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GlaxoSmithkline Consumer Healthcare Ltd.

BSE: 500676 Sector: Agri and agri inputs
NSE: GSKCONS ISIN Code: INE264A01014
BSE LIVE 15:40 | 18 Aug 5399.35 106.75
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NSE 15:45 | 18 Aug 5357.00 61.00
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OPEN 5269.05
PREVIOUS CLOSE 5292.60
VOLUME 286
52-Week high 6398.95
52-Week low 4650.00
P/E 36.15
Mkt Cap.(Rs cr) 22,710
Buy Price 0.00
Buy Qty 0.00
Sell Price 5399.35
Sell Qty 8.00
OPEN 5269.05
CLOSE 5292.60
VOLUME 286
52-Week high 6398.95
52-Week low 4650.00
P/E 36.15
Mkt Cap.(Rs cr) 22,710
Buy Price 0.00
Buy Qty 0.00
Sell Price 5399.35
Sell Qty 8.00

GlaxoSmithkline Consumer Healthcare Ltd. (GSKCONS) - Auditors Report

Company auditors report

To the Members of GlaxoSmithKline Consumer Healthcare Limited

Report on the Financial Statements

1. We have audited the accompanying financial statements of GlaxoSmithKline ConsumerHealthcare Limited ("the Company") which comprise the Balance Sheet as at March31 2016 the Statement of Profit and Loss the Cash Flow Statement for the year thenended and a summary of the significant accounting policies and other explanatoryinformation.

Management’s Responsibility for the Financial Statements

2. The Company’s Board of Directors is responsible for the matters stated inSection 134(5) of the Companies Act 2013 ("the Act") with respect to thepreparation of these financial statements to give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditors’ Responsibility

3. Our responsibility is to express an opinion on these financial statements based onour audit.

4. We have taken into account the provisions of the Act and the Rules made thereunderincluding the accounting standards and matters which are required to be included in theaudit report.

5. We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act and other applicable authoritative pronouncements issued by theInstitute of Chartered Accountants of India. Those Standards and pronouncements requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the financial statements are free from materialmisstatement.

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

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

Opinion

8. In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at March31 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’ issuedby 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 thebooks and records of the Company as we considered appropriate and according to theinformation and explanations given to us we give in the Annexure B a statement on thematters 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 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 except that the backupof the books of accounts and other books and papers maintained in electronic mode has notbeen maintained on servers physically located in India.

(c) The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.

(d) In our opinion the aforesaid financial statements comply with the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014.

(e) On the basis of the written representations received from the directors as on March31 2016 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2016 from being appointed as a director in terms of Section 164 (2) of theAct.

(f) With respect to the maintenance of accounts and other matters connected therewithreference is made to our comment in Paragraph 10(b) above that the backup of the books ofaccounts and other books and papers maintained in electronic mode has not been maintainedon servers physically located in India.

(g) 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.

(h) 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 March31 2016 on its financial position in its financial statements – Refer Note 7 Note24 and Note 25 of the financial statements;

ii) The Company has made provision as at March 31 2016 as required under theapplicable law or accounting standards for material foreseeable losses if any onlong-term contracts - Refer Note 7 of the financial statements. The Company did not haveany derivative contracts as at March 31 2016;

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 312016.

For Price Waterhouse
Firm Registration No.: 301112E
Chartered Accountants
Pramit Agrawal
Place : Gurgaon Partner
Dated : May 17 2016 Membership No.: 099903

Annexure A to Independent Auditors’ Report

Referred to in paragraph 10 (g) of the Independent Auditors’ Report of even dateto the members of GlaxoSmithKline Consumer Healthcare Limited on the financial statementsfor the year ended March 31 2016

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 Consumer Healthcare Limited ("the Company") as of March 31 2016in conjunction with our audit of the financial statements of the Company for the yearended on that date.

Management’s Responsibility for Internal Financial Controls

2. The Company’s management is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the

Company considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India (ICAI). These responsibilities include thedesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the orderly and efficient conduct of its businessincluding 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 controlssystem over 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 thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany’s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

7. Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management overrideof 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 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 2016 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For Price Waterhouse
Firm Registration No.: 301112E
Chartered Accountants
Pramit Agrawal
Place : Gurgaon Partner
Dated : May 17 2016 Membership No.: 099903

Annexure B to Independent Auditors’ Report

Referred to in paragraph 9 of the Independent Auditors’ Report of even date to themembers of GlaxoSmithKline Consumer Healthcare Limited on the financial statements as ofand for the year ended March 31 2016

i. (a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets.

(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 noticedon such verification.

(c) The title deeds of immovable properties as disclosed in Note 9 on fixed assets tothe financial statements are held in the name of the Company except for one buildinghaving a gross book value of Rs. 21.74 lacs and net book value of Rs. Nil and fivefreehold lands having a gross book value of Rs. 6.25 lacs and net book value of Rs. 6.25lacs for which title deeds are not available with the Company and seven buildings having agross book value of Rs. 123.95 Lacs and net block value of Rs. 76.74 Lacs for whichregistration is pending in the name of the Company.

ii. The inventory has been physically verified by the Management during the year. Inrespect of inventory lying with third parties to the extent such inventories have notbeen physically verified by the management such inventories have been substantiallyconfirmed by the third parties. The discrepancies noticed on physical verification ofinventory as compared to book records were not material and have been appropriately dealtwith in the books of accounts.

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. The Central Government of India has not specified the maintenance of cost recordsunder sub-section (1) of Section 148 of the Act for any of the products of the Company.

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 employees’ state insurance income tax andvalue added tax though there has been a slight delay in a few cases and is regular indepositing undisputed statutory dues including provident fund sales tax service taxduty of customs duty of excise cess and other material statutory dues as applicablewith the appropriate 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 depositedon account of any dispute. The particulars of dues of income tax sales tax service taxduty of excise and value added tax as at March 31 2016 which have not been deposited onaccount of a dispute are as follows:

Name of the Statute Nature of Dues A mount (Rs. Lacs)# Period to which the amount relates Forum where the dispute is pending
DUTY OF EXCISE
The Central Excise Act 1944 Interest demand on excess refund 27.14 2001 – 2003 Supreme Court
The Central Excise Act 1944 Excise duty on clearance from excise exempt zone 5114.79 2009-2016 Himachal Pradesh High Court
The Central Excise Act 1944 Inadmissibility of credit on capital goods and other matters 41.70 Various years between 1983-2011 Custom Excise Service Tax Appellate Tribunal Delhi
The Central Excise Act 1944 Valuation cases and other matters 23.95 Various year between Commissioner/ Additional/Deputy/Assistant
1997-2006 Commissioner of Central Excise Various States
Subtotal(A) 5207.58
SERVICE TAX
The Finance Act 1994 Availment of service tax on outward transportation 19.19 2005-07 Custom Excise Service Tax Appellate Tribunal Delhi
The Finance Act 1994 Cenvat credit on rent denied in respect of land lying outside factory Boundary 53.57 2009- 2014 Custom Excise Service Tax Appellate Tribunal Chandigarh
Sub Total (B) 72.76
SALES TAX ENTRYT AXAN D VALUE ADDED TAX
As per the statue applicable in the state of Himachal Pradesh Entry Tax on bulk powder movement from factories 259.36 2015-16 Himachal Pradesh High Court
As per the statue applicable in the state of Tamil Nadu Additions on account of concessional rates of tax 27.04 2007 - 2016 Advance ruling Authority
As per the statute applicable in the state of Uttar Pradesh Assam Maharashtra West Bengal Bihar Jharkhand Madhya Pradesh Orissa and Andhra Pradesh Various disallowances on account of non-availability of forms alleged sale of freebies and discounts 128.53 Various years between 1998-2009 Sales Tax Appellate Tribunal / Revenue Board
As per the statue applicable to Orissa West Bengal Maharashtra Uttar Pradesh Punjab Haryana Gujarat and Kerala VAT Entry Tax and Miscellaneous Demands 178.91 Various years between 2001-2013 First Appellate Authorities at various levels
As per the statue applicable to Punjab Andhra Pradesh Delhi Rajasthan Uttar Pradesh Assam and West Bengal VAT Entry Tax and Miscellaneous Demands 21.49 2000-2006 Adjudication Level
Sub Total (C) 615.33
INCOM E TAX
Income Tax Act 1961 Income tax and Interest 12204.52 AY 2011-12 Income Tax Appellate Tribunal
Sub Total (D) 12204.52
Grand Total= (A+B+C+D) 18100.19

The above details exclude appeals made by the department to higher appellateauthorities as there is no stay on the order(s) passed by lower authorities in favour ofthe Company and the amount is not ascertainable.

# Includes interest and penalty amounts as specified in the demand order and isnet of amount paid under protest. viii. As the Company does not have any loans orborrowings from any financial institution or bank or Government nor has it issued anydebentures as at the balance sheet date the provisions of Clause 3(viii) of the Order arenot applicable to the Company.

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 AccountingStandard (AS) 18 Related Party Disclosures specified under Section 133 of the Act readwith Rule 7 of the Companies (Accounts) Rules 2014.

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 entered into any non-cash transactions with its directors orpersons connected with him. Accordingly the provisions of Clause 3(xv) of the Order arenot 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
Firm Registration No.: 301112E
Chartered Accountants
Pramit Agrawal
Place : Gurgaon Partner
Dated : May 17 2016 Membership Number - 099903