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Aarti Drugs Ltd.

BSE: 524348 Sector: Health care
NSE: AARTIDRUGS ISIN Code: INE767A01016
BSE LIVE 10:12 | 22 Sep 529.50 -4.35
(-0.81%)
OPEN

528.25

HIGH

535.70

LOW

526.80

NSE 11:04 | 22 Sep 536.30 0.70
(0.13%)
OPEN

530.10

HIGH

536.95

LOW

528.00

OPEN 528.25
PREVIOUS CLOSE 533.85
VOLUME 373
52-Week high 684.00
52-Week low 456.25
P/E 19.01
Mkt Cap.(Rs cr) 1,282
Buy Price 528.95
Buy Qty 24.00
Sell Price 531.40
Sell Qty 7.00
OPEN 528.25
CLOSE 533.85
VOLUME 373
52-Week high 684.00
52-Week low 456.25
P/E 19.01
Mkt Cap.(Rs cr) 1,282
Buy Price 528.95
Buy Qty 24.00
Sell Price 531.40
Sell Qty 7.00

Aarti Drugs Ltd. (AARTIDRUGS) - Auditors Report

Company auditors report

TO THE MEMBERS OF AARTI DRUGS LIMITED Report on the financial statements

We have audited the accompanying financial statements of AARTI DRUGS LIMITED ("theCompany") which comprise the Balance sheet as at March 31 2017 and the Statement ofProfit and Loss the Cash Flow Statement for the year then ended and a summary ofsignificant accounting policies and other explanatory information.

Management’s responsibility for the financial statements

The Company’s Board of Directors is responsible for the matters stated in section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. Theseresponsibilities also includes the maintenance of adequate accounting records inaccordance with the provision of the Act for safeguarding of the assets of the company andfor preventing and detecting the frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial control that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to Company’s policies the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditor’s responsibility

Our responsibility is to express an opinion based on our audit of these financialstatements.

We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified undersection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on theauditor’s judgment including the assessment of the risks of material misstatement ofthe financial statements whether due to fraud or error. In making those risk assessmentsthe auditor considers internal financial control relevant to the company’spreparation of the financial statements that give true and fair view in order to designaudit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of accounting policies used and the reasonableness of theaccounting estimates made by Company’s Directors as well as evaluating the overallpresentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the company as at March31 2017 and its profit and its cash flows for the year ended on that date.

Report on other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order 2016 issued by theCentral Government of India in terms of Section 143 (11) of the Companies Act 2013 wegive in the Annexure - A a statement on the matters specified in paragraph 3 & 4 ofthe order.

2. As required by section 143(3) of the Act we report that: a) We have soughtand obtained all the information and explanations which to the best of our knowledge andbelief were necessary for the purposes of our audit. b) In our opinion proper booksof account as required by law have been kept by the Company so far as appears from ourexamination of those books. c) The Balance sheet Statement of Profit and Loss andCash Flow Statement dealt with by this report are in agreement with the books of account. d)In our opinion the aforesaid financial statements comply with the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014.

e) On the basis of written representations received from the Directors as on March31 2017 taken on record by the Board of Directors none of the Directors is disqualifiedas on March 31 2017 from being appointed as a Director in terms of Section 164(2) of theAct. f) With respect to the adequacy of the internal financial controls overfinancial reporting of the Company and the operating effectiveness of such controls referour separate report in "Annexure - B"; and g) With respect to the othermatters included in the Auditor’s Report in accordance with Rule 11 of the Companies(Audit and Auditors) Rules 2014 in our opinion and to our best of our information andaccording to the explanations given to us : i. The Company has disclosed the impactof pending litigations as at March 31 2017 on its financial position in its financialstatements. Refer Note no: 24.2 of the Financial Statements. ii. The Company didnot have any long-term contracts including derivatives contracts for which there were anymaterial foreseeable losses. iii. There has been no delay in transferring amountsrequired to be transferred to the Investor Education and Protection Fund by the Company;and iv. The Company has provided requisite disclosures in its financial statementsas to holdings as well as dealings in Specified Bank Notes during the period from 8thNovember 2016 to 30th December 2016 and these are in accordance with the books ofaccounts maintained by the Company. Refer Note 24.19 to the standalone financialstatements.

For GOKHALE & SATHE
CHARTERED ACCOUNTANTS
Firm Reg. No.: 103264W
Sd/-
TEJAS J. PARIKH
Place: Mumbai PARTNER
Date: 23rd May 2017 Membership No: 123215

ANNEXURE - A TO THE INDEPENDENT AUDITOR’S REPORT

In the Annexure as required by the Companies (Auditor’s Report) Order 2016issued by the Central Government in terms of Section 143 (11) of the Companies Act 2013on the basis of checks as we considered appropriate we report on the matters specifiedin paragraph 3 and 4 of the said order to the extent applicable to the Company i) a. TheCompany has maintained proper records showing full particulars including quantitativedetails and situation of its fixed assets. b. The Company has phased programme ofphysical verification of fixed assets by which all fixed assets are verified over a periodof three years. In our opinion periodicity of physical verification is reasonable havingregard to the size of the Company and nature of the assets. We have been informed that nomaterial discrepancy was noted on such physical verification. c. According to theinformation and explanations given to us and on the basis of examination of the records ofthe Company title deeds of immovable properties other than self-constructed immovableproperties (buildings) are held in the name of the Company except lease hold lands plotno’s R-A/13 E-106 E-105 S-33/34 (aggregate book value of Rs.26.57 lakhs) are inthe name of erstwhile entities which are merged with Company. According to explanationsobtained from management in view of merger through court scheme lease hold land rightsare deemed to be transferred to the Company and procedure for transferring in the name ofCompany is yet to be completed. ii) The stock of inventory has been physically verifiedduring the year by the Management at reasonable intervals except stock lying with thirdparties confirmation of such stocks with the third parties has been obtained by theCompany. In our opinion the procedures of physical verification of inventory followed bythe management are reasonable and adequate in relation to the size of the Company and thenature of its business. The discrepancies noticed on physical verification of stocks ascompared to book records were not material; however the same have been dealt with thebooks of account. iii) The Company had granted loans to its wholly owned subsidiarycovered in the register maintained under section 189 of the Companies Act 2013 (‘theAct’) during the year. a) In our opinion the rate of interest and other termsand conditions on which the loans was granted was not prima facie prejudicial to theinterest of the Company b) The borrower has been regular in the payment of theprincipal and interest as stipulated by the management c) The borrower has repaidthe loan as at the year end and hence there are no overdue amounts in respect of such loangranted. iv) In our opinion and according to the information and explanations given to usthe Company has complied with provisions of section 185 and 186 of the Act with respectto loans and investments made. v) The Company has not accepted any deposits from publicduring the year. vi) The Company has maintained cost records as required under sub section1 of section 148 of the Companies Act 2013. We have not however carried out a detailedexamination of such records. vii) a. The Company is regular in depositing withappropriate authorities undisputed statutory dues including the Provident Fund Employeesstate insurance Income tax Sales tax Wealth tax Service tax duty of Customs duty ofExcise Value added tax cess and any other statutory dues applicable to it. b. Accordingto the information and explanation given to us there are no dues of income tax salestax service tax custom duty excise duty and value added tax which have not beendeposited on account of any dispute except the following:

Name of the Statute / Nature of the Dues Financial Year Forum where dispute is pending Total (Rs in Lakhs)
(Rs in Lakhs)
Commissionerate/ Dy.Commisioner Appellate Authorities and Tribunals
The Central Excise Act 1944/ FY 2007-08 NIL 66.72/- 66.72/-
Custom Duty/Service Tax/Interest & Penalty FY 2008-09
FY 2012-13
FY 2013-14
FY 2014-15
Maharashtra Sales Tax Act 2002/ FY 2007-08 15.18/- NIL 15.18/-
Sales Tax
Income Tax Act / Tax Interest & Penalty FY 2012-13 43.75/- NIL 43.75/-
Total (Rs in Lakhs) 58.93/- 66.72/- 125.65/-

viii) In our opinion and according to the information and explanation given to us theCompany has not defaulted in repayment of dues for loan taken from financial institutionsor bank or debenture holders.

ix) In our opinion and according to the information and explanation given to us theterm loans raised during the year were applied for the purpose for which the loans wereobtained. The Company did not raise any money by way of public offer or further publicoffer (including debt instruments) during the year.

x) According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe course of our audit.

xi) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Act.

xii) In our opinion and according to information and explanations given to us theCompany is not a Nidhi Company. Accordingly paragraph 3(xii) of the Order is notapplicable.

xiii) According to the information and explanation given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.

xiv) According to the information and explanation given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.

xv) According to the information and explanation given to us the Company has notentered into non-cash transactions with directors or persons connected with him.Accordingly paragraph 3(xv) of the Order is not applicable.

xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934

For GOKHALE & SATHE
CHARTERED ACCOUNTANTS
Firm Reg. No.: 103264W
Sd/-
TEJAS J. PARIKH
Place: Mumbai PARTNER
Date: 23rd May 2017 Membership No: 123215

ANNEXURE - B TO THE INDEPENDENT AUDITORS REPORT

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of Aarti DrugsLimited ("the Company") as of March 31 2017 in conjunction with our audit ofthe standalone financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company’s management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (‘ICAI’). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company’s policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors’ Responsibility

Our responsibility is to express an opinion on the Company’s internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects. Our auditinvolves performing procedures to obtain audit evidence about the adequacy of the internalfinancial controls system over financial reporting and their operating effectiveness. Ouraudit of internal financial controls over financial reporting included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor’s judgment including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error. We believe thatthe audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion on the Company’s internal financial controls system over financialreporting.

Meaning of Internal Financial Controls over Financial Reporting

A company’s internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A company’s internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany’s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2017 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For GOKHALE & SATHE
CHARTERED ACCOUNTANTS
Firm Reg. No.: 103264W
Sd/-
TEJAS J. PARIKH
Place: Mumbai PARTNER
Date: 23rd May 2017 Membership No: 123215