Mar 31, 2022
Report on the Audit of the Financial Statements Opinion
We have audited the accompanying financial statements of NOVARTIS INDIA LIMITED (âthe Companyâ), which comprise the Balance Sheet as at 31st March 2022, and the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flows and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Companies Act, 2013 (âthe Actâ) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, (âInd ASâ) and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2022, and its loss, total comprehensive income, its cash flows and the changes in equity for the year ended on that date.
We conducted our audit of the financial statements in accordance with the Standards on Auditing specified under section 143(10) of the Act (SAs). Our responsibilities under those Standards are further described in the Auditorâs Responsibility for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAIâs Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.
Key Audit Matter |
Auditorâs Response |
Revenue recognition - Sale of products [Note 1(J) to the financial statements] The nature of operations of the Company being driven by trading activities, the focus of internal reporting as well as of external stakeholders is on revenue which could be a causal factor to record revenues for sales that either did not occur, or for which the revenue recognition criteria may not have been met. This risk is furthered considering that the Company sells its products across the country through wide spread distribution points. We have therefore specifically focused on the said risk and have considered this to be a key audit matter. |
Assessed the appropriateness of the Companyâs revenue recognition policies by mapping them with the applicable accounting standards. Performed a walkthrough of the revenue business cycle to gain an understanding of the relevant risks and controls around occurrence and timing of revenue recognition. Tested the design, implementation and operating effectiveness of the relevant controls. During the fourth quarter of 2021-22, the Company has entered into an agreement with the customer, who has enhanced reach within the geographies of India, which will further enhance reach of the Companyâs products. Tested transactions on a sample basis by, agreeing sales with the invoices, purchase orders and delivery documents, comparing the invoice prices to the Company price lists and, agreeing the revenue amount recorded by management to underlying accounting records. Reviewed the contracts / purchase orders, as applicable, to assess the terms of sale and confirmed that the sales were recorded in the correct accounting period. Sought confirmations from customers on a test check basis and checked realisation / performed other alternate procedures, where applicable, to support the assertion that revenue has been recognised for sales that have occurred during the year. Made enquiries of the management and obtained written representations as to whether there exist any side agreements or unusual arrangements which may impact revenue recognition. Reviewed variations in revenue over the corresponding period, checked subsequent sales returns and tested any unusual transactions to determine whether the information corroborates with the revenue recorded in the books of account. |
Information Other than the Financial Statements and Auditorâs Report Thereon
⢠The Companyâs Board of Directors is responsible for the other information. The other information comprises the information included in the Business Responsibility Report, Directorsâ report including annexures to the Directorsâ Report and Report on Corporate Governance, but does not include the financial statements and our auditorâs report thereon.
⢠Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
⢠In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.
⢠If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Managementâs Responsibility for the Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the Ind AS
and other accounting principles generally accepted in India. This responsibility also includes 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 frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statement that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Companyâs ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the Companyâs financial reporting process.
Auditorâs Responsibility for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditorâs report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal financial control relevant to the audit in order to design audit procedures that are appropriate in the circumstances Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the management.
⢠Conclude on the appropriateness of managementâs use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companyâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditorâs report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditorâs report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the financial statements.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditorâs report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by Section 143(3) of the Act, based on our audit we report, that:
a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
b) I n our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.
c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the Statement of Cash Flows and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.
d) In our opinion, the aforesaid financial statements comply with the Ind AS specified under Section 133 of the Act.
e) On the basis of the written representations received from the directors as on 31st March, 2022 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2022 from being appointed as a director in terms of Section 164(2) of the Act.
f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Aâ. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Companyâs internal financial controls over financial reporting.
g) With respect to the other matters to be included in the Auditorâs Report in accordance with the requirements of section 197(16) of the Act, as amended,
In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act.
h) With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements.
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
iv. (a) The Management has represented that, to the best of itâs knowledge and
belief, as disclosed in the note 42 to the financial statements no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (âIntermediariesâ), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(b) The Management has represented, that, to the best of itâs knowledge and belief, as disclosed in the note 42 to financial statements, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities (âFunding Partiesâ), with the understanding, whether recorded in writing or otherwise, that the Company shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(c) Based on the audit procedures performed that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under subclause (i) and (ii) of Rule 11(e), as provided under (a) and (b) above, contain any material misstatement.
v. The final dividend proposed in the previous year, declared and paid by the Company during the year is in accordance with section 123 of the Act, as applicable.
As stated in note 12 to the financial statements, the Board of Directors of the Company has proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The dividend proposed is in accordance with section 123 of the Act, as applicable.
2. As required by the Companies (Auditorâs Report) Order, 2020 (âthe Orderâ) issued by the Central Government in terms of Section 143(11) of the Act, we give in âAnnexure Bâ a statement on the matters specified in paragraphs 3 and 4 of the Order.
For Deloitte Haskins & Sells LLP Chartered Accountants (Firmâs Registration No. 117366W/W-100018)
Rakesh N. Sharma Partner
(Membership No. 102042) (UDIN: 22102042AJFSLA5910)
Place : Mumbai
Date : 19th May, 2022
Mar 31, 2018
Independent Auditor''s Report To the Members of Novartis India Limited
Report on the Ind AS Financial Statements
We have audited the accompanying Ind AS financial statements of Novartis India Limited (âthe Companyâ), which comprise the Balance Sheet as at 31st March, 2018, and the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.
Managementâs Responsibility for the Ind AS Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, and other accounting principles generally accepted in India.
This responsibility also includes 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 frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorsâ Responsibility
Our responsibility is to express an opinion on these Ind AS financial statements based on our audit.
In conducting our audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder and the Order issued under section 143(11) of the Act.
We conducted our audit of the Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the Ind AS financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the Ind AS financial statements.
We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the Ind AS financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the Ind AS and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2018, and its profit, total comprehensive income, its cash flows and the changes in equity for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by Section 143(3) of the Act, based on our audit we report that:
a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
b) I n our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.
c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.
d) I n our opinion, the aforesaid Ind AS financial statements comply with the Indian Accounting Standards prescribed under section 133 of the Act.
e) On the basis of the written representations received from the directors of the Company as on 31st March, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2018 from being appointed as a director in terms of Section 164(2) of the Act.
f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Aâ. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Companyâs internal financial controls over financial reporting
g) With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its Ind AS financial statements - Refer Note 27 to Ind AS financial statements;
ii. The Company did not have any long-term contracts for which there were any material foreseeable losses. The Company did not have any derivative contracts;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
2. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government in terms of Section 143(11) of the Act, we give in âAnnexure Bâ a statement on the matters specified in paragraphs 3 and 4 of the Order.
(Referred to in paragraph 1(f) under âReport on Other Legal and Regulatory Requirementsâ section of our report of even date to the members of Novartis India Limited on the Ind AS financial statements for the year ended 31st March, 2018) Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
We have audited the internal financial controls over financial reporting of Novartis India Limited (âthe Companyâ) as of 31st March, 2018 in conjunction with our audit of the Ind AS financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Companyâs management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditorsâ Responsibility
Our responsibility is to express an opinion on the Companyâs internal financial controls over financial reporting of the Company based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. We believe that the audit evidence we have obtained, is sufficient and appropriate to provide a basis for our audit opinion on the Companyâs internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A companyâs internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companyâs internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companyâs assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March, 2018, based on the criteria for internal financial control over financial reporting established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
(Referred to in paragraph 2 under âReport on Other Legal and Regulatory Requirementsâ section of our report of even date to the members of Novartis India Limited on the Ind AS financial statements for the year ended 31st March, 2018)
(i) In respect of its fixed assets:
(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of the fixed assets.
(b) The Company has a program of verification to cover all the items of fixed assets in a phased manner over a period of three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the program, certain fixed assets were physically verified by the management during the year. According to the information and explanations given to us, no material discrepancies were noticed on such verification.
(c) According to the information and explanations given to us, the records examined by us and based on the examination of registered sale deeds/share certificate provided to us, we report that, the title deeds, comprising all the immovable properties of buildings, are held in the name of the Company as at the balance sheet date.
(ii) As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals except for inventories lying at third party locations, for which confirmations have been obtained by the management and goods in transit. No material discrepancies were noticed on physical verification.
(iii) The Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under Section 189 of the Act hence reporting under clause (iii) of paragraph 3 of the Order is not applicable.
(iv) The Company has not granted any loans, made investments or provided guarantees or securities hence reporting under clause (iv) of paragraph 3 of the Order is not applicable.
(v) According to the information and explanations given to us, the Company has not accepted any deposit during the year. The Company does not have unclaimed deposits as at 31st March, 2018 and accordingly, the provisions of Sections 73 to 76 or any other relevant provisions of the Act are not applicable to the Company.
(vi) The maintenance of cost records has not been specified by the Central Government under section 148(1) of the Act.
(vii) According to the information and explanations given to us in respect of statutory dues:
(a) The Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Income-tax, Goods and Services Tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, Cess and other material statutory dues applicable to it with the appropriate authorities.
(b) There were no undisputed amounts payable in respect of Provident Fund, Income-tax, Goods and Services Tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, Cess and other material statutory dues in arrears as at 31st March, 2018 for a period of more than six months from the date they became payable.
(c) Details of dues of Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, and Value Added Tax which have not been deposited as on 31st March, 2018 on account of disputes are given below:
Name of the statute |
Nature of dues |
Forum where the dispute is pending |
Period to which the amount relates |
Amount Involved (? million) |
Amount Unpaid (? million) * |
Income Tax Act, 1961 |
Income Tax including tax deducted at source and interest, as applicable |
Appellate Authority - up to Commissioner level |
Assessment years 1994-95 and 2008-09 to 2017-18 |
445.7 |
403.0 |
Income Tax Appellate Tribunal |
Assessment years 2006-07 and 2012-13 |
64.0 |
31.6 |
||
The Central Sales Tax Act, 1956 and Local Sales Tax Acts |
Sales tax including interest and penalty, as applicable |
Appellate Authority - up to Commissionerâs level |
2000-2001 to 2014-2015 |
485.2 |
429.3 |
Tribunal |
1993-1994, 2001-2002 to 2002 to 2003 2004-2005 to 2005-2006, 2007-08 2010-2011 to 2012-2013 |
60.1 |
29.2 |
||
The High Court of Kerala |
1997-1998 |
0.3 |
0.2 |
||
West Bengal Sales Tax Appellate and Revisional Board |
2008-2009 to 2010-2011 |
15.4 |
15.4 |
||
The Finance Act, 1994 |
Service tax |
Tribunal |
September 2004 to September 2009 |
4.8 |
4.8 |
The Customs Act, 1962 |
Customs Duty |
Appellate Authority - up to Commissionerâs level |
2002-2003 |
0.4 |
0.4 |
The Central Excise Act, 1944 |
Excise duty including penalty, as applicable |
Appellate Authority - up to Commissionerâs level |
1990 and June 1993 to October 1993 |
0.6 |
0.6 |
Customs, Excise & Service Tax Appellate Tribunal |
August 1993 to December 1996 |
2.4 |
2.4 |
(ix) The Company has not raised any moneys by way of initial public offer or further public offer (including debt instruments) or term loans and hence reporting under clause (ix) of paragraph 3 of the Order is not applicable.
(x) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no material fraud on the Company by its officers or employees has been noticed or reported during the year.
(xi) In our opinion and according to the information and explanations given to us, the Company has paid/provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.
(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of paragraph 3 of the Order is not applicable.
(xiii) In our opinion and according to the information and explanations given to us the Company is in compliance with section 177 and 188 of the Act, where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the Ind AS financial statements etc. as required by the applicable accounting standards.
(xiv) During the year the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures and hence reporting under clause (xiv) of paragraph 3 of the Order is not applicable.
(xv) In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its directors or directors of its holding company or persons connected with them and hence provisions of Section 192 of the Act are not applicable.
(xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934 hence reporting under clause (xiv) of paragraph 3 of the Order is not applicable.
For Deloitte Haskins & Sells LLP
Chartered Accountants
(Firmâs Registration No. 117366W/W-100018)
Uday M. Neogi
(Partner)
(Membership No. 30235)
Place : Mumbai
Date : 10th May, 2018
Mar 31, 2017
Report on the Indian Accounting Standards (Ind AS) Financial Statements
1. We have audited the accompanying financial statements of Novartis India Limited (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2017, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.
Managementâs Responsibility for the Ind AS Financial Statements
2. The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these Ind AS financial statements to give a true and fair view of the financial position, financial performance (including other comprehensive income), cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards specified in the Companies (Indian Accounting Standards) Rules, 2015 (as amended) under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorsâ Responsibility
3. Our responsibility is to express an opinion on these Ind AS financial statements based on our audit.
4. We have taken into account the provisions of the Act and the Rules made there under including the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.
5. We conducted our audit of the Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and pronouncements require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Ind AS financial statements are free from material misstatement.
6. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the Ind AS financial statements. The procedures selected depend on the auditorsâ judgment, including the assessment of the risks of material misstatement of the Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial controls relevant to the Companyâs preparation of the Ind AS financial statements that give a true and fair view, in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the Ind AS financial statements.
7. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Ind AS financial statements.
Opinion
8. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2017, and its profit (including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.
Other Matter
9. The financial information of the Company for the year ended March 31, 2016 and the transition date opening balance sheet as at April 1, 2015 included in these Ind AS financial statements, are based on the previously issued statutory financial statements for the years ended March 31, 2016 and March 31, 2015 prepared in accordance with the Companies (Accounting Standards) Rules, 2006 (as amended) which were audited by us and on which we expressed an unmodified opinion dated May 26, 2016 and May 27, 2015 respectively. The adjustments to those financial statements for the differences in accounting principles adopted by the Company on transition to the Ind AS have been audited by us.
Our opinion is not modified in respect of this matter
Report on Other Legal and Regulatory Requirements
10. As required by the Companies (Auditorâs Report) Order, 2016, issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act (âthe Orderâ), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure B a statement on the matters specified in paragraphs 3 and 4 of the Order.
11. As required by Section 143 (3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
(b) I n our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.
(c) The Balance Sheet, the Statement of Profit and Loss (including other comprehensive income), the Cash Flow Statement and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.
(d) I n our opinion, the aforesaid Ind AS financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act.
(e) On the basis of the written representations received from the directors as on March 31, 2017 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2017 from being appointed as a director in terms of Section 164 (2) of the Act.
(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in Annexure A.
(g) With respect to the other matters to be included in the Auditorsâ Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our knowledge and belief and according to the information and explanations given to us:
i) The Company has disclosed the impact, if any, of pending litigations as at March 31, 2017 on its financial position in its Ind AS financial statements -Refer Note 29;
i i) The Company has long-term contracts as at March 31, 2017 for which there were no material foreseeable losses. The Company did not have any derivative contracts as at March 31, 2017;
iii) There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended March 31, 2017;
iv) The Company has provided requisite disclosures in the financial statements as to holdings as well as dealings in Specified Bank Notes during the period from November 8, 2016 to December 30, 2016. Based on audit procedures and relying on the management representation we report that the disclosures are in accordance with books of account maintained by the Company and as produced to us by the Management - Refer Note 35.
Annexure B to Independent Auditors'' Report
Referred to in paragraph 10 of the Independent Auditorsâ Report of even date to the members of Novartis India Limited on the Ind AS financial statements as of and for the year ended March 31, 2017
i. (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation, of fixed assets.
(b) The fixed assets are physically verified by the Management according to a phased programme designed to cover all the items over a period of three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the Management during the year and no material discrepancies have been noticed on such verification.
(c) The title deeds of immovable properties, as disclosed in Note 3 on fixed assets to the Ind AS financial statements, are held in the name of the Company.
ii. The physical verification of inventory (excluding stocks with third parties) has been conducted at reasonable intervals by the Management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. The discrepancies noticed on physical verification of inventory as compared to book records were not material.
iii. The Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under Section 189 of the Act. Therefore, the provisions of Clause 3(iii), (iii)(a), (iii)(b) and (iii)(c) of the said Order are not applicable to the Company.
iv. The Company has not granted any loans or made any investments, or provided any guarantees or security to the parties covered under Section 185 and 186. Therefore, the provisions of Clause 3(iv) of the said Order are not applicable to the Company.
v. The Company has not accepted any deposits from the public within the meaning of Sections 73, 74, 75 and 76 of the Act and the Rules framed there under to the extent notified.
vi. Pursuant to the rules made by the Central Government of India, the Company is required to maintain cost records as specified under Section 148(1) of the Act in respect of its products. We have broadly reviewed the same, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.
vii. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is generally regular in depositing the undisputed statutory dues in respect of service tax, though there have been delays in a few cases for service tax payable based on reverse charge mechanism and is regular in depositing undisputed statutory dues, including provident fund, employeesâ state insurance, income tax, sales tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues, as applicable, with the appropriate authorities.
(b) According to the information and explanations given to us and the records of the Company examined by us, the particulars of dues of income tax, sales tax, value added tax, service tax, duty of customs and duty of excise as at March 31, 2017 which have not been deposited on account of a dispute, are as follows:
Name of the statute |
Nature of dues |
Amount Rs. in Million* |
Period to which the amount relates |
Forum where the dispute is pending |
The Income-tax Act, 1961 |
Income-tax including tax deducted at source and interest, as applicable |
274.1 |
Assessment Years 1994-1995, 2008-2009 to 2016-2017 |
Appellate Authority - up to Commissionerâs level |
|
|
23.0 |
Assessment Year 2006-2007 |
Income Tax Appellate Tribunal |
The Central Sales Tax Act, 1956 and Local Sales Tax Acts |
Sales tax including interest and penalty, as applicable |
374.1 |
2000-2001 to 2013-2014 |
Appellate Authority - up to Commissionerâs level |
|
|
48.1 |
1993-1994, 2001-2002 to 2005-2006, 2007-2008, 2010-2011 and 2012-2013 |
Tribunal |
|
|
0.2 |
1997-1998 |
The High Court of Kerala |
|
|
15.4 |
2008-2009 to 2010-2011 |
West Bengal Sales Tax Appellate and Revisional Board |
The Finance Act, 1994 |
Service tax |
4.8 |
September 2004 to September 2009 |
Appellate Authority - up to Commissionerâs level |
The Customs Act, 1962 |
Customs Duty |
0.4 |
2002-2003 |
Appellate Authority - up to Commissionerâs level |
The Central Excise Act, 1944 |
Excise duty including penalty, as applicable |
0.6 |
1990 and June 1993 to October 1993 |
Appellate Authority - up to Commissionerâs level |
|
|
2.4 |
August 1993 to December 1996 |
Customs, Excise & Service Tax Appellate Tribunal |
* Net of amounts paid including under protest.
viii As the Company neither has any loans or borrowings from any financial institution or bank or Government, nor has it issued any debentures as at the balance sheet date, the provisions of Clause 3(viii) of the Order are not applicable to the Company.
ix. The Company has not raised any money by way of initial public offer, further public offer (including debt instruments) and term loans during the year under review. Accordingly, the provisions of Clause 3(ix) of the Order are not applicable to the Company.
x. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud by the Company or on the Company by its officers or employees, noticed or reported during the year, nor have we been informed of any such case by the Management.
xi. The Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.
xii. As the Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it, the provisions of Clause 3(xii) of the Order are not applicable to the Company
xiii The Company has entered into transactions with related parties in compliance with the provisions of Sections 177 and 188 of the Act. The details of such related party transactions have been disclosed in the Ind AS financial statements as required under Indian Accounting Standard (Ind AS) 24, Related Party Disclosures specified under Section 133 of the Act, read with Companies (Indian Accounting Standard) Rules, 2015 (as amended).
xiv. The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Accordingly, the provisions of Clause 3(xiv) of the Order are not applicable to the Company.
xv. The Company has not entered into any non-cash transactions with its directors or persons connected with him within the meaning of Section 192 of the Act. Accordingly, the provisions of Clause 3(xv) of the Order are not applicable to the Company.
xvi. The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, the provisions of Clause 3(xvi) of the Order are not applicable to the Company.
For Lovelock & Lewes
Firm Registration No. 301056E
Chartered Accountants
Asha Ramanathan
Partner
Mumbai, May 23, 2017 Membership No. 202660
Mar 31, 2016
1. We have audited the accompanying financial statements of Novartis
India Limited ("the Company"), which comprise the Balance Sheet as at
March 31, 2016, the Statement of Profit and Loss, the Cash Flow
Statement for the year then ended, and a summary of the significant
accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
2. The Company''s Board of Directors is responsible for the matters
stated in Section 134(5) of the Companies Act, 2013 ("the Act") with
respect to the preparation of these financial statements to give a true
and fair view of the financial position, financial performance and cash
flows of the Company in accordance with the accounting principles
generally accepted in India, including the Accounting Standards
specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014. This responsibility also includes
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding of the assets of the Company and
for preventing and detecting frauds and other irregularities; selection
and application of appropriate accounting policies; making judgments
and estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal financial controls,
that were operating effectively for ensuring the accuracy and
completeness of the accounting records, relevant to the preparation and
presentation of the financial statements that give a true and fair view
and are free from material misstatement, whether due to fraud or error.
Auditors'' Responsibility
3. Our responsibility is to express an opinion on these financial
statements based on our audit.
4. We have taken into account the provisions of the Act and the Rules
made there under including the accounting standards and matters which
are required to be included in the audit report.
5. We conducted our audit in accordance with the Standards on Auditing
specified under Section 143(10) of the Act and other applicable
authoritative pronouncements issued by the Institute of Chartered
Accountants of India. Those Standards and pronouncements require that
we comply with ethical requirements and plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free from material misstatement.
6. An audit involves performing procedures to obtain audit evidence
about the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditors'' judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal financial control relevant
to the Company''s preparation of the financial statements that give a
true and fair view, in order to design audit procedures that are
appropriate in the circumstances. An audit also includes evaluating the
appropriateness of the accounting policies used and the reasonableness
of the accounting estimates made by the Company''s Directors, as well as
evaluating the overall presentation of the financial statements.
7. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion on the
financial statements.
Opinion
8. In our opinion and to the best of our information and according to
the explanations given to us, the aforesaid financial statements give
the information required by the Act in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India, of the state of affairs of the Company as
at March 31, 2016, and its profit and its cash flows for the year ended
on that date.
Report on Other Legal and Regulatory Requirements
9. As required by ''the Companies (Auditor''s Report) Order, 2016'',
issued by the Central Government of India in terms of sub-section (11)
of Section 143 of the Act (hereinafter referred to as the "Order"), and
on the basis of such checks of the books and records of the Company as
we considered appropriate and according to the information and
explanations given to us, we give in the Annexure B, a statement on the
matters specified in paragraphs 3 and 4 of the Order.
10. As required by Section 143(3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
purposes of our audit.
(b) In our opinion, proper books of account as required by law have
been kept by the Company so far as it appears from our examination of
those books, except that the backup of the books of accounts and other
books and papers maintained in electronic mode has not been maintained
on servers physically located in India.
(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account.
(d) In our opinion, the aforesaid financial statements comply with the
Accounting Standards specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014.
(e) On the basis of the written representations received from the
directors as on March 31, 2016 taken on record by the Board of
Directors, none of the directors is disqualified as on March 31, 2016
from being appointed as a director in terms of Section 164(2) of the
Act.
(f) With respect to the maintenance of accounts and other matters
connected therewith, reference is made to our comment in Paragraph
10(b) above that the backup of the books of accounts and other books
and papers maintained in electronic mode has not been maintained on
servers physically located in India.
(g) With respect to the adequacy of the internal financial controls
over financial reporting of the Company and the operating effectiveness
of such controls, refer to our separate Report in Annexure A.
(h) With respect to the other matters to be included in the Auditors''
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our knowledge and belief
and according to the information and explanations given to us:
i. The Company has disclosed the impact, if any, of pending litigations
as at March 31, 2016 on its financial position in its financial
statements  Refer Note [19];
ii. The Company has long-term contracts as at March 31, 2016, for which
there were no material foreseeable losses. The Company did not have any
derivative contract as at March 31, 2016;
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company during the year ended March 31, 2016.
Referred to in paragraph 9 of the Independent Auditors'' Report of even
date to the members of Novartis India Limited on the financial
statements as of and for the year ended March 31, 2016
i. (a) The Company is maintaining proper records showing full
particulars, including quantitative details and situation, of fixed
assets.
(b) The fixed assets are physically verified by the Management
according to a phased programme designed to cover all the items over a
period of three years which, in our opinion, is reasonable having
regard to the size of the Company and the nature of its assets.
Pursuant to the programme, a portion of the fixed assets has been
physically verified by the Management during the year and no material
discrepancies have been noticed on such verification.
(c) The title deeds of immovable properties, as disclosed in Note 9 on
fixed assets to the financial statements, are held in the name of the
Company.
ii. The physical verification of inventory (excluding stocks with third
parties) have been conducted at reasonable intervals by the Management
during the year. In respect of inventory lying with third parties,
these have substantially been confirmed by them. The discrepancies
noticed on physical verification of inventory as compared to book
records were not material.
iii. The Company has not granted any loans, secured or unsecured, to
companies, firms, Limited Liability Partnerships or other parties
covered in the register maintained under Section 189 of the Act.
Therefore, the provisions of Clause 3(iii), (iii)(a), (iii)(b) and
(iii)(c) of the said Order are not applicable to the Company.
iv. The Company has not granted any loans or made any investments, or
provided any guarantees or security to the parties covered under
Section 185 and 186. Therefore, the provisions of Clause 3(iv) of the
said Order are not applicable to the Company.
v. The Company has not accepted any deposits from the public within the
meaning of Sections 73, 74, 75 and 76 of the Act and the Rules framed
there under to the extent notified.
vi. Pursuant to the rules made by the Central Government of India, the
Company is required to maintain cost records as specified under Section
148(1) of the Act in respect of its products. We have broadly reviewed
the same, and are of the opinion that, prima facie, the prescribed
accounts and records have been made and maintained. We have not,
however, made a detailed examination of the records with a view to
determine whether they are accurate or complete.
vii. (a) According to the information and explanations given to us and
the records of the Company examined by us, in our opinion, the Company
is generally regular in depositing the undisputed statutory dues in
respect of service tax, though there has been a slight delay in a few
cases, and is regular in depositing undisputed statutory dues,
including provident fund, employees'' state insurance, income tax, sales
tax, duty of customs, duty of excise, value added tax, cess and other
material statutory dues, as applicable, with the appropriate
authorities.
(b) According to the information and explanations given to us and the
records of the Company examined by us, there are no dues of value added
tax which have not been deposited on account of any dispute. The
particulars of dues of income tax, sales tax, service tax, duty of
customs and duty of excise as at March 31, 2016 which have not been
deposited on account of a dispute, are as follows:
Name of the Nature of dues Amount Period to
which
statute Rs, in the amount
Million* relates
The Income-tax Income-tax 33.0 Assessment
Act, 1961 including
tax Years 1994-
1995,
deducted at
source 2008-2009,
and interest,
as 2009-2010,
applicable 2011-2012 and
2012-2013
23.0 Assessment Year
The Central
Sales tax 338.1 2000-2001 to
Appellate
Sales Tax Act,
including
interest 2013-2014
1956 and
Local and penalty, as
Sales Tax
Acts applicable
48.1 1993-1994,
2001-2002 to
2005-2006,
2007-2008,
2010-2011
and
2012-2013
0.2 1997-1998
15.4 2008-2009 to
2010-2011
The Finance Service tax 4.7 September 2004
Act, 1994 to September
2009
The Customs Customs Duty 0.4 2002-2003
Act, 1962
The Central
Excise Act, including 0.6
penalty, 1993 to
October
1944 as applicable 1993
2.4 August 1993 to ,
December 1996
Name of the forum where the dispute
is pending
The Income tax Appellate Authority- up to
Act 1961 Commissioners level
Income Tax Appellate
tribunal
The Central Appellate Authority up to
sales Tax Act Commissioner level
1956 and lacal
sales Tax Act
Tribunal
The High Court of Kerela
west Bengal Sales Tax
Appellate and Revisional
Board
The Finance Appellate authority up to
Act 1961 Commissioners level
The Customs Act
1962 appellate authority up to
Commissioners level
The Centrol Appellate Authority
Excise Act up to Commissioners level
1944
Customs,excise & service
Tax Appellate
Tribunal
* Net of amounts paid including under protest.
viii As the Company neither has any loans or borrowings from any
financial institution or bank or Government, nor has it issued any
debentures as at the balance sheet date, the provisions of Clause
3(viii) of the Order are not applicable to the Company.
ix. The Company has not raised any moneys by way of initial public
offer, further public offer (including debt instruments) and term
loans. Accordingly, the provisions of Clause 3(ix) of the Order are not
applicable to the Company.
x. During the course of our examination of the books and records of the
Company, carried out in accordance with the generally accepted auditing
practices in India, and according to the information and explanations
given to us, we have neither come across any instance of material fraud
by the Company or on the Company by its officers or employees, noticed
or reported during the year, nor have we been informed of any such case
by the Management.
xi. The Company has paid/provided for managerial remuneration in
accordance with the requisite approvals mandated by the provisions of
Section 197 read with Schedule V to the Act.
xii. As the Company is not a Nidhi Company and the Nidhi Rules, 2014
are not applicable to it, the provisions of Clause 3(xii) of the Order
are not applicable to the Company.
xiii. The Company has entered into transactions with related parties in
compliance with the provisions of Sections 177 and 188 of the Act. The
details of such related party transactions have been disclosed in the
financial statements as required under Accounting Standard (AS) 18,
Related Party Disclosures specified under Section 133 of the Act, read
with Rule 7 of the Companies (Accounts) Rules, 2014.
xiv. The Company has not made any preferential allotment or private
placement of shares or fully or partly convertible debentures during
the year under review. Accordingly, the provisions of Clause 3(xiv) of
the Order are not applicable to the Company.
xv. The Company has not entered into any non cash transactions with its
directors or persons connected with him within the meaning of Section
192 of the Act. Accordingly, the provisions of Clause 3(xv) of the
Order are not applicable to the Company.
xvi. The Company is not required to be registered under Section 45-IA
of the Reserve Bank of India Act, 1934. Accordingly, the provisions of
Clause 3(xvi) of the Order are not applicable to the Company.
For Lovelock & Lewes
Firm Registration No. 301056E
Chartered Accountants
Asha Ramanathan
Partner
Mumbai, May 26, 2016
Membership No. 202660
Mar 31, 2015
Report on the Financial Statements
1. We have audited the accompanying financial statements of Novartis
India Limited ("the Company"), which comprise the Balance Sheet as at
March 31, 2015, the Statement of Profit and Loss, the Cash Flow
Statement for the year then ended, and a summary of the significant
accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
2. The Company''s Board of Directors is responsible for the matters
stated in Section 134(5) of the Companies Act, 2013 ("the Act") with
respect to the preparation of these financial statements to give a true
and fair view of the financial position, financial performance and cash
flows of the Company in accordance with the accounting principles
generally accepted in India, including the Accounting Standards
specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014. This responsibility also includes
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding of the assets of the Company and
for preventing and detecting frauds and other irregularities; selection
and application of appropriate accounting policies; making judgments
and estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal financial controls,
that were operating effectively for ensuring the accuracy and
completeness of the accounting records, relevant to the preparation and
presentation of the financial statements that give a true and fair view
and are free from material misstatement, whether due to fraud or error.
Auditor''s Responsibility
3. Our responsibility is to express an opinion on these financial
statements based on our audit.
4. We have taken into account the provisions of the Act and the Rules
made thereunder including the accounting standards and matters which
are required to be included in the audit report.
5. We conducted our audit in accordance with the Standards on Auditing
specified under Section 143(10) of the Act and other applicable
authoritative pronouncements issued by the Institute of Chartered
Accountants of India. Those Standards and pronouncements require that
we comply with ethical requirements and plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free from material misstatement.
6. An audit involves performing procedures to obtain audit evidence
about the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor''s judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal financial control relevant
to the Company''s preparation of the financial statements that give a
true and fair view, in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing
an opinion on whether the Company has in place an adequate internal
financial controls system over financial reporting and the operating
effectiveness of such controls. An audit also includes evaluating the
appropriateness of the accounting policies used and the reasonableness
of the accounting estimates made by the Company''s Directors, as well as
evaluating the overall presentation of the financial statements.
7. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion on the
financial statements.
Opinion
8. In our opinion and to the best of our information and according to
the explanations given to us, the aforesaid financial statements give
the information required by the Act in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India, of the state of affairs of the Company as
at March 31, 2015, and its profit and its cash flows for the year ended
on that date.
Report on Other Legal and Regulatory Requirements
9. As required by ''the Companies (Auditor''s Report) Order, 2015'',
issued by the Central Government of India in terms of sub-section (11)
of Section 143 of the Act (hereinafter referred to as the "Order"), and
on the basis of such checks of the books and records of the Company as
we considered appropriate and according to the information and
explanations given to us, we give in the Annexure a statement on the
matters specified in paragraphs 3 and 4 of the Order.
10. As required by Section 143(3) of the Act, we report that:
a. We have sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
purposes of our audit.
b. In our opinion, proper books of account as required by law have
been kept by the Company so far as it appears from our examination of
those books, except that the back up of the books of accounts and other
books and papers maintained in electronic mode has not been maintained
on servers physically located in India.
c. The Balance Sheet, the Statement of Profit and Loss, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account.
d. In our opinion, the aforesaid financial statements comply with the
Accounting Standards specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014.
e. On the basis of the written representations received from the
directors as on March 31, 2015 taken on record by the Board of
Directors, none of the directors is disqualified as on March 31, 2015
from being appointed as a director in terms of Section 164(2) of the
Act.
f. With respect to the other matters to be included in the Auditor''s
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our knowledge and belief
and according to the information and explanations given to us:
1. The Company has disclosed the impact, if any, of pending
litigations as at March 31, 2015 on its financial position in its
financial statements - Refer Note 19.
2. The Company has long-term contracts as at March 31, 2015, for which
there were no material foreseeable losses. The Company did not have any
derivative contract as at March 31, 2015.
3. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company during the year ended March 31, 2015.
Annexure to Independent Auditors'' Report
Referred to in paragraph 9 of the Independent Auditors'' Report of even
date to the members of Novartis India Limited on the financial
statements as of and for the year ended March 31, 2015
i. (a) The Company is maintaining proper records showing full
particulars, including quantitative details and situation, of fixed
assets.
(b) The fixed assets are physically verified by the Management
according to a phased programme designed to cover all items over a
period of three years, which, in our opinion, is reasonable having
regard to the size of the Company and the nature of its assets.
Pursuant to the programme, a portion of the fixed assets has been
physically verified by the Management during the year and no material
discrepancies have been noticed on such verification.
ii. (a) The inventory (excluding stocks with third parties) has been
physically verified by the Management during the year. In respect of
inventory lying with third parties, these have substantially been
confirmed by them. In our opinion, the frequency of verification is
reasonable.
(b) In our opinion, the procedures of physical verification of
inventory followed by the Management are reasonable and adequate in
relation to the size of the Company and the nature of its business.
(c) On the basis of our examination of the inventory records, in our
opinion, the Company is maintaining proper records of inventory. The
discrepancies noticed on physical verification of inventory as compared
to book records were not material.
iii. The Company has not granted any loans, secured or unsecured, to
companies, firms or other parties covered in the register maintained
under Section 189 of the Act. Therefore, the provisions of Clause
3(iii), (iii)(a) and (iii)(b) of the said Order are not applicable to
the Company.
iv. In our opinion, and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business for the
purchase of inventory and fixed assets and for the sale of goods and
services. Further, on the basis of our examination of the books and
records of the Company, and according to the information and
explanations given to us, we have neither come across, nor have been
informed of, any continuing failure to correct major weaknesses in the
aforesaid internal control system.
v. In our opinion, and according to the information and explanations
given to us, the Company has complied with the provisions of Sections
73, 74, 75 and 76 or any other relevant provisions of the Act and the
Rules framed thereunder to the extent notified, with regard to the
deposits accepted from the public. According to the information and
explanations given to us, no order has been passed by the Company Law
Board or National Company Law Tribunal or Reserve Bank of India or any
Court or any other Tribunal on the Company in respect of the aforesaid
deposits.
vi. We have broadly reviewed the books of account maintained by the
Company in respect of products where, pursuant to the rules made by the
Central Government of India, the maintenance of cost records has been
specified under sub-section (1) of Section 148 of the Act, and are of
the opinion that, prima facie, the prescribed accounts and records have
been made and maintained. We have not, however, made a detailed
examination of the records with a view to determine whether they are
accurate or complete.
vii. (a) According to the information and explanations given to us and
the records of the Company examined by us, in our opinion, the Company
is generally regular in depositing the undisputed statutory dues in
respect of service tax, though there has been a slight delay in a few
cases, and is regular in depositing undisputed statutory dues,
including provident fund, employees'' state insurance, income-tax,
sales tax, wealth tax, duty of customs, duty of excise, value added
tax, cess and other material statutory dues, as applicable, with the
appropriate authorities.
(b) According to the information and explanations given to us and the
records of the Company examined by us, there are no dues of wealth
tax and value added tax which have not been deposited on account of
any dispute. The particulars of dues of income-tax, sales tax,
service tax, duty of customs and duty of excise as at March 31, 2015
which have not been deposited on account of a dispute, are as follows -
Name of the statute Nature of dues Amount Rs.in
Million*
The Income-tax Act, 1961 Income-tax including tax 37.3
deducted at source and
interest, as applicable
The Central Sales Tax Sales tax including 454.5
Act, 1956 and Local interest and penalty, as
Sales Tax Acts applicable
The Finance Act, 1994 Service tax 4.5
The Customs Act, 1962 Customs Duty 0.4
The Central Excise Act, Excise duty including 0.6
1944 penalty,as applicable
Amount Rs.in Period to which Forum where the
Million* the amount relates dispute is pending
37.3 Assessment Years 1994-1995, Appellate Authority
2005-2006 and 2007-2008 to up to Commissioner''s
2011-2012 level
23.0 Assessment Year 2006-2007 Income Tax Appellate
Tribunal
454.5 2000-2001 to 2012-2013 and Appellate Authority
August 2013 up to Commissioner''s
level
28.4 1993-1994, 2000-2001 to
2002-2003, 2004-2005,2005-2006, Tribunal
2007-2008 and 2010-2011
0.2 1997-1998 The High Court of
Kerala
15.4 2008-2009 to 2010-2011 West Bengal Sales
Tax Appellate and
Revisional Board
4.5 September 2004 to September Appellate Authority
2009 up to Commissioner''s
level
0.4 2002-2003 Appellate Authority
up to Commissioner''s
level
0.6 1990 and June 1993 to October Appellate Authority
1993 up to Commissioner''s
level
2.4 August 1993 to December 1996 Customs, Excise &
Service Tax Appellate
Tribunal
* Net of amounts paid including under protest.
(c) The amount required to be transferred to Investor Education and
Protection Fund has been transferred within the stipulated time in
accordance with the provisions of the Companies Act, 1956 and the rules
made thereunder.
viii. The Company has no accumulated losses as at the end of the
financial year and it has not incurred any cash losses in the financial
year ended on that date or in the immediately preceding financial year.
ix. As the Company does not have any borrowings from any financial
institution or bank nor has it issued any debentures as at the balance
sheet date, the provisions of Clause 3(ix) of the Order are not
applicable to the Company.
x. In our opinion, and according to the information and explanations
given to us, the Company has not given any guarantee for loans taken by
others from banks or financial institutions during the year.
Accordingly, the provisions of Clause 3(x) of the Order are not
applicable to the Company.
xi. The Company has not raised any term loans. Accordingly, the
provisions of Clause 3(xi) of the Order are not applicable to the
Company.
xii. During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
material fraud on or by the Company, noticed or reported during the
year, nor have we been informed of any such case by the Management.
For Lovelock & Lewes
Firm Registration No. 301056E
Chartered Accountants
Asha Ramanathan
Partner
Mumbai, May 27, 2015 Membership No. 202660
Mar 31, 2014
Report on the Financial Statements
1. We have audited the accompanying financial statements of Novartis
India Limited (the ''company''), which comprise the Balance Sheet as at
31st March, 2014 and the Statement of Profit and Loss and Cash Flow
Statement for the year then ended and a summary of significant
accounting policies and other explanatory information, which we have
signed under reference to this report.
Management''s Responsibility for the Financial Statements
2. The company''s management is responsible for the preparation of
these financial statements that give a true and fair view of the
financial position, financial performance and cash flows of the company
in accordance with the Accounting Standards notified under the
Companies Act, 1956 of India (the ''Act'') read with the General Circular
15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs
in respect of Section 133 of the Companies Act, 2013 of India. This
responsibility includes the design, implementation and maintenance of
internal control relevant to the preparation and presentation of the
financial statements that give a true and fair view and are free from
material misstatement, whether due to fraud or error.
Auditors'' Responsibility
3. Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing and other applicable authoritative
pronouncements issued by the Institute of Chartered Accountants of
India. Those Standards require that we comply with ethical requirements
and plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free from material misstatement.
4. An audit involves performing procedures to obtain audit evidence
about the amounts and disclosures in the financial statements. The
procedures selected depend on the auditors'' judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditors consider internal control relevant to the
company''s preparation and fair presentation of the financial statements
in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the company''s internal control. An audit also includes
evaluating the appropriateness of accounting policies used and the
reasonableness of the accounting estimates made by management, as well
as evaluating the overall presentation of the financial statements.
5. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion.
Opinion
6. In our opinion and to the best of our information and according to
the explanations given to us, the accompanying financial statements
give the information required by the Act in the manner so required and
give a true and fair view in conformity with the accounting principles
generally accepted in India:
(a) in the case of the Balance Sheet, of the state of affairs of the
company as at 31st March, 2014;
(b) in the case of the Statement of Profit and Loss, of the profit for
the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
7. As required by ''The Companies (Auditor''s Report) Order, 2003'', as
amended by ''The Companies (Auditor''s Report) (Amendment) Order, 2004'',
issued by the Central Government of India in terms of sub-section (4A)
of Section 227 of the Act (hereinafter referred to as the ''Order'') and
on the basis of such checks of the books and records of the company as
we considered appropriate and according to the information and
explanations given to us, we give in the Annexure a statement on the
matters specified in paragraphs 4 and 5 of the Order.
8. As required by Section 227(3) of the Act, we report that:
(a) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
(b) In our opinion, proper books of account as required by law have
been kept by the company so far as appears from our examination of
those books;
(c) The Balance Sheet, Statement of Profit and Loss and Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
(d) In our opinion, the Balance Sheet, Statement of Profit and Loss and
Cash Flow Statement dealt with by this report comply with the
Accounting Standards notified under the Act read with the General
Circular 15/2013 dated 13th September, 2013 of the Ministry of
Corporate Affairs in respect of Section 133 of the Companies Act, 2013
of India;
(e) On the basis of written representations received from the directors
as on 31st March, 2014 and taken on record by the Board of Directors,
none of the directors is disqualified as on 31st March, 2014 from being
appointed as a director in terms of clause (g) of sub-section (1) of
Section 274 of the Act.
[Referred to in paragraph 7 of the Independent Auditors'' Report of even
date to the members of Novartis India Limited on the financial
statements as of and for the year ended 31st March, 2014]
1. (a) The company is maintaining proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) The fixed assets are physically verified by the management
according to a phased programme designed to cover all the items over a
period of three years which, in our opinion, is reasonable having
regard to the size of the company and the nature of its assets.
Pursuant to the programme, a portion of the fixed assets has been
physically verified by the management during the year and no material
discrepancies have been noticed on such verification.
(c) In our opinion and according to the information and explanations
given to us, a substantial part of fixed assets has not been disposed
of by the company during the year.
2. (a) The inventory has been physically verified by the management
during the year. In respect of inventory lying with third parties,
these have substantially been confirmed by them. In our opinion, the
frequency of verification is reasonable.
(b) In our opinion, the procedures of physical verification of
inventory followed by the management are reasonable and adequate in
relation to the size of the company and the nature of its business.
(c) On the basis of our examination of the inventory records, in our
opinion, the company is maintaining proper records of inventory. In our
opinion, the discrepancies noticed on physical verification of
inventory as compared to book records were not material.
3. (a) The company has not granted any loans, secured or unsecured, to
companies, firms or other parties covered in the register maintained
under Section 301 of the Act. Accordingly, the provisions of Clause
4(iii)(b) to 4(iii)(d) of the Order are not applicable to the company.
(b) The company has not taken any loans, secured or unsecured, from
companies, firms or other parties covered in the register maintained
under Section 301 of the Act. Accordingly, the provisions of Clause
4(iii)(f) and 4(iii)(g) of the Order are not applicable to the company.
4. In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the company and the nature of its business for the
purchase of inventory and fixed assets and for the sale of goods and
services. Further, on the basis of our examination of the books and
records of the company and according to the information and
explanations given to us, we have neither come across nor have we been
informed of any continuing failure to correct major weaknesses in the
aforesaid internal control system.
5. (a) According to the information and explanations given to us, we
are of the opinion that the particulars of all contracts or
arrangements that need to be entered into the register maintained under
Section 301 of the Act have been so entered.
(b) In our opinion and according to the information and explanations
given to us, in respect of the transactions made in pursuance of such
contracts or arrangements and exceeding the value of Rupees Five Lakhs
in respect of any party during the year, we are unable to comment
whether these transactions have been made at prices which are
reasonable having regard to the prevailing market prices at the
relevant time as there are no comparable market prices available since
these transactions are of specialised/proprietary nature.
6. In our opinion and according to the information and explanations
given to us, the company has complied with the provisions of Sections
58A and 58AA or any other relevant provisions of the Act and the
Companies (Acceptance of Deposits) Rules, 1975 with regard to the
deposits accepted from the public. According to the information and
explanations given to us, no order has been passed by the company Law
Board or National Company Law Tribunal or Reserve Bank of India or any
Court or any other Tribunal on the company in respect of the aforesaid
deposits.
7. In our opinion, the company has an internal audit system
commensurate with its size and the nature of its business.
8. We have broadly reviewed the books of account maintained by the
company in respect of products where, pursuant to the rules made by the
Central Government of India, the maintenance of cost records has been
prescribed under clause (d) of sub-section (1) of Section 209 of the
Act and are of the opinion that, prima facie, the prescribed accounts
and records have been made and maintained. We have not, however, made a
detailed examination of the records with a view to determine whether
they are accurate or complete.
9. (a) According to the information and explanations given to us and
the records of the company examined by us, in our opinion, the company
is generally regular in depositing undisputed statutory dues in respect
of sales tax and service tax though there has been a slight delay in a
few cases and is regular in depositing undisputed statutory dues
including provident fund, investor education and protection fund,
employees'' state insurance, income-tax, wealth tax, customs duty,
excise duty and other material statutory dues, as applicable, with the
appropriate authorities.
(b) According to the information and explanations given to us and the
records of the company examined by us, there are no dues of wealth tax
which have not been deposited on account of any dispute. The
particulars of dues of income-tax, sales tax, service tax, customs duty
and excise duty as at 31st March, 2014 which have not been deposited on
account of a dispute, are as follows Â
Name of the Nature of dues Amount Period to which Forum where the
statute Rs. in the amount dispute is
pending
Mill
-ion* relates
The Income-
tax Income-tax 33.0 Assessment Appellate
Act, 1961 including tax Years 1994-1995, Authority  up
to
deducted at
source 2005-2006, Commissioner''s
level
and interest,
as 2009-2010 to
applicable 2011-2012 and
2014-2015
23.0 Assessment Year Income Tax
Appellate
2006-2007 Tribunal
The
Central Sales tax 382.3 2000-2001 to Appellate
Sales Tax
Act, including
interest 2010-2011, Authority  up
to
1956 and
Local and penalty,
as October 2012 Commissioner''s
level
Sales
Tax Acts applicable and August 2013
23.6 1993-1994, Tribunal
2000-2001 to
2002-2003 and
2004-2005 to
2006- 2007
0.2 1997-1998 The High Court
of Kerala
The
Finance Service tax 4.5 September 2004 Appellate
Act, 1994 to September Authority  up
to
2009 Commissioner''s
level
The
Customs Customs Duty 0.4 2002-2003 Appellate
Act, 1962 Authority  up
to
Commissioner''s
level
The
Central Excise duty 0.6 1990 and June Appellate
Excise
Act, including
penalty, 1993 to October Authority  up
to
1944 as applicable 1993 Commissioner''s
level
2.4 August 1993 to Customs, Excise
&
December 1996 Service Tax
Appellate
Tribunal
* Net of amounts paid including under protest.
10. The company has no accumulated losses as at the end of the
financial year and it has not incurred any cash losses in the financial
year ended on that date or in the immediately preceding financial year.
11. According to the records of the company examined by us and the
information and explanations given to us, the company has not defaulted
in repayment of dues to any financial institution or bank or debenture
holders as at the Balance Sheet date.
12. The company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
Accordingly, the provisions of Clause 4(xii) of the Order are not
applicable to the company.
13. As the provisions of any special statute applicable to chit
fund/nidhi/mutual benefit fund/societies are not applicable to the
company, the provisions of Clause 4(xiii) of the Order are not
applicable to the company.
14. In our opinion, the company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of Clause 4(xiv) of the Order are not applicable to the
company.
15. According to the information and explanations given to us, the
company has not given any guarantee for loans taken by others from
banks or financial institutions during the year. Accordingly, the
provisions of Clause 4(xv) of the Order are not applicable to the
company.
16. The company has not raised any term loans. Accordingly, the
provisions of Clause 4(xvi) of the Order are not applicable to the
company.
17. According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the company, we report
that no funds raised on short-term basis have been used for long-term
investment.
18. The company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under Section
301 of the Act during the year. Accordingly, the provisions of Clause
4(xviii) of the Order are not applicable to the company.
19. The company has not issued any debentures during the year and does
not have any debentures outstanding as at the beginning of the year and
at the year end. Accordingly, the provisions of Clause 4(xix) of the
Order are not applicable to the company.
20. The company has not raised any money by public issues during the
year. Accordingly, the provisions of Clause 4(xx) of the Order are not
applicable to the company.
21. During the course of our examination of the books and records of
the company, carried out in accordance with the generally accepted
auditing practices in India and according to the information and
explanations given to us, we have neither come across any instance of
material fraud on or by the company, noticed or reported during the
year, nor have we been informed of any such case by the management.
For Lovelock & Lewes
Firm Registration No. 301056E
Chartered Accountants
Himanshu Goradia
Partner
Mumbai, 22nd May, 2014 Membership No. 45668
Mar 31, 2013
Report on the Financial Statements
1. We have audited the accompanying financial statements of Novartis
India Limited (the ''company''), which comprise the Balance Sheet as
at 31st March, 2013 and the Statement of Profit and Loss and Cash Flow
Statement for the year then ended and a summary of significant
accounting policies and other explanatory information, which we have
signed under reference to this report.
Management''s Responsibility for the Financial Statements
2. The company''s management is responsible for the preparation of
these financial statements that give a true and fair view of the
financial position, financial performance and cash flows of the company
in accordance with the Accounting Standards referred to in sub-section
(3C) of Section 211 of The Companies Act, 1956'' of India (the
''Act''). This responsibility includes the design, implementation and
maintenance of internal control relevant to the preparation and
presentation of the financial statements that give a true and fair view
and are free from material misstatement, whether due to fraud or error.
Auditors'' Responsibility
3. Our responsibility is to express an opinion on these financial
statements based on our audit We conducted our audit in accordance with
the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
4. An audit involves performing procedures to obtain audit evidence
about the amounts and disclosures in the financial statements. The
procedures selected depend on the auditors'' judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditors consider internal control relevant to the
company''s preparation and fair presentation of the financial
statements in order to design audit procedures that are appropriate in
the circumstances. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of
the accounting estimates made by management, as well as evaluating the
overall presentation of the financial statements.
5. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion.
Opinion
6. In our opinion and to the best of our information and according to
the explanations given to us, the accompanying financial statements
give the information required by the Act in the manner so required and
give a true and fair view in conformity with the accounting principles
generally accepted in India:
(a) in the case of the Balance Sheet, of the state of affairs of the
company as at 31st March, 2013;
(b) in the case of the Statement of Profit and Loss, of the profit for
the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date. Report on Other Legal and Regulatory
Requirements ''
7. As required by ''The Companies (Auditor''s Report) Order,
2003'', as amended by ''The Companies (Auditor''s Report)
(Amendment) Order, 2004'', issued by the Central Government of India
in terms of sub-section (4A) of Section 227 of the Act (hereinafter
referred to as the ''Order'') and on the basis of such checks of the
books and records of the company as we considered appropriate and
according to the information and explanations given to us, we give in
the Annexure a statement on the matters specified in paragraphs 4 and 5
of the Order.
8. As required by Section 227(3) of the Act, we report that:
(a) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
(b) In our opinion, proper books of account as required by law have
been kept by the company so far as appears from our examination of
those books;
(c) The Balance Sheet, Statement of Profit and Loss and Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
(d) In our opinion, the Balance Sheet, Statement of Profit and Loss and
Cash Flow Statement dealt with by this report comply with the
Accounting Standards referred to in sub-section (3C) of Section 211 of
the Act;
(e) On the basis of written representations received from the directors
as on 31st March, 2013 and taken on record by the Board of Directors,
none of the directors is disqualified as on 31st March, 2013 from being
appointed as a director in terms of clause (g) of sub-section (1) of
Section 274 of the Act.
[Referred to in paragraph 7 of the Independent Auditors'' Report of
even date to the members of Novartis India Limited on the financial
statements as of and for the year ended 31st March, 2013]
1. (a) The company is maintaining proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) The fixed assets are physically verified by the management
according to a phased programme designed to cover all the items over a
period of three years which, in our opinion, is reasonable having
regard to the size of the company and the nature of its assets.
Pursuant to the programme, a portion of the fixed assets has been
physically verified by the management during the year and no material
discrepancies have been noticed on such verification.
(c) In our opinion and according to the information and explanations
given to us, a substantial part of fixed assets has not been disposed
of by the company during the year.
2. (a) The inventory (excluding stocks with third parties) has been
physically verified by the management during the year. In respect of
inventory lying with third parties, these have substantially been
confirmed by them. In our opinion, the frequency of verification is
reasonable.
(b) In our opinion, the procedures of physical verification of
inventory followed by the management are reasonable and adequate in
relation to the size of the company and the nature of its business.
(c) On the basis of our examination of the inventory records, in our
opinion, the company is maintaining proper records of inventory. In our
opinion, the discrepancies noticed on physical verification of
inventory as compared to book records were not material.
3. (a) The company has not granted any loans, secured or unsecured, to
companies, firms or other parties covered in the register maintained
under Section 301 of the Act. Accordingly, the provisions of Clause
4(iii)(b) to 4(iii)(d) of the Order are not applicable to the company.
(b) The company has not taken any loans, secured or unsecured, from
companies, firms or other parties covered in the register maintained
under Section 301 of the Act. Accordingly, the provisions of Clause
4(iii)(f) and 4(iii)(g) of the Order are not applicable to the company.
4. In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the company and the nature of its business for the
purchase of inventory and fixed assets and for the sale of goods and
services. Further, on the basis of our examination of the books and
records of the company and according to the information and
explanations given to us, we have neither come across nor have we been
informed of any continuing failure to correct major weaknesses in the
aforesaid internal control system.
5. (a) According to the information and explanations given to us, we
are of the opinion that the particulars of all contracts or
arrangements that need to be entered into the register maintained under
Section 301 of the Act have been so entered.
(b) In our opinion and according to the information and explanations
given to us, in respect of the transactions made in pursuance of such
contracts or arrangements and exceeding the value of Rupees Five Lakhs
in respect of any party during the year, we are unable to comment
whether these transactions have been made at prices which are
reasonable having regard to the prevailing market prices at the
relevant time as there are no comparable market prices available since
these transactions are of specialised/proprietary nature.
6. In our opinion and according to the information and explanations
given to us, the company has complied with the provisions of Sections
58A and 58AA or any other relevant provisions of the Act and the
Companies (Acceptance of Deposits) Rules, 1975 with regard to the
deposits accepted from the public. According to the information and
explanations given to us, no order has been passed by the company Law
Board or National Company Law Tribunal or Reserve Bank of India or any
Court or any other Tribunal on the company in respect of the aforesaid
deposits.
7. In our opinion, the company has an internal audit system
commensurate with its size and the nature of its business.
8. We have broadly reviewed the books of account maintained by the
company in respect of products where, pursuant to the rules made by the
Central Government of India, the maintenance of cost records has been
prescribed under clause (d) of sub-section (1) of Section 209 of the
Act and are of the opinion that, prima facie, the prescribed accounts
and records have been made and maintained. We have not, however, made
a detailed examination of the records with a view to determine whether
they are accurate or complete.
9. (a) According to the information and explanations given to us and
the records of the company examined by us, in our opinion, the company
is generally regular in depositing undisputed statutory dues in respect
of provident fund, sales tax and service tax though there has been a
slight delay in a few cases and is regular in depositing undisputed
statutory dues including investor education and protection fund,
employees'' state insurance, income-tax, wealth tax, customs duty,
excise duty and other material statutory dues, as applicable, with the
appropriate authorities.
(b) According to the information and explanations given to us and the
records of the company examined by us, there are no dues of wealth tax
which have not been deposited on account of any dispute. The
particulars of dues of income-tax, sales tax, service tax, customs duty
and excise duty as at 31st March, 2013 which have not been deposited on
account of a dispute, are as follows -
Name of the Nature of
dues Amount Period to
which the Forum where the
statute Rs. in
Million* amount relates dispute is pending
The Income-
tax Income-tax 3.1 Assessment
Years Appellate
Act, 1961 1991-1992 and Authority - up to
2005-2006 Commissioner''s
level
23.0 Assessment
Year Income Tax
2006-2007 Appellate Tribunal
The Central
Sales Sales tax
including 235.0 2000-2001 to Appellate
Tax Act,
1956 and interest
and penalty, 2010-2011 and Authority - up to
Local
Sales Tax as applicable August 2012 Commissioner''s
Acts level
19.3 1993-1994, Tribunal
2000-2001 to
2002-2003 and
2004-2005 to
2006-2007
0.2 1997-1998 The High Court of
Kerala
The Finance
Act, Service tax 4.5 September
2004 to Appellate
1994 September 2009 Authority - up to
Commissioner''s
level
The Customs
Act, Customs Duty 0.4 2002-2003 Appellate
1962 Authority - up to
Commissioner''s
level
The Central
Excise Excise duty
including 0.6 1990 and June Appellate
Act, 1944 penalty, as
applicable 1993 to October Authority - up to
1993 Commissioner''s
level
2.4 August 1993 to Customs, Excise
December 1996 & Service Tax
Appellate Tribunal
* Net of amounts paid including under protest.
10. The company has no accumulated losses as at the end of the
financial year and it has not incurred any cash losses in the financial
year ended on that date or in the immediately preceding financial year.
11. According to the records of the company examined by us and the
information and explanations given to us, the company has not defaulted
in repayment of dues to any financial institution or bank or debenture
holders as at the Balance Sheet date.
12. The company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
Accordingly, the provisions of Clause 4(xii) of the Order are not
applicable to the company.
13. As the provisions of any special statute applicable to chit
fund/nidhi/mutual benefit fund/societies are not applicable to the
company, the provisions of Clause 4(xiii) of the Order are not
applicable to the company.
14. In our opinion, the company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of Clause 4(xiv) of the Order are not applicable to the
company.
15. According to the information and explanations given to us, the
company has not given any guarantee for loans taken by others from
banks or financial institutions during the year. Accordingly, the
provisions of Clause 4(xv) of the Order are not applicable to the
company.
16. The company has not raised any term loans. Accordingly, the
provisions of Clause 4(xvi) of the Order are not applicable to the
company.
17. According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the company, we report
that no funds raised on short-term basis have been used for long-term
investment.
18. The company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under Section
301 of the Act during the year. Accordingly, the provisions of Clause
4(xviii) of the Order are not applicable to the company.
19. The company has not issued any debentures during the year and does
not have any debentures outstanding as at the beginning of the year and
at the year end. Accordingly, the provisions of Clause 4(xix) of the
Order are not applicable to the company.
20. The company has not raised any money by public issues during the
year. Accordingly, the provisions of Clause 4(xx) of the Order are not
applicable to the company.
21. During the course of our examination of the books and records of
the company, carried out in accordance with the generally accepted
auditing practices in India and according to the information and
explanations given to us, we have neither come across any instance of
material fraud on or by the company, noticed or reported during the
year, nor have we been informed of any such case by the management.
For Lovelock & Lewes
Firm Registration No. 301056E
Chartered Accountants
Himanshu Goradia
Partner
Mumbai, 14th May, 2013 Membership No. 45668
Mar 31, 2012
1. We have audited the attached Balance Sheet of Novartis India
Limited (the 'company'), as at 31st March, 2012, and the related
Statement of Profit and Loss and Cash Flow Statement for the year ended
on that date annexed thereto, which we have signed under reference to
this report. These financial statements are the responsibility of the
company's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
2. We conducted our audit in accordance with the auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003 as
amended by the Companies (Auditor's Report) (Amendment) Order, 2004
(together the 'Order') issued by the Central Government of India in
terms of sub-section (4A) of Section 227 of The Companies Act, 1956'
of India (the 'Act') and on the basis of such checks of the books
and records of the company as we considered appropriate and according
to the information and explanations given to us, we give in the
Annexure a statement on the matters specified in paragraphs 4 and 5 of
the Order.
4. Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
(a) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
(b) In our opinion, proper books of account as required by law have
been kept by the company so far as appears from our examination of
those books;
(c) The Balance Sheet, Statement of Profit and Loss and Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
(d) In our opinion, the Balance Sheet, Statement of Profit and Loss and
Cash Flow Statement dealt with by this report comply with the
accounting standards referred to in sub-section (3C) of Section 211 of
the Act;
(e) On the basis of written representations received from the
directors, as on 31st March, 2012 and taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March, 2012
from being appointed as a director in terms of clause (g) of
sub-section (1) of Section 274 of the Act;
(f) In our opinion and to the best of our information and according to
the explanations given to us, the said financial statements together
with the notes thereon and attached thereto give in the prescribed
manner the information required by the Act and give a true and fair
view in conformity with the accounting principles generally accepted in
India:
(i) in the case of the Balance Sheet, of the state of affairs of the
company as at 31st March, 2012;
(ii) in the case of the Statement of Profit and Loss, of the profit for
the year ended on that date; and
(iii) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
[Referred to in paragraph 3 of the Auditors' Report of even date to
the members of Novartis India Limited on the financial statements as of
and for the year ended 31st March, 2012]
1. (a) The company is maintaining proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) The fixed assets are physically verified by the management
according to a phased programme designed to cover all the items over a
period of three years which, in our opinion, is reasonable having
regard to the size of the company and the nature of its assets.
Pursuant to the programme, a portion of the fixed assets has been
physically verified by the management during the year and no material
discrepancies between the book records and the physical inventory have
been noticed.
(c) In our opinion and according to the information and explanations
given to us, a substantial part of fixed assets has not been disposed
of by the company during the year.
2. (a) The inventory (excluding stocks with third parties) has been
physically verified by the management during the year. In respect of
inventory lying with third parties, these have substantially been
confirmed by them. In our opinion, the frequency of verification is
reasonable.
(b) In our opinion, the procedures of physical verification of
inventory followed by the management are reasonable and adequate in
relation to the size of the company and the nature of its business.
(c) On the basis of our examination of the inventory records, in our
opinion, the company is maintaining proper records of inventory. In our
opinion, the discrepancies noticed on physical verification of
inventory as compared to book records were not material.
3. (a) The company has not granted any loans, secured or unsecured, to
companies, firms or other parties covered in the register maintained
under Section 301 of the Act. Accordingly, clauses (iii)(b) to (iii)(d)
of paragraph 4 of the Order are not applicable to the company for the
current year.
(b) The company has not taken any loans, secured or unsecured, from
companies, firms or other parties covered in the register maintained
under Section 301 of the Act. Accordingly, clauses (iii)(f) and
(iii)(g) of paragraph 4 of the Order are not applicable to the company
for the current year.
4. In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the company and the nature of its business for the
purchase of inventory and fixed assets and for the sale of goods and
services. Further, on the basis of our examination of the books and
records of the company and according to the information and
explanations given to us, we have neither come across nor have we been
informed of any continuing failure to correct major weaknesses in the
aforesaid internal control system.
5. (a) In our opinion and according to the information and
explanations given to us, the particulars of contracts or arrangements
referred to in Section 301 of the Act have been entered in the register
required to be maintained under that Section.
(b) In our opinion and according to the information and explanations
given to us, in respect of the transactions made in pursuance of
contracts or arrangements entered in the register maintained under
Section 301 of the Act and exceeding the value of Rs Five Lakhs in
respect of any party during the year, prevailing market prices at the
relevant time are not available as these transactions are of a special
nature.
6. In our opinion and according to the information and explanations
given to us, the company has complied with the provisions of Sections
58A, 58AA or any other relevant provisions of the Act and the Companies
(Acceptance of Deposits) Rules, 1975 with regard to the deposits
accepted from the public. According to the information and explanations
given to us, no order has been passed by the Company Law Board or National
Company Law Tribunal or Reserve Bank of India or any Court or any other
Tribunal on the company in respect of the aforesaid deposits.
7. In our opinion, the company has an internal audit system
commensurate with its size and nature of its business.
8. We have broadly reviewed the books of account maintained by the
company in respect of the products where, pursuant to the Rules made by
the Central Government of India, the maintenance of cost records has
been prescribed under clause (d) of sub-section (1) of Section 209 of
the Act and are of the opinion that prima facie, the prescribed
accounts and records have been made and maintained. We have not,
however, made a detailed examination of the records with a view to
determine whether they are accurate or complete.
9. (a) According to the information and explanations given to us and
the records of the company examined by us, in our opinion, the company
is regular in depositing undisputed statutory dues including provident
fund, investor education and protection fund, employees' state insurance,
income-tax, sales-tax, wealth tax, service tax, customs duty, excise
duty and other material statutory dues as applicable with the
appropriate authorities in India.
(b) According to the information and explanations given to us and the
records of the company examined by us, there are no dues of wealth-tax
and service tax which have not been deposited on account of any
dispute. The particulars of dues of income-tax, sales tax, customs duty
and excise duty as at 31st March, 2012 which have not been deposited on
account of a dispute, are as follows -
Name of the Nature of dues Amount Period to
which the Forum where the
statute Rs Million amount
relates dispute is
pending
The Income-tax Income-tax 28.5 Assessment
Years Appellate
Act, 1961 1991-1992, Authority -
up to
2006-2007
and Commissioner's
2007-2008 level
The Central
Sales Sales tax
including 252.0 2000-2001
to Appellate
Tax Act,
1956 and interest and
penalty, 2010-2011 Authority -
up to
Local Sales
Tax as applicable Commissioner's
Acts level
9.5 1993-1994, Tribunal
2000-2001
to
2002-2003
and
2004-2005
0.2 1997-1998 The High Court
of Kerala
The Customs
Act, Customs Duty 0.4 2002-2003 Appellate
1962 Authority-up to
Commissioner's
level
The Central
Excise Excise duty
including 0.6 1990 and
June Appellate
Act, 1944 penalty, as
applicable 1993 to
October Authority-up to
1993 Commissioner's
level
2.4 August
1993 to Customs,
December
1996 Excise & Service
Tax Appellate
Tribunal
* Net of amounts paid including under protest.
10. The company has no accumulated losses as at 31st March, 2012 and
has not incurred any cash losses in the financial year ended on that
date or in the immediately preceding financial year.
11. According to the records of the company examined by us and the
information and explanations given to us, the company has not defaulted
in repayment of dues to any financial institution or bank or debenture
holders as at the Balance Sheet date.
12. The company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
13. The provisions of any special statute applicable to chit
fund/nidhi/mutual benefit fund/ societies are not applicable to the
company.
14. The company is not a dealer or trader in shares, securities,
debentures and other investments.
15. According to the information and explanations given to us, the
company has not given any guarantee for loans taken by others from
banks or financial institutions during the year.
16. In our opinion, the company has not obtained any term loans that
were not applied for the purposes for which these were raised.
17. On the basis of an overall examination of the Balance Sheet of the
company, in our opinion and according to the information and
explanations given to us, there are no funds raised on short-term basis
which have been used for long-term investment.
18. The company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under Section
301 of the Act during the year.
19. The company has not issued any debentures.
20. The company has not raised any money by public issues during the
year.
21. During the course of our examination of the books and records of
the company, carried out in accordance with the generally accepted
auditing practices in India and according to the information and
explanations given to us, we have neither come across any instance of
fraud on or by the company, noticed or reported during the year, nor
have we been informed of any such case by the management.
For Lovelock & Lewes
Firm Registration No. 301056E
Chartered Accountants
Himanshu Goradia
Partner
Mumbai, 24th May 2012 Membership No. 45668
Mar 31, 2011
1. We have audited the attached Balance Sheet of Novartis India
Limited (the 'company'), as at 31st March, 2011, and the related Profit
and Loss Account and Cash Flow Statement for the year ended on that
date annexed thereto, which we have signed under reference to this
report. These financial statements are the responsibility of the
company's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
2. We conducted our audit in accordance with the auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003 as
amended by the Companies (Auditor's Report) (Amendment) Order, 2004
(together the 'Order') issued by the Central Government of India in
terms of sub-section (4A) of Section 227 of 'The Companies Act, 1956'
of India (the 'Act') and on the basis of such checks of the books and
records of the company as we considered appropriate and according to
the information and explanations given to us, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
4. Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
(a) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
(b) In our opinion, proper books of account as required by law have
been kept by the company so far as appears from our examination of
those books;
(c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
(d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statement dealt with by this report comply with the accounting
standards referred to in sub-section (3C) of Section 211 of the Act;
(e) On the basis of written representations received from the
directors, as on 31st March, 2011 and taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March, 2011
from being appointed as a director in terms of clause (g) of
sub-section (1) of Section 274 of the Act;
(f) In our opinion and to the best of our information and according to
the explanations given to us, the said financial statements together
with the notes thereon and attached thereto give in the prescribed
manner the information required by the Act and give a true and fair
view in conformity with the accounting principles generally accepted in
India:
(i) in the case of the Balance Sheet, of the state of affairs of the
company as at 31st March, 2011;
(ii) in the case of the Profit and Loss Account, of the profit for the
year ended on that date; and
(iii) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Annexure to Auditors' Report
[Referred to in paragraph 3 of the Auditors' Repcrt of even date to the
members of Novartis India Limited on the financial statements for the
year ended 31st March, 2011]
1. (a) The company is maintaining proper records showing full
particulars including
quantitative details and situation of fixed) assets.
(b) The fixed assets are physically verified by the management
according to a phased programme designed to cover all the items over a
period of three years which), in our opinion, is reasonable having
regard to the size of the company and the nature of its assets.
Pursuant to the programme, a portion of the fixed assets has been
physically verified by the management during the year and no material
discrepancies between the book records and the physical inventory have
been noticed.
(c) In our opinion and according to the information and explanations
given to us, a substantial part of fixed assets has not been disposed
of by the company during the year.
2. (a) The inventory has beer physically verified by the management
during the year. In our
opinion, the frequency of verification is reasonable.
(b) In our opinion, the procedures of physical verification of
inventory followed by the management are reasonable and adequate in
relation to the size of the company and the nature of its business.
(c) On the basis of our examination of the inventory records, in our
opinion, the company is maintaining proper records of inventory. In our
opinion, the discrepancies noticed on physical verification of
Inventory as compared to book records were not material.
3. (a) The company has not granted any loans, secured or unsecured, to
companies, firms
or other parties covered in the register maintained under Section 301
of the Act. Accordingly, clauses (iii)(b) to (iii)(d) of paragraph 4
of the Order are not applicable to the company for the current year.
(b) The company has not teken any loans, secured or unsecured, from
companies, firms or other parties covered in the register maintained
under Section 301 of the Act. Accordingly, clauses (iii)(f) and
(iii)(g) of paragraph 4 of the Order are not applicable to the company
for the current year.
4. In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the company and the nature of its business for the
purchase of inventory and fixed assets and for the sale of goods and
services. Further, on the basis of our examination of the books and
records of the company and according to the information and
explanations given to us, we have neither come across nor have we been
informed of any continuing failure to correct major weaknesses in the
aforesaid internal control system.
5. (a) In our opinion and according to the information and
explanations given to us, the particulars of contracts or arrangements
referred to in Section 301 of the Act have been entered in the register
required to be maintained under that Section.
(b) In our opinion and according to the information and explanations
given to us, in respect of the transactions made in pursuance of
contracts or arrangements entered in the register maintained under
Section 301 of the Act and exceeding the value of Rupees Five Lakhs in
respect of any party during the year, prevailing market prices at the
relevant time are not available as these transactions are of a special,
nature.
6. In our opinion and according to the information and explanations
given to us, the company has complied with the provisions of Sections
5>8A, 58AA or any other relevant provisions of the Act and the
Companies (Acceptance of Deposits) Rules, 1975 with regard to the
deposits accepted from the public. According to the information and
explanations given to us, no order has been passed by the Company Law
Board or National Company Law Tribunal or Reserve Bank of India or
any Court or any other Tribunal on the company in respect of the
aforesaid deposits.
7. In our opinion, the company has an internal audit system
commensurate with its size and nature of its business.
8. We have broadly reviewed the books of account maintained by the
company in respect of the products where, pursuant to the Rules made by
the Central Government of India, the maintenance of cost records has
been prescribed under clause (d) of sub-section (1) of Section 209 of
the Act and are of the opinion that prima facie, the prescribed
accounts and records have been made and maintained. We have not,
however, made a detailed examination of the records with a view to
determine whether they are accurate or complete.
9. (a) According to the information and explanations given to us and
the records of the company examined by us, in our opinion, the company
is generally regular in depositing undisputed statutory dues including
provident fund, investor education and protection fund, employees' state
insurance, income-tax, sales tax, wealth tax, service tax, customs
duty, excise duty, cess and other material statutory dues as applicable
with the appropriate authorities in India.
(b) According to the information and explanations given to us and the
records of the company examined by us, there are no dues of wealth-tax,
service tax and cess which have not been deposited on account of any
dispute. The particulars of dues of income-tax, sales tax, customs duty
and excise duty as at 31st March, 2011 which have not been deposited on
account of a dispute, are as follows -
Name of the Nature of dues Amount* Period to which
the Forum where the
statute Rs.'OOO amount relates dispute is
pending
The Income-
tax Income-tax 23,128 Assessment Years Appellate
Act, 1961 2006-2007 and Authority - up
to
2007-2008 Commissioner's
level
The Central
Sales Sales tax
including 223,986 2000-2001 to Appellate
Tax Act, 1956
and interest and
penalty, 2008-2009 and Authority -
up to
Local Sales
Tax as applicable 2010-2011 Commissioner's
Acts level
9,893 1993-1994, Tribunal
2000-2001 to
2002-2003 and
2004-2005
245 1997-1998 The High
Court of Kerala
The Customs
Act, Customs Duty 393 2002-2003 Appellate
1962 Authority -
up to
Commissioner's
level
The Central
Excise Excise duty
including 551 1990 and June Appellate
Act,1944 penalty, as
applicable 1993 to October Authority -
up to
1993 Commissioner's
level
4,479 January 1987 to Customs,Excise
February 1993 and & Service Tax
August 1993 to Appellate
Tribunal
December 1996
* Net of amounts paid including under piotest.
10. The company has no accumulated losses as at 31st March, 2011 and
has not incurred any cash losses in the financial year ended on that
date or in the immediately preceding financial year.
11. According to the records of the company examined by us and the
information and explanations given to us, the company has not defaultec
in repayment of dues to any financial institution or bank or debenture
holders.
12. The company has not granted any loans and advances on Ihe basis of
security by way of pledge of shares, debentures and other securities.
13. The provisions of any special statute applicable to chit
fund/nidhi/mutual benefit fund/ societies are not applicable to the
company.
14. The company is not a dealer or trader in shares, securities,
debentures and other investments.
15. According to the information and explanations given to us, the
company has not given any guarantee for loans taken by others from
banks or financial institutions during the year.
16. In our opinion, the company has not obtained any term loans that
were not applied for the purposes for which these were raised.
17. On the basis of an overall examination of the Balance Sheet of the
company, in our opinion and according to the information and
explanations given to us, there are no funds raised on short-term basis
which have been used for long-term investment.
18. The company has not made any preferential allotment af shares to
parties and companies covered in the register maintained under Section
301 of the Act during the year.
19. The company has not issued any debentures.
20. The company has not raised any money by public issues during the
year.
21. During the course of our examination of the books and records of
the company, carried out in accordance with the generally accepted
auditing pracices in India and according to the information and
explanations given to us, we have neither come across any instance of
fraud on or by the company, noticed or reported during the year, nor
have we been informed of such case by the management.
For Price Waterhouse
Firm Registration No. 007568S
Chartered Accountants
Himanshu Goradia
Partner
Mumbai, 24th May 2011 Membership No. 45668
Mar 31, 2010
1. We have audited the attached Balance Sheet of Novartis India
Limited (the company), as at 31st March, 2010, and the related Profit
and Loss Account and Cash Flow Statement for the year ended on that
date annexed thereto, which we have signed under reference to this
report. These financial statements are the responsibility of the
companys management. Our responsibility is to express an opinion on
these financial statements based on our audit.
2. We conducted our audit in accordance with the auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditors Report) Order, 2003 as
amended by the Companies (Auditors Report) (Amendment) Order, 2004
(together the Order) issued by the Central Government of India in
terms of sub-section (4A) of Section 227 of The Companies Act, 1956
of India (the Act) and on the basis of such checks of the books and
records of the company as we considered appropriate and according to
the information and explanations given to us, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
4. Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
(a) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
(b) In our opinion, proper books of account as required by law have
been kept by the company so far as appears from our examination of
those books;
(c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
(d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statement dealt with by this report comply with the accounting
standards referred to in sub- section (3C) of Section 211 of the Act;
(e) On the basis of written representations received from the
directors, as on 31st March, 2010 and taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March, 2010
from being appointed as a director in terms of clause (g) of
sub-section (1) of Section 274 of the Act;
(f) In our opinion and to the best of our information and according to
the explanations given to us, the said financial statements together
with the notes thereon and attached thereto give in the prescribed
manner the information required by the Act and give a true and fair
view in conformity with the accounting principles generally accepted in
India:
(i) in the case of the Balance Sheet, of the state of affairs of the
company as at 31st March, 2010;
(ii) in the case of the Profit and Loss Account, of the profit for the
year ended on that date; and
(iii) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
For Price Waterhouse
Firm Registration No. 007568S
Chartered Accountants
Himanshu Goradia
Partner
Mumbai, 7th May 2010 Membership No. 45668
Annexure to Auditors Report
[Referred to in paragraph 3 of the Auditors Report of even date to the
members of Novartis India Limited on the financial statements for the
year ended 31st March, 2010]
1. (a) The company is maintaining proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) A substantial portion of fixed assets has been physically verified
by the management during the year and no material discrepancies between
the book records and the physical inventory have been noticed on such
verification. In our opinion, the frequency of verification is
reasonable.
(c) In our opinion and according to the information and explanations
given to us, a substantial part of fixed assets has not been disposed
of by the company during the year.
2. (a) The inventory has been physically verified by the management
during the year. In our opinion, the frequency of verification is
reasonable.
(b) In our opinion, the procedures of physical verification of
inventory followed by the management are reasonable and adequate in
relation to the size of the company and the nature of its business.
(c) On the basis of our examination of the inventory records, in our
opinion, the company is maintaining proper records of inventory. In our
opinion, the discrepancies noticed on physical verification of
Inventory as compared to book records were not material.
3. (a) The company has granted unsecured loans to two companies
covered In the register maintained under Section 301 of the Act during
the year. The maximum amounts of such loans involved during the year
aggregate to Rs. 4,836,037(000). However, the aforesaid companies are
not covered in the register maintained under Section 301 of the Act as
at the Balance Sheet date.
(b) In our opinion, the rate of interest and other terms and conditions
of such loans are not prima facie prejudicial to the interest of the
company.
(c) In respect of the aforesaid loans, the companies are regular in
repayment of the principal amounts and are also regular in payment of
interest.
(d) In respect of the aforesaid loans, there is no overdue amount more
than Rupees One Lakh.
(e) The company has not taken any loans, secured or unsecured, from
companies, firms or other parties covered in the register maintained
under Section 301 of the Act. Accordingly, clauses (iii)(f) and
(iii)(g) of paragraph 4 of the Order are not applicable to the company
for the current year.
4. In our opinion, having regard to the explanation that certain items
of inventory purchased are of special nature for which suitable
alternative sources do not exist for obtaining comparative quotations,
there is an adequate internal control system commensurate with the size
of the company and the nature of its business for the purchase of
inventory and fixed assets and for the sale of goods and services.
Further, on the basis of our examination of the books and records of
the company, carried out in accordance with the auditing standards
generally accepted in India and according to the information and
explanations given to us, we have neither come across nor have we been
informed of any continuing failure to correct major weaknesses in the
aforesaid internal control system.
5. (a) In our opinion and according to the information and
explanations given to us, the particulars of contracts or arrangements
referred to in Section 301 of the Act have been entered in the register
required to be maintained under that Section.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under Section 301 of
the Act and exceeding the value of Rupees Five Lakhs in respect of any
party during the year, have been made at prices which are reasonable
having regard to the prevailing market prices at the relevant time.
However, in respect of certain transactions including for purchases and
sale of goods and services, prevailing market prices at the relevant
time are not available as these transactions are of a special nature.
6. In our opinion and according to the information and explanations
given to us, the company has complied with the provisions of Sections
58A, 58AA or any other relevant provisions of the Act and the Companies
(Acceptance of Deposits) Rules, 1975 with regard to the deposits
accepted from the public. According to the information and explanations
given to us, no order has been passed by the Company Law Board or
National Company Law Tribunal or Reserve Bank of India or any Court or
any other Tribunal on the company in respect of the aforesaid deposits.
7. In our opinion, the company has an internal audit system
commensurate with its size and nature of its business.
8. We have broadly reviewed the books of account maintained by the
company in respect of the products where, pursuant to the Rules made by
the Central Government of India, the maintenance of cost records has
been prescribed under clause (d) of sub-section (1) of Section 209 of
the Act and are of the opinion that prima facie, the prescribed
accounts and records have been made and maintained. We have not,
however, made a detailed examination of the records with a view to
determine whether they are accurate or complete.
9. (a) According to the information and explanations given to us and
the records of the company examined by us, in our opinion, the company
is generally regular in depositing undisputed statutory dues including
provident fund, investor education and protection fund, employees
state insurance, income-tax, sales tax, wealth tax, service tax,
customs duty, excise duty, cess and other material statutory dues as
applicable with the appropriate authorities in India.
(b) According to the information and explanations given to us and the
records of the company examined by us, there are no dues of income-tax,
wealth-tax, service tax and cess which have not been deposited on
account of any dispute. The particulars of dues of sales tax, customs
duty and excise duty as at 31st March, 2010 which have not been
deposited on account of a dispute, are as follows -
Name of the Nature of dues Amount* Period to
which Forum where
the
statute Rs.OOO the amount dispute
is pending
relates
The Kerala Sales tax on
concessional 245 1997-1998 The High Court
of
General
Sales Tax sales Kerala
Act, 1963
Sales tax
(including
interest, 18,407 2000-2001 Deputy
where
applicable)
on free 2001-2002 Commissioner
issues, sales
returns, stock 2003-2004 (Appeals)
transfers and
concessional 2004-2005
sales 2006-2007 and
2007-2008
The Gujarat
Sales Sales tax on
CSD sales and 2,568 1993-1994 and Sales Tax
Tribunal
Tax Act,
1969 non submission
of sales tax 2002-2003
exemption forms
and sales
tax on tax
free sales
Sales tax on
free issues 10,611 2003-2004 and Joint
Commissioner
and concess
ional sales 2005-2006
and sales tax
on enhanced
turnover, non
submission
of sales tax
exemption
forms and non
payment of
purchase tax
The Karna
taka Sales tax on
sales returns 1,577 1998-1999 Joint
Commissioner
Sales Tax
Act, and exempt
sales (Appeals)
1957
Sales tax on
sales returns 3,235 2002-2003 Sales Tax
Appellate
and exempt
sales Tribunal
Sales tax
paid but not 11,725 2004-2005 Deputy
considered by
the authority Commissioner of
Commercial Taxes
The West
Bengal Sales tax
(including
penalty, 34,169 2004-2005 and Joint
Sales Tax
Act, where
applicable) on 2005-2006 Commissioner
1994 enhanced
turnover, non
submission of
sales tax
exemption
forms, sales
returns,
exempt sales and
difference In
turnover and
purchase tax
Sales tax
(including
penalty, 4,691 2000-2001 Deputy
where
applicable)
on sales Commissioner
returns,
exempt sales
and (Appeals)
difference
in turnover
and
purchase tax
The Delhi
Sales Non submission
of sales tax 1,349 2002-2003 and Additional
Tax Act,
1975 exemption
forms 2004-2005 Commissioner
(Appeals)
The Madhya Sales tax on
sales returns 114 2000-2001 and Deputy
Pradesh and non sub
mission of 2002-2003 Commissioner
Commercial
Tax sales tax
exemption
forms (Appeals)
Act, 1994
The Rajas
than Sales tax
(including
interest) 333 2002-2003 and Deputy
Sales Tax
Act, on free
quantity
schemes 2003-2004 Commissioner
1994 and non
submission of (Appeals)
sales tax
exemption
forms
Non sub
mission of
road 1,501 2000-2001 Sales Tax
Tribunal
permit
The Bihar
Sales Sales tax
on sales
returns, 3,893 2002-2003 to Additional
Tax Act,
1981 non sub
mission
of sales
tax 2004-2005 Commissioner
exemption
forms and
export (Appeals)
sales
Sales tax
on sales
returns, 2,787 2005-2006 to Commissioner of
non sub
mission of
sales tax 2007-2008 Commercial Taxes
exemption
forms and
export
sales
The Jammu
and Sales tax on
rejection of 822 2003-2004 Deputy
Kashmir
General claim for
breakages, non Commissioner of
Sales Tax
Act, submission of
sales tax Commercial Taxes
1962 exemption forms
and expiry (Appeals)
of goods
The Uttar
Pradesh Sales tax on
exempt 2,423 2005-2006 to Deputy
Trade Tax
Act, sales, sales
returns, non 2007-2008 Commissioner of
1948 submission of
sales tax Commercial Taxes
exemption
forms and (Appeals)
enhanced
turnover
The Central
Sales Sales tax
on sales
returns, 1,546 2005-2006 to Commissioner of
Tax Act,
1956 non sub
mission
of sales
tax 2007-2008 Commercial Taxes
exemption
forms and
export
sales
Sales tax
on sales
returns, 8,151 2001-2002 Deputy
difference
in turnover, 2002-2003 and Commissioner
import of
miscellaneous 2004-2005 to (Appeals)
items, stock
transfers and 2007-2008
non submission
of sales tax
exemption forms
Non sub
mission
of sales
tax 3,529 2003-2004 and Additional
exemption
forms 2004-2005 Commissioner
Non sub
mission of
sales tax 700 2004-2005 and Appellate Deputy
exemption
forms 2005-2006 Commissioner
Sales tax
on sales
returns, 22,049 2001-2002 and Joint Commissioner
differ
ence in
turnover, 2003-2004 to
import of
miscell
aneous 2005-2006
items,
stock
transfer
and
non sub
mission
of sales
tax
exemption
forms
Non sub
mission
of sales
tax 3,262 2002-2003 and Sales tax Appellate
exemption
forms 2004-2005 Tribunal
Sales tax
on sales
returns, 467 2004-2005 Additional
non sub
mission of
sales tax Commissioner
exemption
forms and
export (Appeals)
sales
The Customs
Act, Counter
vailing
Duty on 393 2002-2003 Deputy
1962 disputed
classifi
cation of Commissioner of
goods Customs
The Central
Excise Excise
duty
(inclu
ding 2,351 August 1993 to Customs, Excise
Act, 1944 penalty)
on reje
ction of December 1996 & Service Tax
claim for
concessi
onal rate Appellate Tribunal
of duty
Excise
Duty on
diffe
rence 2,128 January 1987 to Customs, Excise
in val
uation
due to
non February 1993 & Service Tax
approval
of price
list of Appellate Tribunal
products
Disallo
wance of
Modified 494 June 1993 to Commissioner of
Value
Added Tax
utilised October 1993 Central Excise
Disallo
wance of
refund
of 57 1990 Assistant
Excise
Duty Commissioner of
Central Excise
* Net of amounts paid under protest or otherwise
10. The company has no accumulated losses as at 31st March, 2010 and
has not incurred any cash losses in the financial year ended on that
date or in the immediately preceding financial year.
11. According to the records of the company examined by us and the
information and explanations given to us, the company has not defaulted
in repayment of dues to any financial institution or bank or debenture
holders as at the Balance Sheet date.
12. The company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
13. The provisions of any special statute applicable to chit
fund/nidhi/mutual benefit fund/ societies are not applicable to the
company.
14. In our opinion, the company is not a dealer or trader in shares,
securities, debentures and other investments.
15. According to the information and explanations given to us, the
company has not given any guarantee for loans taken by others from
banks or financial institutions during the year,
16. In our opinion, the company has not obtained any term loans that
were not applied for the purposes for which these were raised.
17. On the basis of an overall examination of the Balance Sheet of the
company, in our opinion and according to the information and
explanations given to us, there are no funds raised on short-term basis
which have been used for long-term investment.
18. The company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under Section
301 of the Act during the year.
19. The company has not issued any debentures.
20. The company has not raised any money by public issues during the
year.
21. During the course of our examination of the books and records of
the company, carried out in accordance with the generally accepted
auditing practices in India and according to the information and
explanations given to us, we have neither come across any instance of
material fraud on or by the company, noticed or reported during the
year, nor have we been informed of such case by the management.
For Price Waterhouse
Firm Registration No. 007568S
Chartered Accountants
Himanshu Goradia
Partner
Mumbai, 7th May 2010 Membership No. 45668
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