Report on the Financial Statements
We have audited the accompanying financial statements of Emami Limited
(the Company) which comprise the Balance Sheet as at 31st March
2013, and the Statement of Profit and Loss and the Cash Flow Statement
for the year ended on that date 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.
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 of
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 judgement, 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
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 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
i) In the case of the Balance Sheet, of the State of affairs of the
Company as at 31st March, 2013
ii) In the case of the Statement of Profit and Loss, of the Profit for
the year ended on that date; and
iii) In the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
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 & 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
b) In our opinion proper books of accounts as required by law have been
kept by the Company so far as appears from our examination of such
c) The Balance Sheet, Statement of Profit & Loss & Cash Flow Statement
referred to in this report are in agreement with the books of accounts.
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.
1. a. The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
b. The fixed assets were physically verified during the year by the
management in accordance with a program of verification, covering all
fixed assets over a period of three years, which in our opinion
provides for physical verification of all the fixed assets at
reasonable intervals. According to the information and explanations
given to us, no material discrepancies were noticed on such
c. Fixed assets disposed of during the year were not substantial and
therefore, do not affect the going concern assumption.
2. a. As explained to us, 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 are reasonable and adequate in relation to
the size of the Company and 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
inventory. The discrepancies noted on physical verification of stocks
as compared to book records were not significant and the same has been
properly dealt with in the books of accounts.
3. The Company has neither granted nor taken any loans, secured or
unsecured to/from companies, firms or other parties covered in the
register maintained under section 301 of the Companies Act, 1956.
Accordingly, clauses (iii) (b), (iii)(c), (iii)(d), (iii)(f) and
(iii)(g) of paragraph 4 of the Order are not applicable.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business for the purchase of inventory and fixed assets and for the
sale of goods. We have not observed any continuing failure to correct
major weaknesses in the internal control system.
5. a. According to the information and explanations given to us,
particulars of contracts or agreements that needed to be entered into
the register maintained under section 301 of the Companies Act, 1956,
have been so entered.
b. According to the information and explanations given to us, the
Company has entered into a transaction in pursuance of such contracts
or arrangements in respect of a party listed in the register maintained
under section 301of the Companies Act, 1956 at prices which are
reasonable having regard to the prevailing market prices at the
6. The Company has not accepted any deposits as defined under section
58A & 58AA or other relevant provisions of the Companies Act, 1956.
7. In our opinion, the Company has an adequate internal audit system
commensurate with the size and nature of its business.
8. We have broadly reviewed the books of account maintained by the
Company pursuant to the rules prescribed 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.
9. According to the information and explanations given to us in
respect of statutory and other dues:
a. The Company has been regular in depositing undisputed statutory
dues, including Provident Fund, Investor Education and Protection Fund,
Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service
Tax, Customs Duty, Excise Duty, Cess and other Statutory dues with the
appropriate authorities during the year According to the information
and explanations given to us, there were no undisputed amount payable
in respect of these statutory dues which have remained outstanding as
at 31st March, 2013 for a period of more than six months from the date
they became payable
b. Contingent dues on account of Sales Tax, Income Tax, Customs Duty,
Wealth Tax, Service Tax, Excise Duty, Cess disputed by the Company and
not being paid vis-a-vis forums where such disputes are pending are
10. The Company does not have accumulated losses as at the end of the
year and the Company has not incurred cash losses during the current
and the immediately preceding financial year.
11. Based on our audit procedures and on the basis of information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in the repayment of dues to financial
institution and banks.
12. According to the information and explanations given to us, the
Company has not granted loans and advances on the basis of security by
way of pledge of shares, debentures and other securities.
13. According to the information and explanations given to us, the
Company is not dealing or trading in shares, securities, debentures and
14. According to the information given to us, the Company has given
guarantees for loan taken by subsidiaries from banks. Total value of
outstanding guarantee amounts to H 51.50 Crores.
15. To the best of our knowledge and belief and according to the
information and explanations given to us, term loans availed by the
Company were applied by the Company for the purposes for which the
loans were obtained.
16. According to information and explanation given to us and on an
overall examination of Balance Sheet, we report that funds raised on
short-term basis have not been used during the year for long-term
17. The Company has not made any preferential allotment of shares to
parties and companies covered in the Register maintained under section
301 of the Companies Act, 1956, during the year and hence the question
of whether the price at which shares have been issued is prejudicial to
the interest of the Company does not arise.
18. The Company has not issued any secured debentures during the year.
19. The Company has not raised any money by way of public issue during
20. To the best of our knowledge and belief and according to the
information and explanations given to us, no fraud on or by the Company
was noticed or reported during the year.
For, S. K. AGRAWAL & COMPANY
Registration No- 306033E
S. K. AGRAWAL
6th May 2013 Membership No:9067