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Godrej Consumer Products
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« Mar 13
Auditor's Report (Godrej Consumer Products) Year End : Mar '14
We have audited the accompanying financial statements of GODREJ CONSUMER
 PRODUCTS LIMITED (the Company), which comprise the Balance Sheet as
 at March 31, 2014, the Statement of profit and Loss and the Cash Flow
 Statement for the year then ended and a summary of significant
 accounting policies and other explanatory information.
 
 Management''s Responsibility for the Financial Statements
 
 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 sub-section (3C) of section 211
 of the Companies Act, 1956 (the Act) read with the General Circular
 15/2013 dated September 13, 2013, of the Ministry of Corporate Affairs
 in respect of section 133 of the Companies Act, 2013.  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.
 
 Auditor''s Responsibility
 
 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
 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 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 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 entity''s
 internal control. An audit also includes evaluating the appropriateness
 of accounting policies used and the reasonableness of the accounting
 estimates made by Management, as well as evaluating the overall
 presentation of the financial statements.
 
 We believe that the audit evidence we have obtained is suffcient and
 appropriate to provide a basis for our audit opinion.
 
 Opinion
 
 In our opinion and to the best of our information and according to the
 explanations given to us, the 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 March 31, 2014;
 
 b) in the case of the Statement of profit and Loss, of the profits 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 13(b) to the Financial Statements for the
 year ended March 31, 2014, regarding the Scheme of Amalgamation of the
 erstwhile Godrej Household Products Limited with the Company approved
 by The Hon''ble High Court of Judicature at Bombay, whereby an amount of
 Rs. 52.75 crore for the year ended March 31, 2014, equivalent to the
 amortisation of the Goodknight and Hit Brands is directly debited to
 the General Reserve Account instead of debiting the same to the
 Statement of profit and Loss. Had this amount been charged to the
 Statement of profit and Loss, the profit for the year ended March 31,
 2014, would have been lower by Rs. 52.75 crore and the General Reserve
 would have been higher by Rs. 52.75 crore.
 
 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 of India in terms of
 sub-section (4A) of section 227 of the Act, we give in the Annexure a
 statement on the matters specifed 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 purpose of our
 audit.
 
 b) In our opinion, proper books of account as required by law have been
 kept by the Company so far as appears from our examination of those
 books.
 
 c) The Balance Sheet, Statement of profit and Loss, and Cash Flow
 Statement dealt with by this Report are in agreement with the books of
 account.
 
 d) In our opinion, the Balance Sheet, Statement of profit and Loss, and
 Cash Flow Statement comply with the Accounting Standards notified under
 the Companies Act, 1956, read with the General Circular 15/2013 dated
 September 13, 2013, of the Ministry of Corporate Affairs in respect of
 section 133 of the Companies Act, 2013.
 
 e) On the basis of written representations received from the Directors
 as on March 31, 2014, and taken on record by the Board of Directors,
 none of the Directors is disqualified as on March 31, 2014, from being
 appointed as a Director in terms of clause (g) of sub-section (1) of
 section 274 of the Companies Act, 1956.
 
 Annexure to the Independent Auditors'' Report
 
 Referred to in paragraph 1 under the heading ''Report on Other Legal &
 Regulatory Requirements'' of our report of even date:
 
 1.  Fixed Assets:
 
 a) The Company has maintained proper records showing full particulars,
 including quantitative details and situation of fixed assets.
 
 b) The Company has a program for physical verifcation of fixed assets at
 periodic intervals. In our opinion, the period of verifcation is
 reasonable having regard to the size of the Company and the nature of
 its assets. The discrepancies reported on such verifcation are not
 material and have been properly dealt with in the books of account.
 
 c) In our opinion, there have been no significant disposals of fixed
 assets during the year which affect the going concern assumption.
 
 2.  Inventory:
 
 a) The Management has conducted physical verifcation of inventory
 (excluding stocks lying with third parties) at reasonable intervals. In
 respect of inventory lying with third parties, these have substantially
 been confrmed by them. In our opinion, the frequency of verifcation is
 reasonable.
 
 b) The procedures of physical verifcation of inventories followed by
 Management are reasonable and adequate in relation to the size of the
 Company and the nature of its business.
 
 c) The Company is maintaining proper records of inventory and no
 material discrepancies were noticed on verifcation between the physical
 stocks and the book records.
 
 3.  Loans and Advances:
 
 The Company has neither granted nor taken any loans, secured or
 unsecured, to / from companies, frms or other parties listed in the
 register maintained under section 301 of the Companies Act, 1956
 
 4.  In our opinion and according to the information and explanations
 given to us, there is an adequate internal control system commensurate
 with the size of the Company and the nature of its business, for the
 purchases of inventory, fixed assets and for the sale of goods and
 services. During the course of our audit, we have not observed any
 continuing failure to correct major weaknesses in the internal control
 system.
 
 5.  Transactions that need to be entered in the register maintained
 under section 301 of the Companies Act, 1956:
 
 a) Based upon the audit procedures applied by us and according to the
 information and explanations given to us, we are of the opinion that
 the particulars of contracts or arrangements referred to in section 301
 of the Companies Act, 1956, have been entered in the register required
 to be maintained under that section.
 
 b) In our opinion and according to the information and explanations
 given to us, the transactions made in pursuance of such contracts or
 arrangements entered in the register maintained under section 301 of
 the Companies Act, 1956 and exceeding the value of Rs. 500,000 in respect
 of any party during the year, have been made at prices which are
 reasonable, having regard to prevailing market prices at the relevant
 time.
 
 6.  In our opinion and according to the information and explanations
 given to us, the Company has not accepted any deposits from the public
 within the meaning of section 58A, 58AA, or any other relevant
 provisions of the Companies Act, 1956 and the rules framed there under.
 No order has been passed by the Company Law Board, or National Company
 Law Tribunal, or Reserve Bank of India, or any Court, or any other
 Tribunal.
 
 7.  In our opinion, the Company has an internal audit system
 commensurate with the size of the Company and nature of its business.
 
 8.  We have broadly reviewed the books of account and records
 maintained by the Company in respect of manufacture of products covered
 under the Rules made by the Central Government for maintenance of cost
 records, under section 209(l)(d) of the Companies Act, 1956 and are of
 the opinion that prima facie, the prescribed accounts and records have
 been made and maintained. We have not, however, made a detailed
 examination of the records with a view to determine whether they are
 accurate or complete.
 
 9.  Statutory Dues
 
 a) According to the information and explanation given to us, the
 Company is regular in depositing undisputed statutory dues, including
 dues pertaining to Investor Education and Protection Fund, Provident
 Fund, Employees'' State Insurance, Income-tax, Sales-tax, Wealth Tax,
 Service Tax, Custom Duty, Excise duty, Cess and any other statutory
 dues with the appropriate authorities. We have been informed that there
 are no undisputed dues which have remained outstanding as at the end of
 the financial year, for a period of more than six months from the date
 they became payable.
 
 b) According to the information and explanations given to us, there are
 no dues of income-tax, sales tax, wealth tax, service tax, customs
 duty, excise duty or cess outstanding on account of any dispute, other
 than the following:
 
 Name of Statute      Nature of Dues                      Amount
                                                           (Rs.)
 
 Central Excise 
 Act, 1944           Rate differences on account of      6,154,000
                     soap scrap.
 Central Excise Act, 
 1944                Duty on one to one correlation      1,912,132
                     in terms of excisable material      3,651,495
                     purchased and cleared fnal
                     product with reference to the
                     said material wherein the benefit
                     under notification No. 32 of 99,
                     availed
 
                     Valuation of Soap Noodles for     155,393,836
                     stock supplied by Malanpur
                     factory to Himachal Pradesh
                     factories
 
                     Valuation of mosquito repellant    55,307,174
                     refills to EMOX by GCPL
                     Foreign Payment Service Tax not    27,167,930
                     paid on Royalty.
 
                     Input Service tax Distribution      1,609,987
                     Credit availed
                     Advertisement Service - Credit      1,418,981
                     Availed As Input
                     Excise duty in dispute              1,755,920
 
                                                            86,115
 
                     Availment of Cenvat Credit on      64,146,884
                     goods received against EMOX.
 
                     Cenvat Credit availed on GTA        2,475,925
                     CENVAT credit on input services       543,416
                     availed based on the invoices
                     issued by suppliers to the
                     branches prior to registration.
 
 Central Excise Act, 
 1944                Allegations of non-                 6,174,082
                     manufacturing of shoe polish
                     brush
 
                     Others                                100,000
 
 
                                                           333,526
                                                           976,000
                                                           236,000
                                                            28,000
                                                           212,528
                                                           141,191
                                                           221,133
                                                           877,690
 
 
 Name of Statue       Period to which the  Forum where dispute is pending
                         amount relates
 
 Central Excise Act, 
 1944                     2000-04              CESTAT
 
 Central Excise Act, 
 1944                     2002-04          Supreme Court of India
 
                          2000-03          Supreme Court of India
 
                          2007-08 to       Appellate Tribunal
                          2010 - 11
 
                          2008 - 12        CESTAT
 
                          2004-08          Commissioner of Central 
                                           Excise (Appeals)
 
                          2006-08          Commissioner of Central
                                           Excise (Appeals)
 
                          2008-09          Commissioner of Central 
                                           Excise (Appeals)
 
                          2009-10          Commissioner of Central 
                                           Excise (Appeals)
                          2002-03
 
                          2007 - 2008      CESTAT
 
                          2006-08          Tribunal
 
                          2007-08 to       Commissioner of Central 
                                           Excise (Appeals)
                          2011 - 12
 
 Central Excise Act, 1944 2007- 12         Commissioner of Central 
                                           Excise (Appeals)
 
                          1996-99          Assistant Commissioner
 
                          2006-07          CESTAT
 
                          2007-08          CESTAT
 
                          2007-09          CESTAT
 
                          2007-09          CESTAT
 
                          2007-08          Sales Tax Authority
 
                          2008-09          CESTAT
 
                          2004             Commissioner of Central
                                           Excise (Appeals)
 
                          2006-07          CESTAT
 
 
 Name of Statute      Nature of Dues                      Amount
                                                           (Rs.)
 
 Central Sales 
 Tax Act,           Interest on sales tax dues.          1,207,000
 1956 and VAT 
 Acts of
                    Sales Tax Dues                       1,757,925
 various states
 
                    Sales Tax Dues                      10,641,000
 
                    Sales Tax Dues on account of        39,157,279
                    Classifcation Head
 
                    Sales Tax Dues on account of         6,340,450
                    Classifcation Head
 
                    Sales Tax Dues                       6,600,000
 
                    Sales Tax Dues on account of         4,947,927
                    Classifcation Head
 
 Central Sales 
 Tax Act,           Sales Tax Dues on account of         1,026,013
 1956 and VAT 
 Acts of            Classifcation Head
 various states
 
                    Sales Tax Dues on account of        25,809,827
                    Classifcation Head
 
                    Sales Tax Dues on account of        22,449,405
                    Classifcation Head
 
                    Sales Tax Dues on account of        16,838,252
                    Classifcation Head
 
                    Sales Tax Dues                      11,693,000
 
                    Sales Tax Dues on account of        16,580,938
                    Classifcation Head
 
                    Sales Tax Dues on account of         9,044,088
                    Classifcation Head
 
                    Sales Tax Dues on account of         7,171,983
                    Classifcation Head
 
                    Sales Tax Dues on account of         1,837,713
                    Classifcation Head
 
                    Sales Tax Dues                       6,935,724
 
                    Sales Tax Dues on account of         3,607,688
                    Classifcation Head
 
                    Non Submission of Form F             1,268,683
 
                    Sales Tax Dues                       1,000,585
 
                    Sales Tax Dues                       1,286,664
 
 Central Sales 
 Tax Act,           Sales Tax Dues                       1,567,028
 1956 and VAT 
 Acts of various 
 states
 
                    Sales Tax Dues                       1,465,192
 
                    Sales Tax Dues                         958,784
 
                    Sales Tax Dues                       3,073,427
 
                    Sales Tax Dues                     228,973,669
 
                    Sales Tax Dues                      86,380,815
 
                    Sales Tax Dues on account of        27,155,975
                    Classifcation Head
 
                    Sales Tax Dues                      63,651,140
                    Others                              18,736,205
 
 
 
 Name of Statue       Period to which the  Forum where dispute is pending
                         amount relates
 
 
 Central Sales Tax Act,
 1956 and VAT Acts of
 various states             2001-02        Chennai High Court
 
                            2006-07        Joint Commissioner (A)
 
                            2004-05        Appellate Revision Board
 
                            2006-07        Jaipur High Court
 
                            2007-08
 
                            2008-09
 
                            2003-04        Supreme Court
 
                            2004-05
 
                            2005-06
 
                            2005-06        Appellate Revision Board
 
                            2000-01        Bihar Tribunal
 
 Central Sales Tax Act,
 1956 and VAT Acts of
 various states             2000-01        Assessing Authority
 
                            2010-11        Andhra Pradesh High Court
 
                            2009-10        Andhra Pradesh High Court
 
                            2007-08        Allahabad High Court
 
                            2006-07        Deputy Commissioner
 
                            2005-06        Andhra Pradesh High Court
 
                            2006-07
 
                            2007-08
 
                            2008-09
 
                            2005-06        Andhra Pradesh High Court
 
                            2006-07
 
                            2007-08
 
                            2008-09
 
                            2001-02        Bihar Tribunal
 
                            2001-02        Assessing Authority
 
                            2002-03        Assessing Authority
 
                            2003-04
 
                            2004-05
 
                            2002-03        Bihar Tribunal
 
                            2004-05        Uttar Pradesh Tribunal
 
                            2005-2008      Orissa Tribunal
                            2003-04
 
                            2003-04        Deputy Commissioner (A)
 
 Central Sales Tax Act,
 1956 and VAT Acts of
 various states             2004-05        Deputy Commissioner (A)
 
                            2005-06
 
                            2006-07
 
                            2005-06        Joint Commissioner (A)
 
                            2005-06        Deputy Commissioner (A)
 
                            2006-07
 
                            2009-10        Assessing Authority
 
                            2010-12        Orissa Tribunal
 
                            2010-12        Orissa Tribunal
 
                            2012-14        Gujarat Tribunal
 
                            2011-13        Andhra Pradesh High Court
 
                            2002-2014      Uttar Pradesh Tribunal,
                                           Deputy Commissioner (A),
                                           Commissioner of Commercial 
                                           Taxes, Addt Commissioner (A),
                                           Jammu Tribunal, Assessing
                                           Authority, Madhya Pradesh High
                                           Court, Joint Commissioner (A),  
                                           Delhi Tribunal, West Bengal
                                           Tribunal, Addl. Commissioner
                                           (A), Mohali.
 
 
 
 Name of Statute      Nature of Dues                      Amount
                                                           (Rs.)
 
 Income-tax Act, 
 1961                Appeal against order of regular      348,000
                     assessment u/s 143(3) of the
                     Act.
 
                     Demand based on the order of       8,101,490
                     regular assessment u/s 143(3)
                     of the Act.
 
 Income-tax Act, 
 1961                Income-tax in dispute pertaining   3,266,327
                     to erstwhile Godrej Household
                     Products Limited.
 
                                                            4,658
 
                                                        2,534,092
 
                                                      109,478,059
 
 
 
 Name of Statue       Period to which the  Forum where dispute is pending
                         amount relates
 
 Income-tax Act, 1961 Assessment Year     Income - tax Appellate Tribunal
                      2003-04
 
                      Assessment Year     Income - tax Appellate Tribunal
                      2009-10
 
 Income-tax Act, 1961 Assessment Year     CIT (Appeal)
                      2005-06
 
                      Assessment Year     Income - tax Appellate Tribunal
                      2006-07
 
                      Assessment Year     Income - tax Appellate Tribunal
                      2007-08
 
                      Assessment Year     Income - tax Appellate Tribunal
                      2009-10
 
 10.  The Company does not have accumulated losses as at the end of the
 financial year, nor has it incurred cash losses in the current financial
 year, or in the immediately preceding financial year.
 
 11.  According to the information and explanations given to us and
 based on the documents and records produced before us, there has been
 no default in repayment of dues to banks or debenture holders. There
 are no dues to financial institutions.
 
 12.  According to the information and explanations given to us and
 based on the documents and records produced before us, the Company has
 not granted any loans or advances on the basis of security by way of
 pledge of shares, debentures or other securities.
 
 13.  In our opinion and according to the information and explanations
 given to us, the nature of activities of the Company does not attract
 any special statute applicable to chit fund and nidhi / mutual benefit
 fund / societies.
 
 14.  The Company does not deal or trade in shares, securities,
 debentures and other investments.
 
 15.  According to the information and explanations given to us and the
 records examined by us, the terms and conditions of guarantees given by
 the Company for loans taken by its subsidiaries from banks are not
 prima facie prejudicial to the interest of the Company.
 
 16.  According to the information and explanations given to us and the
 records examined by us, on an overall basis, the Company has not
 availed of any term loan.
 
 17.  According to the information and explanations given to us and on
 an overall examination of the Balance Sheet, the Cash Flow Statement
 and other records examined by us, the Company has used funds raised on
 short term basis for long term investment to the extent of Rs. 118.64
 crore. This is primarily on account of funds available from trade
 credit being applied towards non-current assets as the Company operates
 on negative working capital.
 
 18.  The Company has not made any preferential allotment of shares to
 any parties or companies covered in the register maintained under
 section 301 of the Companies Act, 1956.
 
 19.  The Company has not issued any debentures during the year.
 
 20.  The Company has not raised any money through a public issue during
 the year.
 
 21.  Based upon the audit procedures performed by us, to the best of
 our knowledge and belief and according to the information and
 explanations given to us by the Management, no fraud on, or by the
 company, has been noticed or reported during the year.
 
 For and on behalf of KALYANIWALLA & MISTRY 
 CHARTERED ACCOUNTANTS 
 Firm Regn. No.: 104607W
 
 ROSHNI MARFATIA
 
 PARTNER
 
 M. No.: 106548
 
 Mumbai: April 28, 2014.
 
Source : Dion Global Solutions Limited
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