Directors Report of Aarti Drugs Ltd.
Mar 31, 2023
Your Board of Directors ("Board") are pleased to present this 38th (Thirty Eighth) Annual Report on the business and operations of your Company ("the Company" or "Aarti Drugs Limited") together with the Audited Financial Statements of the Company for the Financial Year ended March 31,2023.
|
(Rs. in Lakhs) |
||||
|
Particulars |
Standalone |
Consolidated |
||
|
FY 2022-23 |
FY 2021-22 |
FY 2022-23 |
FY 2021-22 |
|
|
Revenue from Operations |
2,49,7971 |
2,25,117 |
2,71,6051 |
2,48,865 |
|
Other income |
..........223 |
477 |
..........219 |
1,132 |
|
Total Revenue |
..........2)50,620 |
2,25,595 |
.........2,71,825 |
2,49,996 |
|
Total Expenditure |
..........2,29,539 |
2,00,045 |
..........2,49,407 |
2,23,001 |
|
Profit before Depreciation, Amortisation Interest and tax Expenses |
28,464 |
32,296 |
30,780 |
34,075 |
|
Finance Cost |
3,253 |
2,006 |
..........3,329 |
2,075 |
|
Depreciation & Amortisation |
4,729 |
4,739 |
..........5,0321 |
5,005 |
|
Profit before Exceptional Items and Tax |
20,481 |
25,550 |
.........22,418 |
26,996 |
|
Exceptional Income |
- |
- |
- |
- |
|
Profit Before Tax |
20,481 |
25,550 |
22,418 |
26,996 |
|
Less: Total Tax Expenses |
5,200 |
6,050 |
5,782 |
6,496 |
|
Profit after Tax |
15,281 |
19,500 |
16,636 |
20,500 |
|
Earnings Per Share (in '') |
16.50 |
21.04 |
17.97 |
22.12 |
During the year under review, Standalone Revenue from operations of the Company was '' 2,49,797 lakhs as compared to '' 2,25,117 lakhs for FY 2021-22 registering a growth of 10.96%.
The Company has achieved Export Sales of '' 94,339 lakhs as against '' 83,787 lakhs for the last year, registering a growth of 12.59%. The Company''s EBITDA has been '' 28,464 lakhs as compared to '' 32,296 lakhs for FY 202122. PAT has been ''15,281 lakhs as against '' 19,500 lakhs for FY 2021-22.
Likewise, Consolidated Revenue from operations of the Company was '' 2,71,605 lakhs as compared to ''2,48,865 lakhs for FY 2021-22 registering a growth of 9.14%.
On Consolidated basis, The Company has achieved Export Sales of '' 107,141 lakhs as against '' 92,223 lakhs for the last year, registering a growth of 16.16%. The Company''s EBITDA has been '' 30,780 lakhs as compared to '' 34,075 lakhs for FY 2021-22. PAT has been '' 16,636 lakhs as against '' 20,500 lakhs for FY 2021-22.
CONSOLIDATED FINANCIAL STATEMENTS
In accordance with the provisions of Companies Act, 2013, Regulation 33 of the Listing Regulations, and applicable Accounting Standards, the Audited Consolidated Financial
Statements of the Company for the FY 2022-23, together with the Auditors'' Report, form part of this Annual Report.
Your Company has transferred '' 1,528.11 lakhs to the General Reserve (Previous Year '' 1949.98 lakhs).
During the year, the Company has declared and paid an Interim Dividend of ''1/- (@ 10%) each per share (of ''10/-each) aggregating to '' 926 lakhs.
The Dividend payout is in accordance with the Dividend Distribution Policy which is available on the website of the Company.
As per Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), the top 1000 listed companies shall formulate a Dividend Distribution Policy. Accordingly, the policy was adopted to set out the parameters and circumstances that will be taken into account by the Board in determining the distribution of dividend to its shareholders and/or retaining profits earned by the Company. A policy is available on the website of the Company and the web link thereto is: https:// www.aartidrugs.co.in/policies-and-related%20documents/
Your Company''s Equity Share Capital as on March 31, 2023 was as follows:
|
Particulars |
No. of Shares |
Face Value Per Share (in '') |
Total Amount (in '') |
|
Authorised Share Capital |
12,00,00,000 |
10 |
120,00,00,000 |
|
Issued, Subscribed & Paid-up Share Capital |
9,26,00,000 |
10 |
92,60,00,000 |
|
During the FY 2022-23, there was no change in the share capital of the Company. |
|||
The Company, has 3 (three) subsidiaries, namely, Pinnacle Life Science Private Limited, Aarti Speciality Chemicals Limited and Pinnacle Chile SpA.
Of the above subsidiaries, Pinnacle Life Science Private Limited and Aarti Speciality Chemicals Limited are wholly owned subsidiaries. Pinnacle Life Science Private Limited has been classified as the material subsidiary as it fulfills the criteria given under Regulation 16(1) (c) of the Listing Regulations. Pursuant to Regulation 24A of the Listing Regulations, the Secretarial Audit Report as prescribed in Section 204 of Companies Act, 2013 for the Material Subsidiary Company, Pinnacle Life Science Private Limited for financial year ended March 31, 2023 is annexed as "Annexure - C2" and forms an integral part of this Report. The Company has attached along with its financial statements, a separate statement containing the salient features of the financial statements of the said subsidiaries in "Form AOC-1" which is annexed as "Annexure - B" and forms an integral part of this Report.
During the year under review, the Board of Directors reviewed the affairs of the subsidiaries. Also in conformity with Section 134 of the Companies Act, 2013 and Rule 8(1) of the Companies (Accounts) Rules, 2014, Note 33 of Consolidated Financial Statement covers the highlights of performance of subsidiaries and their contribution to the overall performance of the Company during the year.
The Company does not have any Associate Company or Joint Venture. A policy on material subsidiaries has been formulated and is available on the website of the Company at the web link https://www.aartidrugs.co.in/policies-and-related%20documents/
The state of your Company''s affairs is given in the Management Discussion and Analysis, which forms part of this Annual Report.
DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMPs)
In accordance with the prevailing provisions of the Section 149 of the Companies Act, 2013 read with Regulation 17 of the Listing Regulations, as amended from time to time, as on March 31, 2023, the Board of Directors, comprises Twelve Directors (with Five Executive Directors, One Non-Executive
Director and Six Non-Executive Independent Directors). The Chairman of the Board is an Executive Director. The Board has highly qualified members and having varied experience in their respective fields.
At 37th AGM held on August 04, 2022, Shri Bhaskar N. Thorat (DIN: 01293824) and Smt. Neha R. Gada (DIN: 01642373) were appointed as an Independent Directors of the Company for the period of 3 years with effect from May 09, 2022.
Shri Rashesh C. Gogri (DIN:00066291) has been reappointed as the Managing Director of the Company for the period of 5 years with effect from October 31, 2022, approval of the members was sought by way of postal ballot for his appointment. Members approved the postal ballot resolution on October 29, 2022.
Except as stated above, there were no changes in the composition of the Board of Directors and KMPs during the year under review.
In accordance with the provisions of Section 152 of Companies Act, 2013, Shri Harit P Shah (DIN: 00005501) Executive Director of the Company is liable to retire by rotation at the ensuing Annual General Meeting and, being eligible, offer himself for re-appointment. The Board recommends his re-appointment for consideration of the Members. Pursuant to Regulation 36 of the Listing Regulations read with Secretarial Standard-2 on General Meetings, his brief profile is made available, as an Annexure to the Notice of the Annual General Meeting.
Pursuant to the provisions of Regulation 34(3) read with Schedule V to the Listing Regulations, the Company has obtained a Certificate from CS Sunil M. Dedhia (COP No. 2031), of Sunil M. Dedhia & Co. Company Secretary in Practice and the Secretarial Auditor of the Company, certifying that none of the Directors of the Company have been debarred or disqualified from being appointed or continuing as Directors of companies by the Securities and Exchange Board of India or by the Ministry of Corporate Affairs or by any such statutory authority. The said Certificate is annexed to the Corporate Governance Report of the Company for the FY 2022-23.
During the year under review, there was no change in the Key Managerial Personnel of the Company.
Independent DirectorsStatement on declaration given by Independent Directors under sub-section (6) of section 149
In accordance with Section 149(7) of the Companies Act, 2013, all Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16 of the Listing Regulations.
In the opinion of the Board of Directors, the Independent Directors fulfill the conditions specified in Companies Act, 2013 read with the Schedules and Rules issued thereunder as well as Listing Regulations and are independent from Management and hold the highest degree of integrity and are individuals who are experts in their respective fields with enormous experience. The terms and conditions of appointment of the Independent Directors are placed on the website of the Company at the weblink https://www. aartidrugs.co.in/independent-directors/
All the Independent Directors have complied with the Code for Independent Directors prescribed in Schedule IV to the Companies Act, 2013.
All the Independent Directors of the Company have enrolled their names in the ''Independent Directors Data Bank'' maintained by Indian Institute of Corporate Affairs ("IICA").
Familiarisation Programme for Independent Directors
The Company has a Familiarisation programme for its Independent Director which is imparted at the time of appointment of an Independent Director on Board as well as annually. During the year, the Independent Directors of the Company were familiarised and the details of familiarisation programmes imparted to them are placed on the website of the Company and the web link thereto is: https://www.aartidrugs.co.in/independent-directors/
DIRECTORS'' RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3) (c) of the Companies Act, 2013:
a. in the preparation of the annual financial statements for the year ended March 31, 2023, the applicable accounting standards have been followed. There are no material departures from the applicable accounting standards;
b. the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the
Company at the end of the Financial Year and of the profit and loss of the Company for that period;
c. the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the Assets of the Company and for preventing and detecting fraud and other irregularities;
d. the Directors have prepared the annual accounts on a going concern basis;
e. the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;
f. the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
The Board of Directors met Six (6) times during the Financial Year under review. The details of the number of meetings of the Board and its Committees held during the FY 2022-23 and the attendance of each Director/Member at these meetings are provided in the Corporate Governance Report forming part of the Annual Report. The intervening gap between the Board meetings was within the period prescribed under the Companies Act, 2013 and the Listing Regulations.
CORPORATE SOCIAL RESPONSIBILITY
Your Company through, Aarti Foundation and other Trusts/ NGOs - Our CSR arms undertake community interventions to enhance the lives of the communities. Besides our direct involvement, we partner with numerous implementing agencies to carry out need assessment and make impactful interventions. Our Focus areas during the year has been;
⢠Cluster & Rural Development
⢠Education & Skill Development
⢠Childcare & Healthcare Facilities
⢠Women Empowerment & Livelihood Opportunities
⢠Disaster Relief & Rehabilitation
⢠Eradication of Hunger & Poverty
⢠Water Conservation & Environment
⢠Research & Development work for upliftment of Society
The detailed policy on Corporate Social Responsibility is available on the website of the Company on the web link thereto is: https://www.aartidrugs.co.in/policies-and-relat-ed%20documents/
A brief note on various CSR initiatives undertaken during the year including the composition of the CSR Committee is presented in this Annual report. The CSR annual report is annexed as Annexure-A and forms an integral part of the Report.
The details of the composition of the Audit Committee, terms of reference, meetings held, etc. are provided in the Corporate Governance Report, which forms part of this Report. During the year there were no cases where the Board had not accepted any recommendation of the Audit Committee.
VIGIL MECHANISM/ WHISTLE BLOWER POLICY
The Company has established a Vigil Mechanism and Whistle Blower Policy for its Directors and Employees to report concerns about unethical behaviour, actual or suspected fraud, actual or suspected leak of UPSI or violation of Company''s Code of Conduct. It also provides for adequate safeguards against the victimisation of employees and allows direct access to the chairperson of the audit committee in exceptional cases. The said policy has been posted on the website of the Company and the web link thereto is: https://www.aartidrugs.co.in/policies-and-related%20documents/
The Company affirms that no person has been denied access to the Audit Committee Chairman.
The Company has a Policy on Materiality of Related Party Transaction and dealing with Related Party Transaction which is uploaded on the Company''s website at the web-link: https://www.aartidrugs.co.in/policies-and-related%20 documents/
All related party transactions that were entered into during the FY 2022-23 were on arm''s length basis and were carried out in the ordinary course of the business. There are no materially significant related party transactions made by the Company with Promoters, Key Managerial Personnel or other Designated Persons which may have potential conflict with interest of the Company at large.
The related party transactions are approved by the Audit Committee. Omnibus approval is obtained for the transactions which are foreseen and repetitive in nature. A statement of related party transactions is presented before the Audit Committee on a quarterly basis, specifying the nature, value and terms and conditions of transactions. A report of factual findings arising out of the accepted procedures carried out in regard to transactions with Related Parties is given by the Statutory Auditors on quarterly basis and the same is placed before the Audit Committee.
The details of related party transactions are provided in the accompanying financial statements.
Particulars of contracts or arrangements made with related parties
Since all related party transactions entered into by the Company were in ordinary course of business and were on an arm''s length''s basis, Form AOC-2 is not applicable to Company.
The Company has not accepted any deposits from the public and as such, no amount on account of principal or interest on deposits from the public was outstanding as on the date of the Balance Sheet.
The Company does not have any deposits which are not in compliance with the requirements of Chapter V of the Companies Act, 2013.
PARTICULARS OF LOANS, GUARANTEES, INVESTMENTS AND SECURITIES
Particulars of loans given, investments made, guarantees given and securities provided during the year under review and as covered under the provisions of Section 186 of the Companies Act, 2013 have been disclosed in the notes to the standalone financial statements forming part of the Annual Report.
The statement containing particulars of employees as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given in an Annexure and forms part of this report.
In terms of Section 136(1) of the Companies Act, 2013, the Report and the Accounts are being sent to the Members excluding the aforesaid Annexure. Any Member interested in obtaining a copy of the Annexure may write to the Company Secretary at the Registered Office of the Company for a copy of it.
HUMAN RESOURCES DEVELOPMENT AND INDUSTRIAL RELATIONS
Your Company recognises human resource as one of its prime resources. Your Company enjoyed excellent relationships with workers and staff during the year under review and considers them their most important assets. Your Company cares for its people, customers, suppliers, and community at large which reflects in the Company''s policy, programs and development efforts. As on March 31, 2023, the Company had 1006 permanent employees at its manufacturing plants and administrative office. Your Company is committed to build and strengthen our human capital by defining policies that support their growth, goals and help them achieve excellence.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There are no material changes and commitments affecting the financial position of the Company which have occurred between the end of financial year of Company to which the financial statements relate and the date of this Directors'' Report.
INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
Pursuant to the applicable provisions of the Companies Act, 2013 read with IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (''the Rules'') all unpaid or unclaimed dividends are required to be transferred by the Company to the IEPF established by the Government of India, after the completion of seven years. Further, according to the rules, the shares on which Dividend has not been paid or claimed by the Shareholders for seven consecutive years or more shall be transferred to the Demat account of the IEPF Authority. Accordingly the Company has transferred the unclaimed and unpaid dividends and corresponding shares as per the requirement of the IEPF Rules.
Pursuant to Section 92(3) read with Section 134(3)(a) of the Companies Act, 2013, the Annual Return as on March 31,2023 is available in prescribed format on the Company''s website at the web- link: https://www.aartidrugs.co.in/ annual-return/
Corporate Governance essentially involves balancing the interests of a Company''s stakeholders. Corporate Governance practices of our Company are a reflection of our values, polices and relationship with our stakeholders. Your Company has complied with the mandatory Corporate Governance requirements stipulated under Regulation 34(3) of the Listing Regulations. Report on Corporate Governance is annexed hereto forming part of this report together with certificate from the Statutory Auditor regarding report on Corporate Governance.
MANAGEMENT''S DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report with detailed review of operations, performance and future outlook, as stipulated under Regulation 34 read with Schedule V to the Listing Regulations is presented in a separate section forming part of this Annual Report.
BUSINESS RESPONSIBILITY & SUSTAINABILITY REPORTING (BRSR)
The Listing Regulations mandate the inclusion of the Business Responsibility & Sustainability Reporting as part of the Annual Report for top 1000 listed entities based on market capitalisation. BRSR for the year under review, as stipulated under Regulation 34 (f) of Listing Regulations read with SEBI Circular No. SEBI/HO/CFD/CMD-2/P/ CIR/2021/562 dated May 10, 2021 is in a separate section forming part of the Annual Report.
Pursuant to the provisions of Companies Act, 2013 and the Listing Regulations, a structured questionnaire was prepared after taking into consideration various aspects of the Board''s functioning, composition of the Board and its Committees, culture, execution and performance of specific duties, obligations and governance.
The performance of the Committees and Independent Directors were evaluated by the entire Board of Directors except for the Director being evaluated. The performance evaluation of the Chairman, Non-Independent Directors and Board as a whole was carried out by the Independent Directors. The Board of Directors expressed their satisfaction with the outcome of evaluation and the process followed thereof.
NOMINATION AND REMUNERATION POLICY
Pursuant to Section 178 of the Companies Act, 2013 and Regulation 19 of the Listing Regulations, your Company has in place a Nomination and Remuneration Policy which lays down a framework in relation to remuneration of Directors, Key Managerial Personnel and Senior Management of the Company. The policy also lays down criteria for selection and appointment of Board Members. The said policy has been posted on the website of the Company and the web link thereto is: https://www.aartidrugs.co.in/policies-and-related-documents/
The details of this policy are given in the Corporate Governance Report.
Your Company recognises that risk is an integral and unavoidable component of business and is committed to managing the risk in a proactive and effective manner. The Company aims to use risk management to take better informed decisions and improve the probability of achieving its strategic and operational objectives.
In compliance with Regulation 21 of Listing Regulations, your Company has a Risk Management Committee consisting of Shri Prakash M. Patil (Chairman), Shri Rashesh C. Gogri, Shri Harit P. Shah, Shri Harshit M. Savla, Shri Uday M. Patil, Shri Krishnacharya G. Akamanchi, Shri Adhish P. Patil and Shri Dhanaji L. Kakade. The Committee through its dynamic risk management framework continuously identifies, evaluates and takes appropriate measures to mitigate/ minimise various elements of risks. The Risk Management Committee meets at least 2 times in a year, to ensure that appropriate methodologies, processes and systems are in place to monitor and evaluate risks associated with the business of the Company and also to monitor and oversee the implementation of the Risk Management Policy.
The Company with its sheer focus committed to achieve 100% compliance. We have adopted a third-party managed IT-based Compliance Management System. It has a repository of all applicable regulations and requisite compliances. It has an in-built alert system that sends alerts to the users and intimates concerned personnel about upcoming compliances.
SAFETY, HEALTH AND ENVIRONMENT
Your Company is committed to ensure a sound Safety, Health and Environment (SHE) performance related to its activities, products and services. Your Company has been continuously taking various steps to develop and adopt Safer Process technologies and unit operations. Your Company is making continuous efforts for adoption of safe & environmental friendly production processes. Monitoring and periodic review of the designed SHE Management System are done on a continuous basis.
STATUTORY AUDITORS & AUDITORS'' REPORT
In accordance with the provisions of Section 139 of the Companies Act, 2013, the members at the 34th Annual General Meeting held on August 06, 2019 had approved the appointment of Kirtane & Pandit LLP, Chartered Accountants (Firm Registration No: 105215W/ W100057) for a term of 4 years, to hold office till the conclusion of 38th Annual General Meeting to be held in 2023.
In view of the above, the Board on the recommendation of the Audit Committee appointed Gokhale & Sathe, Chartered Accountants (Firm Registration. No. 103264W) as the Statutory Auditors of the Company to hold office from the conclusion of this Annual General Meeting till the conclusion of 43rd Annual General Meeting to be held in 2028. At the request of the Company, Gokhale & Sathe have communicated their eligibility and willingness to accept the office, if appointed. Members are requested to appoint Auditors and to fix their remuneration as mentioned in the notice convening the AGM.
There are no qualifications, reservations or adverse remarks or disclaimer made by the Auditor in their report. The Auditors of the Company have not reported any instances of fraud committed against the Company by its officers or employees as specified under Section 143(12) of the Companies Act, 2013.
In terms of the Section 148 of the Companies Act, 2013 read with the Companies (Cost Record and Audit) Rules, 2014, the Company is required to maintain cost accounting records and have them audited every year.
The Board has appointed GMVP & Associates LLP as Cost Auditor of the Company for FY 2023-24 under Section 148 and all other applicable provisions of the Act. Shareholder''s approval is being sought for ratification of the Remuneration proposed to be paid to GMVP & Associates LLP, Cost Auditor of the Company in respect of Cost Audit for the financial year ending March 31, 2024 as mentioned in the Notice convening the AGM.
The Company has maintained cost records as specified under section 148(1) of the Act.
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and rules made thereunder, the Company had appointed CS Sunil M. Dedhia (COP No. 2031), Proprietor of Sunil M. Dedhia & Co., Company Secretary in Practice to undertake the Secretarial Audit of the Company.
Pursuant to provisions of Section 204(1) of the Companies Act, 2013 and Regulation 24A of the Listing Regulations, the Secretarial Audit Report for the Financial year ended March 31, 2023 issued by CS Sunil M. Dedhia (COP No. 2031), of Sunil M. Dedhia & Co., Company Secretary in Practice and the Secretarial Auditor of the Company is annexed as Annexure-C1 and forms an integral part of this Report. During the year under review, the Secretarial Auditor had not reported any fraud under Section 143(12) of the Act. There is no qualification, reservation or adverse remark or disclaimer made by the Auditor in their report. As regards the observations of the Secretarial Auditor in their Report, the same is self-explanatory and need no further clarifications.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
Your Company has clearly laid down policies, guidelines and procedures that form part of internal control systems, which provide for automatic checks and balances. Your Company has maintained a proper and adequate system of internal controls. The Company has appointed Shri Raman S. Shah & Associates, Chartered Accountants as an Internal Auditor who periodically audits the adequacy and effectiveness of the internal controls laid down by the Management and suggests improvements. This ensures that all Assets are safeguarded and protected against loss from unauthorised use or disposition and that the transactions are authorised, recorded and reported diligently. Your Company''s internal control systems commensurate with the nature and size
of its business operations. Internal Financial Controls are evaluated and Internal Auditors'' Reports are regularly reviewed by the Audit Committee of the Board.
Statutory Auditors Report on Internal Financial Controls as required under Clause (i) of sub-section 3 of Section 143 of the Companies Act, 2013 is annexed with the Independent Auditors'' Report.
SECRETARIAL STANDARDS COMPLIANCE
During the year under review, the Company has complied with all the applicable Secretarial Standards issued by the Institute of Company Secretaries of India and approved by the Central Government pursuant to Section 118 of the Companies Act, 2013.
DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
Your Company is fully committed to uphold and maintain the dignity of every woman working with the Company. The Company has Zero tolerance towards any action on the part of any one which may fall under the ambit of ''Sexual Harassment at workplace''. The Policy framed by the Company in this regard provides for protection against sexual harassment of women at workplace and for prevention and redressal of such complaints.
The Company has complied with the provisions relating to the constitution of Internal Complaints Committee ("ICC") under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. ICC have been set up to redress complaints received regarding sexual harassment.
The status of the Complaints during the FY 2022-23 is as follows:
|
Particulars |
No. of Complaints |
|
Number of Complaints pending as on beginning of the Financial Year |
0 |
|
Number of Complaints filed and resolved during the Financial Year |
0 |
|
Number of Complaints pending as on the end of the Financial Year |
0 |
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGOParticulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo required
under Section 134(3)(m) of the Companies Act, 2013, read with Rule 8(3) of the Companies (Accounts) Rules, 2014, as amended from time to time, are provided in Annexure-D to this report.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS, COURTS OR TRIBUNALS
There were no significant material orders passed by the Regulators/Courts/Tribunals which would impact the going concern status of the Company and its future operations.
DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 DURING THE FINANCIAL YEAR ALONG WITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR
During the Financial Year 2022-23, there was no application made and proceeding initiated / pending by any Financial and/or Operational Creditors against your Company under the Insolvency and Bankruptcy Code, 2016 ("the Code"). Further, there is no application or proceeding pending against your Company under the Code.
DETAILS OF DIFFERENCE BETWEEN THE AMOUNT OF VALUATION AT THE TIME OF ONE TIME SETTLEMENT AND THE VALUATION DONE AT THE TIME OF TAKING A LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS ALONG WITH THE REASONS THEREOF
During the Financial Year 2022-23, the Company has not made any settlement with its bankers for any loan/facility availed or/and still in existence.
The Board of Directors places on record its sincere appreciation for the dedicated services rendered by the employees of the Company at all levels and the constructive cooperation extended by them. Your Directors would like to express their grateful appreciation for the assistance and support by all Shareholders, Government Authorities, Auditors, Financial Institutions, Customers, Employees, Suppliers, other business associates and various other stakeholders.
For and on behalf of the Board
Sd/-
Place: Mumbai Chairman, Managing Director & CEO
Date: April 29, 2023 DIN: 00005618
Mar 31, 2018
Boards'' Report
TO THE MEMBERS OF AARTI DRUGS LIMITED
The Directors have pleasure in presenting the 33rd (Thirty Third) Annual Report on the business and operations of the Company together with the Audited Financial Statements along with the Report of the Auditors for the year ended 31st March, 2018.
COMPANYâS FINANCIAL RESULTS
(Rs, in Lakhs)
|
Particulars |
Standalone |
Consolidated |
||
|
2017-2018 |
2016-2017 |
2017-2018 |
2016-2017 |
|
|
Revenue from Operations |
1,15,966 |
1,18,594 |
1,26,257 |
1,28,808 |
|
Other Operating Income |
117 |
353 |
105 |
400 |
|
Total Income from Operations |
1,16,083 |
1,18,947 |
1,26,362 |
1,29,208 |
|
Total Expenditure |
97,781 |
1,01,051 |
1,06,409 |
1,10,119 |
|
Profit Before Depreciation, Amortization, Interest and Tax Expenses |
18,302 |
17,896 |
19,953 |
19,090 |
|
Less: Interest |
3,301 |
3,448 |
3,496 |
3,642 |
|
Depreciation & Amortization |
3,780 |
3,669 |
4,006 |
3,846 |
|
Profit/(Loss) before other income |
11,221 |
10,778 |
12,450 |
11,601 |
|
Other Income |
||||
|
Profit/(Loss) Before Tax |
11,221 |
10,778 |
12,450 |
11,601 |
|
Less: Provision for taxation - Current |
3,015 |
2,753 |
3,280 |
2,913 |
|
- Earlier Year |
- |
-203 |
- |
-203 |
|
- Deferred |
865 |
680 |
940 |
711 |
|
Profit After Tax |
7,341 |
7,548 |
8,231 |
8,180 |
|
Add: Surplus brought forward |
32,882 |
25,334 |
33,771 |
25,589 |
|
Balance carried to Balance Sheet |
39,936 |
32,882 |
41,734 |
33,771 |
Note : Post the applicability of GST with effect from 1st July, 2017, Sales are disclosed net of GST. Accordingly, the Gross Sales figures for the year ended 31stMarch, 2018 are not comparable with the sales figures depicted for the previous years.
SHARE CAPITAL
During the Financial Year 2017-18, the Company has bought back 2,75,000 (Two Lacs Seventy Five Thousand) fully paid -up Equity shares of face value of Rs, 10/- (Rupees Ten only) each representing 1.15% of the total no. of Equity shares at a price of Rs, 875/- (Rupees Eight Hundred and Seventy Five only) per Equity share (including premium of Rs, 865/- per Equity share) payable in cash for an aggregate amount of Rs, 24,06,25,000/-(Rupees Twenty Four Crores Six Lacs and Twenty Five Thousand only), on a proportionate basis through the tender offer using stock exchange mechanism in accordance with the provisions of the Companies Act, 2013 (âthe Actâ) and the SEBI (Buyback of Securities) Regulations, 1998. Post Buy-back of shares, the paid-up Equity Share Capital of the Company was Rs, 23,58,21,000/-(Rupees Twenty Three Crores Fifty Eight Lacs Twenty One Thousand only).
The Company has neither issued shares with differential rights as to the dividend, voting or otherwise nor issued sweat equity shares. There is no scheme for employee stock option or provision of money for shares of the Company to the employees or Directors of the Company.
Your Directors do not propose to transfer any amount to reserves for the Financial Year ended 31st March, 2018.
DIVIDEND
Your Directors recommends a Final Dividend of Rs, 1/- (Rupee One only) per Equity share [10% of face value of Rs, 10/- each] aggregating to Rs, 2,35,82,100/-.
The Final Dividend, subject to approval of members at the ensuing Annual General Meeting (AGM), will be paid within the statutory period, to those members whose name appears in the Register of Members as on the date of Record Date i.e. Friday, 3rd August, 2018.
As per Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as âSEBI LODR Regulationsâ), top five hundred listed entities based on the market capitalization are required to formulate Dividend Distribution Policy. However, the Company has voluntarily formulated its Dividend Distribution Policy and the details of which are available on the Companyâs website viz. www.aartidrugs.co.in.
OPERATIONS REVIEW
During the year under review, Net Sales of the Company is Rs, 1,140.46 Crores (Previous Year: Rs, 1,088.72 Crores) registering a growth of 4.75 %.
The Company has achieved Export Sales of Rs, 429.28 Crores as against Rs, 422.95 Crores for the last year, registering a growth of 1.50 %.
EBITDA has been Rs, 183.02 Crores (Previous Year: Rs, 178.95 Crores), registering a growth of 2.27 %. PAT has been Rs, 73.41 Crores (Previous Year Rs, 75.48 Crores), registering a decline of 2.74 %.
INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY
Your Companyâs internal control systems commensurate with the nature and size of its business operations. Your Company has maintained a proper and adequate system of internal controls. This ensures that all Assets are safeguarded and protected against loss from unauthorized use or disposition and that the transactions are authorized, recorded and reported diligently.
The Audit Committee and M/s. Raman S. Shah & Associates, Chartered Accountants, Independent Internal Auditors, regularly review internal financial controls, operating systems and procedures for efficiency and effectiveness. The Internal Auditorâs Reports are regularly reviewed by the Audit Committee and provides decisive guidance.
DIRECTORSâ RESPONSIBILITY STATEMENT
As required u/s. 134(5) read with 134(3)(c) of the Act, your Directors hereby state that-
a) in the preparation of the Annual Accounts for the financial year ended 31st March, 2018, the applicable accounting standards have been followed. There are no material departures from the applicable accounting standards;
b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on 31st March, 2018 and of the profit of the Company for that period;
c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d) the Directors had prepared Annual Accounts on a going concern basis;
e) the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively and
f) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and such systems were adequate and operating effectively.
BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP) Composition
The composition of the Board is in conformity with Section 149 of the Act and Regulation 17 of the SEBI LODR Regulations. The Board continues to comprise of 12 (Twelve) Directors out of which 5 (Five) are Executive Directors, 1 (One) Non - Executive Director and 6 (Six) Non-Executive Independent Directors. The Chairman of the Board is an Executive Director.
Shri Prakash M. Patil, Chairman, Managing Director & Chief Executive Officer (CEO), Shri Rashesh C. Gogri, Managing Director, Shri Harshit M. Savla, Jt. Managing Director, Shri Harit P. Shah, Whole-time Director, Shri Uday M. Patil, Whole-time Director, Shri Adhish P. Patil, Chief Financial Officer (CFO) and Shri Vibhav S. Ranade, Company Secretary & Compliance Officer of the Company are the KMP of the Company as on the date of this report.
At the 32nd AGM of the Company held on 18th August, 2017, members approved re-appointment of Shri Prakash M. Patil as Managing Director, Shri Rashesh C. Gogri as Managing Director, Shri Harshit M. Savla as Jt. Managing Director and Shri Harit P. Shah as Whole-time Director for a further term of 5 (five) years respectively.
Except as stated above, there is no change in the composition of the Board of Directors and KMP during the year under review.
The Board has highly qualified members and having varied experience in their respective fields.
Retirement by Rotation
In accordance with the provisions of the Act and the Articles of Association of the Company, Shri Uday M. Patil (DIN: 01186406), Whole-time Director of the Company retires by rotation at the ensuing AGM and being eligible, offers himself for re-appointment as Director. The Board recommends his re-appointment for the consideration of the Members. Brief profile of Shri Uday M. Patil has been given in the Notice convening 33rd AGM.
Independent Directors
The Independent Directors of the Company hold office for a fixed term up to 31st March, 2019 and are not liable to retire by rotation. In accordance with Section 149(7) of the Act, each Independent Director has given a written declaration to the Company confirming that he/she meets the criteria of independence as mentioned under Section 149(6) of the Act and Regulation 16(b) of SEBI LODR Regulations. The terms and conditions of appointment of the Independent Directors are placed on the website of the Company viz. http://www.aartidrugs.co.in/ images/stories/shareholder/Terms%20&%20Conditions%20
of%20Appointment%20of%20Independent%20Directors.pdf.
Number of Meetings of the Board
During the year under review, the Board of Directors met 5 (Five) times. The agenda of the meeting is circulated to the members of the Board in advance along with necessary documents, reports, recommendations etc. so that each Board member can actively participate on agenda items during the meeting. The details of Board and Committee Meetings and the attendance of the Directors at such meetings are provided in the Corporate Governance Report, which forms part of this Annual Report. The intervening gap between the meetings was within the prescribed period under the Act and SEBI LODR Regulations.
BOARD EVALUATION
During the year under review, the Board evaluated its performance and as well as that of its Committees and Individual Directors, including the Chairman of the Board. Separate exercise was carried out to evaluate the performance of Non Independent Directors including the Board Chairman who were evaluated on parameters such as Key achievements, short term and long term targets, challenges faced, Implementation of Strategic decisions, organizational success, participation and attendance in Board and Committee Meetings etc.
During the year under review, the Independent Directors met on 9th March, 2018 to discuss inter alia the following:
a. Evaluation of Performance of Non-Independent Directors and the Board of Directors as a Whole;
b. Evaluation of Performance of the Chairman of the Company taking into account the views of Executive Directors & Non Executive Directors and
c. Evaluation of the quality, content and timeliness of flow of information between the Management and the Board of Directors that is necessary for the Board to effectively & reasonably perform their duties.
The evaluation of the Independent Directors was carried out by the entire Board and that of the Chairman and Non-Independent Directors was carried out by the Independent Directors.
Independent Directors were evaluated on the parameters such as attendance and participations in the meetings, timely inputs on the minutes of the meetings, adherence to ethical standards & code of conduct of the Company, disclosure of Non Independence, as and when exists and disclosure of interest, interpersonal relations with other Directors and Management, understanding of the Company and the external environment in which it operates, contribution to strategic direction, safeguarding interest of whistle-blowers under vigil mechanism and safeguard of confidential information.
The Directors were satisfied with the evaluation results, which reflected the overall engagement of the Board and its Committees with the Company. A detailed disclosure on the manner of the Board evaluation undertaken by the Board has been provided in the Corporate Governance Report, which forms part of this Annual Report.
FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS
The Chairman and Managing Director have one to one discussion with all the Directors to familiarize them with the Companyâs operations and nature of industry in which Company operates. Further, the Company has put in place a system to familiarize the Independent Directors about the Company, its products, business and on-going events relating to the Company. The details of such familiarization programmes for Independent Directors are posted on the website of the Company viz. http://www.aartidrugs.co.in/images/stories/details%20of%20 familiarization%20programmes.pdf.
DETAILS RELATING TO DEPOSITS COVERED UNDER CHAPTER V OF ACT
Your Company has not accepted any deposits within the meaning of Section 73 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 and no amount on account of principal or interest on public deposits was outstanding as on 31st March, 2018.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
Pursuant to the provisions of Section 186 of the Act, the details of Loans, Guarantees and Investments made by the Company as at 31st March, 2018 are given in the notes to the Financial Statements.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
The transactions entered with related parties are approved by the Audit Committee, to ensure that the same are in line with the provisions of the Act and the Related Party Transaction Policy. Prior omnibus approval of the Audit Committee is obtained for the transactions which are of a foreseen and repetitive in nature. The transactions entered into pursuant to the omnibus approval so granted are audited and statement specifying the nature, value and terms & conditions of all related party transactions are placed before the Audit Committee for its review on a quarterly basis. The statement is supported by a certification from the Jt. Managing Director and the CFO. The details of related party transactions are provided in the accompanying financial statements.
In conformity with the requirements of the Act read with SEBI LODR Regulations, the Policy on Related Party Transactions as approved by the Board is available on the Companyâs website and can be accessed through www.aartidrugs.co.in.
All transactions entered into with related parties during the year under review were in the ordinary course of business and on armâs length basis. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3)(h) of the Act, in Form AOC-2 is not applicable to your Company.
EXTRACT OF ANNUAL RETURN
As required by Section 92(3) of the Act and rules framed there under, the extract of the Annual Return in Form MGT-9 is enclosed as âAnnexure-Aâ.
SUBSIDIARY
The Company has one subsidiary, namely, Pinnacle Life Science Private Limited (PLSPL). The Company has attached along with its financial statements, a separate statement containing the salient features of the financial statements of the said subsidiary in âForm AOC-1â which is annexed as âAnnexure - Bâ.
CONSOLIDATED FINANCIAL STATEMENTS
As stipulated under the provisions of the SEBI LODR Regulations, the Consolidated Financial Statements have been prepared by the Company in accordance with the applicable Accounting Standards issued by Institute of Chartered Accountants of India (ICAI). The Audited Consolidated Financial Statement together with Auditorsâ Report forms part of the Annual Report.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There are no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of this Boardsâ Report.
BUSINESS RISK MANAGEMENT
During the year under review, the Company has identified and evaluated elements of business risk. Business risk, inter-alia, further includes fluctuations in foreign exchange, Raw Material Procurement risk, Environmental & Safety Risk, Working Capital Risk, Market Risk and Business Operations Risk. The risk management framework defines the risk management approach of the Company and includes periodic review of such risk and also documentation, mitigating controls and reporting mechanism of such risks.
The Board of Directors and senior management team currently assess the operations and operating environment to identify potential risks and take necessary mitigation actions.
DISCLOSURES RELATED TO COMMITTEES & POLICIES 1. Audit Committee
The Audit Committee is constituted in conformity with the provisions of Section 177 of the Act and Regulation 18 of the SEBI LODR Regulations. The details regarding the composition, terms of reference, meetings and attendance of members of Audit Committee of the Company are disclosed in the report of Corporate Governance, which forms part of this Annual Report.
During the year under review, the Board of Directors of the Company had accepted all the recommendations of the Audit Committee.
2. Nomination & Remuneration Committee
The Nomination & Remuneration Committee of Directors is constituted in accordance with the requirements of Section 178 of the Act and Regulation 19 of SEBI LODR Regulations.
The Company strives to maintain an appropriate combination of Executive, Non-Executive and Independent Directors. In terms of provisions of Section 178 of the Act, the Nomination and Remuneration Committee considers and recommends the Board on appointment and remuneration of Directors and KMPs.
The details regarding composition, term of references, powers, functions, scope, meetings and attendance of members are included in Corporate Governance Report which forms part of the Annual Report.
The policy of the Company on remuneration of Directors, KMPs, and other employees including criteria for determining qualifications, positive attributes, Independence of a Director and other matters provided under sub section (3) of Section 178 of the Act is annexed to the Boardsâ Report as âAnnexure - Câ.
3. Stakeholders Relationship Committee
The Stakeholders Relationship Committee is constituted in accordance with the provisions of Section 178 of the Act and Regulation 20 of SEBI LODR Regulations.
The details regarding composition, term of references, powers, functions, scope, meetings and attendance of members are included in Corporate Governance Report, which forms part of this Annual Report.
4. Corporate Social Responsibility Committee (CSR)
As per the provisions of Section 135 of the Act, read with Companies (Corporate Social Responsibility Policy) Rules, 2014, the Board of Directors has constituted a CSR Committee and the Board of Directors of the Company has approved CSR Policy based on the recommendations of the CSR Committee.
The CSR Policy is available on the Companyâs website and can be accessed through http://www.aartidrugs.co.in/ CSR%20policy.pdf.
Your Company actively contributes to the following segments -
i) Education & Skill Development
Your Company through Aarti Foundation and Various other NGOâS has been doing work in this segment. In this year, the Company has provided funds for construction of schools located at Sarigam, Gujarat. The Company has also actively contributed towards Education Welfare during the Year under review.
ii) Health
Your Company has provided funds for Medical Treatment to Government School Students located at Palghar, Maharashtra. During the Year under review, the Company has contributed towards Medical Welfare in the State of Maharashtra.
iii) Environment
Your Company has entered into an agreement with the Governor, Government of Maharashtra, Through Deputy Conservator of Forest, Dahanu Forest Division, Dahanu through local NGO M/S. Sudha Pratishthan, Masvan, Palghar to participate and assist Government in implementing A forestation programme in the degraded forest land of Dahanu Forest Division spread over 100 Hectares Government Land over a period of
7 years. During the year under review, the Company has contributed towards Green Environment project in Ratnagiri District of Maharashtra.
iv) Social Welfare
During the year under review, your Company has actively contributed for issues pertaining to Social Welfare in the District Palghar, Maharashtra.
In addition to above, your Company participates into a spectrum of CSR activities evolving around the general up-liftmen of the economically backward class of people. Your Company also makes active contribution to various local NGOs to assist in the relief measures in the affected areas.
During the year under review, the Company has spent Rs, 199.83 Lakhs on CSR activities.
The Annual Report on CSR activities is annexed as âAnnexure - Dâ and forms an integral part of the Report.
5. Vigil Mechanism / Whistle Blower Policy
The Company has a vigil mechanism/whistle blower policy to deal with instance of fraud and mismanagement. The details of the said policy is explained in the Corporate Governance Report and also posted on the website of the Company viz. http://www.aartidrugs.co.in/WHISTLE-BLOWER-POLICY.pdf.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS, COURTS OR TRIBUNALS
There are no significant material orders passed by the Regulators/Courts/Tribunals which would impact the going concern status of the Company and its future operations.
CORPORATE GOVERNANCE
As per SEBI LODR Regulations, a separate section on Corporate Governance practices followed by the Company, together with a certificate from the Companyâs Auditors confirming compliance, which forms part of this Annual Report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Pursuant to Regulation 34 of SEBI LODR Regulations, the Management Discussion and Analysis Report for the year under review is presented in a separate section, which forms part of this Annual Report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated in Section 134(3)(m) of the Act and rules framed there under is enclosed herewith as âAnnexure - Eâ.
AUDITORS -a) Statutory Auditor
At the 32nd AGM held on 18th August, 2017, M/s. GBCA & Associates, Chartered Accountants (Firm Regn. No. 103142W) were appointed as Statutory Auditors of the Company to hold office till the conclusion of the 33rd AGM. Hence, M/s. GBCA & Associates will retire as Companyâs Auditors at the conclusion of the ensuing 33rd AGM.
As proposed by the Audit Committee, the Board of Directors of the Company has recommended appointment of M/s. Kirtane & Pandit LLP, Chartered Accountants (Firm Registration No. 105215W/W100057) as the new Statutory Auditors of the Company to hold office as such from the conclusion of 33rd AGM to the conclusion of 34th AGM in terms of provisions of Section 139(2) of the Act.
M/s. Kirtane & Pandit LLP have informed the Company that their appointment, if made, would be within the limits prescribed under Section 141 of the Act. M/s. Kirtane & Pandit LLP have confirmed that they have subjected themselves to the peer review process of the ICAI and hold valid certificates issued by the Peer Review Board of ICAI. M/s. Kirtane & Pandit LLP have also furnished a declaration in terms of Section 141 of the Act that they are eligible to be appointed as auditors and they have not incurred any disqualification under the Act.
There are no qualifications, reservation or adverse remarks or disclaimers made by the Statutory Auditors in their Auditorsâ Report. Further, there are no frauds, details of which as required to be reported under Section 143(12) of the Act.
b) Cost Auditor
M/s. GMVP & Associates LLP were appointed as Cost Auditor by the Company under Section 148 of the Act. The due date for filing the Cost Audit Reports in XBRL mode for the financial year ended 31st March, 2017 was 27th September, 2017 and the Cost Audit Report was filed by the Cost Auditor on 26th October, 2017. The due date for filing the Cost Audit Reports for the Financial Year ended 31st March, 2018 is 27th September, 2018.
On the recommendation of the Audit Committee, the Board of Directors in its meeting held on 16th May, 2018 has reappointed M/s. GMVP & Associates LLP, Cost Accountants as Cost Auditors of the Company for the Financial Year 2018 - 19. The Company is seeking the ratification of the remuneration to be paid to M/s. GMVP & Associates LLP, Cost Auditors of the Company in respect of Cost Audit for the financial year ended 31st March, 2019 as mentioned in the Notice convening 33rd AGM.
c) Secretarial Auditor
Pursuant to provisions of Section 204(1) of the Act, the Secretarial Audit Report for the financial year ended 31st March, 2018 issued by M/s. Sunil M. Dedhia & Co., Practicing Company Secretaries and the Secretarial Auditor of the Company is annexed as âAnnexure - Fâ. In connection with the observation in the said report, it is clarified that non - submission of Form SH-11 in respect of return of Buyback of Securities and transfer of shares in respect of which dividend was unpaid or unclaimed for the seven years to demat account opened by Investor Education and Protection Fund Authorities was delayed due to technical difficulties encountered on Ministry of Corporate Affairs portal and with Registrar & Shares Transfer Agents respectively. Necessary steps are being taken to file / transfer the same.
COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND GENERAL MEETINGS
During the Financial Year, your Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI).
PARTICULARS OF EMPLOYEES
Disclosure pertaining to the remuneration and other details as required under Section 197(12) of the Act read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed as âAnnexure - Gâ. However, as per the provisions of the section 136(1) of the Act, this Report is sent to the shareholders excluding the said information. Any shareholder interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.
HUMAN RESOURCES, ENVIRONMENT & SAFETY
Your Company recognizes its human resources as one of its prime resources. The relations between the Management and the Staff Members remained very cordial throughout the year under review. As on 31st March, 2018, the Company had 1,145 permanent employees at its manufacturing plants and administrative office.
The Company has constituted an Internal Complaint Committee pursuant to the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 for prevention, prohibition and redressal of complaints/grievances on the sexual harassment of women at work places. Your Directors further states that during the year under review, there were no cases filed pursuant to the above Act.
GREEN INITIATIVE
Your Company has adopted green initiative to minimize the impact on the environment. The Company has been circulating the copy of the Annual Report in electronic format to all those members whose email addresses are available with the Company. Your Company appeals other Members also to register themselves for receiving Annual Report in electronic form.
APPRECIATION
We place on record our sincere Green appreciation to the employees of the Company at all levels for their co-operation and dedicated services. We also thank all our customers and suppliers who are always co-operative.
We also express our sincere thanks to Bankers, Customers, Financial Institutions, Shareholders and other stakeholders for their continued support.
For and on behalf of the Board of Directors of Aarti Drugs Limited
Sd/-
Prakash M. Patil
Place: Mumbai Chairman, Managing Director & CEO
Date: 16th May, 2018 DIN: 00005618
Mar 31, 2017
TO THE MEMBERS OF AARTI DRUGS LIMITED
The Directors have pleasure in presenting the Thirty Second Annual Report together with the Audited Financial Statements along with the Report of the Auditors for the year ended 31st March, 2017.
COMPANYâS FINANCIAL RESULTS
(Rs.in Lakhs)
|
Particulars |
Standalone |
Consolidated |
||
|
2016-2017 |
2015-2016 |
2016-2017 |
2015-2016 |
|
|
Net Sales/ Income from Operations |
108872 |
107073 |
119517 |
113488 |
|
Other Operating Income |
353 |
476 |
400 |
496 |
|
Total Income from Operations |
109226 |
107550 |
119917 |
113984 |
|
Total Expenditure |
91455 |
90379 |
100952 |
96415 |
|
Profit Before Depreciation, Amortization, Interest and Tax Expenses |
17771 |
17171 |
18965 |
17569 |
|
Less: Interest |
3448 |
4328 |
3642 |
4389 |
|
Depreciation & Amortization |
3669 |
3558 |
3846 |
3653 |
|
Profit/(Loss) before other income |
10654 |
9284 |
11477 |
9527 |
|
Other Income |
- |
- |
- |
- |
|
Profit/(Loss) Before Tax |
10654 |
9284 |
11477 |
9527 |
|
Less: Provision for taxation - Current |
2753 |
2115 |
2913 |
2115 |
|
- Earlier Year |
(203) |
- |
(203) |
- |
|
- Deferred |
680 |
540 |
711 |
540 |
|
Profit After Tax |
7424 |
6629 |
8056 |
6872 |
|
Add: Surplus brought forward |
27059 |
23068 |
27314 |
23033 |
|
Profit available for appropriation |
34483 |
29697 |
35371 |
29906 |
|
Appropriations: |
||||
|
Transfer to General Reserve |
- |
670 |
- |
670 |
|
Proposed Dividend |
- |
- |
- |
- |
|
1st Interim Dividend |
- |
545 |
- |
545 |
|
2nd Interim Dividend |
- |
363 |
- |
363 |
|
3rd Interim Dividend |
- |
727 |
- |
727 |
|
Tax on Dividend |
- |
333 |
- |
333 |
|
Balance carried to Balance Sheet |
34483 |
27059 |
35371 |
27314 |
SHARE CAPITAL
During the financial year 2016-17, the Company has bought back 3,60,000 (Three Lacs Sixty Thousand) fully paid - up Equity shares of face value of Rs.10/- (Rupees Ten only) each representing up to 1.49% of the total no. of Equity shares at a price of Rs.750/- per Equity share (including premium of Rs.740/- per share) for an aggregate amount of Rs.27,00,00,000/- (Rupees Twenty Seven Crores only), on a proportionate basis through the tender offer using stock exchange mechanism in accordance with the provisions of the Companies Act, 2013 and the SEBI (Buyback of Securities) Regulations, 1998. Post Buy-back of shares, the paid-up Equity Share Capital as on 31st March, 2017 was Rs.23,85,71,000/-.
The Company has neither issued shares with differential rights as to dividend, voting or otherwise nor issued sweat equity shares. There is no scheme for employee stock option or provision of money for shares of the Company to employees or Directors of the Company.
DIVIDEND
Your Directors recommend a dividend of 10% i.e. Re. 1/- per Equity Share of Face Value of Rs.10/- each aggregating to Rs.2,38,57,100/-.
As per Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, top five hundred listed entities based on the market capitalization are required to formulate Dividend Distribution Policy. The listed entities other than top five hundred listed entities based on market capitalization may formulate their Dividend Distribution Policies on a voluntary basis. Accordingly, the Company has formulated its Dividend Distribution Policy and the details of which are available on the Companyâs website www.aartidrugs.com.
OPERATIONS REVIEW
During the year under review, Gross Sales of the Company is Rs.1185.93 Crores (Previous Year: Rs.1166.10 Crores) registering a growth of 1.70%.
The Company has achieved Export Sales of Rs.422.95 Crores as against Rs.389.19 Crores for the last year, registering a growth of 8.67%.
EBITDA has been Rs.177.71 Crores (Previous Year: Rs.171.70 Crores), registering a growth of 3.50%. PAT has been Rs.74.24 Crores (Previous Year Rs.66.29 Crores), registering a growth of 11.99%.
INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY
Your Companyâs internal control systems commensurate with the nature and size of its business operations. Your Company has maintained a proper and adequate system of internal controls. This ensures that all Assets are safeguarded and protected against loss from unauthorized use or disposition and that the transactions are authorized, recorded and reported diligently.
The Audit Committee and M/s. Raman S. Shah & Associates, Chartered Accountants, Independent Internal Auditors, regularly review internal financial controls and operating systems and procedures for efficiency and effectiveness. The Internal Auditorâs Reports are regularly reviewed by the Audit Committee of the Board.
DIRECTORSâ RESPONSIBILITY STATEMENT
As required u/s. 134(3)(c) of the Companies Act, 2013, your Directors hereby state that-
a) in the preparation of the Annual Accounts for the financial year ended 31st March, 2017, the applicable accounting standards have been followed. There are no material departures from the applicable accounting standards;
b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on 31st March, 2017 and of the profit of the Company for that period;
c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d) the Directors had prepared Annual Accounts on a going concern basis;
e) the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively and
f) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and such systems were adequate and were operating effectively.
BOARD OF DIRECTORS
Composition
Aarti Drugs Limited (ADL) Board presently consists of 12 Directors out of which 7 (Seven) are Non-Executive. Out of 7 (Seven) Nonexecutive Directors 6 (Six) Directors are Independent Directors.
Retirement by Rotation
In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Shri Harshit M. Savla (DIN: 00005340), Jt. Managing Director and Shri Prakash M. Patil (DIN: 00005618), Chairman, Managing Director & CEO of the Company retires by rotation and being eligible have offered themselves for re-appointment as Directors.
Independent Directors
The Independent Directors hold office for a fixed term up to 31st March, 2019 and are not liable to retire by rotation. In accordance with Section 149(7) of the Companies Act, 2013, each Independent Director has given a written declaration to the Company confirming that he/she meets the criteria of independence as mentioned under Section 149(6) of the Companies Act, 2013 and SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.
Number of Meetings of the Board
The Board of Directors met 5 (Five) times in the year 2016 - 17. The details of Board and Committee Meeting and the attendance of the Directors at such meetings are provided in the Corporate Governance Report.
BOARD EVALUATION
During the year, the Board evaluated its performance and as well as that of its Committees and Individual Directors, including the Chairman of the Board. Separate exercise was carried out to evaluate the performance of Non-Independent Directors including the
Chairman of the Board who were evaluated on parameters such as Key achievements, Short term and long term targets, challenges faced, Implementation of Strategic decisions, organizational success, participation and attendance in Board and Committee Meetings etc.
The evaluation of the Independent Directors was carried out by the entire Board and that of the Chairman and Non-Independent Directors was carried out by the Independent Directors.
Independent Directors were evaluated on the parameters such as attendance and participations in the meetings and timely inputs on the minutes of the meetings, adherence to ethical standards & code of conduct of the Company, disclosure of non-independence, as and when exists and disclosure of interest, interpersonal relations with other Directors and Management, understanding of the Company and the external environment in which it operates and contribution to strategic direction, safeguarding interest of whistleblowers under vigil mechanism and safeguard of confidential information.
The Directors were satisfied with the evaluation results, which reflected the overall engagement of the Board and its Committees with the Company.
FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS
The Chairman and Managing Director have one to one discussion with all Directors to familiarize them with the Companyâs operations. Further the Company has put in place a system to familiarize the Independent Directors about the Company, its products, business and on-going events relating to the Company. The details of such familiarization programmes for Independent Directors are posted on the website of the Company viz. www.aartidrugs.co.in/images/stories/details%20of%20familirisation%20programme.pdf.
KEY MANAGERIAL PERSONNEL
Shri Prakash M. Patil, Chairman, Managing Director & Chief Executive Officer, Shri Rashesh C. Gogri, Managing Director, Shri Harshit M. Savla, Jt. Managing Director, Shri Harit P. Shah, Whole-time Director, Shri Uday M. Patil, Whole-time Director, Shri Adhish P. Patil, Chief Financial Officer and Shri Vibhav S. Ranade, Company Secretary & Compliance Officer of the Company are the Key Managerial Personnel of the Company as on the date of this report.
DETAILS RELATING TO DEPOSITS COVERED UNDER CHAPTER V OF COMAPANIES ACT, 2013
Your Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014 and no amount on account of principal or interest on public deposits was outstanding as on the date of the balance sheet.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013, are given in the notes to the Financial Statements.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All related party transactions made during the financial year 2016-17 were on armâs length basis and were in the ordinary course of business. All transactions with related parties are placed before the Audit Committee as also the Board for approval. Prior omnibus approval of the Audit Committee is obtained for the transactions which are of a foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted are specifically certified by Statutory Auditors and statement specifying the nature, value and terms & conditions of all related party transactions is placed before the Audit Committee and the Board of Directors for their approval on a quarterly basis. The statement is supported by a certification from the Jt. Managing Director and the Chief Financial Officer (CFO). The details of related party transactions are provided in the accompanying financial statements.
The Policy on Related Party Transactions as approved by the Board is available on the Companyâs website and can be accessed through www.aartidrugs.com
All transactions entered into with related parties during the year were on an armâs length basis and were in the ordinary course of business. Accordingly, there are no transactions that are required to be reported in Form AOC-2.
EXTRACT OF ANNUAL RETURN
As required by Section 92(3) of the Companies Act, 2013 and rules framed there under, the extract of the Annual Return in Form MGT-9 is enclosed as "Annexure- Aâ.
SUBSIDIARY
The Company has one non - material subsidiary, namely, Pinnacle Life Science Private Limited. The Company has attached along with its financial statement, a separate statement containing the salient features of the financial statement of the said subsidiary in âForm AOC-1â which is annexed as "Annexure - Bâ.
CONSOLIDATED FINANCIAL STATEMENTS
As stipulated under the provisions of the SEBI (Listing Obligations & Disclosure Requirement), Regulations, 2015, the Consolidated Financial Statements have been prepared by the Company in accordance with the applicable Accounting Standards. The Audited Consolidated Financial Statement together with Auditorsâ Report form part of the Annual Report.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION
There are no material changes and commitments, affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statement relate and the date of the report.
BUSINESS RISK MANAGEMENT
During the year under review, the Company has identified and evaluated elements of business risk. Business risk, inter-alia, further includes fluctuations in foreign exchange, Raw Material Procurement risk, Environmental & Safety Risk, Working Capital Risk, Market Risk and Business Operations Risk. The risk management framework defines the risk management approach of the Company and includes periodic review of such risk and also documentation, mitigating controls and reporting mechanism of such risks. The Board of Directors and senior management team currently assess the operations and operating environment to identify potential risks and take necessary mitigation actions.
DISCLOSURES RELATED TO COMMITTEES & POLICIES
1. Audit Committee
The Audit Committee of Directors is constituted as per the provisions of Section 177 of the Companies Act, 2013. The Composition of the Audit Committee is in conformity with the provisions of the said section and SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. The composition & terms of reference of Audit Committee of the Board of Directors of the Company is disclosed in the report of Corporate Governance, which forms part of this report.
During the year under review, the Board of Directors of the Company had accepted all the recommendations of the Audit Committee.
2. Nomination & Remuneration Committee
The Nomination & Remuneration Committee of Directors is constituted in accordance with the requirements of Section 178 of the Companies Act, 2013.
The Company strives to maintain an appropriate combination of executive, non-executive and Independent Directors. In terms of provisions of Section 178 of the Companies Act, 2013, the Nomination and Remuneration Committee considers and recommends the Board on appointment and remuneration of Directors and Key Managerial Personnel and the Companyâs Nomination and Remuneration Policy is enclosed as "Annexure - Câ.
3. Stakeholders Relationship Committee
Pursuant to Section 178 of the Companies Act, 2013, the Board of Directors has constituted the Stakeholders Relationship Committee, details of which are given in the Corporate Governance Report.
The Company Secretary acts as the secretary to the Committee.
4. Corporate Social Responsibility Committee
As per the provisions of Section 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014, the Board of Directors has constituted a Corporate Social Responsibility (CSR) Committee and the Board of Directors of the Company has approved CSR Policy based on the recommendations of the CSR Committee.
The CSR Policy is available on the Companyâs website and can be accessed through www.aartidrugs.com.
Your Company actively contributes to the following segments-
i. Education & Skill Development
ii. Health
iii. Environment
iv. Social Welfare
v. Promotion of Sports and allied trainings
i. Education & Skill Development
Your Company through Aarti Foundation and various other NGOâs has been doing work in this segments. In this year, the Company has provided furniture to School located in the state of Maharashtra. The Company has also actively contributed towards Literacy Education Programmes during the year under review.
ii. Health
Your Company through Aarti Foundation is in process of developing Medical College in the State of Gujarat. Also the Company has provided various infrastructure facilities to the Hospitals in the State of Maharashtra.
iii. Environment
Your Company has entered into an agreement with The Governor, Government of Maharashtra through Deputy Conservator of Forest, Dahanu Forest Division, Dahanu through local NGO M/s. Sudha Pratishthan, Masvan, Palghar to participate and assist Government in implementing Afforestation Programme in the degraded forest land of Dahanu Forest Division spread over 100 Hectares Government Land over a period of 7 years. During the year under review, the Company has successfully completed plantation programme of 60,000 trees in the Palghar District.
iv. Social Welfare
During the year under review, your Company has actively contributed for issues pertaining to Social Welfare in the District Palghar, Maharashtra.
v. Promotion of Sports and allied trainings
In order to impart trainings to promote rural sports, the Company has conducted various sports activities in the State of Sikkim during the year under review.
In addition to above, your Company participates into a spectrum of CSR activities evolving around the general up-liftment of the economically backward class of people. Your Company also makes active contribution to various local NGOs to assist in the relief measures in the affected areas.
During the year under review, the Company was required to spend Rs.185.11 Lakhs on CSR activities. However, the Company has spent Rs.185.07 Lakhs on CSR activities. There was a slight difference between estimated expenditure and actual expenditure on account of change in projectâs cost estimation. The Company is constantly evaluating various projects to fulfill its obligations towards the society.
The Annual Report on CSR activities is annexed as "Annexure - Dâ and forms an integral part of the Report.
5. Vigil Mechanism / Whistle Blower Policy
The Company has a vigil mechanism/whistle blower policy to deal with instance of fraud and mismanagement. The details of the said policy is explained in the Corporate Governance Report and also posted on the website of the Company, viz. www. aartidrugs.com
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant material orders passed by the Regulators/Courts which would impact the going concern status of the Company and its future operations.
CORPORATE GOVERNANCE
A separate section on Corporate Governance practices followed by the Company, together with a certificate from the Companyâs Auditors confirming compliance, forms a part of this Annual Report, as per SEBI (Listing Obligations & Disclosure Requirements), Regulations, 2015.
MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis Report as required under the provisions of SEBI Regulations, 2015 is annexed hereto forming part of this Report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated in Section 134(3)(m) of the Companies Act, 2013 and rules framed there under is enclosed herewith as "Annexure - Eâ.
STATUTORY AUDITORS
At the Annual General Meeting held on 11th July, 2014, M/s. Gokhale & Sathe, Chartered Accountants (Firm Regn. No. 103264W) was appointed as Statutory Auditors of the Company to hold office till the conclusion of the Thirty Second Annual General Meeting. Hence, M/s. Gokhale & Sathe will retire as Companyâs Auditors at the conclusion of the ensuing 32nd Annual General Meeting.
The Audit Committee of the Company has proposed and the Board of Directors of the Company has recommended appointment of M/s. GBCA & Associates (Firm Registration No. 103142W) as the new Statutory Auditors of the Company to hold office as such from the conclusion of 32nd Annual General Meeting to the conclusion of 33rd Annual General Meeting in terms of provisions of Section 139(2) of the Companies act, 2013. M/s. GBCA & Associates are proposed to be appointed for a period of one year i.e. from the conclusion of 32nd Annual General Meeting till the conclusion of 33rd Annual General Meeting of the Company. M/s. GBCA & Associates have informed the Company that their appointment, if made, would be within the limits prescribed under Section 141 of the Companies Act, 2013. M/s. GBCA & Associates have confirmed that they have subjected themselves to the peer review process of the Institute of Chartered Accountants of India (ICAI) and hold valid certificates issued by the Peer Review Board of the ICAI. M/s. GBCA & Associates have also furnished a declaration in terms of Section 141 of the Companies Act, 2013 that they are eligible to be appointed as auditors and that they have not incurred any disqualification under the Companies Act, 2013.
There are no qualifications, reservation or adverse remarks or disclaimers made by the Statutory Auditors in their Audit Report.
COST AUDIT
Mr. Girikrishna S. Maniar, the Cost Auditor was re-appointed by the Company under Section 148 of the Companies Act, 2013. The due date for filing the Cost Audit Reports in XBRL mode for the financial year ended 31st March, 2016 was 30th September, 2016 and the Cost Audit Report was filed on 3rd November, 2016. The due date for filing the Cost Audit Reports for the financial year ended 31st March, 2017 is 27th September, 2017.
On the recommendation of Audit Committee, the Board of Directors in its meeting held on 23rd May, 2017 has appointed GMVP & Associates LLP, Cost Accountants as Cost Auditor of the Company for the Financial Year 2017 - 18. The Company is seeking the ratification of the remuneration to be paid to GMVP & Associates LLP, Cost Auditor of the Company in respect of Cost Audit for the financial year ended 31st March, 2018 as mentioned in the Notice convening AGM.
SECRETARIAL AUDITOR
The Secretarial Audit Report for the financial year ended 31st March, 2017 issued by CS Sunil M. Dedhia of Sunil M. Dedhia & Co., Practicing Company Secretaries, Secretarial Auditor is annexed as "Annexure - Fâ. In connection with the auditorâs observation in the report, it is clarified that the non - filing of e-forms for board resolutions and changes in shareholding with Ministry of Corporate Affairs (MCA) are technical lapses that occurred inadvertently and necessary steps are being taken to file the same.
PARTICULARS OF EMPLOYEES
Disclosure pertaining to the remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed as "Annexure - Gâ. However, as per the provisions of the section 136(1) of the Companies Act, 2013, this Report is sent to the shareholders excluding the said information. Any shareholder interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.
HUMAN RESOURCES ENVIRONMENT & SAFETY
Your Company recognizes its human resources as one of its prime & critical resources. The relations between the Management and the Staff Members remained very cordial throughout the year under review. As on 31st March, 2017 the Company had 1181 permanent employees at its manufacturing plants and administrative office.
The Company has constituted an Internal Complaint Committee pursuant to the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 for prevention, prohibition or redressal of complaints/grievances on the sexual harassment of women at work places.
Your Directors further states that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
GREEN INITIATIVE
Your Company has adopted green initiative to minimize the impact on the environment. The Company has been circulating the copy of the Annual Report in electronic format to all those members whose email addresses are available with the Company. Your Company appeals other Members also to register themselves for receiving Annual Report in electronic form.
ACKNOWLEDGEMENT
We place on record our sincere Green appreciation to the employees of the Company at all levels for their co-operation and dedicated services. We also thank all our customers and suppliers who are always co-operative.
We also express our sincere thanks to Bankers, Financial Institutions and the Shareholders for their continued support.
For and on behalf of the Board of Directors
of Aarti Drugs Limited
Sd/-
Prakash M. Patil
Place: Mumbai Chairman & Managing Director
Date: 23rd May, 2017 DIN: 00005618
Mar 31, 2016
The Directors have pleasure in presenting the Thirty First Annual
Report together with the Audited Financial Statements along with the
Report of the Auditors for the year ended 31st March, 2016.
COMPANY''S FINANCIAL RESULTS
(Rs. in Lakhs)
Standalone Consolidated
Particulars 2015-2016 2014-2015 2015-2016 2014-2015
Net Sales/Income from
Operations 107073 108448 113488 109427
Other Operating Income 476 274 496 261
Total Income from
Operations 107550 108722 113984 109688
Total Expenditure 90379 91827 96415 92786
Profit Before
Depreciation,
Amortization, Interest
and Tax Expenses 17170 16895 17569 16902
Less: Interest 4328 3888 4389 3893
Depreciation & Amortization 3558 3066 3653 3102
Profit/(Loss) before
other income 9284 9941 9527 9907
Other Income - 65 - 65
Profit/(Loss) Before Tax 9284 10006 9527 9972
Less: Provision for taxation
- Current 2115 2000 2115 2000
- Earlier Year - (154) - (154)
- Deferred 540 400 540 400
Profit After Tax 6629 7760 6872 7725
Add: Surplus brought
forward 23068 19626 23033 19626
Profit available for
appropriation 29697 27386 29906 27351
Appropriations:
Transfer to General
Reserve 670 780 670 780
Proposed Dividend - 727 - 727
1st Interim Dividend 545 605 545 605
2nd Interim Dividend 363 605 363 605
3rd Interim Dividend 727 - 727 -
Tax on Dividend 333 390 333 390
Bonus Share Issued - *1211 - *1211
Balance carried to
Balance Sheet 27059 23068 27314 23033
* The Company has allotted 1,21,08,550 fully paid-up equity shares
pursuant to a bonus issue in the ratio of 1:1.
SHARE CAPITAL
The paid-up Equity Share Capital as on 31st March, 2016 was Rs.
24,21,71,000/-. The Company has neither issued shares with differential
rights as to dividend, voting or otherwise nor issued sweat equity
shares. There is no scheme for employee stock option or provision of
money for shares of the Company to employees or Directors of the
Company.
DIVIDEND
During the year under review, your Company had declared and paid three
interim dividends aggregating to Rs. 6.75/- per equity share of Rs.
10/- each (Previous Year: Rs. 8/- per share ex-bonus including two
interim and final dividends). Keeping in view the three interim
dividends already declared by the Company, the Board have not
recommended any further dividend.
Total cash outflow on account of dividend payments including dividend
distribution tax will be Rs. 1967.43 Lakhs for the financial year
2015-16 (Previous Year: Rs. 2327 Lakhs).
OPERATIONS REVIEW
During the year under review, Gross Sales of the Company is Rs. 1166.10
Crores (Previous Rs. 1169.94 Crores) registering a decline of 0.33%.
The Company has achieved Export Sales of Rs. 389.19 Crores as against
Rs. 411.71 Crores for the last year, registering a decline of 5.47%.
EBITDA has been Rs. 171.70 Crores (Previous Year: Rs. 168.96 Crores),
registering a growth of 1.62%. PAT has been Rs. 66.29 Crores (Previous
Year Rs. 77.60 Crores), registering a decline of 14.57%.
INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY
Your Company''s internal control systems commensurate with the nature
and size of its business operations. Your Company has maintained a
proper and adequate system of internal controls. This ensures that all
Assets are safeguarded and protected against loss from unauthorized use
or disposition and that the transactions are authorised, recorded and
reported diligently.
The Audit Committee and M/s. Raman S. Shah & Associates, Chartered
Accountants, Independent Internal Auditors, regularly review internal
financial controls and operating systems and procedures for efficiency
and effectiveness. The Internal Auditor''s Reports are regularly
reviewed by the Audit Committee of the Board.
DIRECTORS'' RESPONSIBILITY STATEMENT
As required u/s. 134(3)(c) of the Companies Act, 2013, your Directors
hereby state that -
a) in the preparation of the Annual Accounts for the financial year
ended 31st March, 2016, the applicable accounting standards have been
followed. There are no material departures from the applicable
accounting standards;
b) the Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company as on 31st March, 2016 and of the profit of the Company
for that period;
c) the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 2013 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities;
d) the Directors had prepared Annual Accounts on a going concern basis;
e) the Directors had laid down internal financial controls to be
followed by the Company and that such internal financial controls are
adequate and were operating effectively and
f) the Directors had devised proper systems to ensure compliance with
the provisions of all applicable laws and such systems were adequate
and were operating effectively.
BOARD OF DIRECTORS
Composition
Aarti Drugs Limited (ADL) Board presently consists of 12 Directors out
of which 7 (Seven) are Non-Executive. Out of 7 (Seven) Non-Executive
Directors, 6 (Six) Directors are Independent Directors.
Retirement by Rotation
In accordance with the provisions of the Companies Act, 2013 and the
Articles of Association of the Company, Shri Rashesh C. Gogri (DIN:
00066291), Managing Director of the Company retires by rotation and
being eligible offers his candidature for re-appointment as Director.
Independent Directors
The Independent Directors hold office for a fixed term upto 31st March,
2019 and are not liable to retire by rotation. In accordance with
Section 149(7) of the Companies Act, 2013, each Independent Director
has given a written declaration to the Company confirming that he/she
meets the criteria of independence as mentioned under Section 149(6) of
the Companies Act, 2013 and SEBI (Listing Obligations & Disclosure
Requirements) Regulations, 2015.
Number of Meetings of the Board
The Board of Directors met 5 (Five) times in the year 2015-16. The
details of Board and Committee Meetings and the attendance of the
Directors at such meetings are provided in the Corporate Governance
Report.
The details regarding the Board Meetings and the attendance of the
Directors at the Board Meeting/Committee Meeting during the year are
set out in detail in the Corporate Governance Report.
BOARD EVALUATION
During the year, the Board evaluated its performance and as well as
that of its Committees and Individual Directors, including the Chairman
of the Board. Separate exercise was carried out to evaluate the
performance of Non-Independent Directors including the Board Chairman
who were evaluated on parameters such as Key achievements, Short term
and long term targets, challenges faced, Implementation of Strategic
decisions, organizational success, participation and attendance in
Board and Committee Meetings etc.
The evaluation of the Independent Directors was carried out by the
entire Board and that of the Chairman and Non- Independent Directors
was carried out by the Independent Directors.
Independent Directors were evaluated on the parameters such as
attendance and participations in the meetings and timely inputs on the
minutes of the meetings, adherence to ethical standards & code of
conduct of the Company, disclosure of non-independence, as and when
exists and disclosure of interest, interpersonal relations with other
Directors and Management, understanding of the Company and the external
environment in which it operates and contribution to strategic
direction, safeguarding interest of whistle-blowers under vigil
mechanism and safeguard of confidential information.
The Directors were satisfied with the evaluation results, which
reflected the overall engagement of the Board and its Committees with
the Company.
FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS
The Chairman and Managing Director have one to one discussion with all
Directors to familiarize them with the Company''s operations. Further
the Company has put in place a system to familiarize the Independent
Directors about the Company, its products, business and on-going events
relating to the Company. The details of such familiarization programmes
for Independent Directors are posted on the website of the Company viz.
www.aartidrugs.com.
KEY MANAGERIAL PERSONNEL
During the year under review, Shri Sunny D. Pagare, Company Secretary &
Compliance Officer of the Company resigned w.e.f. 1st December, 2015
and Shri Vibhav S. Ranade has been appointed as Company Secretary &
Compliance Officer of the Company w.e.f. 22nd February, 2016.
DETAILS RELATING TO DEPOSITS COVERED UNDER CHAPTER V OF COMPANIES ACT,
2013
Your Company has not accepted any deposits within the meaning of
Section 73 of the Companies Act, 2013 and the Companies (Acceptance of
Deposits) Rules, 2014 and no amount on account of principal or interest
on public deposits was outstanding as on the date of the balance sheet.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
Details of Loans, Guarantees and Investments covered under the
provisions of Section 186 of the Companies Act, 2013, are given in the
notes to the Financial Statements.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All related party transactions made during the financial year 2015-16
were on arm''s length basis and were in the ordinary course of business.
All transactions with related parties are placed before the Audit
Committee as also the Board for approval. Prior omnibus approval of the
Audit Committee is obtained for the transactions which are of a
foreseen and repetitive nature. The transactions entered into pursuant
to the omnibus approval so granted are audited and a statement
specifying the nature, value and terms & conditions of all related
party transactions is placed before the Audit Committee and the Board
of Directors for their approval on a quarterly basis. The statement is
supported by a certification from the Jt. Managing Director and the
Chief Financial Officer (CFO). The details of related party
transactions are provided in the accompanying financial statements.
The Policy on Related Party Transactions as approved by the Board is
available on the Company''s website and can be accessed through
www.aartidrugs.com.
All transactions entered into with related parties during the year were
on an arm''s length basis and were in the ordinary course of business.
Accordingly, there are no transactions that are required to be reported
in Form AOC-2.
EXTRACT OF ANNUAL RETURN
As required by Section 92(3) of the Companies Act, 2013 and rules
framed thereunder, the extract of the Annual Return in Form MGT-9 is
enclosed as "Annexure - A".
SUBSIDIARY
The Company has one subsidiary, namely, Pinnacle Life Science Private
Limited. The Company has attached along with its financial statement, a
separate statement containing the salient features of the financial
statement of the said subsidiary in "Form AOC-1" which is annexed as
"Annexure - B".
CONSOLIDATED FINANCIAL STATEMENTS
As stipulated under the provisions of the SEBI (Listing Obligations &
Disclosure Requirements), Regulations, 2015, the Consolidated Financial
Statements have been prepared by the Company in accordance with the
applicable Accounting Standards. The audited Consolidated Financial
Statements together with Auditors'' Report form part of the Annual
Report.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION
There are no material changes and commitments, affecting the financial
position of the Company which have occurred between the end of the
financial year of the Company to which the financial statement relate
and the date of the report.
BUSINESS RISK MANAGEMENT
During the year under review, the Company has identified and evaluated
elements of business risk. Business risk, inter alia, further includes
fluctuations in foreign exchange, Raw Material Procurement risk,
Environmental & Safety Risk, Working Capital Risk, Market Risk and
Business Operations Risk. The risk management framework defines the
risk management approach of the Company and includes periodic review of
such risk and also documentation, mitigating controls and reporting
mechanism of such risks. The Board of Directors and senior management
team currently assess the operations and operating environment to
identify potential risks and take necessary mitigation actions.
DISCLOSURES RELATED TO COMMITTEES & POLICIES
1. Audit Committee
The Audit Committee of Directors is constituted as per the provisions
of Section 177 of the Companies Act, 2013. The Composition of the Audit
Committee is in conformity with the provisions of the said section and
SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.
The composition & terms of reference of Audit Committee of the Board of
Directors of the Company is disclosed in the report of Corporate
Governance, which forms part of this report.
During the year under review, the Board of Directors of the Company had
accepted all the recommendations of the Audit Committee.
2. Nomination & Remuneration Committee
The Nomination & Remuneration Committee of Directors is constituted in
accordance with the requirements of Section 178 of the Companies Act,
2013.
The Company strives to maintain an appropriate combination of
executive, non-executive and Independent Directors. In terms of
provisions of Section 178 of the Companies Act, 2013, the Nomination
and Remuneration Committee considers and recommends the Board on
appointment and remuneration of Directors and Key Managerial Personnel
and the Company''s Nomination and Remuneration Policy is enclosed as
"Annexure - C".
3. Stakeholders Relationship Committee
Pursuant to Section 178 of the Companies Act, 2013, the Board of
Directors has constituted the Stakeholders Relationship Committee,
details of which are given in the Corporate Governance Report.
The Company Secretary acts as the secretary to the Committee.
4. Corporate Social Responsibility Committee
As per the provisions of Section 135 of the Companies Act, 2013 read
with Companies (Corporate Social Responsibility Policy) Rules, 2014,
the Board of Directors has constituted a Corporate Social
Responsibility (CSR) Committee and the Board of Directors of the
Company has approved CSR Policy based on the recommendations of the CSR
Committee.
The CSR Policy is available on the Company''s website and can be
accessed through www.aartidrugs.com.
Your Company actively contributes to the following segments-
i. Education & Skill Development
ii. Environment
iii. Rehabilitation in Disaster Affected areas
i. Education & Skill Development
Your Company through own trusts Aarti Foundation & Dhanvallabh
Charitable Trust and various other NGO''s has been doing work in this
segments. In addition to this year Company provides direct help to
schools located nearby all its manufacturing facilities by way of
constructing schools, grant/aid for fees etc.
ii. Environment
Your Company has entered into an agreement with The Governor,
Government of Maharashtra through Deputy Conservator of Forest, Dahanu
Forest Division, Dahanu through local NGO M/s. Sudha Pratishthan,
Masvan, Palghar to participate and assist Government in implementing
Afforestation Programme in the degraded forest land of Dahanu Forest
Division spread over 100 Hectares Government Land over a period of 7
years.
iii. Rehabilitation in Disaster Affected areas
Aarti Drugs which holds an expertise of working in collaboration with
the government and local NGOs has carried out rehabilitation in drought
affected areas of Aurangabad through Shree Siddhivinayak Sevabhavi.
In addition to above, your Company participates into a spectrum of CSR
activities evolving around the general up-liftment of the economically
backward class of people. Your Company also makes active contribution
to various local NGOs to assist in the relief measures in the affected
areas.
During the year, the Company has spent Rs. 175.38 lakhs on CSR
activities.
The Annual Report on CSR activities is annexed as "Annexure - D" and
forms an integral part of the Report.
5. Vigil Mechanism/Whistle Blower Policy
The Company has a vigil mechanism/whistle blower policy to deal with
instance of fraud and mismanagement. The details of the said policy is
explained in the Corporate Governance Report and also posted on the
website of the Company, viz. www.aartidrugs.com.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant material orders passed by the
Regulators/Courts which would impact the going concern status of the
Company and its future operations.
CORPORATE GOVERNANCE
A separate section on Corporate Governance practices followed by the
Company, together with a certificate from the Company''s Auditors
confirming compliance, forms a part of this Annual Report, as per SEBI
(Listing Obligations & Disclosure Requirements), Regulations, 2015.
MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis Report as required under the
provisions of SEBI Regulations, 2015 is annexed hereto forming part of
this Report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
The information on conservation of energy, technology absorption and
foreign exchange earnings and outgo as stipulated in Section 134(3)(m)
of the Companies Act, 2013 and rules framed thereunder is enclosed
herewith as "Annexure - E".
STATUTORY AUDITORS
At the Annual General Meeting held on 11th July, 2014, M/s. Gokhale &
Sathe, Chartered Accountants (Firm Regn. No. 103264W) were appointed
as Statutory Auditors of the Company to hold office till the conclusion
of the Thirty Second Annual General Meeting (AGM).
In terms of the provisions of the Companies Act, 2013, it is necessary
to get the appointment ratified by the shareholders in every Annual
General Meeting until the expiry of the period of original appointment.
In this regard, the Company has received a certificate from the
Auditors to the effect that if they are reappointed, it would be in
accordance with the provisions of the Section 141 of the Companies Act,
2013.
In view of the above, the Board of Directors recommends your
ratification of the appointment of M/s. Gokhale & Sathe, Chartered
Accountants (Firm Regn. No. 103264W) as the Statutory Auditors as
mentioned in the Notice convening AGM.
There are no qualifications, reservation or adverse remarks or
disclaimers made by the Statutory Auditors in their Audit Report.
COST AUDIT
The Cost Auditor Mr. Girikrishna S. Maniar was re-appointed by the
Company under Section 148 of the Companies Act, 2013 and he attended
the Audit Committee Meeting, where Cost Audit Reports was discussed.
The due date for filing the Cost Audit Reports in XBRL mode for the
financial year ended 31st March, 2015 was 30th September, 2015 and the
Cost Audit Reports were filed by the Cost Auditor on 15th January,
2016. The due date for filing the Cost Audit Reports for the financial
year ended 31st March, 2016 is 30th September, 2016.
The Company is seeking the ratification of the remuneration to be paid
to Mr. Girikrishna S. Maniar, Cost Auditor of the Company in respect of
Cost Audit for the financial year ending 31st March, 2017 as mentioned
in the Notice convening AGM.
SECRETARIAL AUDITOR
The Secretarial Audit Report for the financial year ended 31st March,
2016 issued by CS Sunil M. Dedhia of Sunil M. Dedhia & Co., Practicing
Company Secretaries, Secretarial Auditor is annexed as "Annexure - F".
The Secretarial Audit Report does not contain any qualification,
reservation or adverse remark.
PARTICULARS OF EMPLOYEES
Disclosure pertaining to the remuneration and other details as required
under Section 197(12) of the Companies Act, 2013 read with rule 5(2) of
the Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014 is enclosed as "Annexure - G". However, as per the
provisions of the Section 136(1) of the Companies Act, 2013, this
Report is sent to the shareholders excluding the said information. Any
shareholder interested in obtaining such particulars may write to the
Company Secretary at the Registered Office of the Company.
HUMAN RESOURCES ENVIRONMENT & SAFETY
Your Company recognizes its human resources as one of its prime &
critical resources. The relations between the Management and the Staff
Members remained very cordial throughout the year under review. As on
31st March, 2016 the Company had 1072 permanent employees at its
manufacturing plants and administrative office.
The Company has constituted an Internal Complaint Committee pursuant to
the provisions of Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013 for prevention, prohibition or
redressal of complaints/grievances on the sexual harassment of women at
work places.
Your Directors further states that during the year under review, there
were no cases filed pursuant to the Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Act, 2013.
GREEN INITIATIVE
Your Company has adopted green initiative to minimize the impact on the
environment. The Company has been circulating the copy of the Annual
Report in electronic format to all those members whose email addresses
are registered with the Company. Your Company appeals other members
also to register themselves for receiving Annual Report in electronic
form.
ACKNOWLEDGEMENT
We place on record our sincere Green appreciation to the employees of
the Company at all levels for their co-operation and dedicated
services. We also thank all our customers and suppliers who are always
co-operative.
We also express our sincere thanks to Bankers, Financial Institutions
and the Shareholders for their continued support.
For and on behalf of the Board of Directors
of Aarti Drugs Limited
Sd/-
Prakash M. Patil
Place: Mumbai Chairman & Managing Director
Date: 5th May, 2016 DIN: 00005618
Mar 31, 2013
TO THE MEMBERS OF AARTI DRUGS LIMITED
The Directors have pleasure in presenting the Twenty-Eighth Annual
Report together with the Audited Statements of Accounts along with the
Report of the Auditors for the year ended 31st March, 2013.
COMPANY''S FINANCIAL RESULTS
(Rs.in Lakhs)
2012-2013 2011-2012
Net Sales/Income from Operations 82484 65926
Other Operating Income 91 308
Total Income from Operations 82575 66234
Less: (lncrease)/Decrease
in Stock-in-Trade (2259) (91)
Consumption of Raw Materials 57786 45448
Staff Cost 2853 2483
Other Expenditure 12161 10368
Total Expenditure 70541 58208
Profit Before Depreciation,
Amortization, Finance Cost
and Tax Expenses 12034 8027
Less: Interest 2804 2267
Depreciation & Amortization 20599 2422
Profit before Exceptional items 6631 3338
Less: Exceptional items 44 116
Profit Before Tax 6588 3222
Less: Provision for taxation - Current 1760 800
- Deferred 304 176
Profit After Tax 4524 2246
Add: Surplus brought forward 13253 12506
Profit available for appropriation 777 14278
Appropriations:
Income tax of Earlier Year 86
Transfer to General Reserve 450 236
Proposed Dividend 40% 484 363
1st Interim Dividend 30% 363 242
2nd Interim Dividend 30% 363
Tax on Dividend 201 98
Balance carried to Balance Sheet 15916 13253
DIVIDEND
During the year under review, your Company had declared and paid 1st &
2nd interim dividends (of Rs. 3/- each) @ 60% per equity share of Rs. 10/-
each (Previous Year : 20%). Your Directors have recommended a final
Dividend of Rs. 4/- @ 40% per equity share for the financial year 2012-13
(Previous Year: 30%). Total cash outflow on account of dividend
payments including dividend distribution tax will be Rs. 1,411 Lakhs for
the financial year 2012-13 (Previous Year: t 703 Lakhs).
OPERATIONS REVIEW
During the year under review, the Company has achieved Sales Turnover
of Rs. 88,575 Lakhs (Previous Year: Rs. 69,918 Lakhs) registering a growth
of 26.68%.
Further, the Company has achieved Export Turnover of Rs. 32,220 Lakhs as
against Rs. 28,071 Lakhs for the last year, registering a growth of
14.78%.
Operating Profit before Interest, Depreciation, Amortization & Tax, has
been Rs. 12,034 Lakhs (Previous Year Rs. 8,027 Lakhs), registering a growth
of 49.92%. Profit After Tax has been Rs. 4,524 Lakhs (Previous Year Rs.
2,246 Lakhs), registering a growth of 101.42%.
The company had carried out expansion programmes in the year 2010-11 &
2011 -12 keeping long term view in the mind, inspite of recessionary
conditions prevailing globally. The company reaped the benefit of
utilization of expanded capacity for the full year which has resulted
into increased sales. In addition, last year one of our location at
Sarigam suffered loss of production for three months due to general
environmental clearance issue in the area. During the year under
review, we successfully operated that plant at higher capacity. Due to
overall higher capacity utilization across the company, the overheads
got spread over increased production which led to reduction in costs
and thus increase in the profitability.
Fire incident occurred on 22.03.2013 at one of the Production block of
the manufacturing unit located at Plot No. N -198 Tarapur manufacturing
MNI, an intermediate which is further processed to manufacture two
APIs. Loss / damage caused to stock and fixed assets due to fire
incident has been covered under insurance and accounted for
appropriately.
The Company could arrange to outsource the said intermediates from
outside and supplies of said APIs were restored to customers within a
period of a month.
DIRECTORS'' RESPONSIBILITY STATEMENT
As required u/s. 217 (2AA) of the Companies Act, 1956, your Directors
hereby state that -
(i) in the preparation of the Annual Accounts for the financial year
ended 31st March, 2013, the applicable accounting standards have been
followed. There are no material departures from the applicable
accounting standards;
(ii) the Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company at the end of the financial year and of the profit of
the Company for that year;
(iii) the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act for safeguarding the assets of the
Company and for preventing and detecting fraud and other
irregularities;
(iv) the Directors have prepared Annual Accounts on a going concern
basis.
DIRECTORS
In accordance with the provisions of the Companies Act, 1956 and the
Articles of Association of the Company, Shri Rashesh C. Gogri, Shri
Harshit M. Savla, Shri Navin C. Shah and Shri Rajendra V. Gogri retire
by rotation and being eligible, offer themselves for re-appointment.
During the year the Board of Directors have resolved to appoint Shri
Rashesh C. Gogri as Executive Director of the Company with effect from
31st October, 2012.
CORPORATE GOVERNANCE
Your Company has complied with the mandatory Corporate Governance
requirements stipulated under clause 49 of the Listing Agreement.
Report on Corporate Governance is annexed hereto forming part of this
report.
MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis Report as required under the Listing
Agreement is annexed hereto forming part of this Report.
DISCLOSURE OF PARTICULARS
Pursuant to section 217(2A) of the Companies Act,1956 read with
Companies (Particulars of employees) Rules 1975, as amended up to date,
the names and other particulars are set out in the Annexure to the
Directors'' Report. However, as per the provisions of the section 219(1
)(b)(iv) of the Companies Act,1956, this Report is sent to the
shareholders excluding the said information. Any shareholder interested
in obtaining such particulars may write to the Company Secretary at the
Registered Office of the Company.
Particulars required u/s. 217(1)(e) of the Companies Act, 1956, read
with Rule 2 of the Companies (Disclosure of Particulars in the Report
of Board of Directors) Rules, 1988, relating to conservation of energy,
research & development, technology absorption, foreign exchange
earnings and outgo are given in the annexure to this Report.
AUDITORS
M/s. Parikh Joshi & Kothare, Auditors of the Company retire at the
ensuing Annual General Meeting and are eligible for re-appointment.
Members are requested to appoint Auditors and to fix their
remuneration.
COST AUDIT
The Cost Auditor, Mr. Girish S. Maniar, re-appointed by the Company
under Section 233B of the Companies Act, 1956 attended the Audit
Committee Meeting, where Cost Audit Report was discussed.
The due date for filing the Cost Audit Reports in XBRL mode for the
financial year ended March 31, 2012 was February 28, 2013 and the Cost
Audit Reports were filed by the Cost Auditor on February 28, 2013. The
due date for filing the Cost Audit Reports for the financial year ended
March 31, 2013 is September 30, 2013.
HUMAN RESOURCES
Your Company recognizes its human resources as one of its prime &
critical resources. The relations between the Management and the Staff
Members remained very cordial throughout the year under review.
In fire incident occurred at unit N-198, casualty of 6 (Six)
employees/workers was reported. The victims were covered under
insurance and appropriate compensations have been also settled by the
Company.
GREEN INITIATIVE
Last year, we started a Green initiative with the aim of being green
and minimizing our impact on the environment. This year too we are
proposing to send the Annual Report to the registered e-mail addresses
of the shareholders.
ACKNOWLEDGEMENT
We place on record our sincere Green appreciation to the employees of
the Company at all levels for their co-operation and dedicated
services. We also thank all our customers and suppliers who are always
co-operative.
We also express our sincere thanks to Bankers, Financial Institutions
and the Shareholders for their continued support.
By Order of the Board
Sd/-
Rajendra V. Gogri
Chairman
Place: Mumbai
Date: 16th May, 2013
Mar 31, 2012
TO THE MEMBERS OF AARTI DRUGS LIMITED
The Directors have pleasure in presenting the Twenty-Seventh Annual
Report together with the Audited Statements of Accounts along with the
Report of the Auditors for the year ended 31st March, 2012.
COMPANY'S FINANCIAL RESULTS
(Rs. in Lakhs)
2011-12 2010-11
Net Sales/ Income from Operations 65926 49642
Other Operating Income 610 8
Total income from operation 66536 49650
Less: (Increase) / Decrease in Stock-in-Trade (92) (1618)
Consumption of Raw Materials 45750 35721
Staff Cost 2483 1787
Other Expenditure 10368 7490
Total Expenditure 58509 43381
Profit/(Loss) Before Depreciation,
Amortization, Finance Cost and Tax Expenses 8027 6269
Less: Interest 2267 1348
Depreciation & Amortization 2422 1774
Profit/(Loss) Before Exceptional Items 3338 3147
Less: Exceptional Items 116 -
Profit/(Loss) Before Tax 3222 3147
Less: Provision for taxation - Current 800 650
- Deferred 175 250
Profit/(Loss) After Tax 2246 2247
DIVIDEND
During the year under review, your Company had declared and paid
interim dividend of Rs. 2/- @ 20% per equity share of Rs. 10/- each. Your
Directors have recommended a final Dividend of Rs. 3/- @ 30% per share
for the financial year 2011-12 (Previous Year: 50%). Total cash outflow
on account of dividend payment including dividend distribution tax will
be Rs. 703 Lakhs for the financial year 2011-12 (Previous Year: Rs. 705
Lakhs).
OPERATIONS REVIEW
During the year under review, the Company has, post merger of its
wholly owned subsidiary, namely, Suyash Laboratories Ltd., achieved
Sales Turnover of Rs. 69918 lakhs (Previous Year: Rs. 52301 lakhs)
registering a growth of 33.68%.
Similarly, the Company has achieved Export Turnover of Rs. 28071 Lakhs as
against Rs. 21537 lakhs for the last year, registering a growth of
30.34%.
Operating Profit before Interest, Depreciation, Amortization & Tax,
post merger has been Rs. 8027 lakhs (Previous Year Rs. 6269 lakhs)
Profit After Tax, post merger has been Rs. 2246 lakhs (Previous Year Rs.
2247 lakhs).
Figures for the year 2011-12, being post merger, are not comparable
with standalone Company figures for 2010-11 to that extent.
AMALGAMATION
Scheme of Amalgamation of Suyash Laboratories Ltd., wholly owned
subsidiary of the Company, with the Company has become operative w.e.f.
from 1st April, 2011 ("Appointed Date") upon filing of the High Court
order sanctioning the said scheme with the Registrar of Companies on
6th July, 2012.
DIRECTORS' RESPONSIBILITY STATEMENT
As required u/s. 217 (2AA) of the Companies Act, 1956, your Directors
hereby state that -
(i) in the preparation of the Annual Accounts for the financial year
ended 31st March, 2012, the applicable accounting standards have been
followed along with proper explanation relating to material departures,
if any;
(ii) the Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company at the end of the financial year and of the profit of
the Company for that year;
(iii) the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act for safeguarding the assets of the
Company and for preventing and detecting fraud and other
irregularities;
(iv) the Directors have prepared Annual Accounts on a going concern
basis.
DIRECTORS
In accordance with the provisions of the Companies Act, 1956 and the
Articles of Association of the Company, Dr. Vilas G. Gaikar, Shri
Bhavesh R. Vora, Shri Uday M. Patil and Shri Sunil M. Dedhia retire by
rotation and being eligible, offer themselves for re-appointment.
Shri Chandrakant V. Gogri, Chairman would retire on his attaining age
of 66 years on 16th August, 2012. The Directors acknowledge with great
pride his founding contribution to the growth of the Company to its
present state. The Board of Directors have also resolved to appoint him
as Chairman Emeritus.
As a part of Succession Plan approved by the Board, Shri Rajendra V.
Gogri would be Chairman of the Company post retirement of Shri
Chandrakant V. Gogri.
The Board of Directors have resolved to appoint Shri Rashesh C. Gogri
as Director to fill casual vacancy upon retirement of Shri Chandrakant
V. Gogri with effect from 16th August, 2012.
CORPORATE GOVERNANCE
Your Company has complied with the mandatory Corporate Governance
requirements stipulated under clause 49 of the Listing Agreement.
Report on Corporate Governance is annexed hereto forming part of this
report.
MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis Report as required under the Listing
Agreement is annexed hereto forming part of this Report.
DISCLOSURE OF PARTICULARS
Pursuant to section 217(2A) of the Companies Act,1956 read with
Companies (Particulars of employees) Rules 1975, as amended up to date,
the names and other particulars are set out in the Annexure to the
Directors' Report. However, as per the provisions of the section 219(1
)(b)(iv) of the Companies Act,1956, this Report is sent to the
shareholders excluding the said information. Any shareholder interested
in obtaining such particulars may write to the Company Secretary at the
Registered Office of the Company.
Particulars required u/s. 21 7(1 )(e) of the Companies Act, 1956, read
with Rule 2 of the Companies (Disclosure of Particulars in the Report
of Board of Directors) Rules, 1988, relating to conservation of energy,
research & development, technology absorption, foreign exchange
earnings and outgo are given in the annexure to this Report.
AUDITORS & AUDITORS REPORT
M/s. Parikh Joshi & Kothare, Auditors of the Company retire at the
ensuing Annual General Meeting and are eligible for re-appointment.
Members are requested to appoint Auditors and to fix their
remuneration.
COST AUDIT
The Cost Auditor Mr. Girish S. Maniar re-appointed by the Company under
Section 233B of the Companies Act, 1956 attend the Audit Committee
Meeting, where Cost Audit Reports are discussed.
The due date for filing the Cost Audit Reports for the financial year
ended March 31, 2011 was September 30, 2011 and the Cost Audit Reports
were filed by the Cost Auditor on March 14, 2012. The due date for
filing the Cost Audit Reports for the financial year ended March 31,
2012 is September 30, 2012.
HUMAN RESOURCES
Your Company recognizes its human resources as one of its prime &
critical resources. The relations between the Management and the Staff
Members remained very cordial throughout the year under review.
GREEN INITIATIVE
During the previous fiscal, we started a sustainability initiative with
the aim of being green and minimizing our impact on the environment.
Like last year, this year too we are sending the Annual Report to the
registered e-mail addresses of the shareholders.
ACKNOWLEDGEMENT
We place on record our sincere appreciation to the employees of the
Company at all levels for their co-operation and dedicated services. We
also thank all our associated customers and suppliers for their
co-operation.
We also express our sincere thanks to Bankers, Financial Institutions
and the Shareholders for their continued support.
By Order of the Board
Sd/-
Chandrakant V. Gogri
Chairman
Place: Mumbai
Date: 9th July, 2012.
Mar 31, 2011
TO THE MEMBERS OF AARTI DRUGS LIMITED
The Directors have pleasure in presenting the Twenty Sixth Annual
Report together with the Audited Statements of Accounts along with the
Report of the Auditors for the year ended 31st March, 2011.
COMPANY'S STANDALONE FINANCIAL RESULTS
(Rs. in Lakhs)
2010-2011 2009-2010
Gross Sales/ Income from Operations 52301 49695
Less: Excise Duty & Sales Tax 2659 2553
Net Sales/Income from operations 49642 47142
Less: (Increase) / Decrease in
Stock-in-Trade (1618) 376
Consumption of Raw Materials 35721 31381
Staff Cost 1646 1362
Other Expenditure 7632 6591
Total Expenditure 43381 39710
Operating Profit Before Interest,
Depreciation, Amortization & Tax 6261 7432
Add: Non-operating Income 8 45
Profit before Interest, Depreciation
& Tax 6269 7477
Less: Interest 1348 1474
Depreciation & Amortization 1774 1621
Profit Before Tax 3147 4382
Less: Provision for taxation
- Current 650 1502
- Deferred 250 270
Profit After Tax 2247 2610
Add: Surplus brought forward 11189 9549
Profit available for appropriation 13436 12159
Appropriations:
Income tax of Earlier Year - 3
Transfer to General Reserve 225 261
Proposed Dividend 25% 303 605
Interim Dividend 25% 302 -
Tax on Dividend 99 101
Balance carried to Balance Sheet 12507 11189
DIVIDEND
During the year under review, your Company had declared and paid
interim dividend of Rs. 2.50 ps @ 25% per equity share of Rs.10/- each.
Your Directors have recommended a final Dividend of Rs. 2.50 ps (25%)
per share for the financial year 2010-11 (Previous Year: 50%). Total
cash outflow on account of dividend payment including dividend tax will
be Rs. 705 lakhs for the financial year 2010-11(Previous Year: Rs. 706
lakhs).
OPERATIONS REVIEW
During the year under review, the Company has made Sales Turnover of
Rs. 52301 lakhs (Previous Year: Rs. 49695 lakhs) registering a growth
of 5.24 %.
The Company has achieved Export Turnover of Rs. 21537 lakhs as against
Rs.17297 lakhs for the last year, registering a growth of 24.51 %.
Operating Profit before Interest, Depreciation, Amortization & Tax has
been Rs. 6261 lakhs (Previous Year Rs. 7432 lakhs)
Profit After Tax has been Rs. 2247 lakhs (Previous Year: Rs. 2610
lakhs).
DIRECTORS' RESPONSIBILITY STATEMENT
As required u/s. 217 (2AA) of the Companies Act, 1956, your Directors
hereby state that -
(i) in the preparation of the Annual Accounts for the financial year
ended 31st March, 2011, the applicable accounting standards have been
followed. There are no material departures from the applicable
accounting standards;
(ii) the Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company at the end of the financial year and of the profit of
the Company for that year;
(iii) the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act for safeguarding the assets of the
Company and for preventing and detecting fraud and other
irregularities;
(iv) the Directors have prepared Annual Accounts on a going concern
basis.
GROUP
Persons and Companies comprising ÃGroup' are disclose in the note no.
7A in schedule T, notes to accounts for the purpose of SEBI
(Substantial Acquisition of Shares & Takeover) Regulations, 1997 as
amended upto date.
SUBSIDIARY COMPANY
In accordance with the general circular issued by the Ministry of
Corporate Affairs, Government of India, the Balance Sheet, Profit and
Loss Account and other documents of the subsidiary companies are not
being attached with the Balance Sheet of the Company. The Company will
make available the Annual Accounts of the subsidiary company and the
related detailed information to any member of the Company who may be
interested in obtaining the same. The annual accounts of the subsidiary
will also be kept open for inspection at the Registered Office of the
Company as well as at the head office of the subsidiary company. The
Consolidated Financial Statements presented by the Company include the
financial results of its subsidiary company.
CONSOLIDATED STATEMENTS OF ACCOUNTS
The Audited consolidated Accounts and Cash Flow statement, comprising
of the Company and its subsidiary, namely, Suyash Laboratories Limited
form part of this Report. The Consolidated accounts have been prepared
in accordance with Accounting Standards (AS-21), on Consolidated
Financial Statements issued by Institute of Chartered Accountants of
India.
DIRECTORS
In accordance with the provisions of the Companies Act, 1956 and the
Articles of Association of the Company, Mr. Rajendra V. Gogri , Mr.
Ramdas M. Gandhi, Mr. Harit P. Shah and Prof. Krishnacharya G.
Akamanchi retire by rotation and being eligible, offer themselves for
re-appointment.
CORPORATE GOVERNANCE
Report on Corporate Governance compliance along with Auditors
Certificate thereon is included as a part of this Report.
MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis Report as required under the Listing
Agreement is annexed hereto forming part of this Report.
DISCLOSURE OF PARTICULARS
Pursuant to section 217(2A) of the Companies Act,1956 read with
Companies (Particulars of employees) Rules 1975, as amended up to date,
the names and other particulars are set out in the Annexure to the
Directors' Report. However, as per the provisions of the section
219(1)(b)(iv) of the Companies Act,1956, this Report is sent to the
shareholders excluding the said information. Any shareholder interested
in obtaining such particulars may write to the Company Secretary at the
Registered Office of the Company.
Particulars required u/s. 217(1)(e) of the Companies Act, 1956, read
with Rule 2 of the Companies (Disclosure of Particulars in the Report
of Board of Directors) Rules, 1988, relating to conservation of energy,
research & development, technology absorption, foreign exchange
earnings and outgo are given in the annexure to this Report.
AUDITORS & AUDITORS REPORT
M/s. Parikh Joshi & Kothare, Auditors of the Company retire at the
ensuing Annual General Meeting and are eligible for reappointment.
Members are requested to appoint Auditors and to fix their
remuneration.
As regards comment of the Auditors at clause (xv) of the Annexure to
their report, it is clarified that short term funds were applied to
fund part of ongoing capital expenditure which was to be funded by
internal accruals which got affected to some extent due to shut down of
certain APIs plants for about one and half month to align these
existing facilities for expanded capacity and under performance for
major part of the year of Sarigam plants due to environmental issues in
the whole Sarigam Industrial Area. The mismatch in application of funds
as aforesaid is temporary in nature since expansion made is expected to
generate internal accruals in the current year.
COST AUDIT
The Cost Audit Report relating to Bulk Drugs manufactured by the
Company for the financial year 2009-10 was submitted to the Central
Government on 12th April, 2011 within prescribed time. Mr. Girish S.
Maniar, Cost Accountant, was re-appointed as the cost auditor for the
financial year 2011-12 and the report thereof will be submitted to the
Central Government in due course.
HUMAN RESOURCES
Your Company recognizes human resources as one of its prime & critical
resources. The relations between the management and the staff remained
very cordial and satisfactory throughout the year under review.
ACKNOWLEDGEMENT
We place on record our sincere appreciation of the employees of the
Company at all levels for their co-operation and dedicated services. We
also thank all our associated customers and suppliers who are always
co-operative.
We also express our sincere thanks to Bankers, Financial Institutions
and the Shareholders for their continued support.
By Order of the Board
Sd/-
Chandrakant V. Gogri
Chairman
Place: Mumbai
Date: 25th May, 2011.
Mar 31, 2010
The Directors have pleasure in presenting the 25th Annual Report
together with the Audited Statements of Accounts along with the Report
of the Auditors for the year ended 31st March, 2010.
COMPANYS STANDALONE FINANCIAL RESULTS
(Rupees in Lakhs)
2009-2010 2008-2009
Gross Sales/ Income from Operations 49695 40969
Less: Excise Duty & Sales Tax 2553 3319
Net Sales/Income from operations 47142 37650
Less: (Increase) / Decrease in Stock-in-Trade 376 695
Consumption of Raw Materials 23179 21077
Staff Cost 1362 1114
Other Expenditure 14793 8950
Total Expenditure 39710 31837
Operating Profit Before Interest,
Depreciation, Tax & Amortisation 7432 5814
Add: Non-operating Income 45 17
Profit before Interest, Depreciation,
Tax & Amortisation 7477 5831
Less: Interest (previous year interest
includes premium on FCCBs
redemption) 1474 2272
Depreciation & Amortization 1621 1244
Profit Before Tax 4382 2315
Less: Provision for taxation - Current 1502 555
- Deferred 270 255
Profit After Tax 2610 1505
Add: Surplus brought forward 9549 8607
Profit available for appropriation 12159 10112
Appropriations:
Income tax of Earlier Year 3 0
Transfer to General Reserve 261 151
Proposed Dividend 50% (Previous Year : 30%) 605 351
Tax on Dividend 101 60
Balance carried to Balance Sheet 11189 9549
DIVIDEND
Your Directors have recommended Dividend of Rs.5 A (50%) per share for
the year ended 31st March, 2010 (Previous Year:30%). Total cash outflow
on account of dividend payment including dividend tax will be Rs.706
lakhs for the financial year 2009-10(Previous Year:Rs.411 lakhs).
OPERATIONS REVIEW
During the year under review, the Company has achieved Sales Turnover
of Rs.49695/- lakhs (Previous Year: Rs. 40969/- lakhs) registering a
growth of over 21%.
The Company has achieved Export Turnover of Rs.17297/- lakhs as against
Rs.15883/- lakhs for the corresponding period last year, registering a
growth of 8.90%.
Operating Profit before Interest, Depreciation & Tax has been Rs.7164/-
lakhs (Previous Year Rs.5674 lakhs) registering a growth of over 26%.
Profit After Tax has been Rs.2610/- lakhs (Previous Year: Rs.1505
lakhs) registering a growth of over 73%.
PREFERENTIAL ISSUE
The Company has issued and allotted on 20.12.2010, 4,00,000 Equity
Shares of Rs.10/- each at a premium of Rs.42.60 ps. per share, upon
exercise of option by the holders of Convertible Warrants issued by the
Company on preferential basis. Amount raised by issue of the said
Equity Shares have been fully used to meet ongoing capital expenditure
and long term working capital requirements as proposed.
DIRECTORS RESPONSIBILITY STATEMENT
As required u/s. 217 (2AA) of the Companies Act, 1956, your Directors
hereby state that -
(i) in the preparation of the Annual Accounts for the financial year
ended 31st March, 2010, the applicable accounting standards have been
followed. There are no material departures from the applicable
accounting standards;
(ii) the Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company at the end of the financial year and of the profit of
the Company for that year;
(iii) the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act for safeguarding the assets of the
Company and for preventing and detecting fraud and other
irregularities;
(iv) the Directors have prepared Annual Accounts on a going concern
basis.
SUBSIDIARY COMPANY
Upon an application made by the Company under section 212(8) of the
Companies Act,1956, the Central Government, vide its letter dated 17th
March,2010, has exempted the Company from attaching the Balance sheet,
Profit & Loss Account and other related documents to be attached under
section 212(1) of the said Act to the Annual Report of the Company.
Accordingly the said documents of the Company are not attached with the
Balance sheet of the Company. A gist of the financial performance of
the subsidiary company is contained in this Report. The Annual Report
of the subsidiary company is open for inspection by any member/investor
and the Company will make available these documents at the request of
any member or investor of the Company interested in obtaining the same.
The Annual accounts of the subsidiary will also be kept at the
Registered office of the Company as well as at the head office of the
subsidiary Company.
CONSOLIDATED STATEMENTS OF ACCOUNTS
The Audited consolidated Accounts and Cash Flow statement, comprising
of the company and its subsidiary, namely, Suyash Laboratories Limited
form part of this Report. The Consolidated accounts have been prepared
in accordance with Accounting Standards (AS-21), on Consolidated
Financial Statements issued by Institute of Chartered accountants of
India.
DIRECTORS
In accordance with the provisions of the Companies Act, 1956 and the
Articles of Association of the Company, Mr. Chandrakant V. Gogri , Mr.
Harshit M. Savla, Mr. Sunil M. Dedhia, Mr. Uday M. Patil retire by
rotation and being eligible, offer themselves for re-appointment.
CORPORATE GOVERNANCE
Report on Corporate Governance compliance along with Auditors
Certificate thereon is included as a part of this Report.
MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis Report as required under the Listing
Agreement is annexed hereto forming part of this Report.
DISCLOSURE OF PARTICULARS
Pursuant to section 217(2A) of the Companies Act,1956 read with
Companies (Particulars of employees) Rules 1975, as amended up to date,
the names and other particulars are set out in the Annexure to the
Directors Report. However, as per the provisions of the section
219(1)(b)(iv) of the Companies act,1956, this Report is sent to the
shareholders excluding the said information. Any shareholder interested
in obtaining such particulars may write to the Company Secretary at the
Registered Office of the Company.
Particulars required u/s. 217(1)(e) of the Companies Act, 1956, read
with Rule 2 of the Companies (Disclosure of Particulars in the Report
of Board of Directors) Rules, 1988, relating to conservation of energy,
research & development, technology absorption, foreign exchange
earnings and outgo are given in the annexure to this Report.
AUDITORS
M/s. Parikh Joshi & Kothare, Auditors of the Company retire at the
ensuing Annual General Meeting and are eligible for reappointment.
Members are requested to appoint Auditors and to fix their
remuneration.
COST AUDIT
The Cost Audit Report relating to Bulk Drugs manufactured by the
company will be submitted with the Central government in due course.
The board of Directors have appointed Mr. Girish S. Maniar, Cost
Accountant, for conduct of the cost audit for the year ended 31st
March, 2011, subject to the approval of the Central Government.
HUMAN RESOURCES
Your Company recognizes its human resources as one of its prime &
critical resources. The relations between the Management and the Staff
Members remained very cordial and satisfactory throughout the year
under review.
ACKNOWLEDG EMENT
We place on record our sincere appreciation to the employees of the
Company at all levels for their co-operation and dedicated services. We
also thank all our associated customers and suppliers who are always
co-operative.
We also express our sincere thanks to Bankers, Financial Institutions
and the Shareholders for their continued support.
By Order of the Board
Sd/-
Chandrakant V. Gogri
Chairman
Place: Mumbai
Date: 26th May, 2010.
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