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Godrej Consumer Products
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Auditor's Report (Godrej Consumer Products) Year End : Mar '13
Report on the Financial Statements
 
 We have audited the accompanying financial statements of GODREJ
 CONSUMER PRODUCTS LIMITED (the Company), which comprise the
 Balance Sheet as at March 31, 2013, 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). 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.
 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 sufficient 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, 2013;
 
 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 the Note 13 to the Financial Statements for the
 year ended March 31, 2013, 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 on March 31, 2013, 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 on March
 31, 2013, 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 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 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 referred to in
 sub-section (3C) of section 211 of the Companies Act, 1956.
 
 e) On the basis of written representations received from the Directors
 as on March 31, 2013, and taken on record by the Board of Directors,
 none of the Directors is disqualified as on March 31, 2013, 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
 
 As required by the Companies (Auditor''s Report) Order, 2003, as
 amended by the Companies (Auditor''s Report) (Amendment) Order, 2004,
 issued by the Central Government of India in terms of section 227 (4A)
 of the Companies Act, 1956, we further report that:
 
 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 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) 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 verification of inventory
 (excluding stocks lying with third parties) at reasonable intervals. In
 respect of inventory lying with third parties, these have substantially
 been confirmed by them. In our opinion, the frequency of verification
 is reasonable.
 
 b) The procedures of physical verification of inventories followed by
 the 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 verification between the
 physical stocks and the book records.
 
 3.  Loans and Advances:
 
 a) The Company has granted unsecured loan to a company listed in the
 register maintained under section 301 of the Companies Act, 1956. The
 maximum amount involved during the year was Rs. 7.18 crore and the
 closing balance amounted to Rs. Nil.
 
 b) In our opinion, the rate of interest and other terms and conditions
 on which the unsecured loan had been granted to the company listed in
 the register maintained under section 301 of the Companies Act, 1956,
 are not prima facie prejudicial to the interest of the Company.
 
 c) The Company to whom the Company had granted the loan has repaid the
 principal amount as well as the interest as stipulated.
 
 d) There is no overdue amount of loans granted to companies / parties
 listed in the register maintained under Section 301 of the Companies
 Act, 1956.
 
 e) The Company has not taken any loans, secured or unsecured, from
 companies, firms or other parties covered 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 Organic and
 Inorganic Chemicals and Engineering machinery (Including electrical and
 electronic products) pursuant to the Rules made by the Central
 Government for maintenance of cost records, under section 209(1)(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. To the best of our
 knowledge and according to the information given to us, the Central
 Government has not prescribed maintenance of cost records under section
 209(1)(d) of the Companies Act, 1956, for any other products of the
 Company.
 
 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 soap                         6,154,000
                              scrap
 
                              Duty on one to one 
                              correlation in terms            1,912,132
                              of excisable material 
                              purchased and                   3,651,495
                              cleared final product with
                              reference to the said 
                              material wherein the benefit
                              under notification No. 32 
                              of 99, availed
 
                              Foreign Payment Service 
                              Tax not paid                   27,167,930
                              on Royalty
 
                              Input Service tax 
                              Distribution Credit             1,609,987
                              availed
 
                              Advertisement Service - 
                              Credit Availed                  1,418,981
                              As Input
 
                              Excise duty in dispute          1,755,920
 
                                                                 86,115
 
                              Availment of Cenvat Credit 
                              on goods                       64,146,884
                              received against EMOX
 
                              Cenvat Credit availed on GTA    2,475,925
 
                              Others                            100,000
 
                                                                333,526
 
                                                                976.000
 
                                                                236.000
 
                                                                 28,000
 
                                                                212,528
 
                                                                141,191
 
                                                                221,133
 
 Income-tax Act, 1961         Appeal against order of regular   348,000
                              assessment u/s 143(3) of the Act.
 
                              Appeal against order of 
                              regular                        32,271,365
                              assessment u/s 143(3) of the 
                              Act.
 
                              Demand based on the order 
                              of regular                      8,101,490
                              assessment u/s 143(3) of the
                              Act.
 
                              Income-tax in dispute 
                              pertaining to                  26,762,680
                              erstwhile Godrej Household 
                              Products Limited.              10,621,809
 
 
 Name of Statute          Period to which the   Forum where dispute 
                                                is pending
                          amount relates
 
 Central Excise Act 1944  2000-04               CESTAT
 
                          2002-04               Supreme Court of India
 
                          2000-03               Supreme Court of India
 
                          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
                          2002-03              (Appeals)
 
                          2007-08               CESTAT
 
                          2008-09
 
                          2006-08               Tribunal
 
                          1996-99               Assistant Commissioner
 
                          2006-07               CESTAT
 
                          2007-08               CESTAT
 
                          2007-09               CESTAT
 
                          2007-09               CESTAT
 
                          2007-08               Sales Tax Authority
 
                          2008-09               CESTAT
 
                          2004-05               Commissioner of Central
                                                Excise (Appeals)
 
 Income Tax Act 1961      Assessment Year 
                          2003-04               Income-tax Appellate 
                                                Tribunal
 
                          Assessment Year 
                          2006-07               Income-tax Appellate 
                                                Tribunal
 
                          Assessment Year 
                          2009-10               CIT (A)
 
                          Assessment Year
                          2006-07               Income-tax Appellate 
                                                Tribunal
 
                          Assessment Year 
                          2007-08               Income-tax Appellate
                                                Tribunal
 
 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 not used funds raised
 on short term basis for long term investment.
 
 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 issued unsecured redeemable non-convertible
 debentures during the year in respect of which no security is required
 to be created.
 
 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
 
 DARAIUS Z. FRASER
 
 Partner
 
 M. No.: 42454
 
 Mumbai: April 30, 2013.
Source : Dion Global Solutions Limited
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