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Novartis India Ltd.

BSE: 500672 Sector: Health care
NSE: NOVARTIND ISIN Code: INE234A01025
BSE LIVE 15:41 | 18 Aug 593.25 2.35
(0.40%)
OPEN

585.05

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595.00

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NSE 05:30 | 01 Jan Stock Is Not Traded.
OPEN 585.05
PREVIOUS CLOSE 590.90
VOLUME 2769
52-Week high 758.00
52-Week low 579.00
P/E 36.96
Mkt Cap.(Rs cr) 1,669
Buy Price 0.00
Buy Qty 0.00
Sell Price 593.25
Sell Qty 10.00
OPEN 585.05
CLOSE 590.90
VOLUME 2769
52-Week high 758.00
52-Week low 579.00
P/E 36.96
Mkt Cap.(Rs cr) 1,669
Buy Price 0.00
Buy Qty 0.00
Sell Price 593.25
Sell Qty 10.00

Novartis India Ltd. (NOVARTIND) - Auditors Report

Company auditors report

To the Members of Novartis India Limited

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

1. We have audited the accompanying financial statements of Novartis India Limited ("theCompany") which comprise the Balance Sheet as at March 31 2017 the Statement ofProfit and Loss (including Other Comprehensive Income) the Cash Flow Statement and theStatement of Changes in Equity for the year then ended and a summary of the significantaccounting policies and other explanatory information.

Management's Responsibility for the 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 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 Ind AS financial statementsthat give a true and fair view and are free from material misstatement whether due tofraud or error.

Auditors' Responsibility

3. Our responsibility is to express an opinion on these Ind AS financial statementsbased 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 Ind AS financial statements in accordance with theStandards on Auditing specified under Section 143(10) of the Act and other applicableauthoritative pronouncements issued by the Institute of Chartered Accountants of India.Those Standards and pronouncements require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether the Ind ASfinancial statements are free from material misstatement.

6. An audit involves performing procedures to obtain audit evidence about the amountsand the disclosures in the Ind AS financial statements. The procedures selected depend onthe auditors' judgment including the assessment of the risks of material misstatement ofthe Ind AS financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial controls relevant to the Company'spreparation of the Ind AS financial statements that give a true and fair view in order todesign audit 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 Ind AS 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 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 Ind AS financial statements give the information required bythe Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at March 31 2017 and its profit (including other comprehensive income) itscash 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 thetransition date opening balance sheet as at April 1 2015 included in these Ind ASfinancial 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 and onwhich we expressed an unmodified opinion dated May 26 2016 and May 27 2015respectively. The adjustments to those financial statements for the differences inaccounting principles adopted by the Company on transition to the Ind AS have been auditedby us.

Our opinion is not modified 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 Central

Government 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 Ind AS financial statements comply with the IndianAccounting 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 disqualifiedas on March 31 2017 from being appointed as a director in terms of Section 164 (2) of theAct.

(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 pendinglitigations as at March 31 2017 on its financial position in its Ind AS financialstatements – Refer Note 29; ii) The Company has long-term contracts as atMarch 31 2017 for which there were no material foreseeable losses. The Company did nothave any derivative contracts as at March 31 2017; iii) There has been no delay intransferring amounts required to be transferred to the Investor Education and ProtectionFund by the Company during the year ended March 31 2017; iv) The Company has providedrequisite disclosures in the financial statements as to holdings as well as dealings inSpecified Bank Notes during the period from November 8 2016 to December 30 2016. Basedon audit procedures and relying on the management representation we report that thedisclosures are in accordance with books of account maintained by the Company and asproduced to us by the Management – Refer Note 35.

For Lovelock & Lewes
Firm Registration No. 301056E
Chartered Accountants
Asha Ramanathan
Partner
Membership No. 202660
Mumbai May 23 2017

Annexure A to Independent Auditors' Report

Referred to in paragraph 11(f) of the Independent Auditors' Report of even date to themembers of Novartis India Limited on the Ind AS financial statements as of and for theyear 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 of NovartisIndia Limited ("the Company") as of March 31 2017 in conjunction with our auditof the Ind AS financial statements of the Company for the year 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 specified under section143(10) of the Act to the extent applicable to an audit of internal financial controlsboth applicable to an audit of internal financial controls and both issued by the ICAI.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting were established and maintained and if suchcontrols 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 controls 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 controls 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 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 controlsover 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 controls 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 Lovelock & Lewes
Firm Registration No. 301056E
Chartered Accountants
Asha Ramanathan
Partner
Membership No. 202660
Mumbai May 23 2017

Annexure B to Independent Auditors' Report

Referred to in paragraph 10 of the Independent Auditors' Report of even date to themembers of Novartis India Limited on the Ind AS financial statements as of and for theyear ended March 31 2017 i. (a) The Company is maintaining proper records showing fullparticulars including quantitative 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 3 on fixed assets tothe Ind AS financial statements are held in the name of the Company.

ii. The physical verification of inventory (excluding stocks with third parties) hasbeen 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 firms

Limited Liability Partnerships or other parties covered in the register maintainedunder 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 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 depositingthe undisputed statutory dues in respect of service tax though there have been delays ina few cases for service tax payable based on reverse charge mechanism and is regular indepositing undisputed statutory dues including provident fund employees' stateinsurance income tax sales tax duty of customs duty of excise value added tax cessand other material statutory dues as applicable with the appropriate authorities.

(b) According to the information and explanations given to us and the records of theCompany examined by us the particulars of dues of income tax sales tax value added taxservice tax duty of customs and duty of excise as at March 31 2017 which have not beendeposited on account of a dispute are as follows:

Name of the statute Nature of dues

Amount

Period to which the amount relates Forum where the dispute is pending

` in

Million*

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 Commissioner's level

23.0

Assessment Year 2006-2007 Income Tax Appellate Tribunal
The Central Sales tax

374.1

2000-2001 to Appellate
Sales Tax Act including interest 2013-2014 Authority – up to
1956 and Local and penalty as Commissioner's level
Sales Tax Acts applicable

48.1

1993-1994 Tribunal
2001-2002 to
2005-2006
2007-2008
2010-2011 and
2012-2013

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 Commissioner's level
The Customs Act 1962 Customs Duty

0.4

2002-2003 Appellate
Authority – up to
Commissioner's 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 Commissioner's 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 institutionor bank or Government nor has it issued any debentures as at the balance sheet date theprovisions of Clause 3(viii) of the Order are not applicable to the Company. ix. T heCompany 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 theprovisions 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 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 Ind AS financial statements as required underIndian Accounting Standard (Ind AS) 24 Related Party Disclosures specified under Section133 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 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 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 Lovelock & Lewes
Firm Registration No. 301056E
Chartered Accountants
Asha Ramanathan
Partner
Membership No. 202660
Mumbai May 23 2017