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