Report on the Financial Statements
We have audited the accompanying financial statements of Gillette India
Limited (the Company), which comprise the Balance Sheet as at June
30, 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 referred to in Section 211
(3C) of the Companies Act, 1956 (the Act) 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.
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 the
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 the 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
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit 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 June 30, 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.
Emphasis of Matter
We draw attention to Note 36 (b) to the financial statements regarding
the excess commission provided but not paid to the Non-Executive
Directors amounting to Rs. 24 lakhs (including service tax ofRs. 3
lakhs), which is subject to the approval of the Members at the ensuing
Annual General Meeting of the Company and the Central Government.
Further, as reported for the previous year ended June 30, 2012, the
Company had provided excess commission amounting to Rs. 48 lakhs
(including service tax of Rs. 10 lakhs) which was since ratified by the
Members of the Company at the 28th Annual General Meeting of the
Company and paid during the current year, the application for which is
as yet pending for approval with the Central Government.
Our opinion is not qualified in respect of this matter.
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
(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
(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
referred to in Section 211 (3C) of the Act.
(e) On the basis of the written representations received from the
directors as on June 30. 2013 taken on record by the Board of
Directors, none of the directors is disqualified as on June 30, 2013
from being appointed as a director in terms of Section 274( l)(g) of
(i) Having regard to the nature of the Company''s business/
activities/results during the year, clauses x, xi. xii, xiii, xiv, xv,
xvi, xviii, xix and xx of paragraph 4 of the Order are not applicable
to the Company.
(ii) 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 Company has a program of verification of fixed assets to cover
all the items in a phased manner 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 program, certain fixed assets
were physically verified by the Management during the year. 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.
(iii) In respect of its inventories:
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
(iv) 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.
(v) In our opinion and according to the information and explanations
given to us, having regard to the explanations that some of the items
purchased are of special nature and suitable alternative sources are
not readily available for obtaining comparable quotations, 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 and fixed assets and the sale of goods and services. During
the course of our audit, we have not observed any major weakness in
such internal control system.
(vi) According to the information and explanations given to us, there
are no contracts or arrangements, the particulars of which needs to be
entered in the register maintained in pursuance of Section 301 of the
Companies Act, 1956.
(vii) According to the information and explanations given to us, the
Company has not accepted any deposit from the public during the year
within the meaning of the provisions of Sections 58A & 58AA or any
other relevant provisions of the Companies Act, 1956. There are no
unclaimed deposits as at the year end.
(viii) In our opinion, the Company has an adequate internal audit
system commensurate with the size and the nature of its business.
(ix) 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
Act 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.
(x) According to the information and explanations given to us, in
respect of statutory dues:
a. The Company has generally been regular in depositing undisputed
statutory dues, including Provident Fund, Investor Education and
Protection Fund. Employees'' State Insurance, Income-tax, Sales Tax,
Service Tax, Customs Duty, Excise Duty, Cess and other material
statutory dues as applicable to it with the appropriate authorities.
The provisions relating to Wealth Tax are not applicable to the
b. There were no undisputed amounts payable in respect of Provident
Fund, Investor Education and Protection Fund, Employees'' State
Insurance, Customs Duty, Excise Duty, Cess and other material statutory
dues in arrears as at June 30, 2013, for a period of more than six
months from the date they became payable except of Income-tax and Sales
The above excludes disputed unpaid Excise demands of Rs. 2 934 lakhs
raised by the authorities on the third parties with whom the company
has business transactions/ contractual obligation.
There were no disputed dues remaining unpaid in respect of Cess during
(xi) In our opinion and according to the information and explanations
given to us, and on an overall examination of the Balance Sheet of the
Company, we report that funds raised on short-term basis have, prima
facie, not been used during the year for long-term investment.
(xii) 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 DELOITTE HASKINS & SELLS
(Firm Registration No. 117366W)
K. A. Katki
MUMBAI, August 06, 2013 (Membership No. 038568)