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Hindustan Unilever

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« Mar 15
Auditor's Report (Hindustan Unilever) Year End : Mar '16
We have audited the accompanying standalone financial statements of
 Hindustan Unilever Limited (the Company), which comprise the Balance
 Sheet as at 31 March 2016, the Statement of Profit and Loss and the
 Cash Flow Statement for the year ended on that date, and a summary of
 the significant accounting policies and other explanatory information.
 
 MANAGEMENT''S RESPONSIBILITY FOR THE STANDALONE FINANCIAL STATEMENTS
 
 The Company''s Board of Directors is responsible for the matters stated
 in sub-section 5 of Section 134 of the Companies Act, 2013 (the Act)
 with respect to the preparation of these standalone 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 principles generally accepted in India, including the
 Accounting Standards specified under Section 133 of the Act, read with
 Rule 7 of the Companies (Accounts) Rules, 2014 (the Rules).  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 financial
 statements that give a true and fair view and are free from material
 misstatement, whether due to fraud or error.
 
 AUDITORS'' RESPONSIBILITY
 
 Our responsibility is to express an opinion on these standalone
 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 in accordance with the Standards on Auditing
 specified under sub-section 10 of Section 143 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
 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 internal financial controls relevant
 to the Company''s preparation of the 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 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 standalone
 financial statements.
 
 OPINION
 
 In our opinion and to the best of our information and according to the
 explanations given to us, the aforesaid standalone 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, of the state of affairs of the Company as
 at 31 March 2016 and its profit and its cash flows for the year ended
 on that date.
 
 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 of India in exercise of
 powers conferred by sub-section 11 of section 143 of the Act, we
 enclose in Annexure A'' a statement on the matters specified in
 paragraphs 3 and 4 of the Order.
 
 2.  As required by sub-section 3 of Section 143 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, and the Cash
 Flow Statement dealt with by this Report are in agreement with the
 books of account.
 
 (d) In our opinion, the aforesaid standalone financial statements
 comply with the Accounting Standards specified under Section 133 of the
 Act, read with Rule 7 of the Rules.
 
 
 (e) On the basis of the written representations received from the
 Directors as on 31 March 2016 and taken on record by the Board of
 Directors, none of the Directors are disqualified as on 31 March 2016
 from being appointed as a Director in terms of sub-section 2 of Section
 164 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 and
 
 (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:
 
 1. The Company has disclosed the impact of pending litigations on its
 financial position in its financial statements - Refer Note 24 to the
 financial statements;
 
 2.  Provision has been made in the financial statements, as required
 under the applicable law or accounting standards, for material
 foreseeable losses, if any, on long-term contracts including derivative
 contracts-Refer Note 55 to the financial statements ; and
 
 3.  There has been no delay in transferring amounts, required to be
 transferred, to the Investor Education and Protection Fund by the
 Company.
 
 (i) (a) The Company has maintained proper records showing full
 particulars, including quantitative details and situation, of fixed
 assets.
 
 (b) The Company has a regular programme of physical verification of its
 fixed assets by which all fixed assets are verified in a phased manner
 over a period of two years. In accordance with this programme, a
 portion of the fixed assets has been physically verified by the
 management during the year and no material discrepancies have been
 noticed on such verification. In our opinion, this periodicity of
 physical verification is reasonable having regard to the size of the
 Company and the nature of its assets.
 
 (c) According to the information and explanations given to us, the
 title deeds of immovable properties, as disclosed in Note 12 to the
 standalone financial statements, are held in the name of the Company,
 except for the following:
 
                                               (Rs. in Crores)
 
 Particulars              Leasehold      Freehold     Buildings
                               Land          Land
 
 Gross block as at             0.72         1.35         81.21
 31 March 2016
 
 Net block as at 31            0.58         1.35         50.02 
 March 2016
 
 (ii) The inventory, except goods-in-transit, 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.
 
 (iii) In our opinion and according to 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.  Accordingly, paragraph 3(iii) of the Order is not applicable to
 the Company.
 
 (iv) The Company has not granted any loans or provided any guarantees
 or security to the parties covered under Section 185 of the Act. The
 Company has complied with the provisions of Section 186 of the Act in
 respect of investments made or loans or guarantee or security provided
 to the parties covered under Section 186.
 
 (v) The Company has not accepted any deposits from the
 
 public in accordance with the provisions of sections 73 to 76 of the
 Act and the rules framed there under.
 
 (vi) We have broadly reviewed the records maintained by the Company
 pursuant to the rules prescribed by Central Government for maintenance
 of cost records under sub section 1 of Section 148 of the Act and are
 of the opinion that prima facie, the prescribed accounts and records
 have been made and maintained. However, we have not made a detailed
 examination of the records.
 
 (vii) (a) According to the information and explanations given to us and
 the records of the Company examined by us, in our opinion, the Company
 is 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, cess,
 professional tax and other material statutory dues, as applicable, with
 the appropriate authorities.
 
 According to the information and explanations given to us, no
 undisputed amounts payable in respect of provident fund, employees
 state insurance, income tax, sales tax, service tax, duty of customs,
 duty of excise, value added tax, cess, professional tax and other mate
 rial statutory dues were in arrears as at 31 March 2016 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, Value added tax, Service tax,
 duty of customs, duty of excise which have not been deposited with the
 appropriate authorities on account of any dispute other than those
 mentioned in Annexure I to this report.
 
 (viii) As the Company does not have any loans or borrowings from any
 financial institution or bank or Government, nor has it issued any
 debentures, as at the balance sheet date the provisions of Clause
 3(viii) of the Order are not applicable to the Company.
 
 (ix) The Company has not raised any money by way of initial public
 offer, further public offer (including debt instruments) and term loans
 during the year. Accordingly, the provisions of Clause 3(ix) of the
 Order are not applicable to the Company.
 
 (x) According to the information and explanations given to us, no
 material fraud by the Company or on the Company by its officers or
 employees has been noticed or reported during the course of our audit.
 
 
 (xi) According to the information and explanations give 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.
 
 (xii) In our opinion and according to the information and explanations
 given to us, the Company is not a nidhi company. Accordingly, paragraph
 3(xii) of the Order is not applicable.
 
 (xiii) According to the information and explanations given to us and
 based on our examinations 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 financial statements as
 required under Accounting Standard (AS) 18, Related Party Disclosures
 specified under Section 133 of the Act, read with Rule 7 of the
 Companies (Accounts) Rules, 2014.
 
 (xiv) 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.
 
 (xv) According to the information and explanations given to us and
 based on our examination of the records, the Company has not entered
 into non-cash transactions with directors or persons connected with
 him. Accordingly, paragraph 3(xv) of the Order is not applicable.
 
 (xvi) The Company is not required to be registered under Section 4-5-IA
 of the Reserve Bank of India Act, 1934.  Accordingly, the provisions of
 Clause 3(xvi) of the Order are not applicable to the Company.
 
 
 Name of the Statute      Nature of dues            Amount     Amount
                                                  Demanded       Paid
                                             Rs. in crores     Rs. in 
                                                               crores
 
 The Central Excise       Excise duty
                          Including                116.57       4.86
 Act, 1994                Interest and
                          penalty, if
                          applicable
 
 The Central Excise       Excise duty
                          Including                 50.92       1.65
 Act                      Interest and 
                          penalty, if
                          applicable
 
 The Central Excise       Excise duty 
                          Including                  5.56         -
 Act                      Interest and 
                          penalty, if
                          applicable
 
 Customs Act, 1962        Custom Duty,               1.83       0.17
                          Including
                          Interest and
                          penalty, if
                          applicable
 
 Central Sales Tax        Sales tax 
                          (including                 95.58     29.99
 
 Act and Local Sales      interest and
                          penalty, 
 Tax Act                  as applicable)
 
 Central Sales Tax        Sales tax 
                         (including                 24.75      2.31
  
 Act and Local Sales      interest and
                          penalty, 
 Tax Act                  as applicable)
 
 Central Sales Tax        Sales tax 
                          (including               121.32     87.94
 Act and Local Sales      interest and
                          penalty, 
 Tax Act                  as applicable)
 
 Central Sales Tax        Sales tax
                          (including                35.87     20.77
 
 Act and Local Sales      interest and 
                          penalty, 
 Tax Act                  as applicable)
 
 Service tax (Finance     Service tax 
                          (including                97.73     1.50
 Act, 1994)               interest and 
                          penalty,
                          as applicable)
 
 Service tax (Finance     Service tax
                          (including                 8.07     0.55
 Act, 1994)               interest and 
                          penalty,
                          as applicable)
 
 Name of the Statute  Period to which the    Forum where dispute is 
                      amount relates         pending
 
 The Central Excise      1994-2016           Appellate Authority upto
                                             Commissioner''s level
 
 The Central Excise      1994-2014           Customs, Excise and
 Act                                         Service Tax Appellate
                                             Tribunals of various states
 
 The Central Excise      2003-2012           High Courts of various
 Act                                         states
 
 Cusoms ACt 1962         2011-2013           Appellate Authority upto
                                             Commissioner''s level
 
 Central Sales Tax       1985-2016           Appellate Authority upto
 Act and Loacal Slaes                        Commissioner''s level
 Tax ACt
 
 Central Sales TAX       1984-2016           Sales Tax Appellate
 aCT AND lOCAL sALES                         Tribunals of various states
 Tax Act
 
 Central Slaes TAX       1984-2016           High Courts of various
 aCT AND lOCAL sALES                         states
 tAX aCT
 
 Central Sales Tax       1985-2016           Supreme Court
 Act AND Loacl Sales   
 Tax ACt
 
 Service tax (Finance    2003-2016           Appellate Authority upto
 Act,1994)                                   Commissioner''s level
 
 Service tax (Finance    2003-04 & 2005-08   Tribunal (CESTAT)
 Act,1994)
 
                                             (Rs. in Crores)
 
 
 Name of the Statute    Nature of dues      Amount         Amount
                                            Demanded       Paid
                                            Rs. in crores  Rs. in crores
 
 Income Tax Act,        Income Tax 
                        Including            150.08            -
 1961                   interest and
                        penalty, as 
                        applicable
 
 Income Tax Act,        Income Tax 
                        Including              0.20            -
 1961                   interest and 
                        penalty, as 
                        applicable
 
 Income Tax Act,        Income Tax 
                        Including              0.06            -
 1961                   interest and
                        penalty,as
                        applicable
 
 
 
 Name of the statute    Period to which the   Forum where dispute is
                        amount relates        pending
 
 Income Tax Act,1961    1979 - 1980, 1991,    Appellate Authority -
                                              upto
                        AY 2007-08            Commissioner''s Level
 
                        AY 2008-09, 
                        AY 2010-11
 
 Income Tax Act,1961    1982-83               Income Tax Appellate
                                              Tribunal, Mumbai
 
 Income Tax Act,1961    1963-1964             Bombay High Court 
                        1982-1983
 
 
 
 
                                                For B S R & Co. LLP
 
                                                Chartered Accountants 
 
                                                Firm''s Registration 
 
                                                No: 101248W/W- 100022
 
 
 
                                                Akeel Master
 
                                                Partner
 
                                                Membership No: 046768
 
 
 
                                                Mumbai : 9 May 2016
Source : Dion Global Solutions Limited
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