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Novartis India

BSE: 500672  |  NSE: NOVARTIND  |  ISIN: INE234A01025  |  Pharmaceuticals

Explore Novartis India connections « Mar 08
Auditor's Report Year End : Mar '09
1.  We have audited the attached Balance Sheet of Novartis India
 Limited, as at 31st March 2009, and the related Profit and Loss Account
 and Cash Flow Statement for the year ended on that date annexed
 thereto, which we have signed under reference to this report.  These
 financial statements are the responsibility of the companys
 management. Our responsibility is to express an opinion on these
 financial statements based on our audit.
 
 2.  We conducted our audit in accordance with the auditing standards
 generally accepted in India. Those Standards require that we plan and
 perform the audit to obtain reasonable assurance about whether the
 financial statements are free of material misstatement. An audit
 includes examining, on a test basis, evidence supporting the amounts
 and disclosures in the financial statements. An audit also includes
 assessing the accounting principles used and significant estimates made
 by management, as well as evaluating the overall financial statement
 presentation. We believe that our audit provides a reasonable basis for
 our opinion.
 
 3.  As required by the Companies (Auditors Report) Order, 2003 as
 amended by the Companies (Auditors Report) (Amendment) Order, 2004
 (together the Order) issued by the Central Government of India in
 terms of sub-section (4A) of Section 227 of The Companies Act, 1956
 of India (the Act) and on the basis of such checks of the books and
 records of the company as we considered appropriate and according to
 the information and explanations given to us, we give in the Annexure a
 statement on the matters specified in paragraphs 4 and 5 of the Order.
 
 4.  Further to our comments in the Annexure referred to in paragraph 3
 above, we report that:
 
 (a) We have obtained all the information and explanations, which to the
 best of 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 the company so far as appears from our examination of
 those books;
 
 (c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
 dealt with by this report are in agreement with the books of account;
 
 (d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash
 Flow Statement dealt with by this report comply with the accounting
 standards referred to in sub-section (3C) of Section 211 of the Act;
 
 (e) On the basis of written representations received from the
 directors, as on 31st March 2009 and taken on record by the Board of
 Directors, none of the directors is disqualified as on 31st March 2009
 from being appointed as a director in terms of clause (g) of
 sub-section (1) of Section 274 of the Act;
 
 (f) In our opinion and to the best of our information and according to
 the explanations given to us, the said financial statements together
 with the notes thereon and attached thereto give in the prescribed
 manner the information required by the Act and give a true and fair
 view in conformity with the accounting principles generally accepted in
 India:
 
 (i) in the case of the Balance Sheet, of the state of affairs of the
 company as at 31st March 2009;
 
 (ii) in the case of the Profit and Loss Account, of the profit for the
 year ended on that date; and
 
 (iii) in the case of the Cash Flow Statement, of the cash flows for the
 year ended on that date.
 
 Annexure to Auditors Report
 
 [Referred to in paragraph 3 of the Auditors Report of even date to the
 members of Novartis India Limited on the financial statements for the
 year ended 31st March 2009]
 
 1.  (a) The company is maintaining proper records showing full
 particulars including quantitative details and situation of fixed
 assets.
 
 (b) A substantial portion of fixed assets has been physically verified
 by the management during the year and no material discrepancies between
 the book records and the physical inventory have been noticed on such
 verification. In our opinion, the frequency of verification is
 reasonable.
 
 (c) In our opinion, a substantial part of fixed assets has not been
 disposed of by the company during the year.
 
 2.  (a) Inventory has been physically verified by the management during
 the year. In our opinion, the frequency of verification is reasonable.
 
 (b) In our opinion, the procedures of physical verification of
 inventory followed by the management are reasonable and adequate in
 relation to the size of the company and the nature of its business.
 
 (c) On the basis of our examination of the inventory records, in our
 opinion, the company is maintaining proper records of inventory. In our
 opinion, the discrepancies noticed on physical verification of
 inventory as compared to book records were not material.
 
 3.  (a) The company has granted unsecured loans to two companies
 covered in the register maintained under Section 301 of the Act. The
 maximum amounts involved during the year and the year-end balances of
 such loans aggregates to Rs 4,056,289(000) and Rs 3,834,076(000)
 respectively.
 
 (b) In our opinion, the rate of interest and other terms and conditions
 of such loans are not prima facie prejudicial to the interest of the
 company.
 
 (c) In respect of the aforesaid loans, the companies are regular in
 repayment of the principal amounts and are also regular in payment of
 interest.
 
 (d) In respect of the aforesaid loans, there is no overdue amount more
 than Rupees One Lakh.
 
 (e) The company has not taken any loans, secured or unsecured, from
 companies, firms or other parties covered in the register maintained
 under Section 301 of the Act.  Accordingly, clauses (iii)(f) and
 (iii)(g) of paragraph 4 of the Order are not applicable to the company
 for the current year.
 
 4.  In our opinion, having regard to the explanation that certain items
 of inventory purchased are of special nature for which suitable
 alternative sources do not exist for obtaining comparative quotations,
 there is an adequate internal control system commensurate with the size
 of the company and the nature of its business for the purchase of
 inventory and fixed assets and for the sale of goods and services.
 Further, on the basis of our examination of the books and records of
 the company, carried out in accordance with the auditing standards
 generally accepted in India and according to the information and
 explanations given to us, we have neither come across nor have we been
 informed of any continuing failure to correct major weaknesses in the
 aforesaid internal control system.
 
 5.  (a) In our opinion and according to the information and
 explanations given to us, the particulars of contracts or arrangements
 referred to in Section 301 of the Act have been entered in the register
 required to be maintained under that Section.
 
 (b) In our opinion and according to the information and explanations
 given to us, the transactions made in pursuance of contracts or
 arrangements entered in the register maintained under Section 301 of
 the Act and exceeding the value of Rupees Five Lakhs in respect of any
 party during the year, have been made at prices which are reasonable
 having regard to the prevailing market prices at the relevant time.
 However, in respect of certain transactions including for purchases and
 sale of goods, prevailing market prices at the relevant time are not
 available as these transactions are of a special nature.
 
 6.  In our opinion and according to the information and explanations
 given to us, the company has complied with the provisions of Sections
 58A, 58AA or any other relevant provisions of the Act and the Companies
 (Acceptance of Deposits) Rules, 1975 with regard to the deposits
 accepted from the public. According to the information and explanations
 given to us, no order has been passed by the Company Law Board or
 National Company Law Tribunal or Reserve Bank of India or any Court or
 any other Tribunal on the company in respect of the aforesaid deposits.
 
 7.  In our opinion, the company has an internal audit system
 commensurate with its size and nature of its business.
 
 8.  We have broadly reviewed the books of account maintained by the
 company in respect of the products where, pursuant to the Rules made by
 the Central Government of India, the maintenance of cost records has
 been prescribed under clause (d) of sub-section (1) of Section 209 of
 the Act and are of the opinion that prima facie, the prescribed
 accounts and records have been made and maintained. We have not,
 however, made a detailed examination of the records with a view to
 determine whether they are accurate or complete.
 
 9.  (a) According to the information and explanations given to us and
 the records of the company examined by us, in our opinion, the company
 is generally regular in depositing undisputed statutory dues including
 provident fund, investor education and protection fund, employees
 state insurance, income-tax, sales tax, wealth tax, service tax,
 customs duty, excise duty, cess and other material statutory dues as
 applicable with the appropriate authorities in India.
 
 (b) According to the information and explanations given to us and the
 records of the company examined by us, there are no dues of income-tax,
 wealth tax, service tax and cess which have not been deposited on
 account of any dispute. The particulars of dues of sales tax, customs
 duty and excise duty as at 31st March 2009 which have not been
 deposited on account of a dispute, are as follows -
 
 Name of the             Nature of dues
 statute
 
 The Kerala              Sales tax on concessional
 General Sales Tax       sales
 Act, 1963
                         Sales tax (including interest,
                         where applicable) on free
                         ssues, sales returns, stock
                         transfers and concessional
                         sales
                         Sales tax on concessional
                         sales
 
 Amount*    Period to which       Forum where the
 Rs 000    the amount            dispute is pending
            relates
 
     245    1997-1998             The High Court of
                                  Kerala
  16,270    2000-2001 and         Deputy
            2004-2005             Commissioner
                                  (Appeals)
     438    2001-2002             Assistant
                                  Commissioner
 
 * Net of amounts paid under protest or otherwise
 
 Name of the              Nature of dues
 statute
 
 The Gujarat Sales        Sales tax on CSD sales
 Tax Act, 1969
                          Non submission of sales tax
                          exemption forms and sales
                          tax on tax free sales
                          Sales tax on free issues and
                          concessional sales
 The Karnataka            Sales tax on sales returns
 Sales Tax Act,           and exempt sales
 1957
                          Sales tax on sales returns
                          and exempt sales
                          Sales tax paid but not
                          considered by the authority
 The West Bengal          Sales tax on enhanced
 Sales Tax Act,           turnover and non
 1994                     submission of sales tax
                          exemption forms
                          Sales tax (including penalty,
                          where applicable) on sales
                          returns, exempt sales and
                          difference in turnover and
                          purchase tax
 The Delhi Sales          Non submission of sales tax
 Tax Act, 1975            exemption forms
                          Non submission of sales
                          tax exemption forms
 The Andhra               Non submission of sales
 Pradesh General          tax exemption forms
 Sales Tax Act,
 1957
 The Madhya               Non submission of sales
 Pradesh                  tax exemption forms
 Commercial Tax
 Act. 1994
                          Sales tax on sales returns
                          and non submission of
                          sales tax exemption forms
 The Rajasthan            Sales tax (including interest)
 Sales Tax Act,           on free quantity schemes
 1994                     and non submission of
                          sales tax exemption forms
 The Bihar Sales          Non submission of sales
 Tax Act, 1981            tax exemption forms
                          Sales tax on sales returns,
                          non submission of sales tax
                          exemption forms and export
                          sales
 
 Amount*    Period to which     Forum where the
 Rs 000    the amount          dispute is pending
            relates
 
   1,378    1993-1994           Sales Tax Tribunal
     970    2002-2003           Joint Commissioner
   4,060    2003-2004           Assistant
                                Commissioner
   1,577    1998-1999           J Joint Commissioner
                                (Appeals)
   3,235    2002-2003           Sales Tax Appellate
                                Tribunal
  11.725    2004-2005           Deputy
                                Commissioner of
                                Commercial Taxes
  25,015    2005-2006           Additional
                                Commissioner
                                (Appeals)
  32,875    2000-2001 and       Deputy
            2002-2003 to        Commissioner
            2004-2005           (Appeals)
   1,153    2002-2003           Deputy
                                Commissioner
                                (Appeals)
     196    2004-2005           Additional
                                Commissioner
                                (Appeals)
      82    2001-2002 and       Deputy
            2003-2004           Commissioner
                                (Appeals)
      61    2000-2001           Additional
                                Commissioner
                                (Appeals)
      48    2002-2003           Deputy
                                Commissioner
                                (Appeals)
     333    2002-2003 and       Deputy
            2003-2004           Commissioner
                                (Appeals)
     281    2002-2003 and       Deputy
            2003-2004           Commissioner
   6,399    2004-2005 to        Commissioner of
            2007-2008           Commercial Taxes
 
 * Net of amounts paid under protest or otherwise
 
 Name of the           Nature of dues
 statute
 
 The Jammu and         Sales tax on rejection of
 Kashmir General       claim for breakages, non
 Sales Tax Act,        submission of sales tax
 1962                  exemption forms and expiry
                       of goods
 The Central Sales     Sales tax on sales returns,
 Tax Act, 1956         non submission of sales tax
                       exemption forms and export
                       sales
                       Sales tax on sales returns,
                       difference in turnover,
                       import of miscellaneous
                       items, stock transfers and
                       non submission of sales tax
                       exemption forms
                       Non submission of sales
                       tax exemption forms
                       Non submission of sales tax ;
                       exemption forms
                       Sales tax on stock transfer
                       and non submission of
                       sales tax exemption forms
                       Non submission of sales tax
                       exemption forms
                       Non submission of sales tax
                       exemption forms
 The Central Sales     Sales tax on sales returns
 Tax Act, 1956         and exempt sales
                       Non submission of sales tax
                       exemption forms
 The Customs Act,      Countervailing Duty on
 1962                  disputed classification of
                       goods
 The Central Excise    Excise duty (including
 Act, 1944             penalty) on rejection of
                       claim for concessional rate
                       Of duty                                      
                       Excise Duty on difference
                       in valuation due to non
                       approval of price list of
                       products
                       Disallowance of Modified
                       Value Added Tax utilised
                       Disallowance of refund of
                       Excise Duty
 
 Amount*   Period to which        Forum where the
 Rs 000   the amount             dispute is pending
           relates
 
     822   2003-2004              Deputy
                                  Commissioner of
                                  Commercial Taxes
   2,014   2004-2005 to           Commissioner of
           2007-2008              Commercial Taxes
   8,346   2001-2002 to           Deputy
           2004-2005              Commissioner
                                  (Appeals)
     209   2004-2005              Deputy
                                  Commissioner of
                                  Commercial Taxes
     609   2004-2005              Appellate Deputy
                                  Commissioner
  17,207   2003-2004 and          Assistant
           2004-2005              Commissioner
   1,113   2001-2002,             Joint Commissioner
           2002-2003 and          (Appeals)
           2005-2006
      44   2004-2005              Joint Commissioner
                                  of Commercial
                                  Taxes
     132   2002-2003              Sales tax Appellate
                                  Tribunal
   6,153   2003-2004 to           Additional
           2005-2006              Commissioner
                                  (Appeals)
     393   2002-2003              Deputy
                                  Commissioner of
                                  Customs
   2,351   August 1993 to         Customs, Excise
           December 1996          & Service Tax
                                  Appellate Tribunal
   2,128   January 1987 to        Customs, Excise
           February 1993          & Service Tax
                                  Appellate Tribunal
     494   June 1993 to           Commissioner of
           October 1993           Central Excise
      57   1990                   Assistant
                                  Commissioner of
                                  Central Excise
 
 * Net of amounts paid under protest or otherwise
 
 10.  The company has no accumulated losses as at 31st March 2009 and
 has not incurred any cash losses in the financial year ended on that
 date or in the immediately preceding financial year.
 
 11.  According to the records of the company examined by us and the
 information and explanations given to us, the company has not defaulted
 in repayment of dues to any financial institution or bank or debenture
 holders.
 
 12.  In our opinion, the company has maintained adequate documents and
 records in the cases where the company has granted housing loans to
 employees on the basis of security by way of pledge of shares of
 co-operative housing societies.
 
 13.  The provisions of any special statute applicable to chit
 fund/nidhi/mutual benefit fund/ societies are not applicable to the
 company.
 
 14.  In our opinion, the company is not a dealer or trader in shares,
 securities, debentures and other investments.
 
 15.  According to the information and explanations given to us, the
 company has not given any guarantee for loans taken by others from
 banks or financial institutions during the year.
 
 16.  In our opinion, the company has not obtained any term loans that
 were not applied for the purposes for which these were raised.
 
 17.  On the basis of an overall examination of the Balance Sheet of the
 company, in our opinion and according to the information and
 explanations given to us, there are no funds raised on short-term basis
 which have been used for long-term investment.
 
 18.  The company has not made any preferential allotment of shares to
 parties and companies covered in the register maintained under Section
 301 of the Act during the year.
 
 19.  The company has not issued any debentures.
 
 20.  The company has not raised any money by public issues during the
 year.
 
 21.  During the course of our examination of the books and records of
 the company, carried out in accordance with the auditing standards
 generally accepted in India, we have neither come across any instance
 of fraud on or by the company, noticed or reported during the year, nor
 have we been informed of such case by the management.
 
                                                 Himanshu Goradia
                                                          Partner
                                             Membership No. 45668
 
                                             For and on behalf of
                                                 Price Waterhouse
 Mumbai, 8th May 2009                       Chartered Accountants
Source : Religare Technova

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