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AUDITOR'S REPORT

Gillette India Ltd.

You can view full text of the latest Auditor's Report for the company.
Market Cap. (₹) 16246.66 Cr. P/BV 20.87 Book Value (₹) 238.87
52 Week High/Low (₹) 8140/4450 FV/ML 10/1 P/E(X) 64.24
Bookclosure 26/11/2019 EPS (₹) 77.62 Div Yield (%) 0.88
Year End :2018-06 

Report on Audit of the Ind AS Financial Statements

We have audited the accompanying Ind AS financial statements of Gillette India Limited (“the Company”), which comprise the Balance Sheet as at June 30, 2018, the Statement of Profit and Loss (including other comprehensive income), the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended, including a summary of the significant accounting policies and other explanatory information (hereinafter referred to as the Ind 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 the preparation of these Ind AS 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 accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act read with relevant Rules issued thereunder.

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 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 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 the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the 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 of the Company as at June 30, 2018, its profit (including other comprehensive income), changes in equity and its cash flows for the year ended on that date.

Other Matter

The comparative financial information of the Company for the year ended June 30, 2017, included in these Ind AS financial statements have been audited by the predecessor auditor whose report for the year ended June 30, 2017 expressed an unmodified opinion on those audited financial statements vide their audit report dated August 24, 2017.

Our opinion is not modified in respect of this 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 in terms of section 143(11) of the Act, we give in “Annexure A” 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 Other Comprehensive Income), Statement of Changes in Equity and the Cash Flow Statement 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 read with relevant rules issued thereunder.

e) On the basis of the written representations received from the Directors as on June 30, 2018, taken on record by the Board of Directors, none of the Directors is disqualified as on June 30, 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 over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure B”.

g) 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, 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 35 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.

ANNEXURE - “A” TO THE INDEPENDENT AUDITORS’ REPORT

Referred to in paragraph 1 under ‘Report on Other Legal and Regulatory Requirements’ in our Independent Auditor’s Report to the Members of the Company on the Ind AS Financial Statements for the year ended June 30, 2018.

1. Fixed Assets:

a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

b) As explained to us, the Company has a program for physical verification of fixed assets at periodic intervals. In our opinion, the period of verification is reasonable having regard to the size of the Company and the nature of its assets. The discrepancies reported on such verification are not material and have been properly dealt with in the books of account.

c) According to the information and explanations given to us, the title deeds, comprising all the immovable properties of buildings, other than self-constructed buildings, are held in the name of the Company. In respect of immovable properties of land that have been taken on lease and disclosed as non-current / current assets in the financial statements, the lease agreements are in the name of the Company, where the Company is the lessee in the agreement.

2. The inventory has been physically verified by the Management at reasonable intervals during the year. In our opinion, the frequency of such verification is reasonable. In respect of inventory lying with third parties, these have substantially been confirmed by them. The discrepancies noticed on verification between the physical stocks and the book records were not material.

3. In our opinion and according to the information and explanations given to us, the Company has not granted any loans, secured or unsecured, to companies, firms, limited liability partnerships or other parties covered in the register maintained under section 189 of the Act.

4. 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 Act, with respect to investments made, guarantees given and securities provided.

5. According to the information and explanations given to us, the Company has not accepted deposits from the public to which the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 of the Act and the rules framed thereunder apply.

6. According to the information and explanations given to us, the maintenance of cost records has not been prescribed by the Central Government under section 148(1) of the Act.

7. According to the information and explanations given to us and records of the Company examined by us, in our opinion:

a) the Company is generally regular in depositing the 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 services tax, cess, profession tax and other material statutory dues, as applicable, with the appropriate authorities and there are no undisputed amounts payable in arrears as at June 30, 2018 for a period of more than six months from the date they became payable.

b) there are no dues of income-tax, sales tax, service tax, duty of customs, duty of excise, value added tax and goods and services tax which have not been deposited with the appropriate authorities on account of any dispute, other than the following:

Name of Statute

Nature of Dues

Forum where Dispute is Pending

Period to which the Amount Relates*

Amount Involved (Rs. in lakhs)**

The Central Excise Act, 1944

Excise Duty

Appellate Authority -up to Commissioners/ Revisional authorities level

1994-95 to 1997-98, 2002-03 to 2016-17

30 416

Customs, Excise and Service Tax Appellate Tribunal

1994-95 to 1998-99, 2002-03 to 2007-08

164

High Court

1990-91

9

Supreme Court

2000-01

6

Sales Tax and Laws as per statutes applicable in various states

Sales Tax and VAT

Appellate Authority -up to Commissioners/ Revisional authorities level

1999-00 to 2016-17

4 463

Tribunal

1997-98, 1999-00, 2002-03, 2005-06 to 2010-11

36

High Court

2005-06

60

Customs Act, 1962

Customs Duty

Appellate Authority -up to Commissioners/ Revisional authorities level

2000-01, 2005-06, 2006-07, 2012-13

1 582

Tribunal

1995-96

27

Finance Act, 1994

Service Tax

Appellate Authority -up to Commissioners/ Revisional authorities level

2001-02, 2004-06, 2007-08 to 2015-16

2 626

Tribunal

2010-11 to 2013-14

81

* Period denotes the financial year April to March

** includes penalty and interest on taxes, wherever applicable

8. The Company has not taken any loans or borrowings from financial institutions, banks or government nor has issued any debentures.

9. The Company has not raised any money by way of initial public offer, further public offer (including debt instruments) or term loans during the year.

10. According to the information and explanations given to us, no fraud by the Company or on the Company by its officers or employees has been noticed or reported during the course of our audit.

11. According to the information and explanations given to us and based on our examination of the records, the Company has paid / provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.

12. In our opinion and according to the information and explanations given to us, the Company is not a Nidhi company.

13. According to the information and explanations given to us and based on our examination 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 the applicable accounting standards.

14. According to the information and explanations give to us and based on our examination of the records, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.

15. According to the information and explanations given to us and based on our examination of the records, the Company has not entered into any non-cash transactions with Directors or persons connected with him.

16. The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

For KALYANIWALLA & MISTRY LLP

CHARTERED ACCOUNTANTS

Firm Regn. No.: 104607W / W100166

Daraius Z. Fraser

Partner

M. No. 42454

Place : Mumbai

Date : August 23, 2018.

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