act and thereafter vide his order dated 27th November, 2006 upheld the classification of
Micronutrients under chapter heading no 3105 as Fertilizers and consequently cancelled the demand. The Department
had preferred appeals against the said orders before CESTAT, Mumbai and the same was decided in our favour on
11.06.2018 in File No. E/709/2007 vide Order bearing No. A/86615/2018 dated. 31.05.2018. Thereafter the Dept.
preferred a civil appeal bearing No. 41393 of 2018 before The Hon'ble Supreme Court of India. The Hon'ble Supreme
Court dismissed the Appeal on 14.12.2018 in view of the fact that the Excise authorities have accepted the Order passed
by Hyderabad Bench, Central Excise & Service Tax Appellate Tribunal (CESTAT) on 19.06.2017 and did not file an appeal
against the said order.
2) The Commissioner of Central Excise, Navi Mumbai, had passed an order for the period June, 2005 to June, 2017
confirming demand of Rs. 4.79 Crores and interest on the said amount towards Central Excise duty on the classification
of micronutrient fertilizers relating to the Mumbai Factory against which the Company has preferred an appeal before the
Central Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai and the same is pending before CESTAT Mumbai.
3 (a). The Commissioner of Central Excise, Ahmedabad - II, had passed an order for the period March, 2011 to October, 2012
confirming demand of Rs. 3.81 Crores on account of Central Excise duty, interest on the said amount and penalty of like
amount i.e. Rs.3.81 Crores on the classification of micronutrient fertilizers relating to the Sanand facility against which the
Company has filed an appeal before the Central Excise and Service Tax Appellate Tribunal (CESTAT), Ahmedabad and
the same is pending before CESTAT, Ahmedabad.
3 (b). The Commissioner of Central Excise, Ahmedabad, had passed an order for the period October, 2012 to June, 2017
confirming demand of Rs. 13.84 Crores on account of Central Excise duty, penalty on the said amount of Rs. 13.84 Crores
on the classification of micronutrient fertilizers products relating to the Chhatral factory against which the Company has
filed an appeal before the Central Excise and Service Tax Appellate Tribunal (CESTAT), Ahmedabad.
The Central Board of Excise and Customs vide their Circular No. 1022/10/2016/CX dated 06/04/2016 have clarified that
Micronutrients are not classifiable as Plant Growth Regulators and hence are not classifiable under Chapter Heading No.
38.08 of the Central Excise Act.
In view of legal pronouncement and the above referred Circular, the Show Cause-Cum-Demand Notices are liable to be
dropped.
4 (a). The Company has been classifying Sulphur Bentonite under Chapter Heading No. 25030090 as other forms of Sulphur.
However, the Customs authorities classified Sulphur Bentonite imported under Chapter Heading No. 25030010 “as
recovered by product in refining of crude oil”. The Additional Commissioner of Customs, Nhava Sheva confirmed the
classification for the period 2011-12 and 2012-13 under Chapter Heading No. 25030010 and demanded an amount of Rs.
29.91 Lakhs. In addition penalty of like amount i.e. Rs. 29.91 Lakhs along with fine and penalty of Rs. 7.00 Lakhs each
on the Chairman & Managing Director and Purchase Manager of the Company.
The Company preferred an appeal before the Commissioner (Appeals) who vide order dated 19/02/2016 while upholding
the Department's contention on classifying the product under Chapter Heading No. 25030010 set aside the fine and
penalty imposed upon the Company, the Chairman & Managing Director and the Purchase Manager. The Commissioner
Appeals also directed to grant benefit vide Sr. No. 60 under Notification No. 21/2002/CUS. The Company has preferred an
appeal against the said order to the Customs, Central Excise and Service Tax Tribunal (CESTAT), Mumbai on 19/05/2016
contesting the classification of Sulphur Bentotonite under Chapter Heading No. 25030010.
4(b). The Company has been classifying Zn-EDTA & Fe-EDTA under Chapter Heading No. 31059090 as other Fertiliser for
Mumbai Factory. However, the Customs authorities classified the imports under Chapter Heading No. 29224990 “as
Organic Chemicals”. The Commissioner of Customs, Nhava Sheva confirmed the classification under Chapter Heading
No. 29224990 and passed an order for the period February, 2012 to December, 2012 and demanded an amount of
Rs. 81.84 Lakhs, on account of Custom Duty with Interest against which the Company has filed an appeal before the
Customs, Excise & Service Tax Appellate Tribunal (CESTAT) Mumbai.
5(a) Assistant Commissioner of State Tax (GST), Mazgaon (Mumbai), issued a show cause notice FORM GST DRC - 01 No.
INV-A/AC-D-032/ Aries Agro /u/s 73/DRC-01/B- 18 (Ref. No. ZD2705230325161) Mumbai Dated 19th May 2023. being
the availment of ITC on inward supply of inputs from vendors whose GST Registration were cancelled retrospectively
during the financial year 2018-2019 amounting to Rs. 167.28 Lakhs. The Company has submitted reply on 25th Jul
2023. Assistant Commissioner of State Tax (GST), Mazgaon (Mumbai), confirmed the demand of Rs. 167.28 Lakhs
vide his order FORM GST DRC - 07 bearing no. INV-A/AC-D-032/ Aries Agro /u/s 73/DRC-07/B- 196 Mumbai (Ref. No.
ZD271123049090U) and also demanded interest of Rs. 212.44 Lakhs & proposed penalty of Rs. 16.73 Lakhs totaling to
Rs. 396.45 Lakhs. The Company has preferred an Appeal against the said order before the Commissioner of (Appeals)
Mumbai.
5(b). The Superintendent CGST Lucknow issued a Demand-cum-show cause Notice no. 25 dated 31st May 2024 being the
difference between GSTR-1 & GSTR-3B towards outward supply for the financial year 2019-2020 amounting to Rs. 2.53
Lakhs. The Company has submitted reply on 18th Jul 2024. The Superintendent CGST Lucknow however confirmed the
demand vide Order bearing no. DRC-07 Ref. No. ZD090924075986G dated 10th Sep 2024 for Rs. 2.53 Lakhs and also
proposed a penalty of Rs. 0.45 Lakhs totaling to Rs. 2.98 Lakhs. The Company has preferred an Appeal against the said
order on 18th Oct 2024 before the Commissioner of (Appeals) Luknow.
5(c). The Assistant Commissioner of GST, Vijayawada (Guntur), issued show cause notice FORM GST DRC - 01 vide Ref. No.
ZD371124028872E dated 26th Nov 2024 for Rs. 60.43 Lakhs being the mismatch between GSTR-1 & GSTR-3B towards
outward supply and Rs. 56.83 Lakhs toward mismatch between E-Way Bill & GSTR-1 thus totaling to Rs. 117.26 Lakhs
for the financial year 2020-2021. The Company has submitted reply on 24th Dec 2024. The Assistant Commissioner of
GST, Vijayawada (Guntur), has confirmed the demand of Rs. 117.26 Lakhs.vide his order bearing no. DRC-07 dated 25th
Feb 2025 and also proposed a penalty of Rs. 11.73 Lakhs totaling to Rs. 128.99 Lakhs. The Company has preferred an
Appeal against the said order on 21st May 2025 before the Commissioner of (Appeals) Vijayawada (Guntur).
47. Previous Years figures have been regrouped and rearranged wherever necessary so as to make them comparable with the current year
As per our report of even date For and on behalf of the Board of Directors of Aries Agro Limited
For Kirti D. Shah & Associates Dr. Rahul Mirchandani Mrs. Nitya Mirchandani Mr. S. Ramamurthy
Chartered Accountants Chairman & Managing Director Director Director
Firm Registration No. 115133W DIN 00239057 DIN 06882384 DIN 00540033
Kirti D. Shah Mr. Nrupang B. Dholakia Mr. R. V. Balasubramaniam Iyer Dr. Shailesh R. Karnik
Proprietor Director Director Director
Membership No 032371 DIN 06522711 DIN 10265799 DIN 06976928
UDIN :25032371BMUKVK9221
Place : Mumbai Mrs. Chhaya Ashok Warrier Mr. Qaiser P. Ansari
Date : 22nd May, 2025 Sr. Vice President-Finance(CFO) Company Secretary & Chief Legal Officer
Membership No. ACS-8979
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