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Glaxosmithkline Pharmaceuticals Ltd.

BSE: 500660 Sector: Health care
NSE: GLAXO ISIN Code: INE159A01016
BSE LIVE 09:55 | 20 Nov 2500.80 -10.60
(-0.42%)
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2520.00

HIGH

2520.00

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2500.80

NSE 09:42 | 20 Nov 2504.50 -9.30
(-0.37%)
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2515.00

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OPEN 2520.00
PREVIOUS CLOSE 2511.40
VOLUME 82
52-Week high 2795.00
52-Week low 2309.05
P/E 75.37
Mkt Cap.(Rs cr) 21,182
Buy Price 2500.80
Buy Qty 1.00
Sell Price 2505.35
Sell Qty 4.00
OPEN 2520.00
CLOSE 2511.40
VOLUME 82
52-Week high 2795.00
52-Week low 2309.05
P/E 75.37
Mkt Cap.(Rs cr) 21,182
Buy Price 2500.80
Buy Qty 1.00
Sell Price 2505.35
Sell Qty 4.00

Glaxosmithkline Pharmaceuticals Ltd. (GLAXO) - Auditors Report

Company auditors report

TO THE MEMBERS OF GLAXOSMITHKLINE PHARMACEUTICALS LIMITED

Report on the Standalone Indian Accounting Standards (Ind AS) Financial Statements

1. We have audited the accompanying standalone financial statements of GlaxoSmithKlinePharmaceuticals Limited ("the Company") which comprise the Balance Sheet as atMarch 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 endedand a summary of the significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone Ind AS Financial Statements

2. The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone Ind AS financial statements to give a true and fair view of the financialposition financial performance (including other comprehensive income) cash flows andchanges in equity of the Company in accordance with the accounting principles generallyaccepted in India including the Indian Accounting Standards specified in the Companies(Indian Accounting Standards) Rules 2015 (as amended) under Section 133 of the Act. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone Ind AS financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

Auditors' Responsibility

3. Our responsibility is to express an opinion on these standalone Ind AS financialstatements based on our audit.

4. We have taken into account the provisions of the Act and the Rules made thereunderincluding the accounting and auditing standards and matters which are required to beincluded in the audit report under the provisions of the Act and the Rules madethereunder.

5. We conducted our audit of the standalone Ind AS financial statements in accordancewith the Standards on Auditing specified under Section 143(10) of the Act and otherapplicable authoritative pronouncements issued by the Institute of Chartered Accountantsof India. Those Standards and pronouncements require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe standalone Ind AS financial statements are free from material misstatement.

6. An audit involves performing procedures to obtain audit evidence about the amountsand the disclosures in the standalone Ind AS financial statements. The procedures selecteddepend on the auditors' judgment including the assessment of the risks of materialmisstatement of the standalone Ind AS financial statements whether due to fraud or error.In making those risk assessments the auditor considers internal financial controlrelevant to the Company's preparation of the standalone Ind AS financial statements thatgive a true and fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by the Company'sDirectors as well as evaluating the overall presentation of the standalone Ind ASfinancial statements.

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

Opinion

8. In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind

AS financial statements give the information required by the Act in the manner sorequired and give a true and fair view in conformity with the accounting principlesgenerally accepted in India of the state of affairs of the Company as at March 31 2017and its profit (including other comprehensive income) its cash flows and the changes inequity for the year ended on that date.

Other Matter

9. The financial information of the Company for the year ended March 31 2016 and thetransition date opening balance sheet as at April 1 2015 included in these standalone IndAS financial statements are based on the previously issued statutory financial statementsfor the years ended March 31 2016 and March 31 2015 prepared in accordance with theCompanies (Accounting Standards) Rules 2006 (as amended) which were audited by us onwhich we expressed an unmodified opinion dated May 25 2016 and May 18 2015 respectively.The adjustments to those financial statements for the differences in accounting principlesadopted by the Company on transition to the Ind AS have been audited by us.

Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

10. As required by the Companies (Auditor's Report) Order 2016 issued by the CentralGovernment of India in terms of sub-section (11) of Section 143 of the Act ("theOrder") and on the basis of such checks of the books and records of the Company aswe considered appropriate and according to the information and explanations given to uswe give in the Annexure B a statement on the matters specified in paragraphs 3 and 4 ofthe 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 bestof our knowledge and belief were necessary for the purposes of our audit.

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

(c) The Balance Sheet the Statement of Profit and Loss (including other comprehensiveincome) the Cash Flow Statement and the Statement of Changes in Equity dealt with by thisReport are in agreement with the books of account.

(d) In our opinion the aforesaid standalone Ind AS financial statements comply withthe Indian Accounting Standards specified under Section 133 of the Act.

(e) On the basis of the written representations received from the directors as on March31 2017 taken on record by the

Board of Directors none of the directors is disqualified as on March 31 2017 frombeing 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 financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in Annexure A.

(g) With respect to the other matters to be included in the Auditors' Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our knowledge and belief and according to the information andexplanations given to us:

i. The Company has disclosed the impact if any of pending litigations as at March 312017 on its financial position in its standalone Ind AS financial statements - Refer Notes42 (A) 43 44 and 45.

ii. The Company has long-term contracts as at March 31 2017 for which there were nomaterial foreseeable losses. The Company did not have any derivative contracts as at March31 2017.

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company during the year ended March 312017.

iv. The Company has provided requisite disclosures in the financial statements as toholdings as well as dealings in Specified Bank Notes during the period from November 82016 to December 30 2016. Based on audit procedures and relying on the managementrepresentation we report that the disclosures are in accordance with books of accountmaintained by the Company and as produced to us by the Management - Refer Note 41.

For Price Waterhouse & Co Bangalore LLP
Firm Registration Number: 007567S/S-200012
Chartered Accountants
Asha Ramanathan
Mumbai Partner
May 19 2017 Membership Number: 202660

Annexure A to Independent Auditors' Report

Referred to in paragraph 11(f) of the Independent Auditors' Report of even date to themembers of GlaxoSmithKline Pharmaceuticals Limited the standalone financial statements forthe year ended March 31 2017

Report on the internal Financial controls under clause (i) of sub-section 3 of section143 of the act

1. We have audited the internal financial controls over financial reporting ofGlaxoSmithKline Pharmaceuticals Limited ("the Company") as of March 31 2017 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on that date.

Management's Responsibility for internal Financial controls

2. The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India (ICAI). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Act.

Auditors' Responsibility

3. Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing deemed to be prescribedunder Section 143(10) of the Act to the extent applicable to an audit of internalfinancial controls both applicable to an audit of internal financial controls and bothissued by the ICAI. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

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

Meaning of Internal Financial Controls Over Financial Reporting

6. A company's internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect the

transactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

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

Opinion

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

For Price Waterhouse & Co Bangalore LLP
Firm Registration Number: 007567S/S-200012
Chartered Accountants
Asha Ramanathan
Mumbai Partner
May 19 2017 Membership Number: 202660

Annexure B to Independent Auditors' Report

Referred to in paragraph 10 of the Independent Auditors' Report of even date to themembers of GlaxoSmithKline Pharmaceuticals

Limited on the standalone financial statements as of and for the year ended March 312017.

i. (a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets other than the situation of certainplant and equipment furniture and office equipment for which the situation recorded isthe location of the Company's different establishments.

(b) The fixed assets are physically verified by the Management according to a phasedprogramme designed to cover all the items over a period of three years which in ouropinion is reasonable having regard to the size of the Company and the nature of itsassets. Pursuant to the programme a portion of the fixed assets has been physicallyverified by the

Management during the year and no material discrepancies have been noticed on suchverification.

(c) The title deeds of immovable properties as disclosed in Note 3 and Note 4 to thefinancial statements are held in the name of the Company.

ii. The physical verification of inventory excluding stocks with third parties havebeen conducted at reasonable intervals by the Management during the year. In respect ofinventory lying with third parties these have substantially been confirmed by them. Thediscrepancies noticed on physical verification of inventory as compared to book recordswere not material.

iii. The Company has not granted any loans secured or unsecured to companies firmsLimited Liability Partnerships or other parties covered in the register maintained underSection 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 anyguarantees or security to the parties covered under Section 185 and 186. Therefore theprovisions 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 ofSections 73 74 75 and 76 of the Act and the Rules framed there under to the extentnotified.

vi. Pursuant to the rules made by the Central Government of India the Company isrequired to maintain cost records as specified under Section 148(1) of the Act in respectof its products. We have broadly reviewed the same and are of the opinion that primafacie the prescribed accounts and records have been made and maintained. We have nothowever made a detailed examination of the records with a view to determine whether theyare accurate or complete.

vii. (a) According to the information and explanations given to us and the records ofthe Company examined by us in our opinion the Company is generally regular in depositingundisputed statutory dues in respect of professional tax though there has been a slightdelay in a few cases and is regular in depositing undisputed statutory dues in respect ofprovident fund employees' state insurance income tax value added tax service tax dutyof customs duty of excise cess and other statutory dues as applicable with theappropriate authorities.

(b) According to the information and explanations given to us and the records of theCompany examined by us there are no

dues of duty of customs which have not been deposited on account of any dispute. Theparticulars of dues of income tax sales tax including value added tax service tax andduty of excise as at March 31 2017 which have not been deposited on account of a disputeare as follows:

Name of the statute Nature of dues Amount (Rs in lakhs) Period to which the amount relates Forum where the dispute is pending
The Income Tax Act 1961 Income tax including interest as applicable. 2335.72 Several demands pertaining to Assessment years 2005-2006 to 2016-17 Appellate Authority - up to Commissioner's level
36.92 Assessment years 1990-1991 Tribunal
20.43 Assessment year 1994-95 High Court Bombay
Name of the statute Nature of dues Amount (Rs in lakhs) Period to which the amount relates Forum where the dispute is pending
The Central Sales Tax Act 1956 and Local Sales Tax Acts Sales-tax including interest and penalty as applicable 27829.13 Several demands pertaining to the period 1983-1984 and 1988 to 2015. Appellate Authority - up to Commissioner's level
5479.62 (includes Rs 5218.20 lakhs not deposited due to a stay order) Several demands pertaining to the period 1990-19911998-1999 1999-20002001-2002 to 2005-2006. Tribunal
83.08 Several demands pertaining to the period 1990-1991 1999-2000 and 2001-2002. The High Court of Judicature at Allahabad Lucknow and Kerala
42.14 Demand pertaining to the period 1993-1994 and 1994-1995 Supreme Court
The Finance Act 1994 Service Tax 129.20 January 2001 to December 2002 Customs Excise & Service Tax Appellate Tribunal
The Central Excise Act 1944 Excise duty including interest and penalty as applicable 25.60 Several demands pertaining to the periods March 1992 to March 1994 July 1995 to January 1998. Appellate Authority - up to Commissioner's level
1809.71 Several Demands Pertaining to the period October 1994 to January 1995 September 1996 to September 2002 November 2003 to December 2011 September 2012 to March 2013 Customs Excise & Service Tax Appellate Tribunal (CESTAT)
160.83 Demand pertaining to 1977-1980 and 1988-1991 The High Court of Judicature at Bombay

viii. According to the records of the Company examined by us and the information andexplanation given to us the Company has not defaulted in repayment of loans or borrowingsto any financial institution or bank or Government or dues to debenture holders as at thebalance sheet date.

ix. The Company has not raised any moneys by way of initial public offer furtherpublic offer (including debt instruments) and term loans. Accordingly the provisions ofClause 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 Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the Company or on the Company by its officers or employeesnoticed or reported during the year nor have we been informed of any such case by theManagement.

xi. The Company has paid / provided for managerial remuneration in accordance with therequisite approvals mandated by the provisions of Section 197 read with Schedule V to theAct.

xii. As the Company is not a Nidhi Company and the Nidhi Rules 2014 are not applicableto 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 withthe provisions of Sections 177 and 188 of the Act. The details of such related partytransactions have been disclosed in the financial statements as required under IndianAccounting Standard (Ind AS) 24 - Related Party Disclosures specified under Section 133 ofthe Act read with Companies (Indian Accounting Standards) Rules 2015.

xiv. The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year under review. Accordingly theprovisions of Clause 3(xiv) of the Order are not applicable to the Company.

xv. The Company has not any entered into non cash transaction with its directors orpersons connected within the meaning of Section 192 of the Act. Accordingly theprovisions 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 ReserveBank of India Act 1934. Accordingly the provisions of Clause 3(xvi) of the Order are notapplicable to the Company.

For Price Waterhouse & Co Bangalore LLP
Firm Registration Number: 007567S/S-200012
Chartered Accountants
Asha Ramanathan
Mumbai Partner
May 19 2017 Membership Number: 202660