You are here » Home » Companies » Company Overview » Nestle India Ltd

Nestle India Ltd.

BSE: 500790 Sector: Agri and agri inputs
NSE: NESTLEIND ISIN Code: INE239A01016
BSE 00:00 | 18 Feb 16400.80 -174.00
(-1.05%)
OPEN

16555.00

HIGH

16565.00

LOW

16375.00

NSE 00:00 | 18 Feb 16403.85 -184.60
(-1.11%)
OPEN

16569.90

HIGH

16569.90

LOW

16385.05

OPEN 16555.00
PREVIOUS CLOSE 16574.80
VOLUME 2500
52-Week high 16753.45
52-Week low 10028.10
P/E 80.29
Mkt Cap.(Rs cr) 158,137
Buy Price 16370.00
Buy Qty 1.00
Sell Price 16421.00
Sell Qty 5.00
OPEN 16555.00
CLOSE 16574.80
VOLUME 2500
52-Week high 16753.45
52-Week low 10028.10
P/E 80.29
Mkt Cap.(Rs cr) 158,137
Buy Price 16370.00
Buy Qty 1.00
Sell Price 16421.00
Sell Qty 5.00

Nestle India Ltd. (NESTLEIND) - Auditors Report

Company auditors report

TO

THE MEMBERS OF

NESTLE INDIA LIMITED

Report on the Ind AS Financial Statements

We have audited the accompanying Ind AS financial statements of Nestle India Limited("the Company") which comprise the Balance Sheet as at 31 December 2017 theStatement of Profit and Loss (including Other Comprehensive Income) the Statement of CashFlows and the Statement of Changes in Equity for the year then ended and a summary ofsignificant accounting policies and other explanatory information (collectively referredto as "Ind AS financial statements")

Management's Responsibility for the Ind AS Financial Statements

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 preparation of these Ind ASfinancial statements that give a true and fair view of the state of affairs (financialposition) profit or loss (financial performance including other comprehensive income)cash flows and changes in equity of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards (Ind AS)prescribed under Section 133 of the Act.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgements and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the Ind ASfinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these Ind AS financial statements basedon our audit. We have taken into account the provisions of the Act the accounting andauditing standards and matters which are required to be included in the audit report underthe provisions of the Act and the Rules made thereunder.

We conducted our audit of the Ind AS financial statements in accordance with theStandards on Auditing specified under Section 143(10) of the Act. Those Standards requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the Ind AS financial statements are free from materialmisstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the Ind AS financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of theInd AS financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control 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 accounting policies used and the reasonableness of theaccounting estimates made by the Company's Directors as well as evaluating the overallpresentation of the Ind AS financial statements.

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

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 including the Ind AS of the state ofaffairs (financial position) of the Company as at 31 December 2017 and its profit(financial performance including other comprehensive income) its cash flows and thechanges in equity for the year ended on that date.

Other matter

The comparative financial information of the Company for the year ended 31 December2016 and the transition date opening balance sheet as at 1 January 2016 included in theseInd AS financial statements are based on the previously issued statutory financialstatements prepared in accordance with the Companies (Accounting Standards) Rules 2006audited by A.F. Ferguson & Co. Chartered Accountants the predecessor auditor whosereport for the year ended 31 December 2016 and 31 December 2015 dated 15 February 2017 and12 February 2016 respectively expressed an unmodified opinion on those financialstatements as adjusted for the differences in the accounting principles adopted by theCompany on transition to the Ind AS which have been audited by us.

Our opinion is not modified in respect of these matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ('the Order') issued bythe Central Government of India in terms of Section 143(11) of the Act we give in"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of thesaid Order.

2. 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 Statement of Cash Flows and 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 written representations received from the directors as on 31December 2017 and taken on record by the Board of Directors none of the directors isdisqualified as on 31 December 2017 from being appointed as a director in terms of Section164(2) of the Act;

f) with respect to the adequacy of internal financial controls over financial reportingof the Company and the operating effectiveness of such controls refer to our separatereport in "Annexure B"; and

g) with respect to the other matters to be included in the Auditor's Report inaccordance with the Rule 11 of the Companies (Audit and Auditors) Rules 2014 in ouropinion 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 financialposition in its Ind AS financial statements - Refer to Note 39 and 48 of the Ind ASfinancial statements;

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses;

iii. There have been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company; and

iv. The Company did not have any holdings or dealings in Specified Bank Notes duringthe period from 8 November 2016 to 30 December 2016 - Refer to note 53 of the Ind ASfinancial statements.

For B S R & Co. LLP
Chartered Accountants
Firm Registration No.: 101248W/W-100022
Place: Gurugram Jiten Chopra
Date: 14 February 2018 Partner
Membership No.: 092894

Annexure - A to the Independent Auditor's Report of even date on the Ind AS financialstatements of Nestle India Limited (i) (a) The Company has maintained proper recordsshowing full particulars including quantitative details and situation of fixed assets.

(b) The Company has a regular programme of physical verification of its fixed assets bywhich all fixed assets are verified in a phased manner over a period of two years. In ouropinion the periodicity of physical verification is reasonable having regard to the sizeof the Company and the nature of its assets. As informed to us no material discrepancieswere noticed on such verification.

(c) According to the information and explanations given to us and the records examinedby us and based on the examination of the registered sale deed / transfer deed /conveyance deed provided to us we report that the title deeds comprising all theimmovable properties of land and buildings which are freehold are held in the name of theCompany as at the balance sheet date. In respect of immovable properties of land andbuildings that have been taken on lease and disclosed as fixed asset in the financialstatements the lease agreements are in the name of the Company where the Company is thelessee in the agreement.

(ii) The inventory except goods in transit has been physically verified by themanagement during the year. In our opinion the frequency of such verification isreasonable. According to the information and explanations given to us the discrepanciesnoticed on physical verification of inventory as compared to book records were notmaterial and have been properly dealt with in the books of account.

(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 Companies Act 2013. Accordingly clause 3(iii) of the order is notapplicable.

(iv) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the Company has not entered into anytransactions in respect of loans investments guarantees and security which are coveredunder section 185 of the Companies Act 2013.

The Company has complied with the provisions of Section 186 of the Companies Act 2013in respect of grant of loans making investments and providing guarantees and securitiesas applicable.

(v) According to the information and explanations given to us the Company has notaccepted any deposits covered under section 73 to 76 or any other relevant provisions ofthe Companies Act 2013 and the rules framed there under. Accordingly clause 3(v) of theOrder is not applicable.

(vi) We have broadly reviewed the records maintained by the Company pursuant to therules prescribed by Central Government for maintenance of cost records under sub section(1) of Section 148 of the Act and are of the opinion that prima facie the prescribedaccounts and records have been made and maintained. However we have not made a detailedexamination of the records.

(vii) (a) According to the information and explanations given

to us and on the basis of our examination of the records of the Company amountsdeducted/ accrued in the books of account in respect of undisputed statutory duesincluding Provident Fund EmployeesRs. State Insurance Income-tax Sales-tax Servicetax Duty of Customs Duty of Excise Value added tax Goods and Service Tax Cess andother statutory dues have been regularly deposited during the year by the Company with theappropriate authorities.

According to the information and explanations given to us no undisputed amountspayable in respect of Provident Fund Employees State Insurance Income- tax Sales taxService tax Duty of customs Duty of excise Value added tax Goods and Service Tax Cessand other statutory dues were in arrears as at 31 December 2017 for a period of more thansix months from the date they became payable.

(b) According to the information and explanations given to us except as stated inAppendix 1 there are no dues of income-tax sales tax service tax duty of customs dutyof excise or value added tax which have not been deposited on account of any dispute.

(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in repayment of dues to its bankers. The Company did nothave any dues payable to any financial institutions government or debentures holdersduring the year.

(ix) The Company has not raised any money by way of initial public offer furtherpublic offer (including debt instruments) and term loans during the year. Accordingly theprovisions of clause 3(ix) of the Order are not applicable to the Company.

(x) According to the information and explanations given to us no material fraud by theCompany or no material fraud on the Company by its officers or employees has been noticedor reported during the year.

(xi) According to the information and explanations given to us and based on ourexamination of the records the Company has paid or provided for managerial remunerationin accordance with the requisite approvals mandated by the provisions of section 197 readwith Schedule V to the Act.

(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Accordingly clause 3(xii) of the Order is not applicable.

(xiii) According to the information and explanations given to us and based on ourexaminations of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable. The details of suchrelated party transactions have been disclosed in the Ind AS financial statements asrequired by applicable accounting standards.

(xiv) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year. Accordingly clause

3(xiv) of the Order is not applicable.

(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly clause 3(xv) ofthe Order is not applicable.

(xvi) According to the information and explanations given to us the Company is notrequired to be registered under section 45-IA of the Reserve Bank of India Act 1934.

For B S R & Co. LLP
Chartered Accountants
Firm Registration No.: 101248W/W-100022
Place: Gurugram Jiten Chopra
Date: 14 February 2018 Partner
Membership No.: 092894

Appendix 1 to the statement on the matters specified in paragraph vii(b) of theCompanies Auditors Report Order 2016

(Rs. in Million)

Name of the Statute Nature of Dues Amount* Amount Paid under protest Period to which amount relates Forum where case is pending
Central Excise Act 1944 Duty of Excise 68.7 15.5 1996-2006 Supreme Court
Central Excise Act 1944 Duty of Excise 0.9 - 1994 High Court
Central Excise Act 1944 Duty of Excise 97.7 36.5 2005-2008 2012-2013 Customs Excise and Service Tax Appellate Tribunal
Central Excise Act 1944 Duty of Excise 0.5 - 2000 Commissioner
Customs Act 1962 Custom Duty 52.8 3.8 2008-2013 Customs Excise and Service Tax Appellate Tribunal
Customs Act 1962 Custom Duty 53.0 2.9 2008-2009 Commissioner
The Finance Act 1994 Service Tax 626.8 214.3 2005-2007 2008 20102014 Customs Excise and Service Tax Appellate Tribunal
Central Sales Tax/ Value Added Tax Sales Tax/ VAT 101.3 2.5 1997-1998 2000-2006 2007-2009 2014-2015 High Court
Central Sales Tax/ Value Added Tax Sales Tax/ VAT 164.1 54.9 2004-2005 2006-2007 2010-2015 Tribunal
Central Sales Tax/ Value Added Tax Sales Tax/ VAT 183.6 - 2005-2012 Appellate & Revisional Board
Central Sales Tax/ Value Added Tax Sales Tax/ VAT 21.9 2.2 2004- 2007 2008-2009 2011-2013 2014-2015 Commissioner (Appeals)
Central Sales Tax/ Value Added Tax Sales Tax/ VAT 77.8 1.1 2004- 2005 2010-2012 Commissioner
Central Sales Tax/ Value Added Tax Sales Tax/ VAT 51.5 5.8 2008-2009 2010-2011 2012-2015 Additional Commissioner
Central Sales Tax/ Value Added Tax Sales Tax/ VAT 1.1 0.2 2007-2008 Assessing Officer
Income Tax Act 1961 Income Tax 1253.2 - 1996-2001 2004-2008 Supreme Court
Income Tax Act 1961 Income Tax 298.6 - 2000-2004 High Court
Income Tax Act 1961 Income Tax 2904.0 33.4 2006-2007 2008-2014 Income Tax Appellate Tribunal
Income Tax Act 1961 Income Tax 691.3 - 2007-2008 2014-2015 CIT (Appeals)

*As per Demand orders

Annexure - B to the Independent Auditor's Report of even date on the Ind AS financialstatements of Nestle India Limited Report on the Internal Financial Controls under Clause(i) of Subsection 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of NestleIndia Limited ("the Company") as of 31 December 2017 in conjunction with ouraudit of the Ind AS financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

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 Companies Act 2013.

Auditor's Responsibility

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 issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe 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.

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

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures 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

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

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 31 December 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 B S R & Co. LLP
Chartered Accountants
Firm Registration No.: 101248W/W-100022
Place: Gurugram Jiten Chopra
Date: 14 February 2018 Partner
Membership No.: 092894