1. We have audited the attached Balance Sheet of Gillette India
Limited (the Company), as at June 30, 2012, the Statement of
Profit and Loss and the Cash Flow Statement of the Company for the Year
ended on that date, both annexed thereto. These financial statements
are the responsibility of the Company''s Management. Our
responsibility is to express an opinion on these financial statements
based on our audit.
2. We conducted our audit in accordance with the auditing standards
generally accepted in India. These Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatements. An audit
includes examining, on a test basis, evidence supporting the amounts
and the disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by the Management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
3. Attention is invited to:
(i) Note 36(a) to the financial statements regarding the re-appointment
of the Managing Director of the Company which is subject to approval by
the Central Government as required by sub-section (4) of Section 316 of
the Companies Act, 1956, and the Members at the ensuing Annual General
Meeting of the Company.
(ii) Note 36(b) to the financial statements, regarding the excess
commission provided but not paid to the Non-Executive Directors
amounting to Rs. 48 24 905 (including service tax of Rs. 9 88 800), which
is subject to the approval of the Members at the ensuing Annual General
Meeting of the Company and the Central Government.
4. As required by the Companies (Auditors'' Report) Order, 2003
(CARO) issued by the Central Government of India in terms of Section
227(4A) of the Companies Act, 1956, we enclose in the Annexure, a
statement on the matters specified in paragraphs 4 and 5 of the said
5. Further to our comments as stated in paragraphs 3 and the Annexure
referred to in Paragraph 4 above, we report as follows:
(a) we have obtained all the information and explanation 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 dealt with by this report are in compliance
with the Accounting Standards referred to in Section 211 (3C) of the
Companies Act, 1956;
(e) in our opinion and to the best of our information and according to
the explanations given to us, the said accounts give the information
required by the Companies Act, 1956, in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India:
(i) in the case of the Balance Sheet, of the state of affairs of the
Company as at June 30, 2012;
(ii) in the case of the Statement of Profit and Loss, of the profit of
the Company for the Year ended on that date; and
(iii) in the case of the Cash Flow Statement, of the cash flows of the
Company for the Financial Year ended on that date.
6. On the basis of written representations received from the Directors
as on June 30, 2012 and taken on record by the Board of Directors, none
of the Directors is disqualified as on June 30, 2012 from being
appointed as a director in terms of Section 274(1 )(g) of the Companies
Annexure to the Auditor''s Report
(Referred to in paragraph 4 of our report of even date)
(i) Having regard to the nature of the Company''s business/
activities/result, clauses vi, x, xi, xii, xiii, xiv, xv, xvi, xviii,
xix and xx of CARO are not applicable.
(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 fixed assets were physically verified during the Year by the
Management in accordance with a regular programme of verification,
which in our opinion provides for physical verification of all the
fixed assets within an interval of three years. 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 inventory:
a. As explained to us, the inventories were physically verified by the
Management at reasonable intervals during the period.
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) In our opinion, the Company has an adequate internal audit system
commensurate with the size and the nature of its business.
(viii) 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
Companies Act, 1956 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.
(ix) 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, Custom 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 Income-tax,
Custom Duty, Excise Duty, Cess and other material statutory dues in
arrears as at June 30, 2012, for a period of more than six months from
the date they became payable.
c. Details of Excise Duty, Service Tax, Sales tax and Custom Duty
which have not been deposited as on June 30, 2012 on account of
disputes are given below:
Statute Nature Forum where Period to which Amount
of the dispute the amount involved
dues is pending relates (Rs.)
The Central Excise Appellate Nov''94 - May''96, 829689387
Excise Act, duty Authority -
upto Sep''95 - Nov''95,
Revisional July - 1997,
level Apr''02 - Jan''03,
Apr''04 - Sep''04,
Dec''04 - Sep''07,
Apr''08 - Jan''12,
Sep''09 - Mar''ll
Appellate Apr''94 - Sep''96 14232540
Authority - Nov''96 - May''98
High Court 1991 891574
Finance Service Appellate 2001-02, 4954606
Act, 1994 tax Authority -
upto Jan''04 - Dec''04,
Commissioners/ Apr''05 - Mar''06,
Revisional Apr''05 - Sep''05
Customs Custom Appellate May''05 - Dec''06 157600562
Act, 1962 Duty Authority -
Excise 1996 2653495
Sales Tax Sales
Tax Appellate 1997-1998 to 215273908
Laws as Authority -
in various authorities
states Appellate 1997-1998, 15339400
Authority - 1999-2000,
Tax High Court April 2011 to 27185357
Pradesh Tax June 2012
on Entry of
The above excludes disputed unpaid Excise demands of Rs. 293896485 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 Income Tax
and Cess during the year.
(x) According to the information and explanations given to us and on an
overall examination of the Balance Sheet of the Company, we report that
the funds raised on short term basis have not been used during the year
for long term investment.
(xi) 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 23, 2012 (Membership No. 038568)