Dec 31, 2022
Report on the audit of the Financial Statements Opinion
We have audited the accompanying financial statements of Nestle India Limited (âthe Company"), which comprise the Balance Sheet as at December 31 2022, the Statement of Profit and Loss, including the Statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and Notes to the financial statements, including a summary of significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Companies Act, 2013, as amended (âthe 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 December 31, 2022, its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.
Basis for Opinion
We conducted our audit of the financial statements in accordance with the Standards on Auditing (SAs), as specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the ''Auditor''s Responsibilities for the Audit of the Financial Statements'' section of our report. We are independent of the Company in accordance with the ''Code of Ethics'' issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements for the financial year ended December 31, 2022. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.
We have determined the matters described below to be the key audit matters to be communicated in our report. We have
fulfilled the responsibilities described in the Auditor''s responsibilities for the audit of the financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying financial statements.
The Company''s Board of Directors is responsible for the other information. The other information comprises the information included in the Annual Report, but does not include the financial statements and our auditor''s report thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether such other information is materially inconsistent with the financial statements, or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of Management for the Financial Statements
The Company''s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these financial statements that 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 (Ind AS) specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. 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 the 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.
In preparing the financial statements, management is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the Company''s financial reporting process.
Auditor''s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
⢠Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements for the financial year ended December 31,2022 and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Other Matter
The financial statements of the Company for the year ended December 31, 2021, included in these financial statements, have been audited by the predecessor auditor who expressed an unmodified opinion on those statements on February 17, 2022. However, we audited the adjustments related to acquisition of pet food business, as fully described in Note 5 to the financial statements, which have been made to the comparative financial statements presented for the year ended December 31, 2021.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2020 (âthe Order"), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the âAnnexure 1" a statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by Section 143(3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations which to the 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 the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;
(d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;
(e) On the basis of the written representations received from the directors as on December 31, 2022 taken on record by the Board of Directors, none of the directors is disqualified as on December 31, 2022 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 with reference to these financial statements and the operating effectiveness of such controls, refer to our separate Report in âAnnexure 2" to this report;
(g) In our opinion, the managerial remuneration for the year ended December 31, 2022 has been paid / provided by the Company to its directors in accordance with the provisions of section 197 read with Schedule V to the Act;
(h) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 35 and 41 to the financial statements;
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company;
iv. (a) The management has represented that, to the best of its knowledge and belief and as disclosed in the Note 48(vi) to the financial statements, no funds have been advanced or loaned or invested (either from borrowed
funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (âIntermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (âUltimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;.
(b) The management has represented that, to the best of its knowledge and belief and as disclosed in the Note 48(vi) to the financial statements, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities (âFunding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (âUltimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and
(c) Based on such audit procedures performed that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (a) and (b) contain any material misstatement.
v. (a) The final dividend paid by the Company during the year in respect of the same declared for the previous year is in accordance with section 123 of the Act to the extent it applies to payment of dividend.
(b) The interim dividend declared and paid by the Company during the year and until the date of this audit report is in accordance with section 123 of the Act.
(c) As stated in Note 44 to the financial statements, the Board of Directors of the Company have proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. Based on information and explanation provided by the management, audit procedures performed by us and considering facts and circumstances till the date of issuance of this report, the dividend if declared will be in accordance with section 123 of the Act to the extent it applies to declaration of dividend.
Dec 31, 2018
Report on the Audit of the Ind AS Financial Statements
We have audited the accompanying Ind AS financial statements of Nestle India Limited (âthe Companyâ), which comprise the Balance Sheet as at 31 December 2018, the Statement of Profit and Loss, the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended, and summary of the significant accounting policies and other explanatory information (collectively referred to as âInd AS financial statementsâ).
Managementâs Responsibility for the Ind AS Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these Ind AS financial statements that give a true and fair view of the state of affairs, profit/loss and other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed 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 the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgements 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 Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the Ind AS financial statements, management is responsible for assessing the Companyâs ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Auditorâs Responsibility
Our responsibility is to express an opinion on these Ind AS financial statements based on our audit.
We have taken into account the provisions of the Act, 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 thereunder.
We conducted our audit of the Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the Ind AS financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the 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 Companyâs Directors, as well as evaluating the overall presentation of the Ind AS financial statements.
We are also responsible to conclude on the appropriateness of managementâs use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the entityâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in the auditorâs report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify the opinion. Our conclusions are based on the audit evidence obtained up to the date of the auditorâs report. However, future events or conditions may cause an entity to cease to continue as a going concern.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide 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 explanations given to us, the aforesaid 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 31 December 2018, its profit and other comprehensive income, changes in equity and its cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government in terms of Section 143(11) of the Act, we give in âAnnexure Aâ a statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by Section 143(3) of the Act, we report that:
a) We have sought and obtained all the information and explanations which to the 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, the Statement of Cash Flows and Statement of Changes 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 Indian Accounting Standards prescribed under section 133 of the Act.
e) On the basis of the written representations received from the directors as on 31 December 2018 taken on record by the Board of Directors, none of the directors is disqualified as on 31 December 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 with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Bâ.
g) With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its Ind AS financial statements - Refer Note 37 and 45 to the Ind AS financial statements.
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
iv. The disclosures in the financial statements regarding holdings as well as dealings in specified bank notes during the period from 8 November 2016 to 30 December 2016 have not been made since they do not pertain to the financial year ended 31 December 2018.
Annexure - A to the Independent Auditorâs Report of even date on the Ind AS financial statements of Nestle India Limited
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) The Company has a regular programme of physical verification of its fixed assets by which all fixed assets are verified in a phased manner over a period of two years. In our opinion, the periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. As informed to us, no material discrepancies were noticed on such verification.
(c) According to the information and explanations given to us and the records examined by us and based on the examination of the registered sale deed / transfer deed / conveyance deed provided to us, we report that, the title deeds, comprising all the immovable properties of land and buildings which are freehold, are held in the name of the Company as at the balance sheet date. In respect of immovable properties of land and buildings that have been taken on lease and disclosed as fixed asset in the financial statements, the lease agreements are in the name of the Company, where the Company is the lessee in the agreement.
(ii) The inventory, except goods in transit and stock lying with third parties, has been physically verified by the management during the year. In our opinion, the frequency of such verification is reasonable. Confirmations have been obtained for stock lying with third parties at the year end. According to the information and explanations given to us, the discrepancies noticed on physical verification of inventory as compared to book records were not material and have been properly dealt with in the books of account.
(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 Companies Act, 2013. Accordingly, clause 3(iii) of the order is not applicable.
(iv) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not entered into any transactions in respect of loans, investments, guarantees, and security which are covered under section 185 of the Companies Act, 2013.
The Company has complied with the provisions of Section 186 of the Companies Act, 2013 in respect of grant of loans, making investments and providing guarantees and securities, as applicable.
(v) According to the information and explanations given to us, the Company has not accepted any deposits covered under section 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the rules framed there under. Accordingly, clause 3(v) of the Order is not applicable.
(vi) We have broadly reviewed the records maintained by the Company pursuant to the rules prescribed by Central Government for maintenance of cost records under sub section (1) of Section 148 of the Act and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records.
(vii) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including Provident Fund, Employeesâ State Insurance, Income-tax, Duty of Customs, Goods and Services Tax, Cess and other material statutory dues have been regularly deposited during the year by the Company with the appropriate authorities.
According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Employeesâ State Insurance, Income-tax, Duty of customs, Goods and Services Tax, Cess and other material statutory dues were in arrears as at 31 December 2018 for a period of more than six months from the date they became payable.
(b) According to the information and explanations given to us, except as stated in Appendix 1, there are no dues of Income-tax, Goods and Services tax, Sales tax, Service tax, Duty of customs, Duty of excise or Value added tax which have not been deposited on account of any dispute.
(viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to its bankers. The Company did not have any dues payable to any financial institutions, government or debentures holders during the year.
(ix) The Company has not raised any money by way of initial public offer, further public offer (including debt instruments) and term loans during the year. Accordingly, the provisions of clause 3(ix) of the Order are not applicable to the Company.
(x) According to the information and explanations given to us, no material fraud by the Company or no material fraud on the Company by its officers or employees, has been noticed or reported during the year.
(xi) According to the information and explanations given to us and based on our examination of the records, the Company has paid or 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) In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company. Accordingly, clause 3(xii) of the Order is not applicable.
(xiii) According to the information and explanations given to us and based on our examinations of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act, where applicable. The details of such related party transactions have been disclosed in the Ind AS financial statements as required by applicable accounting standards.
(xiv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, clause 3(xiv) of the Order is not applicable.
(xv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly, clause 3(xv) of the Order is not applicable.
(xvi) According to the information and explanations given to us, the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.
Appendix 1 to the statement on the matters specified in paragraph vii(b) of the Companies Auditors Report Order, 2016
(Rs. in Million)
Name of the Statute |
Nature of Dues |
Amount* |
Amount Paid under protest |
Period to which amount relates |
Forum where case is pending |
Central Excise Act, 1944 |
Duty of Excise |
68.7 |
15.5 |
1996-2006 |
Supreme Court |
Central Excise Act, 1944 |
Duty of Excise |
0.9 |
- |
1994 |
High Court |
Central Excise Act, 1944 |
Duty of Excise |
30.9 |
33.1 |
2005-2008 |
Customs, Excise and Service Tax Appellate Tribunal |
Central Excise Act, 1944 |
Duty of Excise |
0.5 |
- |
2000 |
Commissioner |
Customs Act, 1962 |
Custom Duty |
52.8 |
3.8 |
2008-2013 |
Customs, Excise and Service Tax Appellate Tribunal |
Customs Act, 1962 |
Custom Duty |
53.0 |
2.9 |
2008-2009 |
Commissioner |
The Finance Act, 1994 |
Service Tax |
626.8 |
214.3 |
2005-2007, 2008, 20102014 |
Customs, Excise and Service Tax Appellate Tribunal |
Central Sales Tax/ Value Added Tax |
Sales Tax/ VAT |
101.3 |
2.5 |
1997-1998, 2000-2006, 2007-2009, 2014-2015 |
High Court |
Central Sales Tax/ Value Added Tax |
Sales Tax/ VAT |
139.5 |
49.7 |
2004-2005, 2006-2007, 2010-2015 |
Tribunal |
Central Sales Tax/ Value Added Tax |
Sales Tax/ VAT |
183.6 |
- |
2005-2012 |
Appellate & Revisional Board |
Central Sales Tax/ Value Added Tax |
Sales Tax/ VAT |
22.0 |
2.3 |
2005- 2007, 2008-2009, 2011-2013, 2014-2015 |
Commissioner (Appeals) |
Central Sales Tax/ Value Added Tax |
Sales Tax/ VAT |
81.0 |
1.1 |
2004- 2005, 2010-2012, 2013-2014 |
Commissioner |
Central Sales Tax/ Value Added Tax |
Sales Tax/ VAT |
73.3 |
1.9 |
2008-10, 2014-15 |
Joint Commissioner |
Central Sales Tax/ Value Added Tax |
Sales Tax/ VAT |
50.1 |
5.8 |
2008-2009, 2010-2011, 2012-2015 |
Additional Commissioner |
Central Sales Tax/ Value Added Tax |
Sales Tax/ VAT |
1.1 |
0.2 |
2007-2008 |
Assessing Officer |
Income Tax Act, 1961 |
Income Tax |
1,253.2 |
- |
1996-2001, 2004-2008 |
Supreme Court |
Income Tax Act, 1961 |
Income Tax |
298.6 |
- |
2000-2004 |
High Court |
Income Tax Act, 1961 |
Income Tax |
3,594.1 |
33.4 |
2006-2007, 2008-2015 |
Income Tax Appellate Tribunal |
* As per demand order
Annexure B referred to in our Independent Auditorâs Report of even date on the financial statements of Nestle India Limited
Report on the Internal Financial Controls under Clause (i) of Subsection 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
We have audited the internal financial controls with reference to financial statements of Nestle India Limited (âthe Companyâ) as of 31 December 2018 in conjunction with our audit of the Ind AS financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Companyâs management is responsible for establishing and maintaining internal financial controls based on the internal control with reference to financial statements 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 (âICAIâ). 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 companyâs 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 Companies Act, 2013.
Auditorsâ Responsibility
Our responsibility is to express an opinion on the Companyâs internal financial controls with reference to financial statements based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013 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 Institute of Chartered Accountants of India. 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 with reference to financial statements was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system with reference to financial statements and their operating effectiveness. Our audit of internal financial controls with reference to financial statements included obtaining an understanding of internal financial controls with reference to financial statements, 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 auditorâs judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companyâs internal financial controls system with reference to financial statements.
Meaning of Internal Financial Controls with reference to Financial Statements
A companyâs internal financial controls with reference to financial statements 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 companyâs internal financial control with reference to financial statements 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 authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companyâs assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls with reference to Financial Statements
Because of the inherent limitations of internal financial controls with reference to financial statements, 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 with reference to financial statements to future periods are subject to the risk that the internal financial control with reference to financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system with reference to financial statements and such internal financial controls with reference to financial statements were operating effectively as at 31 December 2018, based on the internal control with reference to financial statements 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.
For B S R & Co. LLP
Chartered Accountants
Firmâs Registration No.: 101248W/W-100022
Place: Gurugram Jiten Chopra
Date: 14 February 2019 Partner
Membership No.: 092894
Dec 31, 2017
INDEPENDENT AUDITOR''S REPORT TO THE MEMBERS OF NESTLE INDIA LIMITED
Report on the Ind AS Financial Statements
We have audited the accompanying Ind AS financial statements of Nestle India Limited (âthe Company"), which comprise the Balance Sheet as at 31 December 2017, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flows and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information (collectively referred to as âInd AS financial statements")
Management''s Responsibility for the Ind AS Financial Statements
The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (''the Act'') with respect to preparation of these Ind AS financial statements that give a true and fair view of the state of affairs (financial position), profit or loss (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 Accounting Standards (Ind AS) prescribed 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 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 Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these Ind AS financial statements based on our audit. We have taken into account the provisions of the Act, 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.
We conducted our audit of the Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Ind AS financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the 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 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 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 Ind AS financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide 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 explanations given to us, the aforesaid 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 including the Ind AS, of the state of affairs (financial position) of the Company as at 31 December 2017, and its profit (financial performance including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.
Other matter
The comparative financial information of the Company for the year ended 31 December 2016 and the transition date opening balance sheet as at 1 January 2016 included in these Ind AS financial statements, are based on the previously issued statutory financial statements prepared in accordance with the Companies (Accounting Standards) Rules, 2006 audited by A.F. Ferguson & Co., Chartered Accountants, the predecessor auditor, whose report for the year ended 31 December 2016 and 31 December 2015 dated 15 February 2017 and 12 February 2016 respectively expressed an unmodified opinion on those financial statements, as adjusted for the differences in the accounting principles adopted by the Company on transition to the Ind AS, which have been audited by us.
Our opinion is not modified in respect of these matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2016 (''the Order''), issued by the Central Government of India in terms of Section 143(11) of the Act, we give in âAnnexure A", a statement on the matters specified in paragraphs 3 and 4 of the said Order.
2. As required by Section 143(3) of the Act, we report that:
a) we have sought and obtained all the information and explanations which to the 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 Statement of Cash Flows and Statement of Changes 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 Indian Accounting Standards specified under Section 133 of the Act;
e) on the basis of written representations received from the directors as on 31 December 2017, and taken on record by the Board of Directors, none of the directors is disqualified as on 31 December 2017 from being appointed as a director in terms of Section 164(2) of the Act;
f) with respect to the adequacy of internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in âAnnexure B"; and
g) with respect to the other matters to be included in the Auditor''s Report in accordance with the Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its Ind AS financial statements - Refer to Note 39 and 48 of the Ind AS financial statements;
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;
iii. There have been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company; and
iv. The Company did not have any holdings or dealings in Specified Bank Notes during the period from 8 November 2016 to 30 December 2016 - Refer to note 53 of the Ind AS financial statements.
Annexure - A to the Independent Auditor''s Report of even date
on the Ind AS financial statements of Nestle India Limited
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) The Company has a regular programme of physical verification of its fixed assets by which all fixed assets are verified in a phased manner over a period of two years. In our opinion, the periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. As informed to us, no material discrepancies were noticed on such verification.
(c) According to the information and explanations given to us and the records examined by us and based on the examination of the registered sale deed / transfer deed / conveyance deed provided to us, we report that, the title deeds, comprising all the immovable properties of land and buildings which are freehold, are held in the name of the Company as at the balance sheet date. In respect of immovable properties of land and buildings that have been taken on lease and disclosed as fixed asset in the financial statements, the lease agreements are in the name of the Company, where the Company is the lessee in the agreement.
(ii) The inventory, except goods in transit has been physically verified by the management during the year. In our opinion, the frequency of such verification is reasonable. According to the information and explanations given to us, the discrepancies noticed on physical verification of inventory as compared to book records were not material and have been properly dealt with in the books of account.
(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 Companies Act, 2013. Accordingly, clause 3(iii) of the order is not applicable.
(iv) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not entered into any transactions in respect of loans, investments, guarantees, and security which are covered under section 185 of the Companies Act, 2013.
The Company has complied with the provisions of Section 186 of the Companies Act, 2013 in respect of grant of loans, making investments and providing guarantees and securities, as applicable.
(v) According to the information and explanations given to us, the Company has not accepted any deposits covered under section 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the rules framed there under. Accordingly, clause 3(v) of the Order is not applicable.
(vi) We have broadly reviewed the records maintained by the Company pursuant to the rules prescribed by Central Government for maintenance of cost records under sub section (1) of Section 148 of the Act and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records.
(vii) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including Provident Fund, Employees'' State Insurance, Income-tax, Sales-tax, Service tax, Duty of Customs, Duty of Excise, Value added tax, Goods and Service Tax, Cess and other statutory dues have been regularly deposited during the year by the Company with the appropriate authorities.
According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Employees State Insurance, Income-tax, Sales tax, Service tax, Duty of customs, Duty of excise, Value added tax, Goods and Service Tax, Cess and other statutory dues were in arrears as at 31 December 2017 for a period of more than six months from the date they became payable.
(b) According to the information and explanations given to us, except as stated in Appendix 1, there are no dues of income-tax, sales tax, service tax, duty of customs, duty of excise or value added tax which have not been deposited on account of any dispute.
(viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to its bankers. The Company did not have any dues payable to any financial institutions, government or debentures holders during the year.
(ix) The Company has not raised any money by way of initial public offer, further public offer (including debt instruments) and term loans during the year. Accordingly, the provisions of clause 3(ix) of the Order are not applicable to the Company.
(x) According to the information and explanations given to us, no material fraud by the Company or no material fraud on the Company by its officers or employees, has been noticed or reported during the year.
(xi) According to the information and explanations given to us and based on our examination of the records, the Company has paid or 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) In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company. Accordingly, clause 3(xii) of the Order is not applicable.
(xiii) According to the information and explanations given to us and based on our examinations of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act, where applicable. The details of such related party transactions have been disclosed in the Ind AS financial statements as required by applicable accounting standards.
(xiv) According to the information and explanations give to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, clause
Name of the Statute |
Nature of Dues |
Amount* |
Amount Paid under protest |
Period to which amount relates |
Forum where case is pending |
Central Excise Act, 1944 |
Duty of Excise |
68.7 |
15.5 |
1996-2006 |
Supreme Court |
Central Excise Act, 1944 |
Duty of Excise |
0.9 |
- |
1994 |
High Court |
Central Excise Act, 1944 |
Duty of Excise |
97.7 |
36.5 |
2005-2008, 2012-2013 |
Customs, Excise and Service Tax Appellate Tribunal |
Central Excise Act, 1944 |
Duty of Excise |
0.5 |
- |
2000 |
Commissioner |
Customs Act 1962 |
Custom Duty |
52.8 |
3.8 |
2008-2013 |
Customs, Excise and Service Tax Appellate Tribunal |
Customs Act 1962 |
Custom Duty |
53.0 |
2.9 |
2008-2009 |
Commissioner |
The Finance Act, 1994 |
Service Tax |
626.8 |
214.3 |
2005-2007, 2008, 20102014 |
Customs, Excise and Service Tax Appellate Tribunal |
Central Sales Tax/ Value Added Tax |
Sales Tax/ VAT |
101.3 |
2.5 |
1997-1998, 2000-2006, 2007-2009, 2014-2015 |
High Court |
Central Sales Tax/ Value Added Tax |
Sales Tax/ VAT |
164.1 |
54.9 |
2004-2005, 2006-2007, 2010-2015 |
Tribunal |
Central Sales Tax/ Value Added Tax |
Sales Tax/ VAT |
183.6 |
- |
2005-2012 |
Appellate & Revisional Board |
Central Sales Tax/ Value Added Tax |
Sales Tax/ VAT |
21.9 |
2.2 |
2004- 2007, 2008-2009, 2011-2013, 2014-2015 |
Commissioner (Appeals) |
Central Sales Tax/ Value Added Tax |
Sales Tax/ VAT |
77.8 |
1.1 |
2004- 2005, 2010-2012 |
Commissioner |
Central Sales Tax/ Value Added Tax |
Sales Tax/ VAT |
51.5 |
5.8 |
2008-2009, 2010-2011, 2012-2015 |
Additional Commissioner |
Central Sales Tax/ Value Added Tax |
Sales Tax/ VAT |
1.1 |
0.2 |
2007-2008 |
Assessing Officer |
Income Tax Act, 1961 |
Income Tax |
1,253.2 |
- |
1996-2001, 2004-2008 |
Supreme Court |
Income Tax Act, 1961 |
Income Tax |
298.6 |
- |
2000-2004 |
High Court |
Income Tax Act, 1961 |
Income Tax |
2,904.0 |
33.4 |
2006-2007, 2008-2014 |
Income Tax Appellate Tribunal |
Income Tax Act, 1961 |
Income Tax |
691.3 |
- |
2007-2008, 2014-2015 |
CIT (Appeals) |
3(xiv) of the Order is not applicable.
(xv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly, clause 3(xv) of the Order is not applicable.
(xvi) According to the information and explanations given to us, the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.
Annexure - B to the Independent Auditor''s Report of even date on the Ind AS financial statements of Nestle India Limited
Report on the Internal Financial Controls under Clause (i) of Subsection 3 of Section 143 of the Companies Act, 2013 ("the Act")
We have audited the internal financial controls over financial reporting of Nestle India Limited (âthe Company") as of 31 December 2017 in conjunction with our audit 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 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 Companies Act, 2013.
Auditor''s Responsibility
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 âGuidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, 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 Institute of Chartered Accountants of India. 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.
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.
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
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
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
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 31 December 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.
For B S R & Co. LLP
Chartered Accountants
Firm Registration No.: 101248W/W-100022
Place: Gurugram Jiten Chopra
Date: 14 February 2018 Partner
Membership No.: 092894
Dec 31, 2016
Report on the Financial Statements
We have audited the accompanying financial statements of NESTLE INDIA LIMITED (âthe Companyâ), which comprise the Balance Sheet as at 31st December, 2016, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.
Managementâs Responsibility for the Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to 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 principles generally accepted in India, including the Accounting Standards specified 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 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.
Auditorsâ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit.
We have taken into account the provisions of the Act, 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 and the Order under section 143 (11) of the Act.
We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. 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.
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 auditorâs 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 Companyâs 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 Companyâs Directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid 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 31st December, 2016, and its profit and its cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by Section 143(3) of the Act, we report, to the extent applicable, 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, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.
(d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under section 133 of the Act.
(e) On the basis of the written representations received from the directors as on 31st December, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on 31st December, 2016 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 âAnnexure Aâ. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Companyâs internal financial controls over financial reporting.
(g) With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 28 and 39 to the financial statements;
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company-Refer Note 9 to the financial statements.
2. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government in terms of Section 143(11) of the Act, we give in the âAnnexure Bâ statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
ANNEXURE âAâ TO THE INDEPENDENT AUDITORâS REPORT
(Referred to in paragraph 1 (f) under âReport on Other Legal and Regulatory Requirementsâ of our report of even date)
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
We have audited the internal financial controls over financial reporting of NESTLE INDIA LIMITED (âthe Companyâ) as of December 31, 2016 in conjunction with our audit of the financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Companyâs 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. 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 companyâs 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 Companies Act, 2013.
Auditorâs Responsibility
Our responsibility is to express an opinion on the Companyâs 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 âGuidance Noteâ) issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies 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 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.
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 auditorâs judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companyâs internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A companyâs 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 companyâs 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 authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companyâs 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 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
In our opinion, to the best of our information and according to the explanations given to us, 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 December 31, 2016, 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.
ANNEXURE B TO THE INDEPENDENT AUDITORSâ REPORT
(Referred to in paragraph 2 under âReport on Other Legal and Regulatory Requirementsâ section of our report of even date)
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) The fixed assets were physically verified during the year by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed on such verification.
(c) According to the information and explanations given to us and the records examined by us and based on the examination of the registered sale deed / transfer deed / conveyance deed provided to us, we report that, the title deeds, comprising all the immovable properties of land and buildings which are freehold, are held in the name of the Company as at the balance sheet date. In respect of immovable properties of land and buildings that have been taken on lease and disclosed as fixed asset in the financial statements, the lease agreements are in the name of the Company, where the Company is the lessee in the agreement.
(ii) As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals and no material discrepancies were noticed on physical verification.
(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 Companies Act, 2013.
(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 185 and 186 of the Companies Act, 2013 in respect of grant of loans, making investments and providing guarantees and securities, as applicable.
Name of the Statute |
Nature of Dues |
Amount* (Rs, In Millions) |
Period to which the amount relates (various years covering the period) |
Forum where dispute is pending |
Central Excise Laws |
Excise Duty |
45.7 |
1996-2004 |
Supreme Court |
84.5 |
2005-2006, 2007-2014 |
Customs, Excise and Service Tax Appellate Tribunal |
||
8.2 |
2000, 2011-2015 |
Appellate authority up to Commissionersâ level |
||
Service Tax |
412.6 |
2005-2007, 2008, 2010, 2011, 2013, 2014 |
Customs, Excise and Service Tax Appellate Tribunal |
|
Customs Laws |
Customs Duty |
48.9 |
2008-2013 |
Customs, Excise and Service Tax Appellate Tribunal |
50.2 |
2008 - 2009 |
Appellate authority up to Commissionersâ level |
(v) According to the information and explanations given to us, the Company does not have any outstanding deposits during the year and has not accepted any deposits during the year.
(vi) The maintenance of cost records has been specified by the Central Government under section 148(1) of the Companies Act, 2013 for Milk Powder. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended prescribed by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013, and are of the opinion that, prima facie, the prescribed cost records have been made and maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.
(vii) According to the information and explanations given to us, in respect of statutory dues:
(a) The Company has been regular in depositing undisputed statutory dues, including Provident Fund, Employeesâ State Insurance, Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, Cess and other material statutory dues applicable to it to the appropriate authorities.
(b) There were no undisputed amounts payable in respect of Provident Fund, Employeesâ State Insurance, Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, Cess and other material statutory dues in arrears as at December 31, 2016 for a period of more than six months from the date they became payable.
(c) Details of dues of Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, and Value Added Tax which have not been deposited as on December 31, 2016 on account of disputes are given below:
(viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of loans or borrowings to financial institutions, banks and government. The Company has not issued any debentures.
Name of the Statute |
Nature of Dues |
Amount* (Rs, In Millions) |
Period to which the amount relates (various years covering the period) |
Forum where dispute is pending |
Sales Tax Laws |
Sales Tax/ VAT |
61.3 |
2000-2006, 2007-2009, 2014-2015 |
High Court |
107.2 |
2000-2005, 2006-2007, 2010-2012 |
Appellate Tribunal |
||
254.3 |
2004-2014 |
Appellate authority up to Commissionersâ level |
||
Income Tax Act, 1961 |
Income tax |
0.7 |
2008-2009, 2010-2011 |
Income Tax Appellate Tribunal |
1,657.4 |
2011-2014 |
Appellate authority up to Commissionersâ level |
* Amount includes interest and penalty as per demand orders wherever quantified in the Order, and excludes amount of '' 367.0 Million paid under protest.
The following matters, which have been decided in favour of the Company but the department has preferred appeals at higher levels, have been excluded from the table above and are given below:
Name of the Statute |
Nature of Dues |
Amount (Rs, In Millions) |
Period to which the amount relates (various years covering the period) |
Forum where dispute is pending |
Central Excise Laws |
Excise Duty |
7.5 |
2004 - 2006 |
Supreme Court |
0.9 |
1994 |
High Court |
||
6.6 |
2005 - 2006 |
Customs, Excise and Service Tax Appellate Tribunal |
||
Service Tax |
1.4 |
2008 |
Customs, Excise and Service Tax Appellate Tribunal |
|
Sales Tax Laws |
Sales Tax/ VAT |
17.1 |
1997 - 1998, 2003 |
High Court |
Income Tax Act, 1961 |
Income tax |
1,210.7 |
1996 - 2001, 2004-2008 |
Supreme Court |
335.8 |
2000 - 2004 |
High Court |
||
1,081.0 |
2008 - 2011 |
Income Tax Appellate Tribunal |
(ix) The Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) or term loans and hence reporting under clause (ix) of the CARO 2016 Order is not applicable.
(x) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no material fraud on the Company by its officers or employees has been noticed or reported during the year.
(xi) In our opinion and according to the information and explanations given to us, the Company has paid / provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.
(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of the CARO 2016 Order is not applicable.
(xiii) In our opinion and according to the information and explanations given to us the Company is in compliance with Section 188 and 177 of the Companies Act, 2013, where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the financial statements etc. as required by the applicable accounting standards.
(xiv) During the year the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures and hence reporting under clause (xiv) of CARO 2016 is not applicable to the Company.
(xv) In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its directors or persons connected with him and hence provisions of section 192 of the Companies Act, 2013 are not applicable.
(xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.
For A. F. FERGUSON & CO.
Chartered Accountants
(Firmâs Registration No. 112066W)
Manjula Banerji
(Partner)
(Membership No. 86423)
NEW DELHI,
February 15, 2017
Dec 31, 2014
Report on the Financial Statements
We have audited the accompanying financial statements of NESTLE INDIA
LIMITED ("the Company"), which comprise the Balance Sheet as at 31st
December, 2014, the Statement of Profit and Loss and 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 Financial Statements
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") (which are deemed to be applicable as per Section
133 of the Companies Act, 2013, read with Rule 7 of the Companies
(Accounts) Rules, 2014) and other accounting principles generally
accepted in India. 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
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 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.
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 auditor''s 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 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 Company''s internal control. An audit also
includes evaluating the appropriateness of the accounting policies used
and the reasonableness of the accounting estimates made by the
Management, as well as evaluating the overall presentation of the
financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid 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 31st December, 2014;
(b) in the case of the Statement of Profit and Loss, of the profit of
the Company for the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies
(Auditor''s Report) Order, 2003 ("the Order") issued by the Central
Government in terms of Section 227(4A) of the Act, we give in the
Annexure a statement on the matters specified in paragraphs 4 and 5 of
the Order for the year ended 31st December, 2014, to the extent the
same are applicable to the Company.
2. As required by Section 227(3) of the Act, 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 it appears from our examination of
those books.
(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 Balance Sheet, the Statement of Profit and
Loss, and the Cash Flow Statement comply with the Accounting Standards
notified under the Act (which are deemed to be applicable as per
Section 133 of the Companies Act, 2013, read with Rule 7 of the
Companies (Accounts) Rules, 2014).
(e) Since the provisions of Section 274(1) (g) of the Act are not in
effect from 1st April, 2014, the reporting requirement under Section
227(3) (f) of the Act is not applicable as of the balance sheet date.
ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT
(Referred to in paragraph 1 under ''Report on Other Legal and Regulatory
Requirements'' section of our report of even date)
(i) In respect of its fixed assets:
(a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of the fixed assets.
(b) The fixed assets were physically verified during the year by the
Management in accordance with a regular programme of verification
which, in our opinion, provides for physical verification of all the
fixed assets at reasonable intervals. According to the information and
explanations given to us, no material discrepancies were noticed on
such verification.
(c) The fixed assets disposed off during the year, in our opinion, do
not constitute a substantial part of the fixed assets of the Company
and such disposal has, in our opinion, not affected the going concern
status of the Company.
(ii) In respect of its inventory:
(a) As explained to us, the inventories were physically verified during
the year by the Management at reasonable intervals.
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the Management were reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) In our opinion and according to the information and explanations
given to us, the Company has maintained proper records of its
inventories and no material discrepancies were noticed on physical
verification.
(iii) The Company has neither granted nor taken any loans, secured or
unsecured, to/from companies, firms or other parties covered in the
Register maintained under Section 301 of the Companies Act, 1956,
during the period the said Section was applicable. Accordingly
paragraph 4 (iii) of the Order, is not applicable.
(iv) In 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.
There is no material sale of services. During the course of our audit,
we have not observed any major weakness in such internal control
system.
(v) In respect of contracts or arrangements entered in the Register
maintained in pursuance of Section 301 of the Companies Act, 1956, to
the best of our knowledge and belief and according to the information
and explanations given to us:
(a) The particulars of contracts or arrangements referred to in Section
301 that needed to be entered in the Register maintained under the said
Section have been so entered for the period the said Section was
applicable.
(b) Where each of such transaction made in pursuance of contracts or
agreements entered in the register maintained under Section 301 of the
Companies Act,1956, for the period the said section was applicable, is
in excess of Rs. 5 lakhs during such period in respect of any party,
the transactions have been made at prices which are prima facie
reasonable having regard to the prevailing market prices at the
relevant time.
(vi) According to the information and explanations given to us, the
Company has not accepted any deposit from the public during the year.
(vii) In our opinion, the Company has an adequate internal audit system
commensurate with the size and the nature of its business.
(viii) We have broadly reviewed the cost records maintained by the
Company pursuant to the Companies (Cost Accounting Records) Rules, 2011
prescribed by the Central Government under Section 209(1) (d) of the
Companies Act, 1956 and are of the opinion that prima facie the
prescribed cost records have been maintained, for the period the said
Section was applicable. We have, however, not made a detailed
examination of the cost records with a view to determine whether they
are accurate or complete.
(ix) According to the information and explanations given to us in
respect of statutory dues:
(a) The Company has been regular in depositing undisputed 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
applicable to it with the appropriate authorities.
(b) There were no undisputed amounts payable in respect of 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 in arrears as at
31st December, 2014 for a period of more than six months from the date
they became payable.
(c) Details of dues of Income-tax, Sales Tax, Service Tax, Customs
Duty, Excise Duty and Cess which have not been deposited as on 31st
December, 2014 on account of disputes are given below:
Name of the Statute Nature of the Amount *
Dues (Rs. in Millions)
Central Excise Laws Excise Duty 45.7
18.1
0.5
Service Tax 412.9
Customs Laws Customs Duty 50.2
Sales Tax Laws Sales Tax / VAT 419.2
74.9
272.4
Local State Act Cess 8.8
Income Tax
Act, 1961 Income tax 118.6
0.6
Name of the Statute Period to which the Forum where dispute is
amount relates pending
(various years
covering the period)
Central Excise Laws 1996-2004 Supreme Court
2001-2006, 2007-2010 Customs, Excise and
Service Tax Appellate
Tribunal
2000 Appellate authority upto
Commissioners'' level
2005-2007, 2008, Customs, Excise and
2010, 2011 Service Tax Appellate
Tribunal
Customs Laws 2008-2009 Appellate authority upto
Commissioners'' level
Sales Tax Laws 2000-2010 High Court
1999-2006 Appellate Tribunal
1996-1997, 2004-2013 Appellate authority upto
Commissioners'' level
Local State Act 2001-2014 Appellate authority upto
Commissioners'' level
Income Tax
Act, 1961 1992-1994 High Court
2008-2009 Income-tax Appellate
Tribunal
* Amount as per demand orders including interest and penalty wherever
indicated in the Order.
The following matters, which have been excluded from the table above,
have been decided in favour of the Company but the department has
preferred appeals at higher levels. The details are given below:
Name of the Statute Nature of the Amount
Dues (Rs. in Millions)
Central Excise Laws Excise Duty 16.1
0.9
6.6
Service Tax 0.1
1.4
Sales Tax Laws Sales Tax / VAT 17.1
Income Tax Act, 1961 Income tax 772.2
335.8
625.8
Name of the Statute Period to which the Forum where dispute
amount relates is pending
various years covering
the period)
Central Excise Laws 2000-2006 Supreme Court
1994 High Court
2005-2006 Customs, Excise and
Service Tax
Appellate Tribunal
2005 High Court
2008 Customs, Excise and
Service Tax
Appellate Tribunal
Sales Tax Laws 1997-1998, 2003 High Court
Income Tax Act, 1961 1996-2001, 2004-2006 Supreme Court
2000-2004 High Court
2008-2010 Income Tax Appellate
Tribunal
(x) The Company does not have accumulated losses at the end of the
financial year ended 31st December, 2014. Further, the Company has not
incurred cash losses during the financial year and in the immediately
preceding financial year.
(xi) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in the repayment of dues to
banks and financial institutions. The Company has not issued debentures
during the year.
(xii) As the Company has not granted any loans and advances on the
basis of security by way of pledge of shares, debentures and other
securities, accordingly paragraph 4 (xii) of the Order is not
applicable.
(xiii) The Company is not a chit fund / nidhi / mutual benefit fund /
society to which the provisions of special statute relating to chit
fund are applicable, accordingly paragraph 4 (xiii) of the Order, is
not applicable.
(xiv) As the Company is not dealing or trading in shares, securities,
debentures and other investments, paragraph 4 (xiv) of the Order is not
applicable.
(xv) According to the information and explanations given to us, the
Company has not given any guarantee during the year for loans taken by
others from banks or financial institutions.
(xvi) In our opinion and according to the information and explanations
given to us, the term loans have been applied for the purposes for
which they were obtained.
(xvii) In our opinion and according to the information and explanations
given to us, and on an overall examination of the Balance Sheet, we
report that funds raised on short-term basis have not been used during
the year for long- term investment.
(xviii) The Company has not made any preferential allotment of shares
during the year.
(xix) The Company has not issued any debentures during the year.
(xx) The Company has not raised any money by way of public issue during
the year.
(xxi) To the best of our knowledge and according to the information and
explanations given to us, no fraud by the Company and no material fraud
on the Company has been noticed or reported during the year.
For A. F FERGUSON & CO.
Chartered Accountants
(Firm Registration No. 112066W)
Jaideep Bhargava
(Partner)
(Membership No. 90295)
NEW DELHI, February 13, 2015
Dec 31, 2013
We have audited the accompanying financial statements of NESTLE INDIA
LIMITED ("the Company"), which comprise the Balance Sheet as at 31st
December, 2013, the Statement of Profit and Loss and 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 Financial Statements
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") (which continue to be applicable in respect of
Section 133 of the Companies Act, 2013 in terms of General Circular
15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs)
and in accordance with the accounting principles generally accepted in
India. 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
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 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.
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 auditor''s 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 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 Company''s internal control. An audit also includes
evaluating the appropriateness of the accounting policies used and the
reasonableness of the accounting estimates made by the Management, as
well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid 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 31st December, 2013;
(b) in the case of the Statement of Profit and Loss, of the profit of the
Company for the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government in terms of Section 227(4A) of
the Act, we give in the Annexure a statement on the matters specified in
paragraphs 4 and 5 of the Order.
2. As required by Section 227(3) of the Act, 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 it appears from our examination of
those books.
(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 Balance Sheet, the Statement of Profit and Loss,
and the Cash Flow Statement comply with the Accounting Standards
notified under the Act (which continue to be applicable in respect of
Section 133 of the Companies Act, 2013 in terms of General Circular
15/2013 dated 13th September 2013 of the Ministry of Corporate
Affairs).
(e) On the basis of the written representations received from the
directors as on 31st December, 2013 taken on record by the Board of
Directors, none of the directors is disqualified as on 31st December,
2013 from being appointed as a director in terms of Section 274(1)(g)
of the Act.
ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT
(Referred to in paragraph 1 under ''Report on Other Legal and Regulatory
Requirements'' section of our report of even date)
(i) In respect of its fixed assets:
(a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of the fixed assets.
(b) The fixed assets were physically verified during the year by the
Management in accordance with a regular programme of verification which,
in our opinion, provides for physical verification of all the fixed
assets at reasonable intervals. According to the information and
explanations given to us, no material discrepancies were noticed on
such verification.
(c) The fixed assets disposed off during the year, in our opinion, do
not constitute a substantial part of the fixed assets of the Company and
such disposal has, in our opinion, not affected the going concern
status of the Company.
(ii) In respect of its inventory:
(a) As explained to us, the inventories were physically verified during
the year by the Management at reasonable intervals.
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the Management were reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) In our opinion and according to the information and explanations
given to us, the Company has maintained proper records of its
inventories and no material discrepancies were noticed on physical
verification.
(iii) The Company has neither granted nor taken any loans, secured or
unsecured, to/from companies, forms or other parties covered in the
Register maintained under Section 301 of the Companies Act, 1956.
Accordingly paragraph 4 (iii) of the Order, is not applicable.
(iv) In 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. There
is no material sale of services. During the course of our audit, we
have not observed any major weakness in such internal control system.
(v) In respect of contracts or arrangements entered in the Register
maintained in pursuance of Section 301 of the Companies Act, 1956, to
the best of our knowledge and belief and according to the information
and explanations given to us:
(a) The particulars of contracts or arrangements referred to in Section
301 that needed to be entered in the Register maintained under the said
Section have been so entered.
(b) Where each of such transaction is in excess of Rs.5 lakhs in respect
of any party, the transactions have been made at prices which are prima
facie reasonable having regard to the prevailing market prices at the
relevant time.
(vi) According to the information and explanations given to us, the
Company has not accepted any deposit from the public during the year.
(vii) In our opinion, the Company has an adequate internal audit system
commensurate with the size and the nature of its business.
(viii) We have broadly reviewed the cost records maintained by the
Company pursuant to the Companies (Cost Accounting Records) Rules, 2011
prescribed by the Central Government under Section 209(1) (d) of the
Companies Act, 1956 and are of the opinion that prima facie the
prescribed cost records have been maintained. We have, however, not
made a detailed examination of the cost records with a view to
determine whether they are accurate or complete.
(ix) According to the information and explanations given to us in
respect of statutory dues:
(a) The Company has been regular in depositing undisputed 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
applicable to it with the appropriate authorities.
(b) There were no undisputed amounts payable in respect of 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 in arrears as
at 31st December, 2013 for a period of more than six months from the
date they became payable.
(c) Details of dues of Income-tax, Sales Tax, Service Tax, Customs
Duty, Excise Duty and Cess which have not been deposited as on 31st
December, 2013 on account of disputes are given below:
Name of the
Statute Nature of
the Amount * Period to which
the amount
relates Forum where
dispute is
pending
Dues (Rs. in
Millions) (various years
covering the
period)
Central
Excise Laws Excise
Duty 45.8 1996-2004 Supreme Court
18.1 2001-2006,
2007-2010 Customs, Excise
and Service Tax
Appellate
Tribunal
0.5 2000 Appellate
authority up to
Commissioners
level
Service
Tax 412.9 2005-2007, 2008,
2010, 2011 Customs, Excise
and Service Tax
Appellate
Tribunal
Customs Laws Customs
Duty 50.2 2008-2009 Appellate
authority up to
Commissioners
level
Sales Tax
Laws Sales Tax
/ VAT 101.9 2000-2006,
2007-2009 High Court
76.9 1999-2006 Appellate
Tribunal
231.7 1996-1997,
2001-2011 Appellate
authority up to
Commissioners
level
Local State
Act Cess 6.9 2001-2013 Appellate
authority up to
Commissioners
level
Income Tax
Act, 1961 Income tax 118.6 1992-1994 High Court
1.8 2006-2008 Income Tax
Appellate
Tribunal
377.0 2008-2009 Commissioner of
Income-tax
(Appeals)
* Amount as per demand orders including interest and penalty wherever
indicated in the Order.
The following matters, which have been excluded from the table above,
have been decided in favor of the Company but the department has
preferred appeals at higher levels. The details are given below:
Name of the
Statute Nature of
the Amount * Period to which
the amount
relates Forum where
dispute is
pending
Dues (Rs. in
Millions) (various years
covering the
period)
Central
Excise Laws Excise
Duty 16.1 2000-2006 Supreme Court
0.9 1994 High Court
7.1 2005-2006 Customs, Excise
and Service Tax
Appellate
Tribunal
Service
Tax 0.1 2005 High Court
2.4 2003-2007 Customs, Excise
and Service Tax
Appellate
Tribunal
Sales Tax
Laws Sales Tax
/ VAT 17.1 1997-1998, 2003 High Court
Income Tax
Act, 1961 Income tax 692.1 1996-2000,
2004-2006 Supreme Court
335.8 2000-2004 High Court
169.9 2006-2008 Income Tax
Appellate
Tribunal
(x) The Company does not have accumulated losses at the end of the
financial year ended 31st December, 2013. Further, the Company has not
incurred cash losses during the financial year and in the immediately
preceding financial year.
(xi) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in the repayment of dues to
banks and financial institutions. The Company has not issued debentures
during the year.
(xii) As the Company has not granted any loans and advances on the
basis of security by way of pledge of shares, debentures and other
securities, accordingly paragraph 4 (xii) of the Order is not
applicable.
(xiii) The Company is not a chit fund / nidhi / mutual beneft fund /
society to which the provisions of special statute relating to chit
fund are applicable, accordingly paragraph 4 (xiii) of the Order, is
not applicable.
(xiv) As the Company is not dealing or trading in shares, securities,
debentures and other investments, paragraph 4 (xiv) of the Order is not
applicable.
(xv) According to the information and explanations given to us, the
Company has not given any guarantee during the year for loans taken by
others from banks or financial institutions.
(xvi) In our opinion and according to the information and explanations
given to us, the term loans have been applied for the purposes for
which they were obtained.
(xvii) In our opinion and according to the information and explanations
given to us, and on an overall examination of the Balance Sheet, we
report that funds raised on short-term basis have not been used during
the year for long- term investment.
(xviii) The Company has not made any preferential allotment of shares
during the year.
(xix) The Company has not issued any debentures during the year.
(xx) The Company has not raised any money by way of public issue during
the year.
(xxi) To the best of our knowledge and according to the information and
explanations given to us, no fraud by the Company and no material fraud
on the Company has been noticed or reported during the year.
For A. F. FERGUSON & CO.
Chartered Accountants
(Firm Registration No. 112066W)
Jaideep Bhargava
(Partner)
(Membership No. 90295)
NEW DELHI, February 14, 2014
Dec 31, 2012
1. We have audited the attached Balance Sheet of NESTLÃ INDIA LIMITED
("the Company") as at 31st December, 2012, the Statement of Profit and
Loss and the Cash Flow Statement of the Company for the year ended on
that date, both annexed thereto. These financial statements are the
responsibility of the Company''s 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 misstatements. An audit
includes examining, on a test basis, evidence supporting the amounts
and the disclosures in the financial statements. An audit also
includes assessing the accounting principles used and the significant
estimates made by the 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 (Auditor''s Report) Order, 2003 (CARO)
issued by the Central Government in terms of Section 227(4A) of the
Companies Act, 1956, we enclose in the Annexure a statement on the
matters specified in paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to in paragraph 3
above, we report as follows:
(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 it appears from our examination of
those books;
(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 Balance Sheet, the Statement of Profit and Loss
and the Cash Flow Statement dealt with by this report are in compliance
with the Accounting Standards referred to in Section 211(3C) of the
Companies Act, 1956;
(e) in our opinion and to the best of our information and according to
the explanations given to us, the said accounts give the information
required by the Companies Act, 1956 in the manner so required 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 December, 2012;
(ii) in the case of the Statement of Profit and Loss, of the profit of
the Company for the year ended on that date and
(iii) in the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
5. On the basis of the written representations received from the
Directors as on 31st December, 2012 and taken on record by the Board of
Directors, none of the Directors is disqualified as on 31st December,
2012 from being appointed as a director in terms of Section 274(1) (g)
of the Companies Act, 1956.
ANNEXURE TO THE AUDITORS'' REPORT
(Referred to in paragraph (3) of our report of even date)
(i) In respect of its fixed assets:
(a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of the fixed assets.
(b) The fixed assets were physically verified during the year by the
Management in accordance with a regular programme of verification
which, in our opinion, provides for physical verification of all the
fixed assets at reasonable intervals. According to the information and
explanations given to us, no material discrepancies were noticed on
such verification.
(c) The fixed assets disposed off during the year, in our opinion, do
not constitute a substantial part of the fixed assets of the Company
and such disposal has, in our opinion, not affected the going concern
status of the Company.
(ii) In respect of its inventory:
(a) As explained to us, the inventories were physically verified during
the year by the Management at reasonable intervals.
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the Management were reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) In our opinion and according to the information and explanations
given to us, the Company has maintained proper records of its
inventories and no material discrepancies were noticed on physical
verification.
(iii) The Company has neither granted nor taken any loans, secured or
unsecured, to/from companies, firms or other parties listed in the
Register maintained under Section 301 of the Companies Act, 1956.
Accordingly paragraph 4 (iii) of the Order, is not applicable.
(iv) In 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 with regard
to purchases of inventory, fixed assets and the sale of goods. There is
no material sale of services. During the course of our audit, we have
not observed any major weakness in such internal control system.
(v) In respect of contracts or arrangements entered in the Register
maintained in pursuance of Section 301 of the Companies Act, 1956, to
the best of our knowledge and belief and according to the information
and explanations given to us:
(a) The particulars of contracts or arrangements referred to in Section
301 that needed to be entered in the Register maintained under the said
Section have been so entered.
(b) Where each of such transaction is in excess of Rs. 5 lakhs in respect
of any party, the transactions have been made at prices which are prima
facie reasonable having regard to the prevailing market prices at the
relevant time.
(vi) According to the information and explanations given to us, the
Company has not accepted any deposit from the public during the year.
(vii) In our opinion, the Company has an adequate internal audit system
commensurate with the size and the nature of its business.
(viii) We have broadly reviewed the cost records maintained by the
Company pursuant to the Companies (Cost Accounting Records) Rules, 2011
prescribed by the Central Government under Section 209(1) (d) of the
Companies Act, 1956 and are of the opinion that prima facie the
prescribed cost records have been maintained. We have, however, not
made a detailed examination of the cost records with a view to
determine whether they are accurate or complete.
(ix) According to the information and explanations given to us in
respect of statutory dues:
(a) The Company has been regular in depositing undisputed 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
applicable to it with the appropriate authorities.
(b) There were no undisputed amounts payable in respect of Income-tax,
Wealth Tax, Customs Duty, Excise Duty, Cess and other material
statutory dues in arrears as at 31st December, 2012 for a period of
more than six months from the date they became payable.
(c) Details of dues of Income-tax, Sales Tax, Service Tax, Customs
Duty, Excise Duty and Cess which have not been deposited as on 31st
December, 2012 on account of disputes are given below:
Name of
the Statute Nature of
the Dues Amount Period to which
the
amount relates Forum where
dispute is
pending
(Rs. in
Mil
lions) (various years
covering the
period)
Central
Excise Laws Excise Duty 45.8 1996 - 2004 Supreme Court
43.5 2001 - 2010 Customs, Excise
and Service
Tax Appellate
Tribunal
0.5 2000 Appellate
authority up to
Commissioners''
level
Service Tax 377.6 2005 - 2007,
2008, 2010 Customs, Excise
and Service
Tax Appellate
Tribunal
Customs Laws Customs Duty 53.0 2008 - 2009 Customs, Excise
and Service
Tax Appellate
Tribunal
Sales Tax Laws Sales Tax/ 134.4 2000 - 2006,
2007 - 2009 High Court
VAT 96.6 2000 - 2006 Appellate
Tribunal
192.0 1996 - 1997,
2001 - 2010 Appellate
authority up to
Commissioners''
level
Local State
Act Cess 10.4 2001 - 2012 Appellate
authority up to
Commissioners''
level
Income
Tax Act,
1961 Income tax 118.6 1992 - 1994 High Court
1.8 2006 - 2008 Income-tax
Appellate
Tribunal
* Amount as per demand orders including interest and penalty wherever
indicated in the Order.
The following matters, which have been excluded from the table above,
have been decided in favor of the Company but the department has
preferred appeals at higher levels. The details are given below:
Name of the
Statute Nature of
the Dues Amount Period to which
the amount relates Forum where
Dispute is
pending
(Rs. in
Millions)(various years
covering the
period)
Central
Excise Laws Excise Duty 16.1 2000 - 2006 Supreme Court
0.9 1994 High Court
7.1 2005 - 2006 Customs,
Excise and
Service Tax
Appellate
Tribunal
Service Tax 0.1 2005 High Court
2.4 2003 - 2007 Customs,
Excise and
Service Tax
Appellate
Tribunal
Sales Tax
Laws Sales Tax/VAT 46.0 1997 - 1998,
2000 - 2003 High Court
Income Tax
Act, 1961 Income tax 540.7 1996 - 2000,
2004 - 2005 Supreme Court
335.8 2000 - 2004 High Court
169.9 2006 - 2008 Income Tax
Appellate
Tribunal
(x) The Company does not have accumulated losses at the end of the
financial year ended 31st December, 2012. Further, the Company has not
incurred cash losses during the financial year and in the immediately
preceding financial year.
(xi) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in the repayment of dues to
banks and financial institutions. The Company has not issued debentures
during the year.
(xii) As the Company has not granted any loans and advances on the
basis of security by way of pledge of shares, debentures and other
securities, accordingly paragraph 4 (xii) of the Order is not
applicable.
(xiii) The Company is not a chit fund / nidhi / mutual benefit fund /
society to which the provisions of special statute relating to chit
fund are applicable, accordingly paragraph 4 (xiii) of the Order, is
not applicable.
(xiv) As the Company is not dealing or trading in shares, securities,
debentures and other investments, paragraph 4 (xiv) of the Order is not
applicable.
(xv) According to the information and explanations given to us, the
Company has not given any guarantee during the year for loans taken by
others from banks or financial institutions.
(xvi) In our opinion and according to the information and explanations
given to us, the term loans have been applied for the purposes for
which they were obtained.
(xvii) In our opinion and according to the information and explanations
given to us and on an overall examination of the Balance Sheet, we
report that funds raised on short-term basis have not been used during
the year for long- term investment.
(xviii) The Company has not made any preferential allotment of shares
during the year.
(xix) The Company has not issued any debentures during the year.
(xx) The Company has not raised any money by way of public issue during
the year.
(xxi) To the best of our knowledge and according to the information and
explanations given to us, no fraud by the Company and no material fraud
on the Company has been noticed or reported during the year.
For A.F. FERGUSON & CO.
Chartered Accountants
(Firm Registration No. 112066W)
(Jaideep Bhargava)
Partner
(Membership No. 90295)
NEW DELHI, 20 February, 2013
Dec 31, 2010
1. We have audited the attached balance sheet of NESTLE INDIA LIMITED
("the Company") as at December 31, 2010, the profit and loss account
and the cash flow statement of the Company for the year ended on that
date, both annexed thereto. 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 misstatements. An audit
includes examining, on a test basis, evidence supporting the amounts
and the disclosures in the financial statements. An audit also
includes assessing the accounting principles used and the significant
estimates made by the 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 (CARO)
issued by the Central Government in terms of section 227(4A) of the
Companies Act, 1956, we enclose in the Annexure a statement on the
matters specified in paragraphs 4 and 5 of the said Order.
4. Further to our comments in the annexure referred to in paragraph 3
above, we report as follows:
(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 it appears from our examination of
those books;
(c) the balance sheet, the profit and loss account and the cash flow
statement dealt with by this report are in agreement with the books of
account;
(d) in our opinion, the balance sheet, the profit and loss account and
the cash flow statement dealt with by this report are in compliance
with the accounting standards referred to in Section 211(3C) of the
Companies Act, 1956;
(e) in our opinion and to the best of our information and according to
the explanations given to us, the said accounts give the information
required by the Companies Act, 1956 in the manner so required 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 December 31, 2010;
(ii) in the case of the profit and loss account, of the profit of the
Company for the year ended on that date; and
(iii) in the case of the cash flow statement, of the cash flows of the
Company for the year ended on that date.
5. On the basis of the written representations received from the
directors as on December 31, 2010 taken on record by the Board of
Directors, none of the directors is disqualified as on December 31,
2010 from being appointed as a director in terms of Section 274(1)(g)
of the Companies Act, 1956.
ANNEXURE REFERRED TO IN PARAGRAPH 3 OF THE AUDITORS REPORT TO THE
MEMBERS OF NESTLE INDIA LIMITED ON THE ACCOUNTS FOR THE YEAR ENDED
DECEMBER 31, 2010.
(i) (a) The Company is maintaining proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) In our opinion, the management has physically verified most of the
fixed assets of the Company during the year at reasonable intervals,
having regard to the size of the Company and nature of its assets. The
discrepancies noticed on such verification were not material and have
been properly dealt with in the books of account.
(c) In our opinion and according to the information and explanations
given to us, the Company has not disposed off a substantial part of its
fixed assets during the year.
(ii) (a) During the year, the inventories have been physically verified
by the management. In our opinion, the frequency of verification is
reasonable.
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of stocks 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 records of inventories, we
are of the opinion that the Company is maintaining proper records of
inventories. The discrepancies noticed on physical verification of
inventories as compared to book records were not material and have been
properly dealt with in the books of account.
(iii) (a) According to the information and explanations given to us,
the Company has, during the year, not granted any loans, secured or
unsecured to companies, firms or other parties covered in the register
maintained under section 301 of the Companies Act, 1956. Accordingly,
paragraphs 4 (iii) (a), (b), (c) and (d) of the Companies (Auditors
Report) Order, 2003 (hereinafter referred to as the Order) are not
applicable.
(b) According to the information and explanations given to us, the
Company has, during the year, not taken any loans, secured or unsecured
from companies, firms or other parties covered in the register
maintained under section 301 of the Companies Act, 1956. Accordingly,
paragraphs 4 (iii) (e), (f) and (g) of the Order, are not applicable.
(iv) In our opinion and according to information and explanations given
to us, there are adequate internal control systems commensurate with
the size of the Company and the nature of its business with regard to
the purchase of inventories, fixed assets and with regard to sale of
goods. There is no sale of services. Further, on the basis of our
examination and according to the information and explanations given to
us, no major weaknesses in the aforesaid internal control system, has
been noticed.
(v) (a) According to the information and explanations given to us, we
are of the opinion that, the particulars of the contracts /
arrangements referred to in Section 301 of the Companies Act, 1956,
were 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 Companies Act, 1956 and exceeding the value of Rupees five lacs in
respect of any party were made at prices which were reasonable having
regard to prevailing market prices at the relevant times.
(vi) As, the Company has not accepted any deposits from the public,
paragraph 4(vi) of the Order is not applicable.
(vii) In our opinion, the Company has an internal audit system
commensurate with its size and the nature of its business.
(viii) 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, the maintenance of cost records have been
prescribed under 209 (1) (d) of the Companies Act, 1956 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 records with a view to determining whether they are
accurate or complete.
(ix) (a) According to the information and explanations given to us and
the records of the Company examined by us, the Company has been regular
in depositing undisputed statutory dues including investor education
and protection fund, employees state insurance, income-tax, wealth
tax, custom duty, excise duty, provident fund, sales-tax, service tax,
cess, professional tax and other material statutory dues applicable to
it with the appropriate authorities. We are informed that there are no
undisputed statutory dues as at the year end, outstanding for a period
of more than six months from the date they became payable.
(b) According to the information and explanations given to us and the
records of the Company examined by us, there are no disputed dues of
customs duty and wealth tax, which have not been deposited. The
details of disputed dues as at December 31, 2010 in respect of excise
duty, sales tax, service tax, cess and income-tax that have not been
deposited by the Company, are as follows :-
Name of the Statute Nature of the Dues Amount * (Rs.)
(000s)
Central Excise Laws Excise Duty 73,436
29,347
Service Tax 239,777
57,024
Sales Tax Laws Sales Tax 7,752
26,455
165,409
Local State Act Cess 4,242
Income Tax Act, 1961 Income tax 118,558
135,684
Name of the Statue Period to which the amount Forum where dispute
relates (various years is pending
covering the period)
Central Excise Laws 1996 - 2008 Customs, Excise and Service
Tax Appellate Tribunal
2000 - 2010 Appellate authority upto
Commissioners level
2005 - 2007 Customs, Excise and Service
Tax Appellate Tribunal
2008 Appellate authority upto
Commissioners level
Sales Tax Laws 2000 - 2006 High Court
2000 - 2006 Appellate Tribunal
1992 - 2008 Appellate authority upto
Commissioners level
Local State Act 2001 - 2008 Appellate authority upto
Commissioners level
Income Tax Act, 1961 1992 - 1994 High Court
2006 - 2007 Commissioner of Income-tax
(Appeals)
* Amount as per demand orders including interest and penalty wherever
indicated in the Order.
The following matters, which have been excluded from the table above,
have been decided in favour of the Company but the department has
preferred appeals at higher levels. The details are given below :-
Name of the Statute Nature of the Dues Amount (Rs.)
(000s)
Central Excise Laws Excise Duty 16,052
883
7,065
Service Tax 148
2,420
Sales Tax Laws Sales Tax 45,963
Income Tax Act, 1961 Income tax 807,355
Name of the Statute Period to which the amount Forum where depar-
relates (various years tment has
covering the period> preferred appeals
Central Excise Laws 2000 - 2006 Supreme Court
1994 High Court
2005 - 2006 Customs, Excise and
Service Tax Appellate Tribunal
2005 High Court
2003 - 2007 Customs, Excise and
Service Tax Appellate Tribunal
Sales Tax Laws 1997 - 2003 High Court
Income Tax Act, 1961 1996 - 2005 High Court
(x) The Company does not have accumulated losses at the end of the
financial year December 31, 2010. Further, the Company has not
incurred cash losses during the financial year ended December 31, 2010
and in the immediately preceding financial year ended December 31,
2009.
(xi) According to the records of the Company examined by us and on the
basis of information and explanations given to us, the Company has not
defaulted in repayment of dues to banks during the year. The Company
has not taken any loans from financial institutions and has not issued
debentures during the year.
(xii) The Company has not granted any loans and advances on the basis
of security by way of pledge of shares, debentures and other
securities, accordingly paragraph 4 (xii) of the Order is not
applicable.
(xiii) The Company is not a chit fund / nidhi / mutual benefit fund /
society to which the provisions of special statute relating to chit
fund are applicable, accordingly paragraph 4 (xiii) of the Order, is
not applicable.
(xiv) As the Company is not dealing or trading in shares, securities,
debentures and other investments, paragraph 4 (xiv) of the Order is not
applicable.
(xv) According to the information and explanations given to us, the
Company has not given any guarantee during the year for loans taken by
others from banks or financial institutions.
(xvi) In our opinion and according to the information and explanations
given to us, the Company has not taken any term loans during the year.
(xvii) According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, we report
that, during the year, short term funds have not been used to finance
long term investments.
(xviii) The Company has not made any preferential allotment of shares
during the year.
(xix) The Company has not issued any debentures during the year.
(xx) The Company has not raised any money by way of public issue during
the year.
(xxi) Based upon the audit procedures performed and information and
explanations given by the management, we report that no material fraud
on or by the Company has been noticed or reported during the year ended
December 31, 2010.
For A.F. FERGUSON & CO.
Chartered Accountants
(Registration No. 112066W)
(Manjula Banerji)
Partner
(Membership No. 86423)
DELHI, February 18, 2011
Dec 31, 2009
1. We have audited the attached balance sheet of Nestle India Limited
as at December 31, 2009, the profit and loss account and also the cash
flow statement for the year ended on that date annexed thereto. These
financial statements are the responsibility of the CompanyÃs
management. Our responsibility is to express an opinion on these
financial statements based on our audit.
2. We conducted our audit in accordance with 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 misstatements. 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 (AuditorÃs Report) Order, 2003 issued
by the Central Government of India in terms of sub-section (4A) of
section 227 of the Companies Act, 1956, we enclose in the annexure a
statement on the matters specified in paragraphs 4 and 5 of the said
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 the
books;
c) the balance sheet, the 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 the
cash flow statement dealt with by this report comply with the mandatory
accounting standards referred to in sub-section (3C) of section 211 of
the Companies Act, 1956;
e) on the basis of written representations received from the directors
and taken on record by the Board of Directors, we report that none of
the directors of the Company is disqualified as on December 31, 2009
from being appointed as director of the Company under clause (g) of
sub-section (1) of section 274 of the Companies Act, 1956;
f) in our opinion and to the best of our information and according to
the explanations given to us, the accounts give the information
required by the Companies Act, 1956, in the manner so required 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 December 31, 2009;
ii. in the case of the profit and loss account, of the profit of the
Company for the year ended on that date; and
iii. in the case of cash flow statement, of the cash flows for the year
ended on that date.
ANNEXURE REFERRED TO IN PARAGRAPH Ã3Ã OF THE AUDITORSÃ REPORT TO THE
MEMBERS OF NESTLÃ INDIA LIMITED ON THE ACCOUNTS FOR THE YEAR ENDED
DECEMBER 31, 2009.
(i) (a) The Company is maintaining proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) In our opinion, the management has physically verified most of the
fixed assets of the Company during the year at reasonable intervals,
having regard to the size of the Company and nature of its assets. The
discrepancies noticed on such verification were not material and have
been properly dealt with in the books of account.
(c) In our opinion and according to the information and explanations
given to us, the Company has not disposed off a substantial part of its
fixed assets during the year.
(ii) (a) During the year, the inventories have been physically verified
by the management. In our opinion, the frequency of verification is
reasonable.
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of stocks 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 records of inventories, we
are of the opinion that the Company is maintaining proper records of
inventories. The discrepancies noticed on physical verification of
inventories as compared to book records were not material and have been
properly dealt with in the books of account.
(iii) (a) According to the information and explanations given to us,
the Company has, during the year, not granted any loans, secured or
unsecured to companies, firms or other parties covered in the register
maintained under section 301 of the Companies Act, 1956. Accordingly,
paragraphs 4 (iii) (a), (b), (c) and (d) of the Companies (AuditorÃs
Report) Order, 2003 (hereinafter referred to as the Order) are not
applicable.
(b) According to the information and explanations given to us, the
Company has, during the year, not taken any loans, secured or unsecured
from companies, firms or other parties covered in the register
maintained under section 301 of the Companies Act, 1956. Accordingly,
paragraphs 4 (iii) (e), (f) and (g) of the Order, are not applicable.
(iv) In our opinion and according to information and explanations given
to us, there are adequate internal control systems commensurate with
the size of the Company and the nature of its business with regard to
the purchase of inventories, fixed assets and with regard to sale of
goods. There is no sale of services. Further, on the basis of our
examination and according to the information and explanations given to
us, no major weaknesses in the aforesaid internal control system, has
been noticed.
(v) (a) According to the information and explanations given to us, we
are of the opinion that, the particulars of the contracts /
arrangements referred to in Section 301 of the Companies Act, 1956,
were 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 Companies Act, 1956 and exceeding the value of Rupees five lacs in
respect of any party were made at prices which were reasonable having
regard to prevailing market prices at the relevant times.
(vi) As, the Company has not accepted any deposits from the public,
paragraph 4 (vi) of the Order is not applicable.
(vii) In our opinion, the Company has an internal audit system
commensurate with its size and the nature of its business.
(viii) 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, the maintenance of cost records have been
prescribed under 209 (1) (d) of the Companies Act, 1956 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 records with a view to determining whether they are
accurate or complete.
(ix) (a) According to the information and explanations given to us and
the records of the Company examined by us, the Company has been regular
in depositing undisputed statutory dues including Provident Fund,
investor education and protection fund, employeesà state insurance,
income-tax, wealth tax, customs duty, excise duty and other material
statutory dues applicable to it and has generally been regular in
depositing undisputed statutory dues including provident fund,
sales-tax, service tax, cess and professional tax with the appropriate
authorities. We are informed that there are no undisputed statutory
dues as at the year end, outstanding for a period of more than six
months from the date they became payable.
(b) According to the information and explanations given to us and the
records of the Company examined by us, there are no disputed dues of
customs duty and wealth tax, which have not been deposited. The
details of disputed dues as at December 31, 2009 in respect of excise
duty, sales tax, service tax, cess and income-tax that have not been
deposited by the Company, are as follows :-
Name of the
Statute Nature of the
Dues Amount * (Rs.) Period to which
the amount
(Ã000s) relates (various
years covering the
period)
Central Excise
Laws Excise Duty 47,973 1996 - 2006
481 2000
Service Tax 342 2005
Sales Tax
Laws Sales Tax 4,081 1996 - 2006
5,662 1999 - 2006
205,077 1992 - 2007
Local State
Act Cess 4,242 2001 - 2008
Income Tax
Act, 1961 Income tax 118,558 1992 - 1994
116,919 2005 - 2006
Name of the Statue Forum where dispute is pending
Central Excise Laws Customs, Excise and Service Tax Appellate
Tribunal
Appellate authority upto Commissionersà level
Customs, Excise and Service Tax Appellate
Tribunal
Sales Tax Laws High Court
Appellate Tribunal
Appellate authority upto Commissionersà level
Appellate authority upto Commissionersà level
Local State Act
Income Tax Act, 1961 High Court
Commissioner of Income-tax (Appeals)
* Amount as per demand orders including interest and penalty wherever
indicated in the Order.
The following matters, which have been excluded from the table above,
have been decided in favour of the Company but the department has
preferred appeals at higher levels. The details are given below :-
Name of the
Statute Nature of the
Dues Amount (Rs.) Period to which
the amount
(Ã000s) relates (various years
covering the period)
Central Excise
Laws Excise Duty 16,052 2000 - 2006
2,878 1994 - 2006
7,065 2005 - 2006
Service Tax 148 2005
2,420 2003 - 2007
Sales
Tax Laws Sales Tax 35,401 1997 - 2003
Income
Tax Act,
1961 Income tax 5,187 1997 - 1998
514,735 1996 - 2002
Name of the Statue Forum where department has
preferred appeals
Central Excise Laws Supreme Court
High Court
Customs, Excise and Service
Tax Appellate Tribunal
High Court
Customs, Excise and Service
Tax Appellate Tribunal
Sales Tax Laws
Income Tax Act, 1961 High Court
Supreme Court
High Court
(x) The Company does not have accumulated losses at the end of the
financial year December 31, 2009. Further, the Company has not
incurred cash losses during the financial year ended December 31, 2009
and in the immediately preceding financial year ended December 31,
2008.
(xi) According to the records of the Company examined by us and on the
basis of information and explanations given to us, the Company has not
defaulted in repayment of dues to banks during the year. The Company
has not taken any loans from financial institutions and has not issued
debentures during the year.
(xii) The Company has not granted any loans and advances on the basis
of security by way of pledge of shares, debentures and other
securities, accordingly paragraph 4 (xii) of the Order is not
applicable.
(xiii) The Company is not a chit fund / nidhi / mutual benefit fund /
society to which the provisions of special statute relating to chit
fund are applicable, accordingly paragraph 4 (xiii) of the Order, is
not applicable.
(xiv) As the Company is not dealing or trading in shares, securities,
debentures and other investments, paragraph 4 (xiv) of the Order is not
applicable.
(xv) According to the information and explanations given to us, the
Company has not given any guarantee during the year for loans taken by
others from banks or financial institutions.
(xvi) In our opinion and according to the information and explanations
given to us, the Company has not taken any term loans during the year.
(xvii) According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, we report
that, during the year, short term funds have not been used to finance
long term investments.
(xviii) The Company has not made any preferential allotment of shares
during the year.
(xix) The Company has not issued any debentures during the year.
(xx) The Company has not raised any money by way of public issue during
the year.
(xxi) Based upon the audit procedures performed and information and
explanations given by the management, we report that no material fraud
on or by the Company has been noticed or reported during the year ended
December 31, 2009.
For A.F. FERGUSON & CO.,
Chartered Accountants
(MANJULA BANERJI)
February 19, 2010 Partner
New Delhi Membership No. 86423
Firm ICAI Registration No.: 112066W