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Novartis India Ltd.

BSE: 500672 Sector: Health care
NSE: NOVARTIND ISIN Code: INE234A01025
BSE 00:00 | 19 Jul 621.30 -12.60
(-1.99%)
OPEN

634.00

HIGH

640.00

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619.00

NSE 05:30 | 01 Jan Novartis India Ltd
OPEN 634.00
PREVIOUS CLOSE 633.90
VOLUME 6643
52-Week high 729.00
52-Week low 579.00
P/E 23.20
Mkt Cap.(Rs cr) 1,535
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 634.00
CLOSE 633.90
VOLUME 6643
52-Week high 729.00
52-Week low 579.00
P/E 23.20
Mkt Cap.(Rs cr) 1,535
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Novartis India Ltd. (NOVARTIND) - Auditors Report

Company auditors 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("the Company") which comprise the Balance Sheet as at 31st March 2018 andthe Statement of Profit and Loss (including Other Comprehensive Income) the Cash FlowStatement and the Statement of Changes in Equity for the year then ended and a summary ofthe significant accounting policies and other explanatory information.

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 the preparation ofthese Ind AS financial statements that 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 Indian Accounting Standards (IndAS) prescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended and other accounting principles generally accepted inIndia. 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 judgments 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.

Auditors' Responsibility

Our responsibility is to express an opinion on these Ind AS financial statements basedon our audit.

In conducting our audit we have taken into account the provisions of the Act theaccounting and auditing standards and matters which are required to be included in theaudit report under the provisions of the Act and the Rules made thereunder and the Orderissued under section 143(11) of the Act.

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 andthe disclosures 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 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.

We believe that the audit evidence obtained by us 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 the IndAS and other accounting principles generally accepted in India of the state of affairs ofthe Company as at 31st March 2018 and its profit total comprehensive incomeits 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) Wehave sought and obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purposes of our audit. b) In our opinionproper books of account as required by law have been kept by the Company so far as itappears from our examination of those books. c) The Balance Sheet the Statement of Profitand Loss including Other Comprehensive Income the Cash Flow Statement and Statement ofChanges in Equity dealt with by this Report are in agreement with the books of account. d)In our opinion the aforesaid Ind AS financial statements comply with the IndianAccounting Standards prescribed under section 133 of the Act. e) On the basis of thewritten representations received from the directors of the Company as on 31st March 2018taken on record by the Board of Directors none of the directors is disqualified as on31st 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 financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure A". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting g) With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 asamended in our opinion and to the best of our information and according to theexplanations given to us: i. The Company has disclosed the impact of pending litigationson its financial position in its Ind AS financial statements – Refer Note 27 to IndAS financial statements; ii. The Company did not have any long-term contracts for whichthere were any material foreseeable losses. The Company did not have any derivativecontracts; iii. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.

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

For Deloitte Haskins & Sells LLP
Chartered Accountants
(Firm's Registration No. 117366W/W-100018)
Uday M. Neogi
(Partner)
(Membership No. 30235)
Place : Mumbai
Date : 10th May 2018

Annexure "A" to the Independent Auditor's Report

(Referred to in paragraph 1(f) under ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date to the members of Novartis India Limitedon the Ind AS financial statements for the year ended 31 st 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 ("the Act")

We have audited the internal financial controls over financial reporting of NovartisIndia Limited ("the Company") as of 31st March 2018 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. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to Company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting of the Company based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") issued by the Institute of CharteredAccountants of India and the Standards on Auditing prescribed under Section 143(10) of theCompanies 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 andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols 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.Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our audit opinion on the Company's internal financial controls system overfinancial 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 to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at 31st March 2018 based on the criteria forinternal financial control over financial reporting 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 Deloitte Haskins & Sells LLP
Chartered Accountants
(Firm's Registration No. 117366W/W-100018)
Uday M. Neogi
(Partner)
(Membership No. 30235)
Place : Mumbai
Date : 10th May 2018

Annexure "B" to the Independent Auditor's Report

(Referred to in paragraph 2 under ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date to the members of Novartis India Limitedon 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 includingquantitative details and situation of the fixed assets.

(b) The Company has a program of verification to cover all the items of fixed assets ina phased manner over a period of three years which in our opinion is reasonable havingregard to the size of the Company and the nature of its assets. Pursuant to the programcertain fixed assets were physically verified by the management during the year. Accordingto the information and explanations given to us no material discrepancies were noticed onsuch verification.

(c) According to the information and explanations given to us the records examined byus and based on the examination of registered sale deeds/share certificate provided to uswe report that the title deeds comprising all the immovable properties of buildings areheld 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 bythe Management at reasonable intervals except for inventories lying at third partylocations for which confirmations have been obtained by the management and goods intransit. No material discrepancies were noticed on physical verification.

(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 hence reporting under clause (iii) of paragraph 3 of the Order isnot applicable.

(iv) The Company has not granted any loans made investments or provided guarantees orsecurities hence reporting under clause (iv) of paragraph 3 of the Order is notapplicable.

(v) According to the information and explanations given to us the Company has notaccepted any deposit during the year. The Company does not have unclaimed deposits as at31st March 2018 and accordingly the provisions of Sections 73 to 76 or any otherrelevant provisions of the Act are not applicable to the Company.

(vi) The maintenance of cost records has not been specified by the Central Governmentunder section 148(1) of the Act.

(vii) According to the information and explanations given to us in respect of statutorydues:

(a) The Company has generally been regular in depositing undisputed statutory duesincluding Provident Fund Income-tax Goods and Services Tax Sales Tax Service TaxCustoms Duty Excise Duty Value Added Tax Cess and other material statutory duesapplicable to it with the appropriate authorities. (b) There were no undisputed amountspayable in respect of Provident Fund Income-tax Goods and Services Tax Sales TaxService Tax Customs Duty Excise Duty Value Added Tax Cess and other material statutorydues in arrears as at 31st March 2018 for a period of more than six months fromthe date they became payable.

(c) Details of dues of Income-tax Sales Tax Service Tax Customs Duty Excise Dutyand Value Added Tax which have not been deposited as on 31st March 2018 on account ofdisputes are given below:

Name of the statute Nature of dues Forum where the dispute is pending Period to which the amount relates Amount Involved (Rs. million) Amount Unpaid (Rs. 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 Commissioner's 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 Commissioner's level 2002-2003 0.4 0.4
The Central Excise Act 1944 Excise duty including penalty as applicable Appellate Authority – up to Commissioner's 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

* Net of amount paid under protest.

(viii) The Company has not taken any loans or borrowings from financial institutionsbanks and government or has not issued any debentures. Hence reporting under clause (viii)of paragraph 3 of the Order is not applicable.

(ix) The Company has not raised any moneys by way of initial public offer or furtherpublic 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 explanationsgiven to us no fraud by the Company and no material fraud on the Company by its officersor employees has been noticed or reported during the year.

(xi) In our opinion and according to the information and explanations given to us theCompany has paid/provided managerial remuneration in accordance with the requisiteapprovals 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) ofparagraph 3 of the Order is not applicable.

(xiii) In our opinion and according to the information and explanations given to us theCompany is in compliance with section 177 and 188 of the Act where applicable for alltransactions with the related parties and the details of related party transactions havebeen disclosed in the Ind AS financial statements etc. as required by the applicableaccounting standards.

(xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures and hence reporting underclause (xiv) of paragraph 3 of the Order is not applicable.

(xv) In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsdirectors or directors of its holding company or persons connected with them and henceprovisions of Section 192 of the Act are not applicable.

(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934 hence reporting under clause (xiv) of paragraph 3 of the Order isnot applicable.

For Deloitte Haskins & Sells LLP
Chartered Accountants
(Firm's Registration No. 117366W/W-100018)
Uday M. Neogi
(Partner)
(Membership No. 30235)
Place : Mumbai
Date : 10th May 2018