REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS Opinion
1. We have audited the accompanying standalone financial statements of Hindustan Unilever Limited ('the Company'), which comprise the Standalone Balance Sheet as at 31 st March, 2025, the Standalone Statement of Profit and Loss (including Other Comprehensive Income), the Standalone Statement of Cash Flow and the Standalone Statement of Changes in Equity for the year then ended, and notes to the standalone financial statements, including material accounting policy information and other explanatory information.
2. I n our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 ('the Act') in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards ('Ind AS') specified under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015 and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2025, its profit (including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.
3. We conducted our audit in accordance with the Standards on Auditing 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 Standalone 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 ('ICAI') together with the ethical requirements that are relevant to our audit of the standalone 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 opinion.
4. Key Audit Matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
5. We have determined the matters described below to be the key audit matters to be communicated in our report.
Key Audit Matters
How our audit addressed the key audit matters
Revenue Recognition - Discounts and Rebates
(Refer Notes 2 and 25 to the standalone financial
Our audit procedures included, but were not limited to, the following:
Statements)
• Assessed the appropriateness of the Company's
The revenue of the Company consists primarily of sale of products through various distribution channels. Revenue is recognised net of trade and volume
revenue recognition accounting policies, including those relating to discounts and rebates in accordance with Ind AS 115;
discounts and other rebates as described in the
• Evaluated the design and tested the operating
aforesaid notes (hereinafter referred to as 'discounts
effectiveness of the Company's key internal controls,
and rebates').
including general and specific information technology
Accrual towards discounts and rebates at the reporting date with respect to ongoing discount and incentive schemes is complex due to varying terms and conditions, multiplicity of products, channel partners and markets. Significant judgments are required to be made by management in order to determine variable consideration in accordance with Ind AS 115, 'Revenue from Contracts with Customers' ("Ind AS 115"), particularly in estimating accruals relating to incentive schemes that are based on secondary sales made by
controls, exercised implemented by the management for measurement and recording of such discounts and rebates;
• On a sample basis, inspected key customer contracts and incentive schemes to understand the terms and conditions pertaining to discounts and rebates and evaluated the process followed by the management to determine the amount of accruals as at year end;
• Performed substantive testing on selected samples of discounts and rebates recorded during the year as
the customers of the Company.
well as those recorded through year-end provisions recognised by the Company, by testing relevant
The above complexity leads to a risk of revenue
approvals and underlying supporting documents in
being misstated due to inaccurate estimation of such discounts and rebates, and hence, it requires significant auditor attention.
respect of such schemes and customer contracts;
• Performed analytical procedures on discounts and rebates during the year to identify unusual variances;
Considering the materiality of amounts involved and significant management judgements required in
• Tested accuracy of management judgements in
estimating the accrual of discounts and rebates, this
estimating discounts and rebates accruals;
matter has been considered as a key audit matter for
• Tested, on a sample basis, the manual journal entries
the current year audit.
posted to revenue relating to the discounts and rebates to identify unusual items, if any; and
• Evaluated the appropriateness and adequacy of related disclosures in the standalone financial statements in accordance with applicable accounting standards.
Impairment assessment of Foods Cash Generating
Our audit procedures included, but were not limited
Unit (Foods CGU)
to, the following:
As disclosed in Notes 2 and 4 to the standalone
• Obtained an understanding of the management
financial statements, the Foods CGU includes goodwill
process for annual impairment assessment, and
and intangible assets (having an indefinite useful
assessed the appropriateness of the Company's
life) aggregating ^17,301 crores and ^27,210 crores,
accounting policy for impairment of non-financial
respectively, which cumulatively represents 57% of total
assets in accordance with Ind AS 36;
assets of the Company as at 31st March, 2025.
The Foods CGU is tested for impairment annually,
• Evaluated the design and tested the operating effectiveness of key internal controls implemented by
whereby the carrying amount of the CGU (including
the management over the impairment assessment of
aforementioned goodwill and intangible assets) is
Foods CGU;
compared with its recoverable amount, in accordance
• Assessed the professional competence and
with the requirements of Ind AS 36, Impairment
of Assets' ('Ind AS 36'). The Company determines
objectivity of the management's and auditor's
recoverable amount as higher of the:
valuation experts;
(a) value-in-use (determined using discounted cash
• Involved auditor's valuation experts to assist in
flow ('DCF') model); and
evaluating the appropriateness of the valuation
(b) fair value less cost to sell (determined using
methodology and the reasonableness of the assumptions used by the management's expert to
comparable companies multiple ('CCM') method)
calculate the recoverable amount of Foods CGU;
The annual impairment testing involves significant
• Evaluated and challenged management's
estimates and judgment by the management in
assumptions used in the impairment assessment,
relation to forecasting future cash flow projections
particularly those related to forecast revenue
basis expected growth rates, determining appropriate
growth, earnings, weighted average cost of capital,
discount rate for DCF model and identification of
terminal growth rates and comparable company
appropriate comparable companies for the CCM
multiples based on our understanding of the
method of valuation.
business, past results, approved business plans and
Considering the materiality of the amounts involved and significant judgments and estimates involved in the
external factors;
• Tested the mathematical accuracy of the valuation
impairment testing, this matter has been considered as
model;
a key audit matter for the current year audit.
• Assessed the robustness of the financial projections prepared by the management by comparing projections of previous financial years with the actual results achieved to and carried out an analysis of significant variances, if any;
• Performed an independent sensitivity analysis for reasonably possible changes in the key assumptions used in estimating the recoverable amount to assesses the estimation uncertainties involved and evaluate the sufficiency of available headroom between recoverable amount and carrying amount in the standalone financial statements; and
• Evaluated the appropriateness and adequacy of the related disclosures in the standalone financial statements in accordance with applicable accounting standards.
Provision and contingent liabilities relating to
taxation, litigation and claims
(Refer Notes 2, 9D, 21 and 24 to the standalone financial
statements)
The Company is involved in various direct tax, indirect tax, transfer pricing arrangements, claims, general legal proceedings ('litigations') arising in the normal course of business which includes complexities arising from uncertain tax positions.
Provisions are recognised when the Company has a present obligation (legal/ constructive) as a result of a
accounting policies relating to provisions and contingent liabilities, in accordance with the applicable accounting standards;
• Obtained an understanding of the process, and evaluated the design and tested the operating effectiveness of the key internal controls around the recording and assessment of provisions and contingent liabilities.
past event for which it is probable that a cash outflow
• Engaged subject matter specialists, in case of
will be required, and a reliable estimate can be made of
material litigations, to gain an understanding of
the amount of the obligation.
the current status of litigations and monitored
A disclosure for contingent liabilities is made where
changes in the disputes, if any, through discussions with the management and by reading external
there is a possible obligation or a present obligation
advice received by the Company from their legal
that may probably not require an outflow of resources.
counsel, where relevant, to validate management's
When there is a possible or a present obligation where
conclusions. Also, assessed the professional
the likelihood of outflow of resources is remote, no provision or disclosure is made.
competence and objectivity of such management experts;
The level of management judgement associated with
• On a sample basis, obtained and assessed the
determining the need for, and the quantum of, provisions
Company's assumptions and estimates in respect
for any liabilities and disclosures of any contingent
of litigations, including the liabilities or provisions
liabilities arising from these litigations is considered to be
recognised or contingent liabilities disclosed in the
high.
standalone financial statements, by reviewing the
This judgement is dependent on a number of significant
appropriateness of the probability assessment of
assumptions and assessments which involves
unfavourable outcomes of various litigations, with the
interpreting the various applicable rules, regulations,
help of auditor's subject matter specialists, wherever
practices and considering precedents in the various
required;
jurisdictions, for which the management uses various
• On a sample basis, performed substantive procedures
subject matter experts.
on the underlying calculations supporting the amount
In view of the uncertainty relating to the outcome
involved recorded as provisions or disclosed as
of these litigations, the significance of the amounts
contingent liability; and
involved, and the subjectivity involved in management's
• Evaluated the appropriateness and adequacy of
judgement, this matter has been considered as a key
related disclosures in the standalone financial
audit matter for the current year audit.
statements in accordance with applicable accounting standards.
Information other than the Standalone Financial Statements and Auditor's Report thereon
6. The Company's Board of Directors are responsible for the other information. The other information comprises the information included in the Annual Report, but does not include the standalone financial statements and our auditor's report thereon.
Our opinion on the standalone 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 standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone 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.
7. The accompanying standalone financial statements have been approved by the Company's Board of Directors. The Company's Board of Directors are responsible for the matters stated in Section 134(5) of the Act with respect to the preparation and presentation of these standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, changes in equity and cash flows of the Company in accordance with the Ind AS specified under Section 133 of the Act and other accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were
operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
8. In preparing the standalone financial statements, the Board of Directors 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 the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
9. The Board of Directors is also responsible for overseeing the Company's financial reporting process.
10. Our objectives are to obtain reasonable assurance about whether the standalone 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 Standards on Auditing 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 standalone financial statements.
11. As part of an audit in accordance with Standards on Auditing, specified under Section 143(10) of the Act we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the standalone 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 Board of Directors' 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 standalone 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 standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
12. 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.
13. 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.
14. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period 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.
15. The standalone financial statements of the Company for the year ended 31st March, 2024 were audited by the predecessor auditor, B S R & Co. LLP, who have expressed an unmodified opinion on those standalone financial statements vide their audit report dated 24th April, 2024.
16. As required by Section 197(16) of the Act based on our audit, we report that the Company has paid remuneration to its directors during the year in accordance with the provisions of and Limits Laid down under Section 197 read with ScheduLe V to the Act.
17. As required by the Companies (Auditor's Report) Order, 2020 ('the Order') issued by the CentraL Government of India in terms of Section 143(11) of the Act we give in the Annexure I a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent appLicabLe.
18. Further to our comments in Annexure I, as required by Section 143(3) of the Act based on our audit, 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 purpose of our audit of the accompanying standaLone financiaL statements;
b. I n our opinion, proper books of account as required by Law have been kept by the Company so far as it appears from our examination of those books, except for the matters stated in paragraph 18(h)(vi) beLow on reporting in reLation to audit traiL as required under RuLe 11(g) of the Companies (Audit and Auditors) RuLes, 2014 (as amended);
c. The standaLone financiaL statements deaLt with by this report are in agreement with the books of account;
d. In our opinion, the aforesaid standaLone financiaL statements compLy with Ind AS specified under Section 133 of the Act;
e. On the basis of the written representations received from the directors and taken on record by the Board of Directors, none of the directors is disquaLified as on 31st March, 2025 from being appointed as a director in terms of Section 164(2) of the Act;
f. The modification reLating to the maintenance of accounts and other matters connected therewith in reLation to audit traiL are as stated in paragraph 18(b) above on reporting under Section 143(3)(b) of the Act and paragraph 18(h)(vi) beLow on reporting under RuLe 11(g) of the Companies (Audit and Auditors) RuLes, 2014 (as amended);
g. With respect to the adequacy of the internaL financiaL controLs with reference to financiaL statements of the Company as on 31st March, 2025 and the operating effectiveness of such controLs, refer to our separate report in Annexure II wherein we have expressed an unmodified opinion; and
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, as detaiLed in Notes 9, 21 and 24 to the standaLone financiaL statements, has discLosed the impact of pending Litigations on its financiaL position as at 31st March, 2025;
ii. The Company did not have any Long-term contracts incLuding derivative contracts for which there were any materiaL foreseeabLe Losses as at 31st March, 2025;
iii. There has been no deLay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended 31st March, 2025;
iv. a. The management has represented
that, to the best of its knowLedge and beLief, as discLosed in Note 50 to the standaLone financiaL statements, no funds have been advanced or Loaned or invested (either from borrowed funds or securities premium or any other sources or kind of funds) by the Company to or in any person(s) or entity(ies), incLuding foreign entities ('the intermediaries'), 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 ('the ULtimate Beneficiaries') or provide any guarantee, security or the Like on behaLf the ULtimate Beneficiaries;
b. The management has represented that, to the best of its knowLedge and beLief, as discLosed in Note 50 to the standaLone financiaL statements, no funds have been received by the Company from any person(s) or entity(ies), incLuding foreign entities ('the Funding 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 ('ULtimate Beneficiaries') or provide any guarantee, security or the Like on behaLf of the ULtimate Beneficiaries; and
c. Based on such audit procedures performed as considered reasonabLe and appropriate in the circumstances, nothing has come to our notice that has caused us to beLieve that the management representations under sub-cLauses (a) and (b) above contain any materiaL misstatement.
v. The finaL dividend paid by the Company during the year ended 31st March, 2025 in respect of such dividend decLared for the previous year is in accordance with Section 123 of the Act to the extent it appLies to payment of dividend.
The interim dividend decLared and paid by the Company during the year ended 31st March, 2025 and untiL the date of this audit report is in compLiance with Section 123 of the Act.
As stated in Note 36 to the accompanying standaLone financiaL statements, the Board of Directors of the Company have proposed finaL dividend for the year ended 31st March, 2025 which is subject to the approvaL of the members at the ensuing AnnuaL GeneraL Meeting. The dividend decLared is in accordance with Section 123 of the Act to the extent it appLies to decLaration of dividend.
vi. Based on our examination which incLuded test checks, except for instances mentioned beLow, the Company, in respect of financiaL year commencing on 1st ApriL, 2024, has used accounting software for maintaining its books of account, which have a feature of recording audit traiL (edit Log) faciLity and the same have been operated throughout the year for aLL reLevant transactions recorded in the respective software. Further, during the course of our audit we did not come across any instance of audit traiL feature being tampered with for the period where audit traiL is enabLed and operated. Furthermore, the audit traiL has been preserved by the Company as per the statutory requirements for record retention where the audit traiL feature was enabLed:
(i) In respect of an accounting software used for maintenance of aLL accounting records, the audit traiL for changes to the appLication Layer by a super user has been enabLed and preserved w.e.f. 1st May, 2024.
(ii) The accounting software used for maintaining purchase orders is operated by a third-party software service provider. In absence of an independent auditor's report in reLation to controLs at the third-party service provider, we are unabLe to comment if the audit traiL feature of the said software was enabLed and operated for aLL reLevant transactions recorded in the software at the database LeveL.
The daiLy back-up of audit traiL (edit Log) in respect of its accounting software for maintenance of aLL accounting records, an accounting software for maintaining purchase orders and the accounting software for journaL entries has been maintained on the servers physicaLLy Located in India as mentioned in Note 51 to the financiaL statements.
For Walker Chandiok & Co LLP
Chartered Accountants Firm's Registration No.: 001076N/N500013
Aasheesh Arjun Singh
Partner
PLace: Mumbai Membership No.: 210122
Date: 24th ApriL, 2025 UDIN: 25210122BMONAY1763