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Procter & Gamble Health Ltd.

BSE: 500126 Sector: Health care
NSE: PGHL ISIN Code: INE199A01012
BSE 10:25 | 20 Feb 4177.00 -47.00
(-1.11%)
OPEN

4222.35

HIGH

4222.35

LOW

4174.40

NSE 10:19 | 20 Feb 4179.95 -41.10
(-0.97%)
OPEN

4211.20

HIGH

4248.95

LOW

4175.00

OPEN 4222.35
PREVIOUS CLOSE 4224.00
VOLUME 293
52-Week high 5120.80
52-Week low 2866.25
P/E 43.67
Mkt Cap.(Rs cr) 6,934
Buy Price 4175.70
Buy Qty 30.00
Sell Price 4183.80
Sell Qty 2.00
OPEN 4222.35
CLOSE 4224.00
VOLUME 293
52-Week high 5120.80
52-Week low 2866.25
P/E 43.67
Mkt Cap.(Rs cr) 6,934
Buy Price 4175.70
Buy Qty 30.00
Sell Price 4183.80
Sell Qty 2.00

Procter & Gamble Health Ltd. (PGHL) - Auditors Report

Company auditors report

Report on the Ind AS Financial Statements

We have audited the accompanying Ind AS financial statements of Merck Limited("the Company") which comprise the Balance Sheet as at December 31 2017 theStatement of Profit and Loss (including Other Comprehensive Income) the Cash FlowStatement and the Statement of Changes in Equity for the year then ended and a summary ofsignificant accounting policies and other explanatory information (hereinafter referred toas "Ind AS Financial Statements").

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 state of affairs(financial position) profit (financial performance including other comprehensive income)cash flows and changes in equity of the Company in accordance with the accountingprinciples generally accepted in India including the Indian Accounting Standards (Ind AS)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 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 design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness 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.

Auditor's Responsibility

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 and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the Ind AS financial statements. The procedures selected depend on theauditors' judgment including the assessment of the risks of material misstatement of theInd AS financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to the Company'spreparation of the Ind AS financial statements that give a true and fair view in order todesign audit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of accounting policies used and the reasonableness of theaccounting estimates made by the Company's Directors as well as evaluating the overallpresentation of the Ind AS financial statements. We believe that the audit evidence wehave obtained is sufficient and appropriate to provide a basis for our audit opinion onthe Ind AS financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Ind AS financial statements give the information required bythe Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India including the Ind AS of the state ofaffairs(financial position) of the Company as at 31st December 2017 its profit(financial performance including other comprehensive income) its cash flows and changesin equity for the year ended on that date.

Other Matter

The comparative financial information of the Company for the year ended 31st December2016 and the transition date opening balance sheet as at 1st January 2016 included inthese Ind AS financial statements are based on the previously issued statutory financialstatements prepared in accordance with the Companies (Accounting Standards) Rules 2006audited by B S R & Co. LLP whose report for the year ended 31st December 2016 and 31stDecember 2015 dated March 1 2017 and February 26 2016 respectively expressed anunmodified opinion on those financial statements as adjusted for the differences in theaccounting principles adopted by the Company on transition to the Ind AS which have beenaudited by us.

Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

(1) As required by the Companies (Auditors' Report) Order 2016 ("the Order")issued by the Central Government of India in terms of subsection (11) of Section 143 ofthe Act we give in "Annexure 1" a statement on the matters specified inparagraphs 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 andobtained all the information and explanations which to the best of our knowledge andbelief were necessary for the purposes of our audit; b. In our opinion proper books ofaccount as required by law have been kept by the Company so far as it appears from ourexamination of those books; c. The Balance Sheet the Statement of Profit and Loss theCash Flow Statement and the Statement of Changes in Equity dealt with by this Report arein agreement with the books of account; d. On the basis of written representationsreceived from the directors as on December 31 2017 and taken on record by the Board ofDirectors none of the directors is disqualified as on December 31 2017 from beingappointed as a director in terms of Section 164 (2) of the Act; e. With respect to theadequacy of the internal financial controls over financial reporting of the Company andthe operating effectiveness of such controls we give our separate Report in"Annexure 2". f. With respect to the other matters to be included in theAuditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules2014 in our opinion and to the best of our information and according to the explanationsgiven to us: (i) The Company has disclosed the impact of pending litigations on itsfinancial position in its Ind AS financial statements – Refer Note 42 on ContingentLiabilities to the Ind AS financial statements; (ii) The Company did not have anylong-term contracts including derivative contracts for which there were any materialforeseeable losses;

(iii) There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company; (iv) The Company has providedrequisite disclosures in its Ind AS financial statements as to holdings as well asdealings in Specified Bank Notes during the period from 8th November 2016 to 30thDecember 2016. Based on the procedures performed and relying on managementrepresentations we report that the disclosures made by the Company are in accordance withthe books of account maintained by the Company- Refer Note 50 to the Ind AS financialstatements.

For Haribhakti & Co. LLP
Chartered Accountants
ICAI Firm Registration No.103523W /W100048
Bhavik L. Shah
Place: Mumbai Partner
Date: February 22 2018 Membership No. 122071

Annexure 1 to Independent Auditors' Report

[Referred to in paragraph 1 under ‘Report on Other Legal and RegulatoryRequirements' in the Independent Auditor's Report of even date to the members of MerckLimited on the Ind AS financial statements for the year ended December 31 2017] (i) (a)The Company has maintained proper records showing full particulars including quantitativedetails and situation of Property Plant and Equipment.

(b) During the year Property Plant and Equipment have been physically verified by themanagement as per the regular programme of verification which in our opinion isreasonable having regard to the size of the Company and the nature of its assets. Asinformed no material discrepancies were noticed on such verification.

(c) According to information and explanation given to us the title deeds of immovableproperties other than self-constructed properties recorded as Property Plant andEquipment in the books of account of the Company as on December 31 2017 are held in thename of the Company.

(ii) The inventory (excluding stock lying with third parties) has been physicallyverified by the management during the year. In respect of inventory lying with thirdparties these have been confirmed by them. In our opinion the frequency of verificationis reasonable. As informed no material discrepancies were noticed on physicalverification carried out during the year.

(iii) As informed the Company has not granted any loans secured or unsecured tocompanies firms Limited Liability Partnerships or other parties covered in the registermaintained under Section 189 of the Act. Accordingly paragraph 3 (iii)(a) 3 (iii)(b) and3 (iii)(c) of the Order are not applicable to the Company.

(iv) Based on information and explanation given to us in respect of loans investmentsguarantees and securities the Company has complied with the provisions of Section 185 and186 of the Act. (v) In our opinion and according to the information and explanations givento us the Company has not accepted any deposits from the public within the provisions ofSections 73 to 76 of the Act and the rules framed there under.

(vi) We have broadly reviewed the books of account maintained by the Company in respectof products where the maintenance of cost records has been specified by the CentralGovernment under subsection (1) of Section 148 of the Act and the rules framed there underand we are of the opinion that prima facie the prescribed accounts and records have beenmade and maintained. However we have not made a detailed examination of cost records witha view to determine whether they are accurate or complete.

(vii) (a) According to information and explanation given to us and the records of theCompany examined by us in our opinion the Company is generally regular in depositingwith appropriate authorities undisputed statutory dues including provident fundemployees' state insurance income tax sales tax Goods and Service Tax service taxvalue added tax customs duty excise duty cess and any other material statutory duesapplicable to it.

According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employees' state insurance income tax sales taxservice tax value added tax customs duty excise duty cess and any other materialstatutory dues applicable to it were outstanding at the year end for a period of morethan six months from the date they became payable.

(b) According to the information and explanation given to us the dues outstanding withrespect to income tax sales tax service tax value added tax customs duty exciseduty as listed in Appendix 1 have not been deposited by the company on account ofdisputes.

(viii) According to the information and explanations given to us the Company has notdefaulted in repayment of loans or borrowings to financial institutions banksgovernments or dues to debenture holders.

(ix) The Company has neither raised money by way of public issue offer nor has obtainedany term loans during the year. Therefore paragraph 3(ix) of the Order is not applicableto the Company. (x) During the course of our examination of the books and records of theCompany carried out in accordance with the generally accepted auditing practices inIndia and according to the information and explanations given to us we have neither comeacross any instance of material fraud by the Company or on the Company by its officers oremployees noticed or reported during the year nor have we been informed of any suchinstance by the management.

(xi) According to the information and explanations given to us managerial remunerationhas been paid in accordance with the requisite approvals mandated by the provisions ofSection 197 read with Schedule V to the Act.

(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Therefore paragraph 3(xii) of the Order is not applicableto the Company. (xiii) According to the information and explanation given to us and basedon our examination of the records of the Company transactions entered into by the Companywith the related parties are in compliance with Sections 177 and 188 of the Act whereapplicable.

The details of related party transactions have been disclosed in the financialstatements as required under Indian Accounting Standards (Ind AS) 24 Related partyDisclosures specified under section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014.

(xiv) The Company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year under review. Thereforeparagraph 3(xiv) of the Order is not applicable to the Company.

(xv) According to the information and explanations given to us the Company has notentered into any non-cash transactions with directors or persons connected with him duringthe year.

(xvi) According to the information and explanation given to us the Company is notrequired to be registered under Section 45-IA of the Reserve Bank of India Act 1934.

For Haribhakti & Co. LLP
Chartered Accountants
ICAI Firm Registration No.103523W /W100048
Bhavik L. Shah
Place: Mumbai Partner
Date: February 22 2018 Membership No. 122071

Appendix 1 as referred to in paragraph vii (b) of the Annexure 1 to the IndependentAuditors' Report

Name of the statute Nature of the dues Amount (Rs in million) Period to which the amount relates Forum where dispute is pending
Income Tax Act 1961 Tax and penalty 58 2015-16 Dispute Resolution Penal
99.4 2002-03 2005-06 2008-09 2011-122012-13 2013-14 Income Tax Appellate Tribunal
31.9 1998-99 2003-04 2010-11 AO to passed OGE of ITAT
264.8 2007-08 2008-09 CIT (A)
1.2 1986-87 High Court
Central Excise Act 1944 Tax and penalty 211.5 2000-01 2009-14 2014-15 Customs Excise and Service Tax
Appellate Tribunal (CESTAT)
12.5 2009-14 Commissioner of Service Tax
0.8 2009-10 Additional Commissioner
Local State Sales tax Act and Central Sales Tax Act 1956 Duty and penalty 36.8 2011-12 2012-13 2013-14 Additional commissioner (Commercial Tax)
0.50 2013-14 Additional Commissioner (Entry Tax)
3.7 1994-95 1995-96 1998-99 2011-12 2012-13 Assistant Commissioner (Commercial Tax)
0.8 2003-04 Deputy Commissioner (Appeals)
2.4 2010-11 2011-12 Deputy Commissioner (Commercial Tax)
0.70 2007-08 Joint Commissioner (Commercial Tax)
17.50 2008-09 2009-2010 Senior Joint Commissioner (Commercial Tax)
22.7 2014-15 Special Commissioner Sales Tax (LTU)
4.7 2011-12 Joint Commissioner

Annexure 2 to the Independent Auditors' Report

[Referred to in paragraph 2 under ‘Report on Other Legal and RegulatoryRequirements' in the Independent Auditor's Report of even date to the members of MerckLimited on the Ind AS financial statements for the year ended December 31 2017]

Report on the Internal Financial Controls over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of MerckLimited ("the Company") as of December 31 2017 in conjunction with our audit ofthe 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 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 ("ICAI"). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors' Responsibility

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 Financial Reporting(the "Guidance Note") and the Standards on Auditing specified under section143(10) of the Act to the extent applicable to an audit of internal financial controlsboth issued by the ICAI. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

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 included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgement including the assessment of the risks of materialmisstatement of the Ind AS financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of Ind AS financial statements for external purposes in accordance withgenerally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company;(2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of Ind ASfinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the Ind ASfinancial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at December 31 2017 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the ICAI.

For Haribhakti & Co. LLP
Chartered Accountants
ICAI Firm Registration No.103523W /W100048
Bhavik L. Shah
Place: Mumbai Partner
Date: February 22 2018 Membership No. 122071