In accordance with Ind AS 18 on Revenue and Schedule III to the Companies Act, 2013, sales for the period between January 1 and June 30, 2017 were reported gross of excise duty and net of value-added tax (VAT)/sales tax. Excise duty was reported as a separate expense line item.
Consequent to the introduction of GST with effect from July 1, 2017, VAT/sales tax, excise duty, etc. have been subsumed into GST, and accordingly, the same is not recognised as part of sales as per the requirements of Ind AS 18. This has resulted in lower reported sales in the current year in comparison to the sales reported under the pre-GST structure of indirect taxes.
With the change in structure of indirect taxes, expenses are also being reported net of taxes. Accordingly, financial results for the nine months ended September 30, 2018, and in particular, sales, absolute expenses and ratios in percentage of sales are not comparable with the figures of corresponding periods.
Profit from operations in percentage of sales and net profit in percentage of sales for the nine months ended September 30, 2018 are positively impacted, as the percentages have been calculated on lower reported sales.
Nestle India’s board of directors met at the company’s headquarters and approved the results for the quarter ending September 2018.
Commenting on the results, Suresh Narayanan, its chairman and managing director, said, “The quarter has witnessed another strong performance from the organisation, as we continue to deliver broad-based volume-driven growth.”
“Our focus on innovation and renovation continued with the introduction of Maggi Special Masala Noodles, Maggi Dip and Spread, Kitkat Dessert Delight Brownie Kubes, Nescafe E coffee machine and Nesplus Breakfast Cereals. We have stepped up marketing activities in order to strengthen our brands. We are witnessing headwinds in commodity and crude oil prices coupled with currency depreciation,” he added.
“We believe that as Nestle India we need to participate in enhancing our environment engagement capabilities, including managing plastic waste. As part of this, we have joined hands with other companies as well as non-governmental organisations (NGOs) and are presently working across 12 states in India,” Narayanan said.
He added, “We have also taken the initiative to launch a consumer awareness campaign - 2 Minute Safai Ke Naam, focusing on proper collection and disposal of plastic waste in few geographies, with every hope of extending our involvement in other areas in future.”
