TO THE MEMBERS OF GLAXOSMITHKLINE PHARMACEUTICALS LIMITED
Report on the Standalone Indian Accounting Standards (Ind AS) financial Statements
1. We have audited the accompanying standalone financial statements of GlaxoSmithKline Pharmaceuticals Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2017, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.
Management’s Responsibility for the Standalone Ind AS financial Statements
2. The Company''''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these standalone Ind AS financial statements to give a true and fair view of the financial position, financial performance (including other comprehensive income), cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards specified in the Companies (Indian Accounting Standards) Rules, 2015 (as amended) under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
3. Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.
4. We have taken into account the provisions of the Act and the Rules made there under including the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.
5. We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and pronouncements require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.
6. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditors'''' judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''''s preparation of the standalone Ind AS financial statements that give a true and fair view, in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''''s Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.
7. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.
Opinion
8. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2017, and its profit (including other comprehensive income), its cash 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 the transition date opening balance sheet as at April 1, 2015 included in these standalone Ind AS financial statements, are based on the previously issued statutory financial statements for the years ended March 31, 2016 and March 31, 2015 prepared in accordance with the Companies (Accounting Standards) Rules, 2006 (as amended) which were audited by us, on which we expressed an unmodified opinion dated May 25, 2016 and May 18, 2015 respectively. The adjustments to those financial statements for the differences in accounting principles adopted by the Company on transition to the Ind AS have been audited by us.
Our opinion is not qualified 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 (“the Order”), 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 B a statement on the matters specified in paragraphs 3 and 4 of the 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 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 it appears from our examination of those books.
(c) The Balance Sheet, the Statement of Profit and Loss (including other comprehensive income), the Cash Flow Statement and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.
(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act.
(e) On the basis of the written representations received from the directors as on March 31, 2017 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2017 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 financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in Annexure A.
(g) With respect to the other matters to be included in the Auditors'''' Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our knowledge and belief and according to the information and explanations given to us:
i. The Company has disclosed the impact, if any, of pending litigations as at March 31, 2017 on its financial position in its standalone Ind AS financial statements - Refer Notes 42 (A), 43, 44 and 45.
ii. The Company has long-term contracts as at March 31, 2017 for which there were no material foreseeable losses. The Company did not have any derivative contracts as at March 31, 2017.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended March 31, 2017.
iv. The Company has provided requisite disclosures in the financial statements as to holdings as well as dealings in Specified Bank Notes during the period from November 8, 2016 to December 30, 2016. Based on audit procedures and relying on the management representation we report that the disclosures are in accordance with books of account maintained by the Company and as produced to us by the Management - Refer Note 41.
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Act
1. We have audited the internal financial controls over financial reporting of GlaxoSmithKline Pharmaceuticals Limited (“the Company”) as of March 31, 2017 in conjunction with our audit of the standalone 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 internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.
Auditors’ Responsibility
3. Our responsibility is to express an opinion on the Company''''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing deemed to be prescribed under Section 143(10) of the Act to the extent applicable to an audit of internal financial controls, both 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 and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''''s judgment, including the assessment of the risks of material 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 to provide a basis for our audit opinion on the Company''''s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
6. A company''''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''''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 financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
8. In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2017, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
i. (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation, of fixed assets, other than the situation of certain plant and equipment, furniture and office equipment, for which the situation recorded, is the location of the Company''''s different establishments.
(b) The fixed assets are physically verified by the Management according to a phased programme designed to cover all the items over a period of three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the Management during the year and no material discrepancies have been noticed on such verification.
(c) The title deeds of immovable properties, as disclosed in Note 3 and Note 4 to the financial statements, are held in the name of the Company.
ii. The physical verification of inventory excluding stocks with third parties have been conducted at reasonable intervals by the Management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. The discrepancies noticed on physical verification of inventory as compared to book records were 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 maintained under 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 any guarantees or security to the parties covered under Section 185 and 186. Therefore, the provisions 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 of Sections 73, 74, 75 and 76 of the Act and the Rules framed there under to the extent notified.
vi. Pursuant to the rules made by the Central Government of India, the Company is required to maintain cost records as specified under Section 148(1) of the Act in respect of its products. We have broadly reviewed the same, 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.
vii. (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 in respect of professional tax, though there has been a slight delay in a few cases, and is regular in depositing undisputed statutory dues in respect of provident fund, employees'''' state insurance, income tax, value added tax, service tax, duty of customs, duty of excise, cess and other statutory dues, as applicable, with the appropriate authorities.
(b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues of duty of customs which have not been deposited on account of any dispute. The particulars of dues of income tax, sales tax including value added tax, service tax and duty of excise as at March 31, 2017 which have not been deposited on account of a dispute, are as follows:
Name of the statute
|
Nature of dues
|
Amount (Rs, in lakhs)
|
Period to which the amount relates
|
Forum where the dispute is pending
|
The Income Tax Act, 1961
|
Income tax including interest as applicable.
|
23,35.72
|
Several demands pertaining to Assessment years 2005-2006 to 2016-17
|
Appellate Authority - up to CommissionerRs,s level
|
36.92
|
Assessment years 1990-1991
|
Tribunal
|
20.43
|
Assessment year 1994-95
|
High Court, Bombay
|
Name of the statute
|
Nature of dues
|
Amount (Rs, in lakhs)
|
Period to which the amount relates
|
Forum where the dispute is pending
|
The Central Sales Tax Act, 1956 and Local Sales Tax Acts
|
Sales-tax, including interest and penalty, as applicable
|
278,29.13
|
Several demands pertaining to the period 1983-1984 and 1988 to 2015.
|
Appellate Authority - up to Commissioner''''s level
|
|
|
54,79.62
(includes Rs, 52,18.20 lakhs not deposited due to a stay order)
|
Several demands pertaining to the period 1990-1991,1998-1999, 1999-2000,2001-2002 to 2005-2006.
|
Tribunal
|
|
|
83.08
|
Several demands pertaining to the period 1990-1991, 1999-2000 and 2001-2002.
|
The High Court of Judicature at Allahabad, Lucknow and Kerala
|
|
|
42.14
|
Demand pertaining to the period 1993-1994 and 1994-1995
|
Supreme Court
|
The Finance Act, 1994
|
Service Tax
|
1,29.20
|
January 2001 to December 2002
|
Customs, Excise & Service Tax Appellate Tribunal
|
The Central Excise Act, 1944
|
Excise duty, including interest and penalty, as applicable
|
25.60
|
Several demands pertaining to the periods March 1992 to March 1994, July 1995 to January 1998.
|
Appellate Authority - up to Commissioner''''s level
|
|
|
18,09.71
|
Several Demands Pertaining to the period October 1994 to January 1995, September 1996 to September 2002, November 2003 to December 2011, September 2012 to March 2013
|
Customs, Excise & Service Tax Appellate Tribunal (CESTAT)
|
|
|
1,60.83
|
Demand pertaining to 1977-1980 and 1988-1991
|
The High Court of Judicature at Bombay
|
viii. According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of loans or borrowings to any financial institution or bank or Government or dues to debenture holders as at the balance sheet date.
ix. The Company has not raised any moneys by way of initial public offer, further public offer (including debt instruments) and term loans. Accordingly, the provisions 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 Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud by the Company or on the Company by its officers or employees, noticed or reported during the year, nor have we been informed of any such case by the Management.
xi. The Company has paid / provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.
xii. As the Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to 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 with the provisions of Sections 177 and 188 of the Act. The details of such related party transactions have been disclosed in the financial statements as required under Indian Accounting Standard (Ind AS) 24 - Related Party Disclosures specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015.
xiv. The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Accordingly, the provisions of Clause 3(xiv) of the Order are not applicable to the Company.
xv. The Company has not any entered into non cash transaction with its directors or persons connected within the meaning of Section 192 of the Act. Accordingly, the provisions 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 Reserve Bank of India Act, 1934. Accordingly, the provisions of Clause 3(xvi) of the Order are not applicable to the Company.
For Price Waterhouse & Co Bangalore LLP
Firm Registration Number: 007567S/S-200012
Chartered Accountants
Asha Ramanathan
Mumbai Partner
May 19, 2017 Membership Number: 202660
1. We have audited the accompanying standalone financial statements of
GlaxoSmithKline Pharmaceuticals Limited ("the Company"), which comprise
the Balance Sheet as at March 31, 2016, the Statement of Profit and
Loss, the Cash Flow Statement for the year then ended, and a summary of
the significant accounting policies and other explanatory information.
Management''''s Responsibility for the Standalone Financial Statements
2. The Company''''s Board of Directors is responsible for the matters
stated in Section 134(5) of the Companies Act, 2013 ("the Act") with
respect to the preparation of these standalone financial statements to
give a true and fair view of the financial position, financial
performance and cash flows of the Company in accordance with the
accounting principles generally accepted in India, including the
Accounting Standards specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility
also includes maintenance of adequate accounting records in accordance
with the provisions of the Act for safeguarding of the assets of the
Company and for preventing and detecting frauds and other
irregularities; selection and application of appropriate accounting
policies; making judgments and estimates that are reasonable and
prudent; and design, implementation and maintenance of adequate
internal financial controls, that were operating effectively for
ensuring the accuracy and completeness of the accounting records,
relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
Auditors'''' Responsibility
3. Our responsibility is to express an opinion on these standalone
financial statements based on our audit.
4. We have taken into account the provisions of the Act and the Rules
made thereunder including the accounting standards and matters which
are required to be included in the audit report.
5. We conducted our audit in accordance with the Standards on Auditing
specified under Section 143(10) of the Act and other applicable
authoritative pronouncements issued by the Institute of Chartered
Accountants of India. Those Standards and pronouncements require that
we comply with ethical requirements and plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free from material misstatement.
6. An audit involves performing procedures to obtain audit evidence
about the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditors'''' judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal financial control relevant
to the Company''''s preparation of the financial statements that give a
true and fair view, in order to design audit procedures that are
appropriate in the circumstances.
An audit also includes evaluating the appropriateness of the accounting
policies used and the reasonableness of the accounting estimates made
by the Company''''s Directors, as well as evaluating the overall
presentation of the financial statements.
7. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion on the
standalone financial statements.
Opinion
8. In our opinion and to the best of our information and according to
the explanations given to us, the aforesaid standalone financial
statements give the information required by the Act in the manner so
required and give a true and fair view in conformity with the
accounting principles generally accepted in India, of the state of
affairs of the Company as at March 31, 2016, and its profit and its
cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
9. 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 (hereinafter referred to as the "Order"), 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 B, a statement on the
matters specified in paragraphs 3 and 4 of the Order.
10. 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 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 it appears from our examination of
those books, except that the backup of the books of accounts and other
books and papers maintained in electronic mode has not been maintained
on servers physically located in India.
(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account.
(d) In our opinion, the aforesaid standalone financial statements
comply with the Accounting Standards specified under Section 133 of the
Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
(e) On the basis of the written representations received from the
directors as on March 31, 2016 taken on record by the Board of
Directors, none of the directors is disqualified as on March 31, 2016
from being appointed as a director in terms of Section 164 (2) of the
Act.
(f) With respect to the maintenance of accounts and other matters
connected therewith, reference is made to our comment in Paragraph
10(b) above that the backup of the books of accounts and other books
and papers maintained in electronic mode has not been maintained on
servers physically located in India.
(g) With respect to the adequacy of the internal financial controls
over financial reporting of the Company and the operating effectiveness
of such controls, refer to our separate Report in Annexure A.
(h) With respect to the other matters to be included in the Auditors''''
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our knowledge and belief
and according to the information and explanations given to us:
i. The Company has disclosed the impact, if any, of pending
litigations as at March 31, 2016 on its financial position in its
standalone financial statements - Refer Note 21 (A), 22, 23 and 24.
ii. The Company has long-term contracts as at March 31, 2016, for
which there were no material foreseeable losses. The Company did not
have any derivative contract as at March 31, 2016.
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company during the year ended March 31, 2016.
Referred to in paragraph 9 of the Independent Auditors'''' Report of even
date to the members of GlaxoSmithKline Pharmaceuticals Limited on the
standalone financial statements as of and for the year ended March 31,
2016.
i. (a) The Company is maintaining proper records showing full
particulars, including quantitative details and situation, of fixed
assets, other than the situation of certain plant and equipment,
furniture and office equipment, for which the situation recorded, is
the location of the Company''''s different establishments.
(b) The fixed assets are physically verified by the Management
according to a phased programme designed to cover all the items over a
period of three years which, in our opinion, is reasonable having
regard to the size of the Company and the nature of its assets.
Pursuant to the programme, a portion of the fixed assets has been
physically verified by the Management during the year and no material
discrepancies have been noticed on such verification.
(c) The title deeds of immovable properties (including those held for
sale), as disclosed in Note 11 and Note 15 to the financial statements,
are held in the name of the Company.
ii. The physical verification of inventory excluding stocks with third
parties have been conducted at reasonable intervals by the Management
during the year. In respect of inventory lying with third parties,
these have substantially been confirmed by them. The discrepancies
noticed on physical verification of inventory as compared to book
records were 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 maintained under 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 any guarantees or security to the parties covered under
Section 185 and 186 of the Act. Therefore, the provisions 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 of Sections 73, 74, 75 and 76 of the Act and the Rules framed
there under to the extent notified.
vi. Pursuant to the rules made by the Central Government of India, the
Company is required to maintain cost records as specified under Section
148(1) of the Act in respect of its products. We have broadly reviewed
the same, 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.
vii. (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 in respect
of sales tax including value added tax and service tax, though there
has been a slight delay in a few cases, and is regular in depositing
undisputed statutory dues, including provident fund, employees'''' state
insurance, income tax, duty of customs, duty of excise, cess and other
material statutory dues, as applicable, with the appropriate
authorities.
(b) According to the information and explanations given to us and the
records of the Company examined by us, there are no dues of duty of
customs which have not been deposited on account of any dispute. The
particulars of dues of income tax, sales tax including value added tax,
service tax and duty of excise as at March 31, 2016 which have not been
deposited on account of a dispute, are as follows:
Name of the statute Nature of dues Amount
(Rs. in lakhs)
The Income Tax Act, Income tax 44,29.90
1961 including interest
as applicable.
36.92
Name of the Statute Period to which
the amount Forum where the dispute
relates is pending
The Income Tax Act,1961 Several demands
pertaining Appellate Authority - up
to Assessment
Years 2005- to Commissioner''''s level
2006 to 2016-17.
Assessment
years 1990- Tribunal
1991.
Name of the statute Nature of dues Amount
(Rs. in lakhs)
The Central Sales Tax Sales-tax, including 269,33.79
Act, 1956 and Local interest and penalty,
Sales Tax Acts as applicable
54,79.62
(includes
Rs. 52,18.20
Lakhs not
deposited
due to a stay
order)
83.08
42.14
The Finance Act, Service Tax 1,29.20
1994
The Central Excise Excise duty, 25.60
Act, 1944 including interest
and penalty, as
applicable
18,09.71
1,60.83
Name of the Statute Period to which
the amount Forum where the dispute
relates is pending
The Central Sales Tax Several demands
pertaining Appellate Authority - up
Act,1956 and Local to the period
1983-1984 and to Commissioner''''s level
1988 to 2012.
Several demands
pertaining Tribunal
to the period
1990-1991,1998-
1999, 1999-2000
and 2001-2002 to
2005-2006.
Several demands
pertaining The High court of
to the period
1990-1991, Judicature at Allahabad,
1999-2000 and
2001-2002. Lucknow and Kerala
Demand pertaining
to the Supreme Court
period 1993-1994
and 1994-1995
The Finance Act,1994 January 2001
to December Customs, Excise &
2002 Service Tax Appellate
Tribunal
The Central Excise Several demands
Act.1944 pertaining Appellate Authority -
up
to the periods
March 1992 to Commissioner''''s level
to March 1994,
July 1995 to
January 1998.
Several demands
pertaining Customs, Excise &
to the Period
October 1994 Service Tax Appellate
to January 1995,
September Tribunal (CESTAT)
1996to September
2002, November
2003 to December
2011, September
2012 to March
2013
Demand pertaining
to 1977- The High Court of
1980 and 1988-1991 Judicature at Bombay
viii. According to the records of the Company examined by us and the
information and explanation given to us, the Company has not defaulted
in repayment of loans or borrowings to any financial institution or
bank or Government or dues to debenture holders as at the balance sheet
date.
ix. The Company has not raised any moneys by way of initial public
offer, further public offer (including debt instruments) and term
loans. Accordingly, the provisions 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
Company, carried out in accordance with the generally accepted auditing
practices in India, and according to the information and explanations
given to us, we have neither come across any instance of material fraud
by the Company or on the Company by its officers or employees, noticed
or reported during the year, nor have we been informed of any such case
by the Management.
xi. The Company has paid/ provided for managerial remuneration in
accordance with the requisite approvals mandated by the provisions of
Section 197 read with Schedule V to the Act.
xii. As the Company is not a Nidhi Company and the Nidhi Rules, 2014
are not applicable to 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 with the provisions of Sections 177 and 188 of the Act. The
details of such related party transactions have been disclosed in the
financial statements as required under Accounting Standard (AS) 18,
Related Party Disclosures specified under Section 133 of the Act, read
with Rule 7 of the Companies (Accounts) Rules, 2014.
xiv. The Company has not made any preferential allotment or private
placement of shares or fully or partly convertible debentures during
the year under review. Accordingly, the provisions 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 or persons connected with him within the meaning of Section
192 of the Act. Accordingly, the provisions 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 Reserve Bank of India Act, 1934. Accordingly, the provisions of
Clause 3(xvi) of the Order are not applicable to the Company.
For Price Waterhouse & Co Bangalore LLP
Chartered Accountants
Firm Registration Number: 007567S/S -200012
Asha Ramanathan
Mumbai Partner
May 25, 2016 Membership Number: 202660
1. We have audited the accompanying financial statements of
GlaxoSmithKline Pharmaceuticals Limited (the "Company"), which
comprise the Balance Sheet as at March 31, 2015, the Statement of
Profit and Loss for the 15 months period from January 1, 2014 to March
31, 2015 (the "period") and Cash Flow Statement for the period then
ended, and a summary of significant accounting policies and other
explanatory information, which we have signed under reference to this
report.
Management''s Responsibility for the Financial Statements
2. The Company''s Management is responsible for the preparation of these
financial statements that give a true and fair view of the financial
position, financial performance and cash flows of the Company in
accordance with the Accounting Standards notified under the Companies
Act, 1956 (the "Act") read with the General Circular 15/2013 dated
September 13, 2013 of the Ministry of Corporate Affairs in respect of
Section 133 of the Companies Act, 2013. This responsibility includes
the design, implementation and maintenance of internal control relevant
to the preparation and presentation of the financial statements that
give a true and fair view and are free from material misstatement,
whether due to fraud or error.
Auditors'' Responsibility
3. Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing and other applicable authoritative
pronouncements issued by the Institute of Chartered Accountants of
India. Those Standards require that we comply with ethical requirements
and plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free from material misstatement.
4. An audit involves performing procedures to obtain audit evidence,
about the amounts and disclosures in the financial statements. The
procedures selected depend on the auditors'' judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditors consider internal control relevant to the
Company''s preparation and fair presentation of the financial statements
in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entity''s internal control. An audit also includes
evaluating the appropriateness of accounting policies used and the
reasonableness of the accounting estimates made by Management, as well
as evaluating the overall presentation of the financial statements.
5. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion.
Opinion
6. I n our opinion, and to the best of our information and according to
the explanations given to us, the accompanying financial statements
give the information required by the Act in the manner so required and
give a true and fair view in conformity with the accounting principles
generally accepted in India:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2015;
(b) in the case of the Statement of Profit and Loss, of the profit for
the period ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the
period ended on that date.
Report on Other Legal and Regulatory Requirements
7. As required by ''the Companies (Auditor''s Report) Order, 2003'', as
amended by ''the Companies (Auditor''s Report) (Amendment) Order,
2004'', issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act [Section 143(11) of the
Companies Act, 2013] (hereinafter referred to as the "Order"), 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.
8. As required by section 227(3) of the Act [Section 143(3) of the
Companies Act, 2013], 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 purpose of our
audit;
(b) I n 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, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
(d) I n our opinion, the Balance Sheet, Statement of Profit and Loss,
and Cash Flow Statement dealt with by this report comply with the
Accounting Standards notified under the Companies Act, 1956 read with
the General Circular 15/2013 dated September 13, 2013 of the Ministry
of Corporate Affairs in respect of Section 133 of the Companies Act,
2013;
(e) On the basis of written representations received from the directors
as on March 31, 2015, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31,2015, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Act [Section 164(2) of the Companies Act, 2013].
Annexure To Independent Auditors'' Report
Referred to in paragraph 7 of the Independent Auditors'' Report of
even date to the members of GlaxoSmithKline Pharmaceuticals Limited on
the financial statements as of and for the 15 months period ended March
31, 2015
i. (a) The Company is maintaining proper records showing full
particulars, including quantitative details and situation, of fixed
assets, other than the situation of certain plant and equipment,
furniture and office equipment, for which the situation recorded, is
the location of the Company''s different establishments.
(b) The fixed assets of the Company have been physically verified by
the Management according to a phased programme designed to cover all
the items over a period of three years which, in our opinion, is
reasonable having regard to the size of the Company and the nature of
its assets. Pursuant to the programme, a portion of the fixed assets
has been physically verified by the Management during the period and no
material discrepancies have been noticed on such verification.
(c) In our opinion, and according to the information and explanations
given to us, a substantial part of fixed assets has not been disposed
off by the Company during the period.
ii. (a) The inventory excluding stocks with third parties has been
physically verified by the Management during the period. In respect of
inventory lying with third parties, these have substantially been
confirmed by them. 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. The
discrepancies noticed on physical verification of inventory as compared
to book records were not material.
iii. I n our opinion, and according to the information and explanations
given to us, 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, and according to the information and
explanations given to us, we have neither come across, nor have been
informed of, any continuing failure to correct major weaknesses in the
aforesaid internal control system.
iv. According to the information and explanations given to us, there
have been no contracts or arrangements that need to be entered in the
register maintained under Section 301 of the Act [Section 189 of the
Companies Act, 2013].
v. In our opinion, and according to the information and explanations
given to us, the Company has not accepted any deposits from the public
within the meaning of Sections 58A and 58AA of the Act [Section 73, 74,
75 and 76 of the Companies Act, 2013] and the rules framed there under.
vi. In our opinion, the Company has an internal audit system
commensurate with its size and the nature of its business.
vii. We have broadly reviewed the books of account maintained by the
Company in respect of 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 [Section 148(1) of the Companies Act, 2013], 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.
viii. (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 in respect
of service tax, sales tax and professional tax, though there has been a
slight delay in a few cases, and is regular in depositing undisputed
statutory dues, including provident fund, investor education and
protection fund, employees'' state insurance, income tax, wealth tax,
customs duty, excise duty and other material statutory dues, as
applicable, with the appropriate authorities.
(b) According to the information and explanations given to us and the
records of the Company examined by us, there are no dues of wealth tax
and custom duty which have not been deposited on account of any
dispute. The particulars of dues of income tax, sales tax, service tax
and excise duty as at March 31, 2015 which have not been deposited on
account of a dispute, are as follows:
Name of the statute Nature of dues Amount*
(Rs. in lakhs)
The Income-tax Income-tax 39,24.88
Act, 1961 including interest,
as applicable
2,86.79
The Central Sales Tax Sales-tax 30,47.89
Act, 1956 and including
Local Sales Tax Acts interest and penalty,
as applicable
Name of the statute Period to which the
amount Forum where the
dispute is
relates pending
The Income-tax
Act, 1961 Several demands
pertaining Appellate Authority - up to
to Assessment Years Commissioner''s level
2005-2006 to 2008-
2009 and 2011-12.
Assessment years Tribunal
1990-1991 and
1999-2000.
The Central Sales Tax
Act, 1956 and
Local Sales Tax Acts Several demands
pertaining Appellate Authority - up to
to the period
1983-1984 and Commissioner''s level
1988 to 2014.
Name of the statute Nature of dues Amount*
(Rs. in lakhs)
56,43.11
(include
Rs. 52,18.20
Lakhs not
deposited
due to a stay
order)
83.08
42.14
The Finance Service tax 1,29.20
Act, 1994
The Central Excise duty 25.60
Excise Act, 1944 including interest
and penalty,
as applicable
18,09.71
1,60.83
Name of the statute Period to which the
amount Forum where the
dispute is
relates pending
The Finance
Act, 1994 Several demands
pertaining Tribunal
to the period 1990-1991,
1998- 1999, 1999-2000 and
2001-2002 to
2008-2009.
Several demands
pertaining The High Court of
Judicature
to the period 1990-
1991, at Allahabad, Lucknow,
1999- 2000 and
2001-2002 and Kerala
Demand pertaining to
the Supreme Court
period 1993-1994 and
1994-1995
The Central
Excise Act, 1944 January 2001 to
December Customs, Excise &
Service Tax
2002 Appellate Tribunal
Several demands
pertaining Appellate Authority-
up to
to the periods March
1992 Commissioner''s level
to March 1994, July
1995 to January 1998.
Several Demands
Pertaining Customs, Excise &
Service Tax
to the Period October
1994 Appellate Tribunal
(CESTAT)
to January 1995,
September 1996 to
September 2002,
November 2003 to
December 2011,
September 2012 to
March 2013.
Demand pertaining to The High Court of
Judicature
1977-1980 and 1988-1991. at Bombay
*Net of amounts paid including under protest.
ix. The Company has no accumulated losses as at the end of the period
and it has not incurred any cash losses in the period ended on that
date or in the immediately preceding financial year.
x. According to the records of the Company examined by us and the
information and explanation given to us, the Company has not defaulted
in repayment of dues to any financial institution or bank or debenture
holders as at the balance sheet date.
xi. According to the information and explanations given to us and on an
overall examination of the balance sheet of the company, we report that
the no funds raised on short-term basis have been used for long-term
investment.
xii. During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
material fraud on or by the Company, noticed or reported during the
period, nor have we been informed of any such case by the Management.
xiii. Matters specified in clauses (iii), (xii), (xiii), (xiv), (xv),
(xvi), (xviii), (xix) and (xx) of paragraph 4 of the Order do not apply
to the Company.
For Price Waterhouse & Co., Bangalore LLP
Firm Registration Number :007567S/S-200012
Chartered Accountants
Priyanshu Gundana
Partner
Mumbai, May 18, 2015 Membership Number: 109553