Page 36 - GlaxoSmithKline Pharmaceuticals AR 2012

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Annexure To Auditors’ Report
[Referred to in paragraph 3 of the Auditors’ Report of even date to the members of GlaxoSmithKline Pharmaceuticals Limited on the
financial statements for the year ended 31 st December, 2012]
1. (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation of fixed
assets, other than the situation of certain plant and equipment, furniture and office equipment, for which the situation
recorded, is the location of the Company’s different establishments.
(b) The fixed assets are physically verified by the Management according to a phased programme designed to cover all the
items over a period of three years which, in our opinion, is reasonable having regard to the size of the Company and the
nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the Management
during the year and no material discrepancies have been noticed on such verification.
(c) In our opinion, and according to the information and explanations given to us, a substantial part of fixed assets has not been
disposed off by the Company during the year.
2. (a) The inventory excluding materials in transit has been physically verified by the Management during the year. Further a major
portion of inventory lying with third parties has been physically verified by the Management during the year. In our opinion,
the frequency of verification is reasonable.
(b) In our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate
in relation to the size of the Company and the nature of its business.
(c) On the basis of our examination of the inventory records, in our opinion, the Company is maintaining proper records of
inventory. In our opinion, the discrepancies noticed on physical verification of inventory as compared to book records were
not material.
3. (a) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register
maintained under Section 301 of the Act. Therefore, the provisions of clauses 4(iii)(b),(c) and (d) of the said Order are not
applicable to the Company.
(b) The Company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register
maintained under Section 301 of the Act. Therefore, the provisions of clauses 4(iii)(f) and (g) of the said Order are not
applicable to the Company.
4. 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 and services. Further, on the basis of our examination of the books and records of the Company, and according
to the information and explanations given to us, we have neither come across, nor have been informed of, any continuing failure
to correct major weaknesses in the aforesaid internal control system.
5. According to the information and explanations given to us, there have been no contracts or arrangements that need to be entered
in the register maintained under Section 301 of the Act.
6. The Company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA of the Act and the
rules framed thereunder.
7. In our opinion, the Company has an internal audit system commensurate with its size and the nature of its business.
8. We have broadly reviewed the books of account maintained by the Company in respect of products where, pursuant to the rules
made by the Central Government of India, the maintenance of cost records has been prescribed under clause (d) of sub-section
(1) of Section 209 of the Act, and are of the opinion that, prima facie, the prescribed accounts and records have been made
and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are
accurate or complete.
9. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion,
the Company is generally regular in depositing undisputed statutory dues in respect of income tax though there has been
a slight delay in a few cases, and is regular in depositing undisputed statutory dues, including provident fund, investor
education and protection fund, employees’ state insurance, wealth tax, sales tax, service tax, customs duty, excise duty and
other material statutory dues, as applicable, with the appropriate authorities.
(b) According to the information and explanations given to us and the records of the Company examined by us, there are no
dues of wealth-tax and customs duty which have not been deposited on account of any dispute. The particulars of dues of
income tax, sales tax, service tax and excise duty as at 31st December, 2012 which have not been deposited on account
of a dispute, are as follows:
Name of the statute Nature of dues Amount*
Rs. in lakhs
Period to which the amount
relates
Forum where the dispute is
pending
The Income-tax
Act, 1961
Income-tax
including interest,
as applicable
12,38.27 Assessment Years
2007-2008 and 2008-2009
Appellate Authority – up to
Commissioner’s level
2,86.79 Assessment Year
1990-1991 and 1999-2000
Tribunal
The Central Sales Tax
Act, 1956 and
Local Sales Tax Acts
Sales tax
including
interest and penalty,
as applicable
17,70.63 Several demands
pertaining to the
period 1983-1984
and 1988 to 2010
Appellate Authority
– up to
Commissioner’s level