Mar 31, 2023
REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS
Opinion
We have audited the standalone financial statements of Hindustan Unilever Limited (the "Company") which comprise the standalone balance sheet as at 31st March, 2023, and the standalone statement of profit and loss (including other comprehensive income), standalone statement of changes in equity and standalone statement of cash flows for the year ended 31st March, 2023, and notes to the standalone financial statements, including a summary of significant accounting policies and other explanatory information.
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 Companies Act, 2013 ("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 31st March, 2023, and its profit and other comprehensive loss, changes in equity and its cash flows for the year ended on that date.
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditor''s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the standalone financial statements.
Key audit matters are those matters that, in our professional judgement , were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
The key audit matter |
How the matter was addressed in our audit |
⢠Examining historical rebate accrual together with our understanding of current year developments to form an expectation of the rebate accrual as at year end and comparing this expectation against the actual rebate accrual, completing further inquiries and obtaining underlying documentation, on a sample basis, as appropriate. Further, we also performed retrospective review to evaluate the precision with which management makes estimates. ⢠Checking completeness and accuracy of the data used by the Company for accrual of discounts and rebates. ⢠Testing actualisation of estimated accruals on a sample basis. ⢠Testing a selection of rebate accruals recorded after 31st March, 2023 and assessing whether the accrual is recorded in the correct period. ⢠Testing a selection of payments made after 31st March, 2023 and where relevant, comparing the payment to the related rebate accrual. ⢠Critically assessing manual journal entries posted to revenue, on a sample basis, to identify unusual items and examining the underlying documentation. |
|
Impairment assessment of Food & Refreshment Cash Generating Unit (F&R CGU) |
|
See Note 4 to standalone financial statements |
|
The key audit matter |
How the matter was addressed in our audit |
As disclosed in note 4 to the standalone financial statements, |
Our audit procedures included: |
the F&R CGU includes ?17.301 crores of goodwill and ?27.210 |
|
crores of indefinite life intangible assets which together |
⢠Understanding the process followed by the Company in |
represents 62% of total assets of the Company as at 31st |
respect of the annual impairment analysis for F&R CGU. |
March, 2023. |
⢠Evaluating the design and implementation and testing the |
The recoverable value of the F&R CGU which is based on |
operating effectiveness of key internal controls related to |
the value in use model, has been derived from discounted |
the Company''s process relating to review of the annual |
cash flow model. This model requires the Company to make |
impairment analysis, including controls over determination |
significant assumptions such as discount rate, near and |
of discount rate, near and long-term revenue growth rate and |
long-term revenue growth rate and projected margins which |
projected margins. |
involves inherent uncertainty since they are based on future |
⢠Challenging the reasonableness of the assumptions, |
business prospects and economic outlook. |
particularly forecasted revenue growth rate and margins |
Due to the materiality of above assets in context of the |
based on our knowledge of the Company and market. |
standalone financial statements and sensitivity of discount |
Assessing historical accuracy by comparing past forecasts to |
rate and near and long-term revenue growth rate assumptions |
actual results achieved. |
where a minor change could have a significant impact on |
⢠Involving the valuation professionals with specialised skills |
the recoverable value, we have considered the impairment |
and knowledge to assist in evaluating the impairment model |
assessment of F&R CGU to be a key audit matter. |
used and assumptions (including discount rate and longterm sales growth rate applied by the Company by comparing it to a range of rates that were independently developed using publicly available market indices and market data for comparable entities). Applying additional sensitivities to assess the reasonableness of the above key assumptions. ⢠Testing data used to develop the estimate for completeness and accuracy. ⢠Performing a sensitivity analysis to evaluate the impact of change in key assumptions individually or collectively to the recoverable value. ⢠Evaluating the adequacy of the Company''s disclosures in the standalone financial statements in respect of its impairment testing. |
Revenue recognition - Discounts and rebates See Note 25 to standalone financial statements |
|
The key audit matter |
How the matter was addressed in our audit |
As disclosed in note 25 to the standalone financial statements, |
Our audit procedures included: |
revenue is measured net of any trade discounts and volume rebates to customers ("discounts and rebates"). |
⢠Understanding the process followed by the Company to |
determine the amount of accrual for discounts and rebates. |
|
Certain discounts and rebates for goods sold during the year are only finalised when the precise amounts are known, |
⢠Evaluating the design and implementation and testing |
and revenue therefore includes an estimate of variable |
operating effectiveness of Company''s general IT controls, |
consideration. The variable consideration represents the |
key manual and application controls over the Company''s |
portion of discounts and rebates that are not directly deducted |
IT systems including controls over rebates agreements |
on the invoice and involves estimation by the Company |
/ arrangements, rebate payments / settlements and |
in recognition and measurement of such discounts and |
Company''s review over the rebate accruals. |
rebates. This includes establishing an accrual at year end, |
⢠1 nspecting on a sample basis, key customer contracts. |
particularly in arrangements with customers involving varying |
Based on the terms and conditions relating to discounts |
terms which are based on annual contracts or shorter-term |
and rebates, assessing the Company''s revenue recognition |
arrangements. In addition, the value and timing of promotions for products varies from period to period, and the activity can span beyond the year end. The unsettled portion of the |
policies with reference to the requirements of the applicable accounting standards. |
variable consideration results in discounts and rebates due to |
⢠Performing substantive testing by selecting samples of |
customers as at year end. |
discounts and rebates transactions recorded during the year as well as period end discounts and rebates accruals and |
Therefore, there is a risk of revenue being overstated due to |
matching the parameters used in the computation with the |
fraud through manipulation of discounts and rebates accruals recognised, resulting from pressure the Company may feel to achieve performance targets at the year end. |
relevant source documents. |
We identified the evaluation of accrual for discounts and rebates as a key audit matter. |
Provisions and contingent liabilities relating to taxation, litigations and claims See Note 21 and 24 to standalone financial statements
The key audit matter How the matter was addressed in our audit
The provisions and contingent liabilities relate to ongoing Our audit procedures included:
litigations and claims with various authorities and third , , ,,,,,,
parties. These relate to direct tax, indirect tax, transfer ⢠Understandmgthe process fo^wed by the C°mpany f°r
pricing arrangements, claims, general legal proceedings, assessment and dete^rnot⢠of the amount of
environmental issues and other eventualities arising in the a"d contingent liabilities relating to taxation, litigations and
regular course of business. .
As at 31st March, 2023, the amounts involved are significant. ⢠Evaluating design and , implementation and testing The determination of a provision or contingent liability operating effecbvenew of key internal controls araund
requires significant judgement by the Company because the recognit''on and ^ure^m of provisions and re
assessment of contingent liabilities.
of the inherent complexity in estimating future costs. The
amount recognised as a provision is the best estimate of the ⢠Involving our tax professionals with specialised skills and
expenditure. The provisions and contingent liabilities are knowledge to assist in the assessment of the value of
subject to changes in the outcomes of litigations and claims significant provisions and contingent liabilities relating to
and the positions taken by the Company. taxation matters, on sample basis, in light of the nature
It involves significant judgement and estimation to of the exposures, applicable regulations and related
determine the likelihood and timing of the cash outflows correspondence with the authorities.
and interpretations of the legal aspects, tax legislations and ⢠Inquiring the status in respect of significant provisions and
judgements previously made by authorities. contingent liabilities with the Company''s internal tax and
legal team, including challenging the assumptions and critical judgements made by the Company which impacted the computation of the provisions and inspecting the computation.
⢠Assessing the assumptions used and estimates of outcome and financial effect, including considering judgement of the Company, supplemented by experience of similar decisions previously made by the authorities and, in some cases, relevant opinions given by the Company''s advisors.
⢠Testing data used to develop the estimate for completeness and accuracy.
⢠Evaluating judgements made by the Company by comparing the estimates of prior year to the actual outcome.
⢠Evaluating the Company''s disclosures in the standalone financial statements in respect of provisions and contingent liabilities.
Other Information and describe actions applicable under the applicable laws
and regulations.
The Company s Management and Board of Directors are
responsibie for the ^en^rm^n. Theother information Management''s and Board of Directors'' Responsibilities
compn^ the m^mat,^ mduded m the annual rep^, for the Standalone Financial Statements
but does not include the financial statements and auditor s
report thereon. The annual report is expected to be made The Company s Management and Board of Direct°rs are available to us after the date of this auditor''s report. responsible for tire matters stated in Sectori 134(5) of tire
Act with respect to the preparation of these standalone Our °pini°n on tire standalone financial statements does financial statements that give a true and fair view of the not cover tire other mfo^ti^ and we wU not express any state of affairs, profit/ loss and other comprehensive form of assurance c°nclusi°n thereon. income, changes in equity and cash flows of the Company
In connection with our audit of the standalone financial in accordance with tine (acc^tmg pmcip^ gei^raUy statements, our responsibility is to read the other accepted m |ndia, including the |ndian Accountmc| information identified above when it becomes available Standards (Ind AS) specified under Secti°n 133 of the Act. and, in doing so, consider whether the other information This responsibility also mchjde:; maintenance of adequate is materially inconsistent with the standalone financial accounting records in acc°rdance with the pr°visi°ns of the statements or our knowledge obtained in the audit, or Act for safeguarding of the assets of the Company and for otherwise appears to be materially misstated. preventing and detecting frauds and other irregularities;
selection and application of appropriate accounting When we read the annual rep°rt, if we c°nclude that there policies; making judgements and estimates that are is a material misstatement therein, we are required to reasonable and prudent; and design, implementation and communicate the matter to those charged with g°vernance 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 standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, the Management and Board of Directors are responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors is also responsible for overseeing the Company''s financial reporting process.
Auditor''s Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs, we exercise professional judgement and maintain professional skepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3) (i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Management and Board of Directors.
⢠Conclude on the appropriateness of the Management and Board of Directors use of the going concern basis of accounting in preparation of standalone financial statements and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the
Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2020 ("the Order") issued by the Central Government of India in terms of Section 143(11) of the Act, we give in the "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
2 A. As required by Section 143(3) 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 standalone balance sheet, the standalone statement of profit and loss (including other comprehensive income), the standalone statement of changes in equity and the standalone statement of cash flows 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 Ind AS specified under Section 133 of the Act.
e. On the basis of the written representations received from the directors as on 31st March, 2023 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2023 from being appointed as a director in terms of Section 164(2) of the Act.
f. With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B".
B. 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:
a. The Company has disclosed the impact of pending litigations as at 31st March, 2023 on its financial position in its standalone financial statements - Refer Note 21 and 24 to the standalone financial statements.
b. The Company did not have any long-term contracts for which there were any material foreseeable losses. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses on derivative contracts - Refer Note 46 to the standalone financial statements.
c. There is an instance of delay of 15 days in transferring an amount of ?1 crore pertaining to Unpaid dividend required to be transferred during the year, to the Investor Education and Protection Fund by the Company.
d (i) The management has represented that, to the best of it''s knowledge and belief, as disclosed in the Note 7(3) to the standalone financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(ii) The management has represented that, to the best of it''s knowledge and belief, as disclosed in the Note 7(3) to the standalone financial
statements, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Parties ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(iii) Based on the audit procedures performed that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11 (e), as provided under (i) and (ii) above, contain any material misstatement.
e. The final dividend paid by the Company during the year, in respect of the same declared for the previous year is in accordance with Section 123 of the Act to the extent it applies to payment of dividend.
The interim dividend declared and paid by the Company during the year and until the date of this audit report is in compliance with Section 123 of the Act.
As stated in Note 36 to the standalone financial statements, the Board of Directors of the Company has proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The dividend declared is in accordance with Section 123 of the Act to the extent it applies to declaration of dividend.
f. As proviso to rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable for the Company only with effect from 1st April, 2023, reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 is not applicable.
C. With respect to the matter to be included in the Auditor''s Report under Section 197(16) of the Act:
In our opinion and according to the information and explanations given to us, the remuneration paid by the Company to its directors during the current year is in accordance with the provisions of Section 197 of the Act. The remuneration paid to any director is not in excess of the limit laid down under Section 197 of the Act. The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) of the Act which are required to be commented upon by us.
For B S R & Co. LLP
Chartered Accountants Firm''s Registration No.: 101248W/W-100022
Aniruddha Godbole
Partner
Place: Mumbai Membership No.: 105149
Date: 27th April, 2023 ICAI UDIN: 23105149BGYFRB8085
Mar 31, 2022
REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS
Opinion
We have audited the standalone financial statements of Hindustan Unilever Limited (the "Company"), which comprise the standalone balance sheet as at 31 March 2022, and the standalone statement of profit and loss (including other comprehensive income), the standalone statement of changes in equity and the standalone statement of cash flows for the year then ended, and notes to the standalone financial statements, including a summary of the significant accounting policies and other explanatory information.
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 Companies Act, 2013 ("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 2022, and its profit and other comprehensive income, changes in equity and its cash flows for the year ended on that date.
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditor''s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our opinion on the standalone financial statements.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
The key audit matter |
How the matter was addressed in our audit |
Therefore, there is a risk of revenue being overstated due to fraud through manipulation of discounts and rebates accruals recognised, resulting from pressure the Company may feel to achieve performance targets at the year end. We identified the evaluation of accrual for discounts and rebates as a key audit matter. |
⢠Checking completeness and accuracy of the data used by the Company for accrual of discounts and rebates. ⢠Testing actualisation of estimated accruals on a sample basis. ⢠Testing a selection of rebate accruals recorded after 31 March 2022 and assessing whether the accrual is recorded in the correct period. ⢠Testing a selection of payments made after 31 March 2022 and where relevant, comparing the payment to the related rebate accrual. ⢠Critically assessing manual journal entries posted to revenue, on a sample basis, to identify unusual items and examining the underlying documentation. |
Impairment assessment of Food & Refreshment Cash Generating Unit (F&R CGU) See note 4 to the standalone financial statements |
|
The key audit matter |
How the matter was addressed in our audit |
As disclosed in note 4 to the standalone financial statement, the F&R CGU includes ''17,301 crores of goodwill and ''27,210 crores of indefinite life intangible assets which together represents 64% of total assets of the Company as at 31 March 2022. The recoverable value of the F&R CGU which is based on the value in use model, has been derived from discounted cash flow model. This model requires the Company to make significant assumptions such as discount rate, near and long-term revenue growth rate and projected margins which involves inherent uncertainty since they are based on future business prospects and economic outlook. Due to the materiality of above assets in context of the standalone financial statements and sensitivity of discount rate and near and longterm revenue growth rate assumptions where a minor change could have a significant impact on the recoverable value, we have considered the impairment assessment of F&R CGU to be a key audit matter. |
Our audit procedures included: ⢠Understanding the process followed by the Company in respect of the annual impairment analysis for F&R CGU. ⢠Evaluating the design and implementation and testing the operating effectiveness of key internal controls related to the Company''s process relating to review of the annual impairment analysis, including controls over determination of discount rate, near and long-term revenue growth rate and projected margins. ⢠Challenging the reasonableness of the assumptions, particularly forecasted revenue growth rate and margins based on our knowledge of the Company and market. Assessing historical accuracy by comparing past forecasts to actual results achieved. ⢠Involving the valuation professionals with specialised skills and knowledge to assist in evaluating the impairment model used and assumptions (including discount rate and long-term sales growth rate applied by the Company by comparing it to a range of rates that were independently developed using publicly available market indices and market data for comparable entities). Applying additional sensitivities to assess the reasonableness of the above key assumptions. ⢠Testing data used to develop the estimate for completeness and accuracy. ⢠Performing a sensitivity analysis to evaluate the impact of change in key assumptions individually or collectively to the recoverable value. ⢠Evaluating the adequacy of the Company''s disclosures in the standalone financial statements in respect of its impairment testing. |
Revenue recognition - Discounts and rebates See note 25 to the standalone financial statements |
|
The key audit matter |
How the matter was addressed in our audit |
As disclosed in note 25 to the standalone financial statements, revenue is measured net of any trade discounts and volume rebates to customers ("discounts and rebates"). Certain discounts and rebates for goods sold during the year are only finalised when the precise amounts are known, and revenue therefore includes an estimate of variable consideration. The variable consideration represents the portion of discounts and rebates that are not directly deducted on the invoice and involves estimation by the Company in recognition and measurement of such discounts and rebates. This includes establishing an accrual at year end, particularly in arrangements with customers involving varying terms which are based on annual contracts or shorter-term arrangements. In addition, the value and timing of promotions for products varies from period to period, and the activity can span beyond the year end. The unsettled portion of the variable consideration results in discounts and rebates due to customers as at year end. |
Our audit procedures included: ⢠Understanding the process followed by the Company to determine the amount of accrual for discounts and rebates. ⢠Evaluating the design and implementation and testing operating effectiveness of Company''s general IT controls, key manual and application controls over the Company''s IT systems including controls over rebates agreements / arrangements, rebate payments / settlements and Company''s review over the rebate accruals. ⢠Inspecting on a sample basis, key customer contracts. Based on the terms and conditions relating to discounts and rebates, assessing the Company''s revenue recognition policies with reference to the requirements of the applicable accounting standards. ⢠Performing substantive testing by selecting samples of discounts and rebates transactions recorded during the year as well as period end discounts and rebates accruals and matching the parameters used in the computation with the relevant source documents. ⢠Examining historical rebate accrual together with our understanding of current year developments to form an expectation of the rebate accrual as at year end and comparing this expectation against the actual rebate accrual, completing further inquiries and obtaining underlying documentation, on a sample basis, as appropriate. Further, we also performed retrospective review to evaluate the precision with which management makes estimates. |
Provisions and contingent liabilities relating to taxation, litigations and claims See note 21 and 24 to the standalone financial statements |
||
The key audit matter |
How the matter was addressed in our audit |
|
The provisions and contingent liabilities relate to ongoing litigations and claims with various authorities and third parties. These relate to direct tax, indirect tax, transfer pricing arrangements, claims, general legal proceedings, environmental issues and other eventualities arising in the regular course of business. As at the year ended 31 March 2022, the amounts involved are significant. The determination of a provision or contingent liability requires significant judgement by the Company because of the inherent complexity in estimating future costs. The amount recognised as a provision is the best estimate of the expenditure. The provisions and contingent liabilities are subject to changes in the outcomes of litigations and claims and the positions taken by the Company. It involves significant judgement and estimation to determine the likelihood and timing of the cash outflows and interpretations of the legal aspects, tax legislations and judgements previously made by authorities. |
Our audit procedures included: ⢠Understanding the process followed by the Company for assessment and determination of the amount of provisions and contingent liabilities relating to taxation, litigations and claims. ⢠Evaluating the design and implementation and testing operating effectiveness of key internal controls around the recognition and measurement of provisions and re-assessment of contingent liabilities. ⢠1 nvolving our tax professionals with specialised skills and knowledge to assist in the assessment of the value of significant provisions and contingent liabilities relating to taxation matter, on sample basis, in light of the nature of the exposures, applicable regulations and related correspondence with the authorities. ⢠Inquiring the status in respect of significant provisions and contingent liabilities with the Company''s internal tax and legal team, including challenging the assumptions and critical judgements made by the Company which impacted the computation of the provisions and inspecting the computation. ⢠Assessing the assumptions used and estimates of outcome and financial effect, including considering judgement of the Company, supplemented by experience of similar decisions previously made by the authorities and, in some cases, relevant opinions given by the Company''s advisors. ⢠Testing data used to develop the estimate for completeness and accuracy. ⢠Evaluating judgements made by the Company by comparing the estimates of prior year to the actual outcome. ⢠Evaluating the Company''s disclosures in the standalone financial statements in respect of provisions and contingent liabilities. |
|
Other Information The Company''s Management and Board of Directors are responsible for the other information. The other information comprises the information included in the Company''s annual report, but does not include the standalone financial statements and our auditor''s report thereon. Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. |
Management''s and Board of Directors'' Responsibilities for the Standalone Financial Statements The Company''s Management and Board of Directors are responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs, profit/loss and other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of 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 standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, the Management and Board of Directors are responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors is also responsible for overseeing the Company''s financial reporting process.
Auditor''s Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3) (i) of the Act, we are also responsible for expressing our opinion on whether the company has adequate internal
financial controls with reference to financial statements in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Management and Board of Directors.
⢠Conclude on the appropriateness of the Management and Board of Directors use of the going concern basis of accounting in preparation of standalone financial statements and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
(iii) Based on such audit procedures as considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (d)(i) and (d)(ii) contain any material misstatement; and
(e) The dividend declared or paid during the year by the Company is in compliance with Section 123 of the Act.
4. With respect to the matter to be included in the Auditor''s Report under Section 197(16) of the Act:
In our opinion and according to the information and explanations given to us, the remuneration paid by
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2020 ("the Order") issued by the Central Government of India in terms of Section 143(11) of the Act, we give in the "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
2. As required by Section 143(3) 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 standalone balance sheet, the standalone statement of profit and loss (including other comprehensive income), the standalone statement of changes in equity and the standalone statement of cash flows 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 Ind AS specified under Section 133 of the Act;
(e) On the basis of the written representations received from the directors as on 31 March 2022 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2022 from being appointed as a director in terms of Section 164(2) of the Act; and
(f) With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B".
3. 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:
(a) The Company has disclosed the impact of pending litigations as at 31 March 2022 on its financial position in its standalone financial
statements - Refer Notes 21 and 24 to the standalone financial statements;
(b) The Company did not have any long-term contracts for which there were any material foreseeable losses. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses on derivative contracts - Refer Note 45 to the standalone financial statements;
(c) There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company;
(d) (i) The management has represented that,
to the best of its knowledge and belief, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other persons or entities, including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall:
⢠directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever ("Ultimate Beneficiaries") by or on behalf of the Company or
⢠provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries;
(ii) The management has represented that, to the best of its knowledge and belief, no funds have been received by the Company from any persons or entities, including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall:
⢠directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever ("Ultimate Beneficiaries") by or on behalf of the Funding Party or
⢠provide any guarantee, security or the like from or on behalf of the Ultimate Beneficiaries; and
the Company to its directors during the current year is in accordance with the provisions of Section 197 of the Act. The remuneration paid to any director is not in excess of the limit laid down under Section 197 of the Act. The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) of the Act which are required to be commented upon by us.
For B S R & Co. LLP
Chartered Accountants Firm''s Registration No: 101248W/W-100022
Aniruddha Godbole
Partner
Mumbai Membership No: 105149
27 April 2022 ICAI UDIN: 22105149AHWXQC2679
Mar 31, 2021
REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS
Opinion
We have audited the standalone financial statements of Hindustan Unilever Limited ("the Company"), which comprise the standalone balance sheet as at 31 March 2021, and the standalone statement of profit and loss (including other comprehensive income), standalone statement of changes in equity and standalone statement of cash flows for the year then ended, and notes to the standalone financial statements, including a summary of the significant accounting policies and other explanatory information.
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 Companies Act, 2013 ("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 2021, and profit and other comprehensive income, changes in equity and its cash flows for the year ended on that date.
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditor''s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the standalone financial statements.
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
The key audit matter |
How the matter was addressed in our audit |
Therefore, there is a risk of revenue being overstated due |
⢠Examining historical rebate accrual together with our |
to fraud through manipulation of discounts and rebates |
understanding of current year developments to form |
accruals recognised, resulting from pressure the Company |
an expectation of the rebate accrual as at year end and |
may feel to achieve performance targets at the year end. |
comparing this expectation against the actual rebate |
We identified the evaluation of accrual for discounts and |
accrual, completing further inquiries and obtaining |
rebates as a key audit matter. |
underlying documentation, on a sample basis, as appropriate. Further, we also performed retrospective review to evaluate the precision with which management makes estimates. |
⢠Checking completeness and accuracy of the data used by the Company for accrual of discounts and rebates. ⢠Testing actualisation of estimated accruals on a sample basis. ⢠Testing a selection of rebate accruals recorded after 31 March 2021 and assessing whether the accrual is recorded in the correct period. ⢠Testing a selection of payments made after 31 March 2021 and where relevant, comparing the payment to the related rebate accrual. |
|
⢠Critically assessing manual journal entries posted to revenue, on a sample basis, to identify unusual items and examining the underlying documentation. |
|
Provisions and contingent liabilities relating to taxation, litigations and claims See note 20 and 23 to the standalone financial statements |
|
The key audit matter |
How the matter was addressed in our audit |
The provisions and contingent liabilities relate to ongoing |
Our audit procedures included: |
litigations and claims with various authorities and third parties. These relate to direct tax, indirect tax, transfer pricing arrangements, claims, general legal proceedings, |
⢠Understanding the process followed by the Company for assessment and determination of the amount of |
environmental issues and other eventualities arising in the |
provisions and contingent liabilities relating to taxation, |
regular course of business. |
litigations and claims. |
As at the year ended 31 March 2021, the amounts involved |
⢠Evaluating the design and implementation and testing |
are significant. The computation of a provision or contingent |
operating effectiveness of key internal controls around |
liability requires significant judgement by the Company |
the recognition and measurement of provisions and re- |
because of the inherent complexity in estimating future |
assessment of contingent liabilities. |
costs. The amount recognised as a provision is the best estimate of the expenditure. The provisions and contingent |
⢠Involving our tax professionals with specialised skills |
liabilities are subject to changes in the outcomes of |
and knowledge to assist in the assessment of the value |
litigations and claims and the positions taken by the |
of significant provisions and contingent liabilities |
Company. It involves significant judgement and estimation |
relating to taxation matter, on sample basis, in light of |
to determine the likelihood and timing of the cash outflows |
the nature of the exposures, applicable regulations and |
and interpretations of the legal aspects, tax legislations and |
related correspondence with the authorities. |
judgements previously made by authorities. |
⢠Inquiring the status in respect of significant provisions and contingent liabilities with the Company''s internal tax and legal team, including challenging the assumptions and critical judgements made by the Company which impacted the computation of the provisions and inspecting the computation. |
Revenue recognition - Discounts and rebates See note 24 to the standalone financial statements The key audit matter How the matter was addressed in our audit |
|
As disclosed in note 24 to the standalone financial |
Our audit procedures included: |
statements, revenue is measured net of any trade discounts |
⢠Understanding the process followed by the |
and volume rebates to customers ("discounts and rebates"). |
Company to determine the amount of accrual for |
Certain discounts and rebates for goods sold during the year are only finalised when the precise amounts are known |
discounts and rebates. |
and revenue therefore includes an estimate of variable |
⢠Evaluating the design and implementation and |
consideration. The variable consideration represents the |
testing operating effectiveness of Company''s general |
portion of discounts and rebates that are not directly |
IT controls, key manual and application controls |
deducted on the invoice and involves estimation by the |
over the Company''s IT systems including controls |
Company in recognition and measurement of such discounts |
over rebates agreements / arrangements, rebate |
and rebates. This includes establishing an accrual at year |
payments / settlements and Company''s review over the |
end, particularly in arrangements with customers involving varying terms which are based on annual contracts or |
rebate accruals. |
shorter-term arrangements. In addition, the value and |
⢠Inspecting on a sample basis, key customer contracts. |
timing of promotions for products varies from period to |
Based on the terms and conditions relating to discounts |
period, and the activity can span beyond the year end. The |
and rebates, assessing the Company''s revenue |
unsettled portion of the variable consideration results in |
recognition policies with reference to the requirements |
discounts and rebates due to customers as at year end. |
of the applicable accounting standards. ⢠Performing substantive testing by selecting samples of discounts and rebates transactions recorded during the year as well as period end discounts and rebates accruals and matching the parameters used in the computation with the relevant source documents. |
The key audit matter |
How the matter was addressed in our audit |
⢠Assessing the assumptions used and estimates of outcome and financial effect, including considering judgement of the Company, supplemented by experience of similar decisions previously made by the authorities and, in some cases, relevant opinions given by the Company''s advisors. ⢠Testing data used to develop the estimate for completeness and accuracy. ⢠Evaluating judgements made by the Company by comparing the estimates of prior year to the actual outcome. ⢠Assessing the Company''s disclosures in the standalone financial statements in respect of provisions and contingent liabilities. |
|
Accounting for acquisition of GlaxoSmithKline Consumer Healthcare Limited |
|
See note 40 to the standalone financial statements |
|
The key audit matter |
How the matter was addressed in our audit |
As disclosed in note 40 to the standalone financial |
Our audit procedures included: |
statements, on 1 April 2020, the Company acquired |
⢠Understanding the process followed by the Company |
GlaxoSmithKline Consumer HealthCare Limited (GSK CH |
|
India) under a scheme of amalgamation. The fair value |
for assessment and determination of the effective |
of the consideration transferred by the Company was |
date and the accounting treatment for the scheme of |
''40,242 crores. |
amalgamation, including the identification of assets and liabilities and determination of their fair values and |
Accounting for the acquisition involves judgement in order to: ⢠Identify and measure the fair value of the identifiable |
also evaluation of work of management experts. |
assets (tangible and intangible) acquired and liabilities |
⢠Evaluating the design and implementation and testing |
assumed including the contingent liabilities. |
the operating effectiveness of key internal controls (including management review control) related to the |
⢠Allocate the consideration transferred between |
Company''s valuation process, including assumptions |
identifiable assets and liability and goodwill. |
around near and long-term revenue growth rates |
The most significant judgements made by the Company include: |
and discount rate. |
⢠Testing the completeness of the identified assets |
|
⢠Determining the discount rate, near and long-term |
acquired and liabilities assumed by comparison to the |
revenue growth rate and projected margins to develop |
scheme of amalgamation, through discussions with the |
the fair value of the intangible assets, including |
Company and their external valuation experts. |
determination of their economic useful lives. |
⢠Challenging the reasonableness of the key assumptions, |
⢠Determining the comparable market rates, replacement |
including discount rate, near and long-term revenue |
cost and economic useful life to develop the fair value of |
growth rate and projected margins for indefinite life |
the property, plant and equipment. |
intangible asset based on future business prospects and |
Complex auditor''s judgement and specialised skills were |
external industry growth rate. |
also required in evaluating these assumptions for which |
⢠Involving valuation professionals with specialised skills |
management had engaged external valuation experts. |
and knowledge to assist in: |
This was a material acquisition for the Company and |
- Evaluating the appropriateness of the valuation |
given the level of estimation and judgement required, we |
|
considered it to be a key audit matter. |
methodologies applied and also, to test the inputs to the valuation models used to determine the value of the tangible and intangible assets. |
The key audit matter |
How the matter was addressed in our audit |
- Evaluating the economic useful life for tangible and intangible assets. - Evaluating the discount rate and long-term revenue growth rate applied by the Company by comparing it to a range of rates that were independently developed using publicly available market indices and market data for comparable entities. Applying additional sensitivities to assess the reasonableness of the above key assumptions. - Evaluating market rates and replacement cost basis knowledge of the business and independent market sources to develop the fair value of property, plant and equipment. ⢠Testing data used to develop the estimate for completeness and accuracy. ⢠Involving our tax professionals with specialised skills and knowledge to assist in evaluating the management judgement to recognise and measure fair value of tax litigations, for selected matters. ⢠Evaluating the recognition of deferred tax liability for all temporary differences on date of acquisition (including those arising as a result of uncertainty over tax benefit of indefinite life intangibles). |
|
Impairment assessment of Food & Refreshment Cash Generating Unit (F&R CGU) See note 4 to the standalone financial statements The key audit matter How the matter was addressed in our audit |
|
As disclosed in note 4 to the standalone financial statement, the F&R CGU includes ''17,301 crores of goodwill and ''27,210 crores of indefinite life intangible assets which together represents 65% of total assets of the Company as at 31 March 2021. The recoverable value of the F&R CGU which is based on the value in use model, has been derived from discounted forecast cash flow model. This model requires the Company to make significant assumptions such as discount rate, near and long-term revenue growth rate and projected margins which involves inherent uncertainty since they are based on future business prospects and economic outlook. Due to the materiality of above assets in context of the standalone financial statements and sensitivity of discount rate and near and long-term revenue growth rate assumptions where a minor changes could have a significant impact on the recoverable value, we have considered the impairment assessment of F&R CGU to be a key audit matter. |
Our audit procedures included: ⢠Understanding the process followed by the Company in respect of the annual impairment analysis for F&R CGU. ⢠Evaluating the design and implementation and testing the operating effectiveness of key internal controls related to the Company''s process relating to review of the annual impairment analysis, including controls over determination of discount rate, near and long-term revenue growth rate and projected margins. ⢠Challenging the reasonableness of the assumptions, particularly forecasted revenue growth rate and margins based on our knowledge of the Company and market. Assessing historical accuracy by comparing past forecasts to actual results achieved. |
The key audit matter |
How the matter was addressed in our audit |
⢠Involving the valuation professionals with specialised skills and knowledge to assist in evaluating the impairment model used and assumptions (including discount rate and long-term sales growth rate applied by the Company by comparing it to a range of rates that were independently developed using publicly available market indices and market data for comparable entities). Applying additional sensitivities to assess the reasonableness of the above key assumptions. ⢠Testing data used to develop the estimate for completeness and accuracy. ⢠Performing a sensitivity analysis to evaluate the impact of change in key assumption individually or collectively to the recoverable value. |
|
⢠Assessing the adequacy of the Company''s disclosures in respect of its impairment testing. |
The Company''s management and Board of Directors are responsible for the other information. The other information comprises the information included in the Company''s annual report, but does not include the standalone financial statements and our auditor''s report thereon.
Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
The Company''s Management and Board of Directors are responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs, profit/loss and other comprehensive
income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgements and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, the Management and Board of Directors are responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors is also responsible for overseeing the Company''s financial reporting process.
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs, we exercise professional judgement and maintain professional skepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls with reference to standalone financial statements in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures in the standalone financial statements made by the Management and Board of Directors.
⢠Conclude on the appropriateness of the Management and Board of Directors use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report
to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
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 in terms of Section 143(11) of the Act, we give in the "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
2. As required by Section 143(3) 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 standaLone baLance sheet, the standaLone statement of profit and loss (including other comprehensive income), the standalone statement of changes in equity and the standaLone statement of cash fLows 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 Ind AS specified under Section 133 of the Act;
e) On the basis of the written representations received from the directors as on 31 March 2021 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2021 from being appointed as a director in terms of Section 164(2) of the Act; and
f) With respect to the adequacy of the internaL financial controls with reference to standalone financiaL statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B".
>. 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:
i. The Company has disclosed the impact of pending Litigations as at 31 March 2021 on its financiaL position in its standaLone financiaL statements - Refer Note 23 to the standalone financiaL statements;
ii. The Company did not have any Long-term contracts for which there were any materiaL foreseeabLe Losses. The Company has made provision, as required under the applicable Law or accounting standards, for material foreseeable Losses on derivative contracts - Refer Note 43 to the standalone financial statements;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company; and
iv. The discLosures in the standaLone financiaL statements regarding hoLdings as weLL as deaLings in specified bank notes during the period from 8 November 2016 to 30 December 2016 have not been made in these standalone financial statements since they do not pertain to the financial year ended 31 March 2021.
4. With respect to the matter to be incLuded in the Auditor''s Report under Section 197(16) of the Act:
In our opinion and according to the information and explanations given to us, the remuneration paid by the Company to its directors during the current year is in accordance with the provisions of Section 197 of the Act. The remuneration paid to any director is not in excess of the Limit Laid down under Section 197 of the Act. The Ministry of Corporate Affairs has not prescribed other detaiLs under Section 197(16) which are required to be commented upon by us.
For B S R & Co. LLP
Chartered Accountants Firm''s Registration No. 101248W/W - 100022
Aniruddha Godbole
Partner
Membership No. 105149 Mumbai: 29 ApriL 2021 ICAI UDIN: 1105149AAAACH9056
Mar 31, 2019
REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS
Opinion
We have audited the standalone financial statements of Hindustan Unilever Limited (âthe Companyâ), which comprise the standalone balance sheet as at 31 March 2019, and the standalone statement of profit and loss (including other comprehensive income), standalone statement of changes in equity and standalone statement of cash flows for the year then ended, and notes to the standalone financial statements, including a summary of the significant accounting policies and other explanatory information.
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 Companies Act, 2013 (âActâ) 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 2019, and profit and other comprehensive income, changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditorâs Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Revenue recognition See note 25 to the standalone financial statements
The key audit matter |
How the matter was addressed in our audit |
Revenue from sale of goods is recognised when control of the products being sold is transferred to the customer and when there are no longer any unfulfilled obligations. The performance obligations in the contracts are fulfilled at the time of dispatch, delivery or upon formal customer acceptance depending on customer terms. Revenue is measured at fair value of the consideration received or receivable, after deduction of any trade discounts, volume rebates and any taxes or duties collected on behalf of the government such as goods and services tax, etc. Accumulated experience is used to estimate the provision for discounts and rebates. Revenue is only recognised to the extent that it is highly probable a significant reversal will not occur. Rebates and discounts are material and have arrangements with varying terms which are based on annual contracts or shorter term arrangements. In addition, |
Our audit procedures included: - We assessed the appropriateness of the revenue recognition accounting policies, including those relating to rebates and discounts by comparing with applicable accounting standards. - We tested the design, implementation and operating effectiveness of managementâs general IT controls and key application controls over the Companyâs IT systems which govern revenue recognition, including access controls, controls over program changes, interfaces between different systems and key manual internal controls over revenue recognition to assess the completeness of the revenue entries being recorded in the general ledger accounting system. - We tested the design, implementation and operating effectiveness of controls over the calculation of discounts and rebates. - We performed substantive testing by selecting samples of revenue transactions recorded during the year by verifying the underlying documents, which included goods dispatch notes and shipping documents. - We inspected, on a sample basis, key customer contracts to identify terms and conditions relating to goods acceptance and rebates and assessing the Companyâs revenue recognition policies with reference to the requirements of the applicable accounting standards. - We performed substantive testing by selecting samples of rebate and discount transactions recorded during the year and comparing the parameters used in the calculation of the rebate and discounts with the relevant source documents (including invoices, schemes and contracts) to assess whether the methodology |
the value and timing of promotions for products varies from period to period, and the activity can span over a year end. |
adopted in the calculation of the rebates and discounts was in accordance with the terms and conditions defined in the schemes and corresponding customer contract. |
|
There is a risk of revenue being overstated due to fraud, including through manipulation of rebates and discounts, resulting from pressure the management may feel to achieve performance targets at the reporting period end. |
- We performed cut-off testing for samples of revenue transactions recorded before and after the financial year end date by comparing with relevant underlying documentation, which included goods dispatch notes and shipping documents, to assess whether the revenue was recognized in the correct period. - We assessed manual journals posted to revenue to identify unusual items. |
|
Provisions for taxation, litigation and other significant provisions See note 9 and 20 to the standalone financial statements |
||
The key audit matter |
How the matter was addressed in our audit |
|
Accrual for tax and other contingencies requires the Management to make judgements and estimates in relation to the issues and exposures arising from a range of matters relating to direct tax, indirect tax, transfer pricing arrangements, claims, general legal proceedings, environmental issues and other eventualities arising in the regular course of business. The key judgement lies in the estimation of provisions where they may differ from the future obligations. By nature, provision is difficult to estimate and includes many variables. Additionally, depending on timing, there is a risk that costs could be provided inappropriately that are not yet committed. |
Our audil procedures included: - We tested the effectiveness of controls around the recognition of provisions. - We used our subject matter experts to assess the value of material provisions in light of the nature of the exposures, applicable regulations and related correspondence with the authorities. - We challenged the assumptions and critical judgements made by management which impacted their estimate of the provisions required, considering judgements previously made by the authorities in the relevant jurisdictions or any relevant opinions given by the Companyâs advisors and assessing whether there was an indication of management bias. - We discussed the status in respect of significant provisions with the Companyâs internal tax and legal team. - We performed retrospective review of management judgements relating to accounting estimate included in the financial statement of prior year and compared with the outcome. |
|
Assessment of contingent liabilities relating to litigations and claims See note 24 to the standalone financial statements |
||
The key audit matter |
How the matter was addressed in our audit |
|
The Company is periodically subject to challenges/scrutiny on range of matters relating to direct tax, indirect tax and transfer pricing arrangements. Further, potential exposures may also arise from general legal proceedings, environmental issues etc. in the normal course of business. Assessment of contingent liabilities disclosure requires Management to make judgements and estimates in relation to the issues and exposures. Whether the liability is inherently uncertain, the amounts involved are potentially significant and the application of accounting standards to determine the amount, if any, to be provided as liability, is inherently subjective. |
Our audit procedurer included: - We tested the effectiveness of controls around the recording and re-assessment of contingent liabilities. - We used our subject matter experts to assess the value of material contingent liabilities in light of the nature of exposures, applicable regulations and related correspondence with the authorities. - We discussed the status and potential exposures in respect of significant litigation and claims with the Companyâs internal legal team including their views on the likely outcome of each litigation and claim and the magnitude of potential exposure and sighted any relevant opinions given by the Companyâs advisors. - We assessed the adequacy of disclosures made. - We discussed the status in respect of significant provisions with the Companyâs internal tax and legal team. - We performed retrospective review of management judgements relating to accounting estimate included in the financial statement of prior year and compared with the outcome. |
Other Information
The Companyâs management and Board of Directors are responsible for the other information. The other information comprises the information included in the Companyâs annual report, but does not include the standalone financial statements and our auditorâs report thereon.
Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Managementâs Responsibility for the Standalone Financial Statements
The Companyâs management and Board of Directors are responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs, profit/loss and other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of 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 standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, management and Board of Directors are responsible for assessing the Companyâs ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Board of Directors is also responsible for overseeing the Companyâs financial reporting process.
Auditorâs Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditorâs report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
- Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.
- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
- Conclude on the appropriateness of managementâs use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companyâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditorâs report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditorâs report. However, future events or conditions may cause the Company to cease to continue as a going concern.
- Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditorâs report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government in terms of section 143(11) of the Act, we give in the âAnnexure Aâ a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
2. As required by section 143(3) 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 standalone balance sheet, the standalone statement of profit and loss (including other comprehensive income), the standalone statement of changes in equity and the standalone statement of cash flows 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 Ind AS specified under section 133 of the Act.
e) On the basis of the written representations received from the directors as on 31 March 2019 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2019 from being appointed as a director in terms of section 164(2) of the Act.
f) With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Bâ.
3. With respect to the other matters to be included in the Auditorâs 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
i. The Company has disclosed the impact of pending litigations as at 31 March 2019 on its financial position in its standalone financial statements - Refer Note 24 to the standalone financial statements.
ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts- Refer Note 45 to the standalone financial statements.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
iv. The disclosures in the standalone financial statements regarding holdings as well as dealings in specified bank notes during the period from 8 November 2016 to 30 December 2016 have not been made in these standalone financial statements since they do not pertain to the financial year ended 31 March 2019.
4. With respect to the matter to be included in the Auditorâs Report under section 197(16):
In our opinion and according to the information and explanations given to us, the remuneration paid by the Company to its directors during the current year is in accordance with the provisions of section 197 of the Act. The remuneration paid to any director is not in excess of the limit laid down under section 197 of the Act. The Ministry of Corporate Affairs has not prescribed other details under section 197(16) which are required to be commented upon by us.
(Referred to in paragraph 1 under âReport on Other Legal and Regulatory Requirementsâ section of our report of even date)
(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 3A to the standalone financial statements, are held in the name of the Company, except for the following:
(Rs. crores)
Particulars |
Leasehold Land |
Freehold Land |
Buildings |
Gross block as at 31 March 2019 |
0.76 |
0.19 |
82.13 |
Net block as at 31 March 2019 |
0.62 |
0.19 |
46.93 |
(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) 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) According to information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of the directives issued by the Reserve Bank of India, provisions of section 73 to 76 of the Act, any other relevant provisions of the Act and the relevant rules framed thereunder.
(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 section 148(1) 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, goods and service tax, duty of customs, 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, goods and service tax, duty of customs, cess, professional tax and other material statutory dues were in arrears as at 31 March 2019 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, goods and 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 Appendix I to this report.
(viii) According to the information and explanations given to us, the Company has not taken any loans or borrowings from any financial institution, bank or Government nor has it issued any debentures. Accordingly, paragraph 3 (viii) of the Order is not applicable to the Company.
(ix) The Company has not raised any moneys by way of initial public offer, further public offer (including debt instruments) or term loans during the year. Accordingly, paragraph 3 (ix) of the Order is 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 year.
(xi) According to the information and explanations given to us and based on our examination of the records, the Company has paid or 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 to the Company.
(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 standalone financial statements as required by applicable Indian Accounting Standards.
(xiv) According to the information and explanations given 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. Accordingly, paragraph 3 (xiv) of the Order is not applicable to the Company.
(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 to the Company.
(xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, paragraph 3 (xvi) of the Order is not applicable to the Company.
APPENDIX I
Name of the Statute |
Nature of dues ; |
Amount Demanded Rs. in crores |
Amount Paid Rs. in crores |
Period to which the amount relates |
Forum where dispute is pending |
Central Excise Act, 1944 |
Excise duty (including Interest and penalty, if applicable) |
105.28 |
3.71 |
1982-2018 |
Appellate Authority upto Commissionerâs level |
Central Excise Act, 1944 |
Excise duty (including Interest and penalty, if applicable) |
267.52 |
7.43 |
1994-2017 |
Customs, Excise and Service Tax Appellate Tribunals of various states |
Central Excise Act, 1944 |
Excise duty (including Interest and penalty, if applicable) |
7.80 |
- |
2003-2010 |
High Courts of various states |
Customs Act, 1962 |
Custom Duty, (including Interest and penalty, if applicable |
2.29 |
0.12 |
2011-2014 |
Appellate Authority upto Commissionerâs level. |
Customs Act, 1962 |
Custom Duty, (including Interest and penalty, if applicable) |
8.42 |
0.36 |
2012-2017 |
Customs, Excise and Service Tax Appellate Tribunals of various states |
Central Sales Tax Act, 1956 and Local Sales Tax Act |
Sales tax (including interest and penalty, if applicable) |
195.32 |
52.51 |
1985-2018 |
Appellate Authority upto Commissionerâs level |
Central Sales Tax Act, 1956 and Local Sales Tax Act |
Sales tax (including interest and penalty, if applicable) |
32.84 |
2.73 |
1984-2014 |
Sales Tax Appellate Tribunals of various states |
Central Sales Tax Act, 1956 and Local Sales Tax Act |
Sales tax (including interest and penalty, if applicable) |
133.03 |
102.36 |
1977-2018 |
High Courts of various states |
Central Sales Tax Act, 1956 and Local Sales Tax Act |
Sales tax (including interest and penalty, if applicable) |
24.26 |
9.40 |
1985-2017 |
Supreme Court |
Service tax (Finance Act, 1994) |
Service tax (including interest and penalty, if applicable) |
130.47 |
5.55 |
2005-2017 |
Appellate Authority upto Commissionerâs level |
Customs, Excise |
|||||
Service tax (Finance |
Service tax (including interest |
82.42 |
6.20 |
2003-2017 |
and Service Tax |
Act, 1994) |
and penalty, if applicable) |
Appellate Tribunals of various states |
|||
Goods and Service Tax Act, 2017 |
Goods and Service tax (including interest and penalty if applicable) |
0.48 |
0.01 |
2018-2019 |
Appellate Authority upto Commissionerâs Level |
Goods and Service Tax Act, 2017 |
Goods and Service tax |
302.09 |
50.00 |
2017-2018 |
Delhi High Court |
Appellate |
|||||
Income Tax Act, 1961 |
Income Tax (including interest and penalty, if applicable) |
95.68 |
- |
1979-80, 1991, 2009-10 |
Authority - upto Commissionerâs Level |
1982-83, 2006- |
Income Tax |
||||
Income Tax Act, 1961 |
Income Tax (including interest and penalty, if applicable) |
58.00 |
- |
07, 2007-08, 2011-12, 2013-14 |
Appellate Tribunal, Mumbai |
Income Tax Act, 1961 |
Income Tax (including interest and penalty, if applicable) |
0.06 |
- |
1963-1964, 1982- 1983 |
Bombay High Court |
Annexure B
to the Independent Auditorâs report on the standalone financial statements of Hindustan Unilever Limited for the year ended 31 March 2019
Report on the internal financial controls with reference to the aforesaid standalone financial statements under section 143(3) (i) of the Companies Act, 2013
(Referred to in paragraph 2(f) under âReport on Other Legal and Regulatory Requirementsâ section of our report of even date)
Opinion
We have audited the internal financial controls with reference to financial statements of Hindustan Unilever Limited (âthe Companyâ) as of 31 March 2019 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.
In our opinion, the Company has, in all material respects, an adequate internal financial control s ystem with reference to financial statements and such internal financial controls were operating effectively as at 31 March 2019, based on the internal financial controls with reference to financial statements criteria established by the Company considering the essential components of internal controls stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (the âGuidance noteâ).
Managementâs Responsibility for Internal Financial Controls
The Companyâs management and the Board of Directors are responsible for establishing and maintaining internal financial controls based on the internal financial controls with reference to financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013 (hereinafter referred to as âthe Actâ).
Auditorâs Responsibility
Our responsibility is to express an opinion on the Companyâs internal financial controls with reference to financial statements based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing, prescribed under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls with reference to financial statements. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to financial statements were established and maintained and whether such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls with reference to financial statements and their operating effectiveness. Our audit of internal financial controls with reference to financial statements included obtaining an understanding of such internal financial controls, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgement, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companyâs internal financial controls with reference to financial statements.
Meaning of Internal Financial Controls with reference to Financial Statements
A companyâs internal financial controls with reference to financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companyâs internal financial controls with reference to financial statements include those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companyâs assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls with reference to financial statements
Because of the inherent limitations of internal financial controls with reference to financial statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls with reference to financial statements to future periods are subject to the risk that the internal financial controls with reference to financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
For B S R & Co. LLP
Chartered Accountants
Firmâs Registration No. 101248W/W-100022
Akeel Master
Partner
Mumbai, 03 May 2019 Membership No. 046768
Mar 31, 2018
INDEPENDENT AUDITORâS REPORT
to the Members of Hindustan Unilever Limited
REPORT ON THE AUDIT OF THE STANDALONE IND AS FINANCIAL STATEMENTS
We have audited the accompanying standalone Ind AS financial statements of Hindustan Unilever Limited ("the Company"), which comprise the Balance Sheet as at 31 March 2018, the Statement of Profit and Loss (including other comprehensive income), the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended, and summary of the significant accounting policies and other explanatory information (herein after referred to as "standalone Ind AS financial statements").
MANAGEMENTâS RESPONSIBILITY FOR THE STANDALONE IND AS FINANCIAL STATEMENTS
The Company''s Board of Directors is responsible for the matters stated in Section 134 (5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the state of affairs, profit/ loss and other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards ("Ind AS") prescribed under Section 133 of the Act.
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 standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
AUDITORâS RESPONSIBILITY
Our responsibility is to express an opinion on these standalone Ind AS 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 there under.
We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143 (10) 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 standalone Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS 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 standalone Ind AS 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 standalone Ind AS financial statements.
We are also responsible to conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the entity''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in the auditor''s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify the opinion. Our conclusions are based on the audit evidence obtained up to the date of the auditor''s report. However, future events or conditions may cause an entity to cease to continue as a going concern.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.
OPINION
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS 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 2018, its profit and other comprehensive income, changes in equity 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 in terms of Section 143 (11) of the Act, we give in "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by Section 143 (3) 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) I n 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 (including other comprehensive income), the Statement of Changes in Equity and the Statement of Cash Flows dealt with by this Report are in agreement with the books of account.
(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards prescribed under Section 133 of the Act.
(e) On the basis of the written representations received from the directors as on 31 March 2018 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2018 from being appointed as a director in terms of Section 164 (2) of the Act.
(f) With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate report in "Annexure B".
(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 standalone Ind AS financial statements - Refer Note 24 to the standalone Ind AS financial statements.
2. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts - Refer Note 45 to the standalone Ind AS financial statements.
3. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
4. The disclosures regarding details of specified bank notes held and transacted during 8 November 2016 to 30 December 2016 has not been made since the requirement does not pertain to financial year ended 31 March 2018.
(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 3A to the standalone Ind AS financial statements, are held in the name of the Company, except for the following:
Particulars |
Leasehold Land |
Freehold Land |
Buildings |
Gross block as at 31 |
0.76 |
0.19 |
78.48 |
March 2018 |
|||
Net block as at 31 |
0.62 |
0.19 |
46.76 |
March 2018 |
(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) According to information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of the directives issued by the Reserve Bank of India, provisions of Section 73 to 76 of the Act, any other relevant provisions of the Act and the relevant 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 Section 148 (1) 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, goods and 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, goods and service tax, duty of customs, duty of excise, value added tax, cess, professional tax and other material statutory dues were in arrears as at 31 March 2018 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, goods and 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 Appendix I to this report.
(viii) The Company has not taken any loans or borrowings from any financial institution, bank or Government nor has it issued any debentures. Accordingly, paragraph 3 (viii) of the Order is not applicable to the Company.
(ix) The Company has not raised any moneys by way of initial public offer, further public offer (including debt instruments) or term loans during the year. Accordingly, paragraph 3 (ix) of the Order is 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 year.
(xi) According to the information and explanations given to us and based on our examination of the records, the Company has paid or 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 to the Company.
(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 standalone Ind AS financial statements as required by applicable Indian Accounting Standards.
(xiv) According to the information and explanations given 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. Accordingly, paragraph 3 (xiv) of the Order is not applicable to the Company.
(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 to the Company.
(xvi) The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, paragraph 3 (xvi) of the Order is not applicable to the Company.
Name of the Statute |
Nature of dues |
Amount Demanded '' in crores |
Amount Paid '' in crores |
Period to which the amount relates |
Forum where dispute is pending |
Central Excise Act, 1944 |
Excise duty (including Interest and penalty, if applicable) |
69.48 |
3.85 |
1982-2017 |
Appellate Authority up to Commissioner''s level |
Central Excise Act, 1944 |
Excise duty (including Interest and penalty, if applicable) |
278.22 |
7.42 |
1994-2016 |
Customs, Excise and Service Tax Appellate Tribunals of various states |
Central Excise Act, 1944 |
Excise duty (including Interest and penalty, if applicable) |
3.59 |
- |
2003-2010 |
High Courts of various states |
Customs Act, 1962 |
Custom Duty, (including Interest and penalty, if applicable) |
2.29 |
0.12 |
2011-2014 |
Appellate Authority up to Commissioner''s level |
Customs Act, 1962 |
Custom Duty, (including Interest and penalty, if applicable) |
8.42 |
0.36 |
2012-2017 |
Customs, Excise and Service Tax Appellate Tribunals of various states |
Central Sales Tax Act, 1956 and Local Sales Tax Act |
Sales tax (including interest and penalty, if applicable) |
270.71 |
49.64 |
1985-2017 |
Appellate Authority up to Commissioner''s level |
Central Sales Tax Act, 1956 and Local Sales Tax Act |
Sales tax (including interest and penalty, if applicable) |
30.81 |
2.23 |
1984-2014 |
Sales Tax Appellate Tribunals of various states |
Central Sales Tax Act, 1956 and Local Sales Tax Act |
Sales tax (including interest and penalty, if applicable) |
151.11 |
102.38 |
1977-2017 |
High Courts of various states |
Central Sales Tax Act, 1956 and Local Sales Tax Act |
Sales tax (including interest and penalty, if applicable) |
24.44 |
9.40 |
1985-2017 |
Supreme Court |
Service tax (Finance Act, 1994) |
Service tax (including interest and penalty, if applicable) |
163.70 |
2.79 |
2005-2017 |
Appellate Authority up to Commissioner''s level |
Service tax (Finance Act, 1994) |
Service tax (including interest and penalty, if applicable) |
47.55 |
3.58 |
2003-2015 |
Customs, Excise and Service Tax Appellate Tribunals of various states |
Income Tax Act, 1961 |
Income Tax (including interest and penalty, if applicable) |
151.11 |
1979-80, 1991, 2006-07, 200708, 2009-10, 2011-12 |
Appellate Authority - up to Commissioner''s Level |
|
Income Tax Act, 1961 |
Income Tax (including interest and penalty, if applicable) |
0.20 |
- |
1982-83 |
Income Tax Appellate Tribunal, Mumbai |
Income Tax Act, 1961 |
Income Tax (including interest and penalty, if applicable) |
0.06 |
- |
1963-1964, 1982- 1983 |
Bombay High Court |
REPORT ON THE INTERNAL FINANCIAL CONTROLS UNDER SECTION 143 (3) (i) OF THE COMPANIES ACT, 2013 ("THE ACT")
We have audited the internal financial controls with reference to financial statements of Hindustan Unilever Limited ("the Company") as of 31 March 2018 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.
MANAGEMENTâS RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS
The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal controls with reference to financial statements criteria established by the Company considering the essential components of internal controls stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the "Guidance note") issued by the Institute of Chartered Accountants of India ("ICAI"). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.
AUDITORâS RESPONSIBILITY
Our responsibility is to express an opinion on the Company''s internal financial controls with reference to financial statements based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing, issued by ICAI and deemed to be prescribed under Section 143 (10) of the Act, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to financial statements was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system with reference to financial statements and their operating effectiveness. Our audit of internal financial controls with reference to financial statements included obtaining an understanding of internal financial controls with reference to financial statements, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal controls based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial control system with reference to financial statements.
MEANING OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO FINANCIAL STATEMENTS
A company''s internal financial controls with reference to financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial controls with reference to financial statements includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.
INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO FINANCIAL STATEMENTS
Because of the inherent limitations of internal financial controls with reference to financial statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls with reference to financial statements to future periods are subject to the risk that the internal financial controls with reference to financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
OPINION
In our opinion, the Company has, in all material respects, an adequate internal financial control system with reference to financial statements and such internal financial controls with reference to financial statements were operating effectively as at 31 March 2018, based on the internal controls with reference to financial statements criteria established by the Company considering the essential components of internal controls stated in the Guidance Note issued by ICAI.
For B S R & Co. LLP
Chartered Accountants
Firm''s Registration No: 101248W/W-100022
Akeel Master
Mumbai Partner
14th May, 2018 Membership No: 046768
Mar 31, 2017
INDEPENDENT AUDITOR''S REPORT
to the Members of Hindustan Unilever Limited
REPORT ON THE STANDALONE IND AS FINANCIAL STATEMENTS
We have audited the accompanying standalone Ind AS financial statements of Hindustan Unilever Limited ("the Company"), which comprise the Balance Sheet as at 31 March 2017, the Statement of Profit and Loss (including other comprehensive income), the Statement of Cash Flows and the Statement of Changes in Equity for the year ended on that date and a summary of the significant accounting policies and other explanatory information (herein after referred to as "standalone Ind AS financial statements").
MANAGEMENTâS RESPONSIBILITY FOR THE STANDALONE IND AS 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 Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards ("Ind AS") prescribed under Section 133 of the Act, read with relevant rules issued there under.
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 standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
AUDITORâS RESPONSIBILITY
Our responsibility is to express an opinion on these standalone Ind AS 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 there under.
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 standalone Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS 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 standalone Ind AS 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 standalone Ind AS 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 Ind AS financial statements.
OPINION
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS 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 including the Ind AS, of the financial position of the Company as at 31 March 2017, and its financial performance including other comprehensive income, its cash flows and the changes in equity 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 (âthe 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 (including other comprehensive income), the Statement of Cash Flows and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;
(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards prescribed under Section 133 of the Act, read with relevant rules issued there under;
(e) On the basis of the written representations received from the Directors as on 31 March 2017 and taken on record by the Board of Directors, none of the Directors are disqualified as on 31 March 2017 from being appointed as a Director in terms of subsection 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 standalone Ind AS financial statements - Refer Note 25 to the standalone Ind AS financial statements;
2. The Company has made provision, as required under the applicable law or accounting standards, for material
foreseeable losses, if any, on long-term contracts including derivative contracts - Refer Note 47 to the standalone Ind AS financial statements;
3. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company; and us by the Management - Refer Note 45 to the standalone Ind AS financial statements.
4. The Company has provided requisite disclosures in the standalone Ind AS financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8 November 2016 to 30 December 2016. Based on audit procedures and relying on the management representation, we report that the disclosures are in accordance with books of account maintained by the Company and as produced to
(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 4A to the standalone Ind AS financial statements, are held in the name of the Company, except for the following:
(Rs. in Crores)
Particulars |
Leasehold Land |
Freehold Land |
buildings |
Gross block as at |
0.76 |
0.19 |
75.36 |
31 March 2017 |
|||
Net block as at |
0.62 |
0.19 |
42.86 |
31 March 2017 |
(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 material statutory dues were in arrears as at 31 March 2017 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 Appendix 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 given 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 standalone Ind AS financial statements as required by applicable accounting standards.
(xiv) According to the information and explanations given 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 45-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.
APPENDIX I |
(Rs. in Crores) |
||||
Name of the Statute |
Nature of dues |
Amount Demanded Rs. in crores |
Amount Paid under dispute Rs. in crores |
Period to which the amount relates |
Forum where dispute is pending |
The Central Excise Act, 1994 |
Excise duty (including interest and penalty, if applicable) |
71.67 |
3.67 |
1987-2016 |
Appellate Authority up to Commissioner''s level |
The Central Excise Act |
Excise duty (including interest and penalty, if applicable) |
71.51 |
3.69 |
1994-2016 |
Customs, Excise and Service Tax Appellate Tribunals of various states |
The Central Excise Act |
Excise duty (including interest and penalty, if applicable) |
3.59 |
- |
2003-2010 |
High Courts of various states |
Customs Act, 1962 |
Custom Duty (including interest and penalty, if applicable) |
1.62 |
0.12 |
2011-2013 |
Appellate Authority up to Commissioner''s level |
Customs Act, 1962 |
Custom Duty (including interest and penalty, if applicable) |
0.05 |
0.05 |
2012 |
Customs, Excise and Service Tax Appellate Tribunals of various states |
Central Sales Tax Act and Local Sales Tax Act |
Sales tax (including interest and penalty, as applicable) |
150.17 |
49.83 |
1985-2017 |
Appellate Authority up to Commissioner''s level |
Central Sales Tax Act and Local Sales Tax Act |
Sales tax (including interest and penalty, as applicable) |
28.78 |
2.23 |
1984-2014 |
Sales Tax Appellate Tribunals of various states |
Central Sales Tax Act and Local Sales Tax Act |
Sales tax (including interest and penalty, as applicable) |
142.36 |
101.29 |
1984-2017 |
High Courts of various states |
Central Sales Tax Act and Local Sales Tax Act |
Sales tax (including interest and penalty, as applicable) |
27.63 |
12.76 |
1985-2009 |
Supreme Court |
Service tax (Finance Act, 1994) |
Service tax (including interest and penalty, as applicable) |
79.25 |
0.56 |
2005-2017 |
Appellate Authority up to Commissioner''s level |
Service tax (Finance Act, 1994) |
Service tax (including interest and penalty, as applicable) |
8.11 |
1.5 |
2003-2008 |
Customs, Excise and Service Tax Appellate Tribunals of various states |
Income Tax Act, 1961 |
Income Tax (including interest and penalty, if applicable) |
153.21 |
1979 - 1980, 1991, AY 200607, AY 2007-08, AY 2009-10, AY 2011-12 |
Appellate Authority up to Commissioner''s Level |
|
Income Tax Act, 1961 |
Income Tax (including interest and penalty, if applicable) |
0.20 |
- |
1982-1983 |
Income Tax Appellate Tribunal, Mumbai |
Income Tax Act, 1961 |
Income Tax (including interest and penalty, if applicable) |
0.06 |
- |
1963-1964 1982-1983 |
Bombay High Court |
REPORT ON THE INTERNAL FINANCIAL CONTROLS UNDER CLAUSE (I) OF SUB-SECTION 3 OF SECTION 143 OF THE ACT
We have audited the internal financial controls over financial reporting of Hindustan Unilever Limited ("the Company") as of 31 March 2017 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.
management''s responsibility for internal financial controls
The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal controls over financial reporting criteria established by the Company considering the essential components of internal controls stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the "Guidance Note") issued by the Institute of Chartered Accountants of India ("ICAI"). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013 ("the Act").
auditor''s responsibility
Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Act to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal controls based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial control system over financial reporting.
MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING
A company''s internal financial controls over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial controls over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.
INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial controls over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
OPINION
In our opinion, the Company has, in all material respects, an adequate internal financial control system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2017, based on the internal controls over financial reporting criteria established by the Company considering the essential components of internal controls stated in the Guidance Note issued by the ICAI.
For B S R & co. LLP
Chartered Accountants
Firm''s Registration No:
101248W/ W - 100022
Akeel Master
Partner
Membership No: 046768
Mumbai: 17 May 2017
Mar 31, 2015
We have audited the accompanying standalone financial statements of
Hindustan Unilever Limited("the Company"), which comprise the Balance
Sheet as at March 31, 2015, 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. 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 auditors'' 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 control 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, but not for the purpose of expressing
an opinion on whether the Company has in place an adequate internal
financial controls system over financial reporting and the operating
effectiveness of such controls. 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 March 31, 2015, 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, 2015 (''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 the Annexure 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) I n 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 Companies (Accounts) Rules, 2014.
(e) On the basis of the written representations received from the
Directors as on March 31, 2015 taken on record by the Board of
Directors, none of the Directors are disqualified as on March 31, 2015
from being appointed as a Director in terms of sub-section 2 of Section
164 of the Act.
(f) With respect to the other matters to be included in the Auditors''
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
derivatives 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.
ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT (Referred to in our report
of even date) (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.
(ii) (a) The inventory, except goods-in-transit, has been physically
verified by the management during the year. In respect of inventory
lying with third parties, these have substantially been confirmed by
them. In our opinion, the frequency of such verification is
reasonable.
(b) The procedures for the 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. The
discrepancies noticed on verification between the physical stocks and
the book records were not material.
(iii) The Company has not granted any loans, secured or unsecured, to
companies, firms or other parties covered in the register maintained
under Section 189 of the Act.
(iv) 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 with regard
to purchase of inventories and fixed assets and sale of goods and
services. In our opinion and according to the information and
explanations given to us, there is no continuing failure to correct
major weakness in internal control system.
(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 the 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
on the basis of our examination of the records of the Company, amounts
deducted/accrued in the books of account in respect of undisputed
statutory dues including Provident fund, Employees'' State Insurance,
Income tax, Sales tax, Wealth tax, Service tax, Customs duty, Excise
duty, Value added tax, Cess, Professional tax and other material
statutory dues have been regularly deposited during the year by the
Company 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, Wealth tax, Service tax,
Customs duty, Excise duty, Value added tax, Cess, Professional tax and
other material statutory dues were in arrears as at March 31,2015 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, Wealth tax, Sales tax, Value added tax,
Service tax, Customs duty, Excise duty and Cess which have not been
deposited with the appropriate authorities on account of any dispute
other than those mentioned in Annexure I to this report.
(c) According to the information and explanations given to us and on
the basis of our examination of the records of the Company, the amount
required to be transferred to Investor Education and Protection Fund in
accordance with the relevant provisions of the Companies Act, 1956 (1
of 1956) and rules made thereunder has been transferred to such fund
within time.
(viii) The Company does not have any accumulated losses at the end of
the year and has not incurred cash losses during the year and in the
immediately preceding financial year.
(ix) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to its
bankers. The Company did not have any outstanding dues to any financial
institution or debentures holders during the year.
(x) According to the information and explanations given to us, the
terms and conditions on which the Company has given guarantee for loan
taken by others from bank are not prejudicial to the interest of the
Company. The Company has not given any guarantees for loan taken by
others from financial institutions.
(xi) In our opinion and according to the information and explanations
given to us, the Company has not raised any term loans.
(xii) According to the information and explanations given to us, no
instances of material fraud on or by the Company has been noticed or
reported during the course of our audit.
Annexure I
Amount Amount deposited
Name of the Nature of dues Demanded under dispute
statue (Rs. crores) (Rs in crores)
The Central
Excise Excise duty
Including 170.90 4.58
Act, 1944 Interest and penalty,
if applicable
The Central
Excise Excise duty Including 19.40 0.43
Act, 1944 Interest and penalty,
if applicable
The Central
Excise Excise duty Including 5.30 -
Act, 1944 Interest and penalty,
if applicable
Customs Act,
1962 Custom Duty, 1.71 -
Including Interest and
penalty, if applicable
Central and
Local Sales tax (including 127.83 32.07
Sales Tax interest and penalty,
Acts as applicable]
Central and
Local Sales tax (including 21.17 2.5
Sales Tax
Acts interest and penalty,
as applicable]
Central and
Local Sales tax (including 114.82 75.3
Sales Tax Acts interest and penalty,
as applicable]
Central and
Local Sales tax (including 22.23 9.42
Sales Tax Acts interest and penalty,
as applicable]
Service Tax Appellate Authority 80.55 0.5
(Finance upto Commissioner''s
Act, 1994] level
Income Tax Act, Income Tax
Including 117.14 -
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 Periods to which the Forum where the dispute is
amount relates pending
The Central Excise
Act, 1944 1994-2014 Appellate Authority upto
Commissioner''s level
The Central Excise
Act, 1944 1994-2010 Customs, Excise and Service
Tax Appellate Tribunals of
various states
The Central Excise
Act, 1944 2003- 2012 High Courts of various states
Customs Act, 1962 2011-2012 Appellate Authority upto
Commissioner''s level
Central and Local
Sales Tax
Acts 1985-2015 Appellate Authority upto
Commissioner''s level
Central and Local
Sales Tax Acts 1984- 2015 Sales Tax Appellate Tribunals
of various states
Central and Local
Sales Tax Acts 1983-2015 High Courts of various states
Central and Local
Sales Tax Acts 1985- 2007 Supreme Court
Service Tax
(Finance
Act, 1994] 2005-2014 Appellate Authority upto
Commissioner''s level
Income Tax Act,
1961 1979 - 1980, 1991, Appellate Authority - upto
2009 - 2010 Commissioner''s Level
Income Tax Act,
1961 1963 - 1964 Income Tax Appellate
1982 - 1983 Tribunal, Mumbai
Income Tax Act,
1961 1982 - 1983 Bombay High Court
For B S R & Co. LLP
Chartered Accountants
Firm''s Registration
No: 101248W/W-100022
Akeel Master
Partner
Membership No: 046768
Mumbai: 8 May, 2015
Mar 31, 2013
REPORT ON THE FINANCIAL STATEMENTS
1. We have audited the accompanying financial statements of Hindustan
Unilever Limited (the "Company"), which comprise the Balance Sheet as
at 31st March, 2013, and the Statement of Profit and Loss and Cash Flow
Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information, which we have
signed under reference to this report.
MANAGEMENT''S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS
2. The Company''s 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'' of India (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.
AUDITORS'' RESPONSIBILITY
3. 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.
4. An audit involves performing procedures to obtain audit evidence,
about the amounts and disclosures in the financial statements. The
procedures selected depend on the auditors'' 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 auditors consider 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.
5. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion.
OPINION
6. In our opinion, and to the best of our information and according to
the explanations given to us, the accompanying 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 31st March, 2013;
(b) in the case of the Statement of Profit and Loss, of the profit for
the year ended on that date; and
(c) In the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
7. 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
sub-section (4A) of section 227 of the Act (hereinafter referred to as
the "Order"), and on the basis of such checks of the books and records
of the Company as we considered appropriate and according to the
information and explanations given to us, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
8. 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 dealt with by this report comply with the
Accounting Standards referred to in sub-section (3C) of section 211 of
the Act;
(e) On the basis of written representations received from the directors
as on 31st March, 2013, and taken on record by the Board of Directors,
none of the directors is disqualified as on 31st March, 2013, from
being appointed as a director in terms of clause (g) of sub- section
(1) of section 274 of the Act.
1. (a) The Company is maintaining proper records showing full
particulars, including quantitative details and situation, of fixed
assets.
(b) The fixed assets are physically verified by the Management
according to a phased programme designed to cover all the items over a
period of two years which, in our opinion, is reasonable having regard
to the size of the Company and the nature of its assets. Pursuant to
the 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.
(c) I n our opinion, and according to the information and explanations
given to us, a substantial part of fixed assets has not been disposed
off by the Company during the year.
2. (a) The inventory (excluding stocks with third parties) has been
physically verified by the Management during the year. 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) In our opinion, the procedures of physical verification of
inventory followed by the Management are reasonable and adequate in
relation to the size of the Company and the nature of its business.
(c) On the basis of our examination of the inventory records, in our
opinion, the Company is maintaining proper records of inventory. The
discrepancies noticed on physical verification of inventory as compared
to book records were not material.
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 Act. Therefore, the
provisions of Clause 4(iii)[(b), (c), (d), (f) and (g)] of the said
Order are not applicable to the Company.
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
purchase of inventory and fixed assets and for the sale of goods and
services. Further, on the basis of our examination of the books and
records of the Company, and according to the information and
explanations given to us, we have neither come across, nor have been
informed of, any continuing failure to correct major weaknesses in the
aforesaid internal control system.
5. (a) According to the information and explanations given to us, we
are of the opinion that the particulars of all contracts or
arrangements that need to be entered into the register maintained under
section 301 of the Companies Act, 1956 have been so entered.
(b) In our opinion, and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements and exceeding the value of Rupees Five lakhs in respect of
any party during the year have been made at prices which are reasonable
having regard to the prevailing market prices at the relevant time.
6. The Company has not accepted any deposits from the public within
the meaning of Sections 58A and 58AA of the Act and the rules framed
there under.
7. I n our opinion, the Company has an internal audit system
commensurate with its size and the nature of its business.
8. We have broadly reviewed the books of account maintained by the
Company in respect of products where, pursuant to the rules made by the
Central Government of India, the maintenance of cost records has been
prescribed under clause (d) of sub-section (1) of Section 209 of the
Act, 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. (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 generally regular in depositing undisputed statutory dues in respect
of provident fund, employees'' state insurance, service tax, excise duty
and tax deducted at source, and is regular in depositing undisputed
statutory dues, including investor education and protection fund,
income tax, sales tax, wealth tax, customs duty and other material
statutory dues, as applicable, with the appropriate authorities.
(b) According to the information and explanations given to us and the
records of the Company examined by us, there are no dues of wealth tax
which have not been deposited on account of any dispute. The
particulars of dues of income tax, sales tax, service tax, customs duty
and excise duty as at 31st March, 2013 which have not been deposited on
account of a dispute, are as follows:
10. The Company has no accumulated losses as at the end of the
financial year and it has not incurred any cash losses in the financial
year ended on that date or in the immediately preceding financial year.
11. As the Company does not have any borrowings from any financial
institution or bank nor has it issued any debentures as at the balance
sheet date, the provisions of Clause 4(xi) of the Order are not
applicable to the Company.
12. The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
Therefore, the provisions of Clause 4(xii) of the Order are not
applicable to the Company.
13. As the provisions of any special statute applicable to chit fund/
nidhi/ mutual benefit fund/ societies are not applicable to the
Company, the provisions of Clause 4(xiii) of the Order are not
applicable to the Company.
14. I n our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of Clause 4(xiv) of the Order are not applicable to the
Company.
15. In our opinion, and according to the information and explanations
given to us, the Company has not given any guarantee for loans taken by
others from banks or financial institutions during the year.
Accordingly, the provisions of Clause 4(xv) of the Order are not
applicable to the Company.
16. The Company has not raised any term loans. Accordingly, the
provisions of Clause 4(xvi) of the Order are not applicable to the
Company.
17. The Company has not raised any loans on short term basis.
Accordingly, the provisions of Clause 4(xvii) of the Order are not
applicable to the Company.
18. The Company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under Section
301 of the Act during the year. Accordingly, the provisions of Clause
4(xviii) of the Order are not applicable to the Company.
19. The Company has not issued any debentures during the year and does
not have any debentures outstanding as at the beginning of the year and
at the year end. Accordingly, the provisions of Clause 4(xix) of the
Order are not applicable to the Company.
20. The Company has not raised any money by public issues during the
year. Accordingly, the provisions of Clause 4(xx) of the Order are not
applicable to the Company.
21. During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
material fraud on or by the Company, noticed or reported during the
year, nor have we been informed of any such case by the Management.
For Lovelock & Lewes
Firm Registration Number: 301056E
Chartered Accountants
Pradip Kanakia
Partner
Membership Number: 39985
Mumbai: 29th April, 2013
Mar 31, 2012
1. We have audited the attached Balance Sheet of Hindustan Unilever
Limited (the "Company") as at 31st March, 2012, and the related
Statement of Profit and Loss and Cash Flow Statement for the year ended
on that date annexed thereto, which we have signed under reference to
this report. 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. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by Management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003, as
amended by the Companies (Auditor's Report) (Amendment) Order, 2004
(together the "Order"), issued by the Central Government of India in
terms of sub-section (4A) of Section 227 of 'The Companies Act, 1956'
of India (the Act') and on the basis of such checks of the books and
records of the Company as we considered appropriate and according to
the information and explanations given to us, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
4. Further to our comments in paragraph 3 above, 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 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 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 dealt with by this report comply with the
accounting standards referred to in sub- section (3C) of Section 211 of
the Act;
(e) On the basis of written representations received from the
directors, as on 31st March, 2012 and taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March, 2012
from being appointed as a director in terms of clause (g) of
sub-section (1) of Section 274 of the Act;
(f) In our opinion and to the best of our information and according to
the explanations given to us, the said financial statements together
with the notes thereon and attached thereto give, in the prescribed
manner, the information required by the Act, 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 3lsl March 2012;
(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.
annexure to auditors' report
Referred to in paragraph 3 of the Auditors' Report of even date to the
members of Hindustan Unilever Limited on the financial statements as of
and for the year ended 31st March 2012
1. (a) The Company is maintaining proper records showing full
particulars, including quantitative details and situation, of fixed
assets.
(b) The fixed assets are physically verified by the Management
according to a phased programme designed to cover all the items over a
period of two years which, in our opinion, is reasonable having regard
to the size of the Company and the nature of its assets. Pursuant to
the programme, a portion of the fixed assets has been physically
verified by the Management during the year and no material
discrepancies between the book records and the physical inventory have
been noticed.
(c) In our opinion, and according to the information and explanations
given to us, a substantial part of fixed assets has not been disposed
off by the Company during the year.
2. (a) The inventory (excluding stocks with third parties) has been
physically verified by the Management during the year. 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) In our opinion, the procedures of physical verification of
inventory followed by the Management are reasonable and adequate in
relation to the size of the Company and the nature of its business.
(c) On the basis of our examination of the inventory records, in our
opinion, the Company is maintaining proper records of inventory. The
discrepancies noticed on physical verification of inventory as compared
to book records were not material.
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 Act. Consequently, 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 is an adequate internal control system 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 and
services. Further, on the basis of our examination of the books and
records of the Company, and according to the information and
explanations given to us, no major weakness have been noticed or
reported.
5. (a) In our opinion, and according to the information and
explanations given to us, the particulars of contracts or arrangements
referred to in Section 301 of the Act 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 and exceeding the value of Rupees Five Lakhs in respect of
any party during the year have been made at prices which are reasonable
having regard to the prevailing market prices at the relevant time.
6. The Company has not accepted any deposits from the public within
the meaning of Sections 58A and 58AA of the Act and the rules framed
there under.
7. In our opinion, the Company has an internal audit system
commensurate with its size and the nature of its business.
8. We have broadly reviewed the books of account maintained by the
Company in respect of products where, pursuant to the rules made by the
Central Government of India, the maintenance of cost records has been
prescribed under clause (d) of sub-section (1) of Section 209 of the
Act, 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. (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 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 and other material statutory dues, as applicable, with the
appropriate authorities.
(b) According to the information and explanations given to us and the
records of the Company examined by us, there are no dues of wealth tax
which have not been deposited on account of any dispute, and the
particulars of dues of income tax, sales tax, service tax, customs duty
and excise duty as at 31st March 2012 which have not been deposited on
account of a dispute, are as follows:
Name of the
statute Nature of dues Amount under Periods to which the
dispute not yet amount relatest
Deposit
(Rs.Crores)
The
Central
Excise Act Excise duty
including
interest and 97.33 1982-83,1985-90,
1944 penalty, as
applicable 1991-2011
64.21 1981,1992-99, 2000-10
0.03 1999
4.70 1979 -1983
Central
Sales Tax
Act Sales tax including
interest and 94.82 1983-89,
1990-10
and Local
Sales Tax
Acts penalty, as
applicable
10.23 1992-10
32.29 1976-77,1983-86,
1988-89,1991-01,
2003, 2004-05, 2007
2.18 1985-90, 1995-97, 2000
Customs
Act,1962 Customs duty
including
interest 2.74 1995,1998-99,2011
and penalty,
as applicable
Income-tax
Act, 1961 Income tax
including
interest and 169.23 1979-80,1991,
penalty, as
applicable 2003-08, 2010-12
126.20 1982-83, 2005-06
0.06 1963-64,1982-83
Service Tax
(Finance Act Service tax 12.41 2004, 2005-10, 2011
1994) including
interest and
penalty, as
applicable
3.62 2009
Name of the statute Forum where the dispute is pending
The central Excise Act,1944 Appellate Authority-up to commissioner's
Tribunal High Court Supreme Court
Central Sales Tax Act Appellate Authority-up to commissioner's
and Local Sales Tax Acts level
(including works contract) Tribunal High Courts supreme court
Customs Act.1962 Appellate Authority -up to commissioner
level tribunal High Court
Income-tax Act,1961
Service Tax (Financial Act
1994) Appellate Authority-up to commissioner's
Tribunal
10. The Company has no accumulated losses.
11. According to the records of the Company examined by us and the
information and explanation given to us, the Company has not defaulted
in repayment of dues to any financial institution or bank or debenture
holders as at the balance sheet date.
12. The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
13. The provisions of any special statute applicable to chit fund /
nidhi / mutual benefit fund / societies are not applicable to the
Company.
14. In our opinion, the Company is not a dealer or trader in shares,
securities, debentures and other investments.
15. In our opinion, and according to the information and explanations
given to us, the Company has not given any guarantee for loans taken by
others from banks or financial institutions during the year.
16. The Company has not obtained any term loans.
17. On the basis of an overall examination of the balance sheet of the
Company, in our opinion, and according to the information and
explanations given to us, there are no funds raised on a short- term
basis which have been used for long- term investment.
18. The Company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under Section
301 of the Act during the year.
19. The Company has not issued any debentures during the year; and
does not have any debentures outstanding as at the year end.
20. The Company has not raised any money by public issues during the
year.
21. During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
material fraud on or by the Company, noticed or reported during the
year, nor have we been informed of any such case by the Management.
For Lovelock & Lewes
Firm Registration Number: 301056E
Chartered Accountants
Pradip Kanakia
Partner
Mumbai: 1st May, 2012 Membership No: 39985
Mar 31, 2010
1 We have audited the attached Balance Sheet of Hindustan Unilever
Limited (the "Company") as at 31 st March, 2010, and the related Profit
and Loss Account and Cash Flow Statement for the year ended on that
date annexed thereto, which we have signed under reference to this
report. These financial statements are the responsibility of the
Companys 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. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by Management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3 As required by the Companies (Auditors Report) Order, 2003 as
amended by Companies (Auditors Report) (Amendment) Order, 2004
(together the "Order"), issued by the Central Government of India in
terms of sub-section (4A) of Section 227 of The Companies Act, 1956 of
India (the "Act") and on the basis of such checks of the books and
records of the Company as we considered appropriate and according to
the information and explanations given to us, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the said
Order.
4 Further to our comments in the Annexure referred to in paragraph 3
above, 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 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 appears from our examination of those
books;
c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
d) In ouropinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statement dealt with by this report comply with the accounting
standards referred to in sub-section (3C) of Section 211 of the Act;
e) On the basis of written representations received from the directors
as on 31st March, 2010 and other information and explanations obtained,
and taken on record by the Board of Directors, none of the directors is
disqualified as on 31st March, 2010 from being appointed as a director
in terms of clause (g) of sub-section (1) of Section 274 of the Act;
f) In our opinion and to the best of our information and according to
the explanations given to us, the said financial statements together
with the notes thereon and attached thereto give, in the prescribed
manner, the information required by the Act, 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 31 st March, 2010; ii) in the case of the Profit and Loss
Account, 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.
Auditors Report
Annexure to the AuditorsReport
[Referred to in paragraph 3 of the Auditors Report of even date to the
members of Hindustan Unilever Limited on the financial statements for
the year ended 31 st March, 2010]
1 a) The Company is maintaining proper records showing full
particulars, including quantitative details and situation, of fixed
assets.
b) The fixed assets are physically verified by the Management according
to a phased programme designed to cover items at all the locations once
in two years which, in our opinion, is reasonable having regard to the
size of the Company and the nature of its assets. Pursuant to the
programme, fixed assets at certain locations were physically verified
by the management during the year and no material discrepancies between
the book records and the physical inventory have been noticed.
c) In our opinion and according to the information and explanations
given to us, a substantial part of fixed assets has not been disposed
off by the Company during the year.
2 a) The inventory (excluding stocks with third parties) has been
physically verified by the Management during the year. 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) In our opinion, the procedures of physical verification of inventory
followed by the Management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
c) On the basis of our examination of the inventory records, in our
opinion, the Company is maintaining proper records of inventory. The
discrepancies noticed on physical verification of inventory as compared
to book records were not material.
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 Act. Consequently, clauses
(iii)(b), (iii)(c), (iii)(d), (iii)(f) and (iii)(g) of paragraph 4 of
the Orderare not applicable.
4 In our opinion and according to the information and explanations
given to us, having regard to the explanation that certain items
purchased are of special nature for which suitable alternative sources
do not exist for obtaining comparative quotations, there is an adequate
internal control system commensurate with the size of the Company and
the nature of its business for the purchase of inventory, fixed assets
and for the sale of goods and services. Further, on the basis of our
examination of the books and records of the Company, and according to
the information and explanations given to us, we have neither come
across nor have been informed of any continuing failure to correct
major weaknesses in the aforesaid internal control system.
5 a) In our opinion and according to the information and explanations
given to us, the particulars of contracts or arrangements referred to
in Section 301 of the Act 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, there are no transactions made in pursuance of such
contracts or arrangements and exceeding Rs. five lakhs in respect of
any party during the year, which have been made at prices which are not
reasonable having regard to the prevailing market prices at the
relevant time.
6 The Company has not accepted any deposits from the public within the
meaning of Sections 58Aand 58AAof the Act and the rules framed there
under.
7 In our opinion, the Company has an internal audit system commensurate
with its size and nature of its business.
8 We have broadly reviewed the books of account maintained by the
Company in respect of products where, pursuant to the Rules made by the
Central Government of India, the maintenance of cost records has been
prescribed under clause (d) of sub-section (1) of Section 209 of the
Act, 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 orcomplete.
9 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
generally 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 material statutory dues as
applicable with the appropriate authorities.
b) According to the information and explanations given to us and the
records of the Company examined by us, there are no dues of wealth tax
which have not been deposited on account of any dispute, and the
particulars of excise duty, sales tax, customs duty, income-tax,
service tax and cess as at 31st March, 2010 which have not been
deposited on account of a dispute are as follows:
Name of the
statute Nature of dues Amount under dispute
not yet deposited
Rs. Crores
The Central
Excise Act, Excise duty including 57.35
1944 interest and penalty, as
applicable
46.88
0.26
Central Sales
Tax Act and Sales tax including 97.80
Local Sales
Tax Acts interest and penalty, as
(including
works contract) applicable 14.93
95.98
Customs Act,
1962 Customs duty including 0.56
interest and penalty, as
applicable
Income-tax Act,
1961 Income tax including 4.39
interest and penalty, as
applicable 9.69
0.31
Service Tax
(Finance Act, Service tax including 0.65
1994) interest and penalty, as
applicable 3.62
Bombay
Provincial Cess on entry of goods 0.05
Municipal
Corporations
Act, 1949
[Amended]
Name of the Statue Periods Forum where the
to which the dispute is pending
amount relates
The Central Excise Act,
1944 1982,1987 Appellate Authority-upto
1991 to 1995 Commissioners level
1997 to 2008
1983 to 1986 Tribunal
1989 to 1991
1994 to 2006
1979 to 1983 Supreme Court
Central Sales Tax Act and
Local Sales Tax Acts
(including works contract) 1976, 1977 Appellate Authority-upto
1983 to 2008 Commissioners level
1984 to 2004 Tribunal
1983 to 2001 High Courts
1986 to 1998
1999 to 2008
Customs Act, 1962 1995 Appellate Authority-upto
Commissioners level
Income-tax Act, 1961 1979-80 Appellate Authority-upto
1995-96 Commissioners level
1985-86 Tribunal
1991-92
2004-05
2005-06
1988-89 High Courts
1991-92
Service Tax (Finance Act,
1994) 2004 to 2006 Appellate Authority-upto
Commissioners level
2005 to 2009 Tribunal
Bombay Provincial
Municipal Corporations
Act, 1949 [Amended] 2000-01 Appellate Authority-upto
Commissioners level
10 The Company has no accumulated losses as at 31st March, 2010, and
has not incurred any cash losses in the financial year ended on that
date or in the immediately preceding financial year.
11 According to the records of the Company examined by us and the
information and explanations given to us, the Company has not defaulted
in repayment of dues to any financial institution or bankor debenture
holders as at the balance sheet date.
12 The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
13 The provisions of any special statute applicable to chit fund /
nidhi / mutual benefit fund / societies are not applicable to the
Company.
14 In our opinion, the Company is not a dealer or trader in shares,
securities, debentures and other investments.
15 In our opinion and according to the information and explanations
given to us, the Company has not given any guarantee for loans taken by
others from banks or financial institutions during the year.
16 In our opinion, and according to the information and explanations
given to us, on an overall basis, the term loans have been applied
forthepurposesforwhichtheywereobtained.
17 On the basis of an overall examination of the balance sheet of the
Company, in our opinion and according to the information and
explanations given to us, there are no funds raised on a short- term
basis which have been used for long-term investment.
18 The Company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under Section
301 of the Act during the year.
19 The Company has not issued any debentures during the year.
20 The Company has not raised any money by public issue during the
year.
21 During the course of our examination of the books and records of the
Company, carried out in accordance with the generally accepted auditing
practices in India, and according to the information and explanations
given to us, we have neither come across any instance of material fraud
on or by the Company, noticed or reported during the year, nor have we
been informed of such case by the Management.
For Lovelock & Lewes
Firm Registration
Number: 301056E
Chartered Accountants
Sharmila A. Karve
Partner
Mumbai: 25th May, 2010 Membership No: 43229