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Aarti Drugs Ltd.

BSE: 524348 Sector: Health care
NSE: AARTIDRUGS ISIN Code: INE767A01016
BSE LIVE 15:40 | 09 Dec 655.35 2.75
(0.42%)
OPEN

655.00

HIGH

665.00

LOW

650.00

NSE LIVE 15:31 | 09 Dec 659.65 6.45
(0.99%)
OPEN

654.40

HIGH

665.00

LOW

644.00

OPEN 655.00
PREVIOUS CLOSE 652.60
VOLUME 1212
52-Week high 684.00
52-Week low 431.10
P/E 20.44
Mkt Cap.(Rs cr) 1587.26
Buy Price 660.00
Buy Qty 99.00
Sell Price 0.00
Sell Qty 0.00
OPEN 655.00
CLOSE 652.60
VOLUME 1212
52-Week high 684.00
52-Week low 431.10
P/E 20.44
Mkt Cap.(Rs cr) 1587.26
Buy Price 660.00
Buy Qty 99.00
Sell Price 0.00
Sell Qty 0.00

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 31st March 2016 theStatement of Profit and Loss the Cash Flow Statement for the year then ended and asummary of significant 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.

These responsibilities 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 thereunder.

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 the auditor'sjudgment including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders internal financial control relevant to the Company's preparation of thefinancial statements that give true and fair view in order to design audit procedures thatare appropriate in the circumstances.

An audit also includes evaluating the appropriateness of accounting policies used andthe reasonableness of the accounting estimates made by Company's Directors as well asevaluating the overall presentation 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 31stMarch 2016 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 the CentralGovernment of India in terms of Section 143 (11) of the Companies Act 2013 we give in theAnnexure - A a statement on the matters specified in paragraph 3 & 4 of the order.

2. As required by section 143(3) of the Act we report that:

(a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.

(b) In our opinion proper books of account as required by law have been kept by theCompany so far as appears from our examination of those books.

(c) The Balance sheet Statement of Profit and Loss and Cash Flow Statement dealt withby 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 31stMarch 2016 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2016 from being appointed as a director interms of Section 164(2) of the Act.

(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer ourseparate report in "Annexure - B"; and

(g) With respect to the other matters included in the Auditor's Report in accordancewith Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinion and to ourbest of our information and according to the explanations given to us :

i. The Company has disclosed the impact of pending litigations as at 31stMarch 2016 on its financial position in its financial statements. Refer Note no: 24.2 ofthe Financial Statements.

ii. The Company did not have any long-term contracts including derivatives contractsfor which there were any material foreseeable losses.

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

For GOKHALE & SATHE
CHARTERED ACCOUNTANTS
Firm Registration No.: 103264W
Sd/-
CA TEJAS J. PARIKH
PARTNER
M. No. 12321 5
Place: Mumbai
Date: 5th May 2016

ANNEXURE - A TO THE INDEPENDENT AUDITOR'S REPORT

In the Annexure as required by the Companies (Auditor's Report) Order 2016 issued bythe Central Government in terms of Section 143 (11) of the Companies Act 2013 on thebasis of checks as we considered appropriate we report on the matters specified inparagraph 3 and 4 of the said order to the extent applicable to the Company.

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of its fixed assets.

(b) The Company has phased programme of physical verification of fixed assets by whichall fixed assets are verified over a period of three years. In our opinion periodicity ofphysical verification is reasonable having regard to the size of the Company and nature ofthe assets. We have been informed that no material discrepancy was noted on such physicalverification.

(c) According to the information and explanations given to us and on the basis ofexamination of the records of the Company title deeds of immovable properties other thanself constructed immovable properties (buildings) are held in the name of the Companyexcept Leasehold Lands Plot no's R-A/13 E-106 E-105 S-33/34 (aggregate book value of '26.57 lakhs) are in the name of erstwhile entities which are merged with Company.According to explanations obtained from management in view of merger through courtscheme leasehold land rights are deemed to be transferred to the Company and procedurefor transferring in the name of the Company is in progress.

(ii) The stock of inventory has been physically verified during the year by theManagement at reasonable intervals except stock lying with third parties confirmation ofsuch stocks with the third parties has been obtained by the Company. In our opinion theprocedures of physical verification of inventory followed by the management are reasonableand adequate in relation to the size of the Company and the nature of its business. Thediscrepancies noticed on physical verification of stocks as compared to book records werenot material; however the same have been dealt with the books of account.

(iii) The Company had granted loans to its wholly owned subsidiary covered in theregister maintained under section 189 of the Companies Act 2013 ('the Act') during theyear.

(a) In our opinion the rate of interest and other terms and conditions on which theloans was granted was not prima facie prejudicial to the interest of the Company.

(b) The borrower have been regular in the payment of the principal and interest asstipulated by the management..

(c) The borrower has repaid the loan as at the year end and hence there is no overdueamounts in respect of such loan granted.

(iv) In our opinion and according to the information and explanations given to us theCompany has complied with provisions of section 185 and 186 of the Act with respect toloans and investments made.

(v) The Company has not accepted any deposits from public during the year.

(vi) The Company has maintained cost records as required under sub section 1 of section148 of the Companies Act 2013. We have not however carried out a detailed examinationof such records.

(vii) (a) The Company is regular in depositing with appropriate authorities undisputedstatutory dues including the

Provident Fund Employees state insurance Income tax Sales tax Wealth tax Servicetax duty of Customs duty of Excise Value added tax cess and any other statutory duesapplicable to it.

(b) According to the information and explanation given to us there are no dues ofincome tax sales tax service tax custom duty excise duty and value added tax whichhave not been deposited on account of any dispute except the following:

Forum where dispute is pending (Rs. in Lakhs)

Name of the Statute/Nature of the Dues Financial Year Commissioner/ Dy. Commisioner Appellate Authorities and Tribunals Total (Rs. in Lakhs)
The Central Excise Act 1944/Custom Duty/Service Tax/Interest & Penalty FY 2007-08 38.88/- 38.88/-
Maharashtra Sales Tax Act 2002/ Sales Tax FY 2007-08 15.18/- - 15.18/-
Income Tax Act/Tax Interest & Penalty FY 1999-2000 FY 2012-13 55.41/- - 55.41/-
Total (Rs. in Lakhs) 70.59/- 38.88/- 109.47/-

(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 Registration No.: 103264W
Sd/-
CA TEJAS J. PARIKH
PARTNER
M. No. 12321 5
Place: Mumbai
Date: 5th May 2016

ANNEXURE - B TO THE INDEPENDENT AUDITOR'S 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 31 March 2016 in conjunction with our audit of thestandalone 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'). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired 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 audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures 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 31 March 2016 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 Registration No.: 103264W
Sd/-
TEJAS J. PARIKH
Partner
M. No. 12321 5
Place: Mumbai
Date: 5th May 2016

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