To the Members of Colgate Palmolive (India) Limited
Report on the Ind AS Financial Statements
We have audited the accompanying Ind AS financial statements of Colgate Palmolive(India) Limited ("the Company") which comprise the Balance Sheet as at March31 2018 the Statement of Profit and Loss including the statement of Other ComprehensiveIncome the Cash Flow Statement and the Statement of Changes in Equity for the year thenended and a accounting policies and other summaryofsignificant explanatory information.
Management's Responsibility for the Ind AS Financial Statements
The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese Ind AS financial statements that give a true and fair view of the financialposition financial performance including other comprehensive income cash flows andchanges in equity of the Company in accordance with accounting principles generallyaccepted in India including the Indian Accounting Standards (Ind AS) specified undersection 133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015as amended. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and the design implementation and maintenance of adequateinternal financial control that were ensuring the accuracy and operatingeffectivelycompleteness of the accounting records relevant to the preparation and presentation ofthe Ind AS financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
Our responsibility is to express an opinion on these Ind AS financial statements basedon our audit. We have taken into account the provisions of the Act the accounting andauditing standards and matters which are required to be included in the audit report underthe provisions of the Act and the Rules made thereunder. We conducted our audit of the IndAS financial statements in accordance with the Standards on Auditing issued by theInstitute of Chartered Accountants of India as specified under Section 143(10) of theAct. Those Standards require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether the financial statements are freefrom material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the Ind ASfinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of theInd AS financial statements that give a true and fair view in order to design auditprocedures that are appropriate in the circumstances. An audit also includes evaluatingthe appropriateness of accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the Ind AS financial statements. We believe that the audit evidence we have obtained issufficient audit opinion on the Ind AS financial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the Ind AS financial statements give the information required by the Act inthe manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at March31 2018 its profit including other comprehensive income its cash flows and the changesin equity for the year ended on that date.
The Ind AS financial statements of the Company for the year ended March 31 2017included in these Ind AS financial statements have been audited by the predecessorauditor who expressed an unmodified opinion on those statements on May 15 2017.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub- section (11) of section 143 ofthe Act we give in the "Annexure 1" a statement on the matters specified inparagraphs 3 and 4 of the Order.
2. As required by section 143 (3) of the Act we that:
(a) We have sought and obtained information and explanations which to thebest 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 theCompany so far as it appears from our examination of those books;
(c) The Balance Sheet Statement of Profit and Loss including the Statement of OtherComprehensive Income the Cash Flow Statement and Statement of Changes inEquity dealt with by this Report are in agreement with the books of account;
(d) In our opinion the aforesaid Ind AS financial statements comply with theAccounting Standards specifiedunder section 133 of the Act read with Companies(Indian Accounting Standards) Rules 2015 as amended; (e) On the basis of writtenrepresentations received from the directors as on March 31 2018 and taken onrecord by the Board of Directors none of the directors is disqualified as on March31 2018 from being appointed as a director in terms of section 164 (2) ofthe Act;
(f) With respect to the adequacy of the financial controls over financial reporting ofthe Company with reference to Ind AS financial statements operating effectiveness of suchcontrols refer to our separate Report in to this report;
(g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 inour opinion and to the best of our information and according to theexplanations given to us:
i. The Company has disclosed the impact of pending litigations on its financialposition in its Ind AS financial statements report Refer Note 24 (A) and 24 (B) and Note31 to the Ind AS financial statements; all the
ii. The Company did not have any long-term contracts including derivativecontracts for which there were any material foreseeable losses.
iii. There has been one instance of slight delay of 7 days in transferringamounts of INR 3351980 in respect of unclaimed dividend required to betransferred to the Investor Education and Protection Fund by the Company.
ANNEXURE I TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTSOF COLGATE PALMOLIVE (INDIA) LIMTED
(i) (a) The Company has maintained proper records showing full particularsincluding quantitative details and situation of Property Plant and Equipment. (b)The property plant and equipment are physically verified by the Managementaccording to a phased programme designed to cover all the items over a period ofthree years which in our opinion is reasonable having regard to the sizeof the Company and the nature of its assets. Pursuant to the programme aportion of the fixed assets has been physically verified by the Management during the yearand no material discrepancies have been noticed on such verification. (c) Accordingto information and explanations given by the management the title deeds of immovableproperties included in property plant and equipment are held in the name of the Companyexcept as noted below:-
Leasehold land at Sewri stated in the books of accounts at Nil where formal transferof lease rights in favour of the Company is pending.
Lease rights in respect of one plot of leasehold land at Aurangabad stated in the bookof accounts at 5.59 lacs pending execution with the concerned authorities.
(ii) The inventory has been physically verified by the management during the year. Inour opinion the frequency of verification is reasonable. No material discrepancies werenoticed on such physical verification. Inventories lying with third parties have beenconfirmed by them as at March 31 2018 and no material discrepancies were noticed inrespect of such confirmations.
(iii) According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies firms Limited LiabilityPartnerships or other parties covered in the register maintained under section 189 of theCompanies Act 2013. Accordingly the provisions of clause 3(iii) (a) (b) and (c) of theOrder are not applicable to the Company and hence not commented upon.
(iv) In our opinion and according to the information and explanations given to usthere are no loans investments guarantees and securities given in respect of whichprovisions of section 185 of the Companies Act 2013 are applicable and hence not commentedupon. In respect of loans and advances given provisions of section 186 of the CompaniesAct 2013 have been complied with by the Company.
(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76of the Act and the Companies (Acceptance of Deposits) Rules 2014 (as amended).Accordingly the provisions of clause 3(v) of the Order are not applicable.
(vi) To the best of our knowledge and as explained the Central Government has notspecified the maintenance of cost records under Section 148(1) of the Companies Act 2013for the products/ services of the Company.
(vii) (a) The Company is regular in depositing appropriate authorities undisputedstatutory dues including provident fund state insurance income-tax sales-taxservice tax duty of custom duty of excise value added tax goods and servicetax and other statutory dues applicable to it.
(b) According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employees' state insurance income- taxservice tax sales-tax duty of custom duty of excise value added tax goods andservice tax cess and other statutory dues were outstanding at the year end fora period of more than six months from the date they became payable.
(c ) According to the records of the Company the dues of income-tax sales-taxservice tax duty of custom duty of excise value added tax and cess onaccount of any dispute are as follows:
Independent Auditor's Report for the year ended March 31 2018
|Income Tax || || || |
|Name of the Statute ||Period to which the amount relates ||Forum where dispute is pending ||Amount ( Lacs) |
|1 Income Tax Act 1961 ||2011-12 2012-13 and 2013-14 ||Income Tax Appellate tribunal ||21982.40 |
| ||2006-07 and 2007- 08 ||First Appellate Authority ||42.75 |
| ||1996-1997 to 2000-2001 ||High Court ||1100.21 |
|Total || || ||23125.36 |
|Sales tax || || || |
|1 Statute applicable in Maharashtra ||1993-94 and 2004-05 ||High court ||51.86 |
|Uttar Pradesh || || || |
|2 Statute applicable in Uttar Pradesh ||1987-88 1988-89 1990-91 ||Assessing authorities and ||954.47 |
|Andhra Pradesh Kerala Rajasthan ||1995-961996-97 1997-98 ||First Appellate Authorities of || |
|Delhi Tripura West Bengal Bihar ||1999-2000 2000-01 2001-02 ||various states || |
|Orissa Assam Maharashtra ||2003 - 2004 2009-10 2010-11 || || |
|Gujarat Karnataka Jharkhand and ||and 2011-12 || || |
|Goa || || || |
|3 Statute applicable in Maharashtra ||FY 1995-96 1998-99 2000-01 to ||Sales Tax Appellate ||250.01 |
|Andhra Pradesh Kerala Bihar ||2014-15 ||Tribunal of various States || |
|Orissa and Gujarat || || || |
|Total || || ||1256.34 |
|Service tax || || || |
|1 Service Tax (Finance Act 1994) ||1997-1998 to 2000-2001 ||High Court ||939.73 |
| ||2005- 2006 and 2006- 2007 || || |
|2 Service Tax (Finance Act 1994) ||1997-1998 to 2000-2001 ||Customs Excise and Service ||72.84 |
| ||2007- 2008 and 2008- 2009 ||Tax Appellate Tribunal || |
|3 Service Tax (Finance Act 1994) ||2002-2003 2004 - 2005 to ||First appellate authorities ||71.00 |
| ||2009-2010 || || |
|Total || || ||1083.57 |
|Excise duty || || || |
|1 The Central Excise Act 1944 ||1994-1995 and 2000-2001 to ||Customs Excise and Service ||994.66 |
| ||2010-2011. ||Tax Appellate Tribunal || |
|2 The Central Excise Act 1944 ||1998-1999 to 1999-2000 ||First appellate authorities ||764.37 |
| ||2001- 2002 to 2004- 2005 || || |
| ||2009-2010 2011-2012 to || || |
| ||2014-2015 February 2015 to || || |
| ||October 2015 and November || || |
| ||2015 to August 2016. || || |
|Total || || ||1759.03 |
(viii) The Company did not have any loans or borrowing dues in respect of a financialinstitution or bank or to government or dues to debenture holders during the year. (ix)According to the information and explanations given by the management the Company has notraised any money by way of initial public offer / further public offer / debt instrumentsand term loans hence reporting under clause (ix) is not applicable to the Company andhence not commented upon.
(x) Based upon the audit procedures performed for the purpose of reporting the true andfair view of the financial statements and according to the information and explanationsgiven by the management we report that no fraud by the company or no fraud on the companyby the officers and employees of the Company been noticed or reported during the year.(xi) According to the information and explanations given by the management the managerialremuneration has been paid / provided in accordance with the requisite approvals mandatedby the provisions of section 197 read with Schedule V to the Companies Act 2013. (xii) Inour opinion the Company is not a nidhi Company. Therefore the provisions of clause3(xii) of the order are not applicable to the Company and hence not commented upon. (xiii)According to the information and explanations given by the management transactions withthe related parties are in compliance with section 177 and 188 of Companies Act 2013where outstanding applicable and the details have been disclosed in the notes to thefinancial statements as required by the applicable accounting standards.
(xiv) According to the information and explanations given to us and on an overallexamination of the balance sheet the Company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the yearunder review. Accordingly the reporting requirements under clause 3(xiv) are notapplicable to the Company and hence not commented upon.
(xv) According to the information and explanations given by the management the Companyhas not entered into any non-cash transactions with directors or persons connected withhim as referred to in Section 192 of the Companies Act 2013.
(xvi) According to the information and explanations given to us the provisions ofsection 45- IA of the Reserve Bank of India Act 1934 are not applicable to the Company.
ANNEXURE 2 TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTSOF COLGATE-PALMOLIVE (INDIA) LIMITED
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting ofColgate-Palmolive (India) Limited ("the Company") as of March 31 2018in conjunction with our audit of the financial statements of the Company for the yearended on that date.
Management's Responsibility for Internal Financial Controls
The Company's Management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controlsthat were operating the orderly and efficienteffectively conduct of its businessincluding adherence to the Company's policies the safeguarding of itsassets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") and the Standards on Auditing asspecified under section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls and both issued by the Institute of CharteredAccountants of India. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating thedesign and operating effectiveness of internal control based on the assessed risk.The procedures selected depend on the auditor's judgement including the assessmentof the risks of material misstatement of the financial statements whether due to fraud orerror.
We believe that the audit evidence we have obtained is sufficient a basis forour audit opinion on the internal financial controls system over financialreporting.
A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financialcontrol over financial reporting includes those policies and procedures that (1) pertainto the maintenance of records that in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principlesand that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets thatcould 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 overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur andnot be detected. Also projections of any evaluation of the internal financial controlsover financial reporting to future periods are subject to the risk that the internalfinancial control over financial reporting may become inadequate because of changes inconditions or that the degree of compliance with the policies or procedures maydeteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financialcontrols over financial reporting as at March 31 2018were operating effectively based onthe internal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Auditof Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.
For S R B C & CO LLP
ICAI Firm Registration Number: 324982E/E300003
per Jayesh Gandhi
Membership Number: 037924
Place of Signature: Mumbai
Date: May 21 2018