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Auditor Report of Godrej Consumer Products Ltd.

Mar 31, 2017

REPORT ON THE STANDALONE FINANCIAL STATEMENTS

We have audited the accompanying standalone Ind AS financial statements of GODREJ CONSUMER PRODUCTS LIMITED (“the Company”), which comprise the Balance Sheet as at March 31, 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 then ended, and a summary of significant accounting policies and other explanatory information (hereinafter referred to as ''Standalone Ind AS financial statements’).

Management’s Responsibility for the Standalone Ind AS Financial Statements

The Company’s Board of Directors is responsible for the matters 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 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 thereunder,

This responsibility also includes maintenance of adequate accounting records in accordance with the provision 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.

Auditor’s 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 thereunder,

We conducted our audit 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 control 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 March 31, 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 (“the Order”) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure A, a statement on the matters specified in the paragraph 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) 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 thereunder,

e) On the basis of the written representations received from the directors as on March 31, 2017 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2017 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 over financial reporting 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:

i, The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements - Refer Note 40 to the standalone Ind AS financial statements,

ii, The Company did not have any material foreseeable losses on long term contracts including derivative contracts requiring provision under the applicable law or accounting standards,

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 Company has provided requisite disclosures in the financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8th November, 2016 to 30th 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 us by the Management - Refer Note 47 to the standalone Ind AS financial statements,

ANNEXURE A TO THE INDEPENDENT AUDITOR’S REPORT

Referred to in Para 1 ‘Report on Other Legal and Regulatory Requirements’ in our Independent Auditors’ Report to the members of the Company on the standalone Ind AS financial statements for the year ended March 31, 2017.

Statement on Matters specified in paragraphs 3 & 4 of the Companies (Auditor’s Report) Order, 2016:

i) a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets;

b) As explained to us, the Company has a program for physical verification of fixed assets at periodic intervals, In our opinion, the period of verification is reasonable having regard to the size of the Company and the nature of its assets. The discrepancies reported on such verification are not material and have been properly dealt with in the books of account.

c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company,

ii) The Management has conducted physical verification of inventory (excluding stocks lying with third parties) at reasonable intervals. In respect of inventory lying with third parties, these have substantially been confirmed by them. In our opinion, the frequency of verification is reasonable. The discrepancies reported on such verification are not material and have been properly dealt with in the books of account.

iii) The Company has not granted any loans, secured or unsecured, to companies, firms, limited liability partnerships or other parties listed in the register maintained under section 189 of the Companies Act. Accordingly, the provisions of sub-clause (a), (b) and (c) of paragraph 3 (iii) of the Order are not applicable, to the Company,

iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of section 185 and 186 of the Act, with respect to investments made, guarantees given and securities provided,

v) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of section 73 to 76, or any other relevant provisions of the Companies Act and the rules framed there under. No order has been passed by the Company Law Board, or National Company Law Tribunal, or Reserve Bank of India, or any Court, or any other Tribunal,

vi) We have broadly reviewed the books of accounts and records maintained by the Company in respect of manufacture of products covered under the Rules made by the Central Government for maintenance of cost records, under section 148 (i) of the Companies 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,

vii) a) According to the information and explanation given to us and the records examined by us, the Company is generally regular in depositing undisputed statutory dues, including dues pertaining to provident fund, employees’ state insurance, income-tax, sales-tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues with the appropriate authorities, wherever applicable and there are no such outstanding dues as at March 31, 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 and the records of the Company examined by us, dues of income tax, sales tax, service tax, customs duty and excise duty not deposited on account of dispute are as follows:

Name of Statute Nature of Dues

Amount (Rs.)

Period

Forum where Dispute is pending

Central Excise Act, 1944

Duty on one to one correlation in terms of excisable material purchased and cleared final product with reference to the said material wherein the benefit under notification No, 32 of 99 availed

3,824,264

2002-03

The Hon''ble Supreme Court of India

7,302,990

2001-03

The Hon''ble Supreme Court of India

CENVAT credit availed on Capital Goods

1,755,920

2007-08

CESTAT, Chennai

86,115

2002-03

Advertisement Service- Credit availed as Input

2,837,962

2008-09

Commissioner of Central Excise (Appeals)

Input Service Tax Distribution Credit availed

3,219,974

2006-08

Commissioner of Central Excise (Appeals)

Service Tax not paid on Royalty (Foreign Payment)

27,167,930

2004-08

Commissioner of Central Excise (Appeals)

Cenvat credit availed on goods received from Emox

64,146,884

2007-08

CESTAT, Chennai

Valuation of Soap Noodles transferred from Malanpur factory to Himachal Pradesh factories

144,754,226

2007-12

CESTAT, Delhi

Cenvat credit on input services availed based on the invoices issued by suppliers to the branches prior to registration,

543,416

2007-12

CESTAT, Chennai

Allegations of non- manufacturing of shoe polish brush

6,174,082

2011-12

CESTAT, Chennai

Valuation of Mosquito Repellant supplied from Guwahati factories to Emox Puducherry

55,307,174

2008-12

CESTAT, Kolkata

Excise valuation dispute on account of non compete fees and trademark license fees paid by PGG (JV between Godrej Soaps Limited and Proctor and Gamble) to Godrej

103,600,000

1993-96

The Hon''ble Supreme Court of India

Distribution of Cenvat Credit by Head Office to

243,129,676

2008-12

Commissioner of Central Excise

Other Factories

196,719,214

2006-12

CESTAT, Chennai

Valuation of PHD - Differential demand between Section 4 and 4A valuation

78,976,342

2008-14

Commissioner of Central Excise

Valuation of Combi pack which are marked as Goods for Export

3,045,410

2007-08

CESTAT, Chennai

Central Excise Act,1994

Violation of Target Plus Scheme of Customs

8,249,528

2007-08

CESTAT, Chennai

CENVAT credit availed on the grounds of valuation methodology adopted by one plant while transferring goods from Lokhra plant

14,7762,862

2008-13

CESTAT, Chennai

Self credit taken by Sikkim Unit denied by Asst Commissioner

26,044,314

Commissioner Appeals

CENVAT credit availed on supplementary invoices issued by GCPL to Emox upon payment of differential duty by GCPL,

4,456,848

2009-10

CESTAT, Chennai

CENVAT credit availed on account of account of trading activity conducted

37,845,678

2009-12

CESTAT, Mumbai

Recovery of Service tax on processing activity done by Colortek for Lokhra operations

43,394,056

2009-14

CESTAT, Kolkata

Service Tax on Business Support Service provided by third party

37,552,534

2009-14

CESTAT, Kolkata

Cenvat Credit disallowance on outward transportation

225,200

2014-15

Commissioner of Central Excise (Appeals), Kolkata

Utilisation of Cenvat credit to pay Education Cess and Higher Education Cess demanded back by authorities

22,934,798

2010-16

Commissioner of Central Excise (Appeals), Kolkata

Others

951,996

2007-08

CESTAT, New Delhi

282,382

2008-09

CESTAT, Kolkata

442,266

2003-04

Commissioner of Central Excise (Appeals), Chennai

425,056

2007-08

Commissioner Excise

Central Sales Tax

Sales Tax Dues on account of Classification

34,232,967

2005-07

Appellate Authority

Act, 1956

Head

2009-13

& Value Added Tax Act of Various States

82,519,288

1996-97

2005-09

2011-12

Assessing Officer

3,278,512

2008-2014

Appellate Deputy Commissioner, Vizag and Hyderabad

19,918,004

2009-2011

Commissioner Commercial Taxes, Ernakulum

2124000

1998-99

Deputy Commissioner Appeals

39,157,279

2006-09

High Court, Rajasthan

187,351,651

2005-15

High Court, Andhra Pradesh

2,396,904

2000-05

2006-07

High Court, Madhya Pradesh

784,488

2014-15

Joint Commissioner Appeals, Chennai

12,462,631

2012-13

Joint Commissioner Appeals, Uttarakhand

18,993,960

2015-16

Assistant Commissioner

16,448,458

2013-15

Uttar Pradesh Tribunal

555,281

2013-2015

Andhra Pradesh Tribunal

1,642,753

2000-02

2005-06

Bihar Tribunal

2369744

2013-14

Madhya Pradesh Tribunal

3,208,868

2003-05

Supreme Court of India

Central Sales Tax

Check post case

1,610,000

2010-11

Appellate Authority

Act, 1956 & Value Added Tax Act of Various States

Entry Tax

19,724,486

2005-08

2010-13

Appellate Authority

5,790,286

2005-13

Assessing Officer

1,451,267

1999-00

2005-06

Madhya Pradesh High Court

Non submission of C and F Forms

4,415,747

2002-11

2012-13

Assessing Officer

1,048,019

1997-99

2004-09

Appellate Authority

19,449,405

2009-10

Andhra Pradesh High Court

6,867,888

2003-04

Karnataka High Court

8,212,639

2009-10

Kolkata High Court

Truck Detention cases

314,721

2004-05

UP. High Court

3,126,227

2004-05

2007-10

2013-17

Assessing Officer

370,953

2013-14

Appellate Authority

Other Sales Tax Dues

34,737,177

2001-12

Appellate Authority, West Bengal;

2013-14

High Court, Andhra Pradesh and Tamil Nadu; Assessing Officer; Joint Commissioner (Appeals), Mumbai; Tribunal, Bihar and UP.

Income Tax Act,

Demand based on the order of regular

1,082,401

AY 2010-11

Income - tax Appellate Tribunal

1961

assessment u/s 143(3) of the Act,

Income-tax in dispute pertaining to erstwhile

92,200

AY 2006-07

High Court

Godrej Household Products Limited,

99,136,617

AY 2006-07 to 2010-11

Income tax Appellate Tribunal

viii) According to the information and explanations given to us and based on the documents and records produced before us, there has been no default in repayment of loans or borrowings to financial institutions, banks or debenture holders. There were no loans or borrowings taken from the government during the year,

ix) According to the information and explanations given to us and the records examined by us, no moneys were raised either by way of initial public offer or further public offer (including debt instruments) or term loans by the Company during the year,

x) Based upon the audit procedures performed by us, to the best of our knowledge and belief and according to the information and explanations given to us by the Management, no material fraud on, or by the Company, has been noticed or reported during the year,

xi) According to the information and explanations give to us and based on our examination of the records of the Company, 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 examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards,

xiv) According to the information and explanations give to us and based on our examination of the records of the Company, 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 of the Company, 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 and hence the provisions of paragraph 3(xvi) of the Order is not applicable,

For KALYANIWALLA & MISTRY

Chartered Accountants

Firm Registration No, 104607W

Roshni R. Marfatia

Partner

M, No,: 106548

Mumbai: May 9, 2017


Mar 31, 2015

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of GODREJ CONSUMER PRODUCTS 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 then ended, and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters in Section 134(5) 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 provision 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.

Auditor's Responsibility

Our responsibility is to express an opinion on these 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 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 financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial 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 control 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.

Emphasis of Matter

We draw attention to:

i) Note 12(b) regarding the Scheme of Amalgamation of the erstwhile Godrej Household Products Limited with the Company approved by The Hon'ble High Court of Judicature at Bombay, whereby an amount of Rs. 52.75 crore for the year ended March 31, 2015, equivalent to the amortisation of the Goodknight and Hit Brands is directly debited to the General Reserve Account instead of debiting the same to the Statement of Profit and Loss as per the provisions of AS 26,The said accounting treatment is in accordance with the accounting treatment prescribed in the Order of the High Court of Mumbai dated February 28, 2011 under section 394 of the Companies Act, 1956.

Had this amount been charged to the Statement of Profit and Loss, the profit for the year ended March 31, 2015, would have been lower by Rs. 52.75 crore and the General Reserve would have been higher by Rs. 52.75 crore.

ii) Note 23 on other income for the year ended March 31, 2015 including the recovery of loan amounting to Rs. 25.25 crore from GCPL ESOP Trust which was earlier written off and debited to Reserves under a Court approve Scheme of Amalgamation.

Our opinion is not modified in respect of these matters.

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 terms of sub-section (11) of section 143 of the Act, we give in the Annexure a statement on the matters specified in the paragraph 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 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) Except for the matters descried in sub-paragraph (i) of Emphasis of Matter paragraph above, 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 is disqualified as on March 31, 2015 from being appointed as a director in terms of Section 164 (2) of the Act.

f) 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 financial statements disclose the impact of pending litigations on the financial position of the Company - Refer Note 32 to the financial statements.

ii. The Company did not have any material foreseeable losses on long term contracts including derivative contracts requiring provision under the applicable law or accounting standards.

iii. 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

The Annexure referred to in Para 1 'Report on Other Legal and Regulatory Requirements' in our Independent Auditors' Report to the members of the Company on the standalone financial statements for the year ended March 31, 2015 :

i) a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets;

b) The Company has a program for physical verification of fixed assets at periodic intervals. In our opinion, the period of verification is reasonable having regard to the size of the Company and the nature of its assets.The discrepancies reported on such verification are not material and have been properly dealt with in the books of account.

ii) a) The Management has conducted physical verification of inventory (excluding stocks lying with third parties) at reasonable intervals. 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) The procedures of physical verification of inventories followed by 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 and no material discrepancies were noticed on verification between the physical stocks and the book records.

iii) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties listed in the register maintained under section 189 of the Companies Act. Therefore, the provisions of sub-clause (a) and (b) of paragraph 3 (iii) of the Order are not applicable.

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, for the purchases of inventory, fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal control system.

v) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of section 73 to 76, or any other relevant provisions of the Companies Act and the rules framed thereunder. No order has been passed by the Company Law Board, or National Company Law Tribunal, or Reserve Bank of India, or any Court, or any other Tribunal.

vi) We have broadly reviewed the books of accounts and records maintained by the Company in respect of manufacture of products covered under the Rules made by the Central Government for maintenance of cost records, under section 148 (i) of the Companies 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.

vii) a) According to the information and explanation given to us and the records examined by us, the Company is generally regular in depositing undisputed statutory dues, including dues pertaining to provident fund, Employees' State Insurance, income-tax, sales-tax, wealth tax, service tax, duty of customs, duty of excise , value added tax, cess and any other statutory dues with the appropriate authorities. According to the information and explanations given to us, there are no undisputed dues which have remained outstanding as at the end of the financial year, for a period of more than six months from the date they became payable.

b) According to the information and explanations given to us and the records of the Company examined by us, dues of income tax, sales tax, service tax, customs duty and excise duty not deposited on account of dispute are as follows:

Name of Statute Nature of Dues

Central Excise Duty on one to one correlation in terms of Act, 1944 excisable material purchased and cleared final product with reference to the said material wherein the benefit under notification No. 32 of 99 availed CENVAT credit availed on Capital Goods

Advertisement Service - Credit availed as Input Input Service Tax Distribution Credit availed Service Tax not paid on Royalty (Foreign Payment) Cenvat credit availed on GTA Cenvat credit availed on goods received from Emox

Valuation of Soap Noodles transferred from Malanpur factory to Himachal Pradesh factories Cenvat credit on input services availed based on the invoices issued by suppliers to the branches prior to registration.

Central Excise Allegations of non- manufacturing of shoe polish Act, 1944 brush Valuation of Mosquito Repellent supplied from Guwahati factories to Emox Puducherry Excise valuation dispute on account of non- compete fees and trademark license fees paid by PGG (JV between Godrej Soaps Limited and Proctor and Gamble) to Godrej Distribution of Cenvat Credit by Head Office to Other Factories Valuation of Soap Noodles transferred from Malanpur factory to Himachal Pradesh factories Valuation of PHD - Differential demand between Section 4 and 4A valuation Valuation of Combipack which are marked as "Goods for Export" Violation of Target Plus Scheme of Customs CENVAT credit availed on Transportation Services CENVAT credit availed on the grounds of valuation methodology adopted by one plant while transferring goods from Lokhra plant CENVAT credit availed on supplementary invoices issued by GCPL to Emox upon payment of differential duty by GCPL. CENVAT credit availed on account of trading activity conducted CENVAT credit availed on Capital Goods because same is not availed in the month which it pertains to Others

Central Sales Sales Tax Dues on account of Classification Head Tax Act, 1956 & Value Added Tax Act of Various Sales Tax Dues States Central Sales Tax Dues Sales Tax Dues on account of Classification Head

Sales Tax Dues on account of Classification Head

Central Sales Tax Dues Central Sales Tax Dues Sales Tax Dues on account of Classification Head Sales Tax Dues on account of Classification Head Sales Tax Dues on account of Classification Head Sales Tax Dues on account of Classification Head EntryTax Entry Tax

Sales Tax Dues on account of Classification Head

Sales Tax Dues on account of Classification Head Central Sales Tax Dues Sales Tax Dues

Sales Tax Dues Sales Tax Dues Sales Tax Dues

Sales Tax Dues Central Sales Tax Dues Interest on Sales Tax Dues Sales Tax Dues Sales Tax Dues Central Sales Tax Dues & Others

Sales Tax Dues Sales Tax Dues on account of Classification Head Sales Tax Dues on account of Classification Head

Sales Tax Dues on account of Classification Head

Sales Tax Dues on account of Classification Head Sales Tax Dues Sales Tax Dues Checkpost Sales Tax Dues Sales Tax Dues on account of Classification Head

Sales Tax Dues on account of Classification Head

Sales Tax Dues on account of Classification Head

Sales Tax Dues on account of Classification Head

Central Sales Tax Dues

Sales Tax Dues

Sales Tax Dues on account of Classification Head

Sales Tax Dues on account of Classification Head

Sales Tax Dues on account of Classification Head

Entry Tax

Entry Tax

Entry Tax

Other Sales Tax Dues

Income Tax Act, Demand based on the order of regular assessment 1961 u/s 143(3) of the Act. Demand based on the order of regular assessment u/s 143(3) of the Act. Income-tax in dispute pertaining to erstwhile Godrej Household Products Limited.

Name of Statute Nature of Dues Amount Period (Rs.)

Central Excise Act, 1944 1,912,132 2002-04

3,651,495 2000-03

1,755,920 2009-10 86,115 2002-03

1,418,981 2008-09 1,609,987 2006-08 27,167,930 2004-08 2,475,925 2006-08 64,146,884 2007-08

155,393,836 2007-11 543,416 2007-12

Central Excise Act, 1944 6,174,082 2007-12

55,307,174 2008-12

51,800,000 1993-96



121,564,838 2008-12

31,851,841 2011-12

66,897,878 2011-13

1,522,705 2007-08

4,124,764 2007-08 311,754 2011-12 73,881,431 2008-12

1,114,212 2009

18,922,839 2008-12

940,000 Aug-12

976,000 2007-08 212,528 2007-08 141,191 2008-09 221,133 2003-04 877,690 2006-07

Central Sales Tax Act, 1956 & 39,157,279 2006-07 Value Added Tax 2007-08 Act of Various 2008-09 States 689,121 2004-05

579,562 2004-05 642,305 1999-00 2001-02 6,340,450 2003-04 2004- 05 2005- 06

789,432 2006-07 6,600,000 2005-06 6,000,940 2000-01 9,009,696 2001-02 3,607,688 2002-03 497,261 2005-06 1,000,585 2005-08 2,254,849 1999-00 2005- 06 2006-07 16,580,938 2005-06 2006-07 2007-08 2008-09

22,449,405 2009-10 160,178 2004-05 1,406,850 2005-06 2006-07 700,728 2005-06 258,056 2006-07 1,146,028 2002-03 2003-04 2004-05 1,465,192 2005-06 256,482 2005-06 1,207,000 2001-02 510,000 2002-03 1,757,925 2006-07 1,190,919 2005-06

2006-07

2007-08 2013-14

10,641,000 2004-05 16,838,252 2007-08 4,838,279 2008-09 2009-10 2010-11 9,044,088 2005-06 2006-07 2007-08 2008-09

25,809,827 2010-11 11,693,000 2006-07 394,000 2006-07 1,610,000 2010-11 3,073,427 2009-10 228,973,669 2010-11 2011-12 86,380,815 2010-11 2011-12 27,155,975 2012-13 2013-14 63,651,140 2011-12

2012-13 57,681 2011-12 539,028 2008-09 555,281 2013-14 650,541 2011-12 883,023 2012-13 10,985,048 2005-06 12,586,720 2006-07 8,601,779 2007-08 5,502,678 2002-13

Income Tax Act, 1961 8,101,491 AY 2009-10 11,020 AY 2007-08 3,266,327 AY 2005-06

Name of Statute Forum where Dispute is pending Nature of Dues

Central Excise The Hon'ble Supreme Court of India Act, 1944 The Hon'ble Supreme Court of India

Commissioner of Central Excise (Appeals)

Commissioner of Central Excise (Appeals) Commissioner of Central Excise (Appeals) Commissioner of Central Excise (Appeals) Assessing Authority CESTAT, Chennai Adjudicating Authority Commissioner of Central Excise (Appeals)

Central Excise Commissioner of Central Excise (Appeals) Act, 1944 CESTAT, Kolkata The Hon'ble Supreme Court of India

CESTAT, Delhi

Adjudicating Authority

CESTAT, Kolkata

CESTAT, Chennai

CESTAT, Chennai Adjudicating Authority CESTAT, Chennai Adjudicating Authority

CESTAT, Chennai

Adjudicating Authority

CESTAT Sales Tax Authority CESTAT, Kolkata Commissioner of Central Excise (Appeals) CESTAT, Chennai

Central Sales Jaipur High Court Tax Act, 1956 & Value Added Tax Act of Various Uttar Pradesh Tribunal States Uttar Pradesh Tribunal Jammu Tribunal

The Hon'ble Supreme Court of India

Assessing Authority Appellate Revision Board Bihar Tribunal Bihar Tribunal Bihar Tribunal Assessing Authority OrissaTribunal Madhya Pradesh High Court

Andhra Pradesh High Court

Andhra Pradesh High Court Deputy Commissioner (A) Deputy Commissioner (A)

Deputy Commissioner (A) Deputy Commissioner (A) Deputy Commissioner Sales Tax Nagpur

Joint Commissioner (A) Deputy Commissioner (A) Chennai High Court Additional Commissioner (Appeals) Joint Commissioner (A) West Bengal Tribunal

Appellate Revision Board

Allahabad High Court

Assessing Authority

Andhra Pradesh High Court

Andhra Pradesh High Court Deputy Commissioner Assessing Authority Additional Commissioner (Appeals) Assessing Authority Orissa Tribunal

Orissa Tribunal

Orissa Tribunal

Andhra Pradesh High Court

Deputy Commissioner (Appeals), Jaipur

Deputy Commissioner (Appeals), Jammu

Deputy Commissioner (Appeals), Hyedrabad

Deputy Commissioner III, Haldwani

Deputy Commissioner III, Haldwani

Deputy Commissioner (Appeals)

Deputy Commissioner (Appeals)

Deputy Commissioner (Appeals)

Uttar Pradesh Tribunal,

Deputy Commissioner (A),

Commissioner of Commercial Taxes,

Addt Commissioner (A),

Jammu Tribunal,

Assessing Authority,

Madhya Pradesh High Court,

Joint Commissioner (A),

Delhi Tribunal,

West Bengal Tribunal,

Addl. Commissioner (A)Mohali.

Income Tax Act, Income - tax Appellate Tribunal 1961 High Court

CIT (Appeal)

c) According to the information and explanations given to us, the amounts which were required to be transferred to the investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules there under has been transferred to such fund within time.

viii) The Company does not have accumulated losses as at the end of the financial year, nor has it incurred cash losses in the current financial year, or in the immediately preceding financial year.

ix) According to the information and explanations given to us and based on the documents and records produced before us, there has been no default in repayment of dues to banks or debenture holders. There were no dues to financial institutions during the year.

x) According to the information and explanations given to us and based on the documents and records produced before us, the terms and conditions of guarantees given by the Company for loans taken by its subsidiaries from banks are prima facie not prejudicial to the interest of the Company

xi) According to the information and explanations given to us and the records examined by us, the Company has not obtained any term loans.

xii) Based upon the audit procedures performed by us, to the best of our knowledge and belief and according to the information and explanations given to us by the Management, no fraud on, or by the company, has been noticed or reported during the year.

For KALYANIWALLA & MISTRY CHARTERED ACCOUNTANTS Firm Registration No. 104607W

ROSHNI R. MARFATIA PARTNER M. No.: 106548 Mumbai: April 28, 2015


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of GODREJ CONSUMER PRODUCTS LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2013, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

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.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s 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 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.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2013;

b) in the case of the Statement of Profit and Loss, of the profits of the Company for the year ended on that date; and

c) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date. Emphasis of Matter

We draw attention to the Note 13 to the Financial Statements for the year ended March 31, 2013, regarding the Scheme of Amalgamation of the erstwhile Godrej Household Products Limited with the Company approved by The Hon''ble High Court of Judicature at Bombay whereby an amount of Rs. 52.75 crore for the year ended on March 31, 2013, equivalent to the amortisation of the Goodknight and Hit Brands is directly debited to the General Reserve Account instead of debiting the same to the Statement of Profit and Loss. Had this amount been charged to the Statement of Profit and Loss, the profit for the year ended on March 31, 2013, would have been lower by Rs. 52.75 crore and the General Reserve would have been higher by Rs. 52.75 crore.

Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, we report that:

a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our 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 comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956.

e) On the basis of written representations received from the Directors as on March 31, 2013, and taken on record by the Board of Directors, none of the Directors is disqualified as on March 31, 2013, from being appointed as a Director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

Annexure to the Independent Auditors'' Report

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 section 227 (4A) of the Companies Act, 1956, we further report that:

1. Fixed Assets:

a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

b) The Company has a program for physical verification of fixed assets at periodic intervals. In our opinion, the period of verification is reasonable having regard to the size of the Company and the nature of its assets. The discrepancies reported on such verification are not material and have been properly dealt with in the books of account.

c) In our opinion, there have been no significant disposals of fixed assets during the year which affect the going concern assumption.

2. Inventory:

a) The Management has conducted physical verification of inventory (excluding stocks lying with third parties) at reasonable intervals. 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) The procedures of 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 and no material discrepancies were noticed on verification between the physical stocks and the book records.

3. Loans and Advances:

a) The Company has granted unsecured loan to a company listed in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 7.18 crore and the closing balance amounted to Rs. Nil.

b) In our opinion, the rate of interest and other terms and conditions on which the unsecured loan had been granted to the company listed in the register maintained under section 301 of the Companies Act, 1956, are not prima facie prejudicial to the interest of the Company.

c) The Company to whom the Company had granted the loan has repaid the principal amount as well as the interest as stipulated.

d) There is no overdue amount of loans granted to companies / parties listed in the register maintained under Section 301 of the Companies Act, 1956.

e) The Company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

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 purchases of inventory, fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal control system.

5. Transactions that need to be entered in the register maintained under section 301 of the Companies Act, 1956:

a) Based upon the audit procedures applied by us and according to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956, 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 entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of Rs. 500,000 in respect of any party during the year, have been made at prices which are reasonable, having regard to prevailing market prices at the relevant time.

6. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of section 58A, 58AA, or any other relevant provisions of the Companies Act, 1956 and the rules framed there under. No order has been passed by the Company Law Board, or National Company Law Tribunal, or Reserve Bank of India, or any Court, or any other Tribunal.

7. In our opinion, the Company has an internal audit system commensurate with the size of the Company and nature of its business.

8. We have broadly reviewed the books of account and records maintained by the Company in respect of manufacture of Organic and Inorganic Chemicals and Engineering machinery (Including electrical and electronic products) pursuant to the Rules made by the Central Government for maintenance of cost records, under section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete. To the best of our knowledge and according to the information given to us, the Central Government has not prescribed maintenance of cost records under section 209(1)(d) of the Companies Act, 1956, for any other products of the Company.

9. Statutory Dues

a) According to the information and explanation given to us, the Company is regular in depositing undisputed statutory dues, including dues pertaining to Investor Education and Protection Fund, Provident Fund, Employees'' State Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise duty, Cess and any other statutory dues with the appropriate authorities. We have been informed that there are no undisputed dues which have remained outstanding as at the end of the financial year, 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, Wealth Tax, Service Tax, Customs Duty, Excise Duty or Cess outstanding on account of any dispute, other than the following:

Name of Statute Nature of Dues Amount (Rs.)

Central Excise Act, 1944 Rate differences on account of soap 6,154,000 scrap

Duty on one to one correlation in terms 1,912,132 of excisable material purchased and 3,651,495 cleared final product with reference to the said material wherein the benefit under notification No. 32 of 99, availed

Foreign Payment Service Tax not paid 27,167,930 on Royalty

Input Service tax Distribution Credit 1,609,987 availed

Advertisement Service - Credit Availed 1,418,981 As Input

Excise duty in dispute 1,755,920

86,115

Availment of Cenvat Credit on goods 64,146,884 received against EMOX

Cenvat Credit availed on GTA 2,475,925

Others 100,000

333,526

976.000

236.000

28,000

212,528

141,191

221,133

Income-tax Act, 1961 Appeal against order of regular 348,000 assessment u/s 143(3) of the Act.

Appeal against order of regular 32,271,365 assessment u/s 143(3) of the Act.

Demand based on the order of regular 8,101,490 assessment u/s 143(3) of the Act.

Income-tax in dispute pertaining to 26,762,680 erstwhile Godrej Household Products Limited. 10,621,809

Name of Statute Period to which the Forum where dispute is pending amount relates

Central Excise Act 1944 2000-04 CESTAT

2002-04 Supreme Court of India

2000-03 Supreme Court of India

2004-08 Commissioner of Central Excise (Appeals)

2006-08 Commissioner of Central Excise (Appeals)

2008-09 Commissioner of Central Excise (Appeals)

2009-10 Commissioner of Central Excise 2002-03 (Appeals)

2007-08 CESTAT

2008-09

2006-08 Tribunal

1996-99 Assistant Commissioner

2006-07 CESTAT

2007-08 CESTAT

2007-09 CESTAT

2007-09 CESTAT

2007-08 Sales Tax Authority

2008-09 CESTAT

2004-05 Commissioner of Central Excise (Appeals)

Income Tax Act 1961 Assessment Year 2003-04 Income-tax Appellate Tribunal

Assessment Year 2006-07 Income-tax Appellate Tribunal

Assessment Year 2009-10 CIT (A)

Assessment Year 2006-07 Income-tax Appellate Tribunal

Assessment Year 2007-08 Income-tax Appellate Tribunal

10. The Company does not have accumulated losses as at the end of the financial year, nor has it incurred cash losses in the current financial year, or in the immediately preceding financial year.

11. According to the information and explanations given to us and based on the documents and records produced before us, there has been no default in repayment of dues to banks or debenture holders. There are no dues to financial institutions.

12. According to the information and explanations given to us and based on the documents and records produced before us, the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures or other securities.

13. In our opinion and according to the information and explanations given to us, the nature of activities of the Company does not attract any special statute applicable to chit fund and nidhi / mutual benefit fund / societies.

14. The Company does not deal or trade in shares, securities, debentures and other investments.

15. According to the information and explanations given to us and the records examined by us, the terms and conditions of guarantees given by the Company for loans taken by its subsidiaries from banks are not prima facie prejudicial to the interest of the Company.

16. According to the information and explanations given to us and the records examined by us, on an overall basis, the Company has not availed of any term loan.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet, the Cash Flow Statement and other records examined by us, the Company has not used funds raised on short term basis for long term investment.

18. The Company has not made any preferential allotment of shares to any parties or companies covered in the register maintained under section 301 of the Companies Act, 1956.

19. The Company has issued unsecured redeemable non-convertible debentures during the year in respect of which no security is required to be created.

20. The Company has not raised any money through a public issue during the year.

21. Based upon the audit procedures performed by us, to the best of our knowledge and belief and according to the information and explanations given to us by the Management, no fraud on, or by the company, has been noticed or reported during the year.

For and on behalf of

KALYANIWALLA & MISTRY

Chartered Accountants

Firm Regn. No.: 104607W

DARAIUS Z. FRASER

Partner

M. No.: 42454

Mumbai: April 30, 2013.


Mar 31, 2012

1. We have audited the attached Balance Sheet of GODREJ CONSUMER PRODUCTS LIMITED as at March 31, 2012 and also the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date annexed thereto. 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 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, issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956, we annex hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Without qualifying our opinion, attention is drawn to:

a) Note 13: Notes to the Financial Statements, regarding the Scheme of Amalgamation of the erstwhile Godrej Household Products Limited with the Company approved by The Hon'ble High Court of Judicature at Bombay whereby an amount of Rs. 52.75 crore for the year ended on March 31, 2012, equivalent to the amortisation of the Goodknight and HIT Brands is directly debited to the General Reserve Account instead of debiting the same to the Statement of Profit and Loss. Had this amount been charged to the Statement of Profit and Loss, the profit for the year would have been lower by Rs. 52.75 crore and the General Reserve would have been higher by Rs. 52.75 crore.

b) Note 45: Notes to the Financial Statements, regarding the Scheme of Amalgamation of the wholly owned subsidiaries of the Company viz. Naturesse Consumer Care Products Limited (NCCPL) and Essence Consumer Care Products Limited (ECCPL), with the Company approved by The Hon'ble High Court of Judicature at Bombay, whereby all the assets and liabilities of NCCPL and ECCPL have been taken over at their respective book values as on December 3, 2010. The difference between the book value of the assets and liabilities taken over amounting to Rs. 37.67 crore, after giving effect to the adjustments proposed in the Scheme, has been debited to the General Reserve in accordance with the Scheme of Amalgamation.

5. 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 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 such 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, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956.

e) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with the notes thereon, give the information required by the Companies Act, 1956, in the manner so required 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 March 31, 2012;

ii) in the case of the Statement of Profit and Loss, of the profit of the Company for the year ended on that date; and

iii) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

6. On the basis of the written representations received from the Directors as on March 31, 2012 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on March 31, 2012, from being appointed as a Director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

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 Section 227 (4A) of the Companies Act, 1956, we further report that:

1. Fixed Assets:

a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

b) The Company has a program for physical verification of fixed assets at periodic intervals. In our opinion, the period of verification is reasonable having regard to the size of the Company and the nature of its assets. The discrepancies reported on such verification are not material and have been properly dealt with in the books of account.

c) In our opinion, there have been no significant disposals of fixed assets during the year which affect the going concern assumption.

2. Inventory:

a) The Management has conducted physical verification of inventory (excluding stocks lying with third parties) at reasonable intervals. 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) The procedures of 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 and no material discrepancies were noticed on verification between the physical stocks and the book records.

3. Loans and Advances:

The Company has neither granted nor taken any loans, secured or unsecured, to/from companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956.

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 purchases of inventory, fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal control system.

5. Transactions that need to be entered in the register maintained under Section 301 of the Companies Act, 1956:

a) Based upon the audit procedures applied by us and according to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956, 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 entered in the register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of Rs. 500,000 in respect of any party during the year, have been made at prices which are reasonable, having regard to prevailing market prices at the relevant time.

6. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of Section 58A, 58AA, or any other relevant provisions of the Companies Act, 1956 and the rules framed thereunder. No order has been passed by the Company Law Board, or National Company Law Tribunal, or Reserve Bank of India, or any Court, or any other Tribunal.

7. In our opinion, the Company has an internal audit system commensurate with the size of the Company and nature of its business.

8. We have broadly reviewed the books of account and records maintained by the Company in respect of manufacture of soaps, cosmetics, household insecticides and toiletries pursuant to the Rules made by the Central Government for maintenance of cost records, under Section 209(l)(d) of the Companies Act, 1956 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. To the best of our knowledge and according to the information given to us, the Central Government has not prescribed maintenance of cost records under Section 209(1)(d) of the Companies Act, 1956, for any other products of the Company.

9. Statutory Dues

a) According to the information and explanation given to us, the Company is regular in depositing undisputed statutory dues, including dues pertaining to Investor Education and Protection Fund, Provident Fund, Employees' State Insurance, Income-tax, Sales-tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and any other statutory dues with the appropriate authorities. We have been informed that there are no undisputed dues which have remained outstanding as at the end of the financial year, 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, wealth tax, service tax, customs duty, excise duty or cess outstanding on account of any dispute, other than the following:

Name of statute Nature of Dues Amount (Rs.)

Central Excise Act, 1944 Rate differences on account of 6,154,000 soap scrap.

Cenvat credit availed on input 1,081,274 services.

Excise duty claim in respect of 11,826,624 non-payment of education cess.

Differential duty on value of 10,644,000 by- product credit apportioned in cost of soap noodle

Duty on one to one correlation 1,912,132 in terms of excisable material purchased and cleared fnal 3,651,495 product with reference to the said material wherein the benefit under notifcation No. 32 of 99, availed

Foreign Payment Service Tax not 6,747,181 paid on Royalty.

Input Service tax Distribution 1,609,987 Credit availed

Advertisement Service - Credit 1,418,981 Availed As Input

Excise duty in dispute 1,755,920 86,115

Others 100,000

669,426

152,462

333,526

976,000

236,000

28,000

56,167

60,674

212,528

The Finance Act, 1994 Service Tax in dispute 1,621,000

Central Sales Tax Act, Interest on sales tax dues. 1,207,000 1956 and VAT Act of various states

Sales Tax Dues 1,757,925

Sales Tax Dues 10,641,000

Sales Tax Dues on account of 39,157,279 Classifcation Head

Sales Tax Dues on account of 17,175,997 Classifcation Head

Sales Tax Dues on account of 6,340,450 Classifcation Head

Sales Tax Dues 6,600,000

Sales Tax Dues 35,892,717

Sales Tax Dues on account of 6,000,940 Classifcation Head

Sales Tax Dues on account of 25,809,827 Classifcation Head

Sales Tax Dues on account of 22,449,405 Classifcation Head

Sales Tax Dues on account of 16,838,252 Classifcation Head

Sales Tax Dues 11,693,000

Sales Tax Dues on account of 16,580,938 Classifcation Head

Sales Tax Dues on account of 9,044,088 Classifcation Head

Sales Tax Dues on account of 9,009,696 Classifcation Head

Sales Tax Dues 6,935,724

Sales Tax Dues on account of 3,607,688 Classifcation Head

Non Submission of Form F 1,268,683

Sales Tax Dues 2,287,249

Sales Tax Dues 1,646,978

Sales Tax Dues 4,153,440

Sales Tax Dues 1,567,028

Sales Tax Dues 1,465,192

Sales Tax Dues 1,239,044

Sales Tax Dues 1,757,925

Others 13,766,689

The Customs Act, 1962 Differential Customs Duty on 57,317,813 Imported Oils

Income-tax Act, 1961 Appeal against order of regular 348,000 assessment u/s 143(3) of the Act.

Appeal against order of regular 32,271,365 assessment u/s 143(3) of the Act.

Demand based on the order of 150,528 regular assessment u/s 143(3) of the Act.

Demand based on the order of 8,101,490 regular assessment u/s 143(3) of the Act. Income-tax in dispute pertaining 26,762,680 to erstwhile Godrej Household Products Limited.

10,621,809





Name of Statute Period to which the Forum where dispute is pending amount relates

Central Excise 2000-04 CESTAT Act,1944 2008-09 CESTAT

2004-08 CESTAT

2006-07 Commissioner of Central Excise (Appeals)

2002-04 Supreme Court of India

2000-03 Supreme Court of India

2004-08 Commissioner of Central Excise (Appeals)

2006-08 Commissioner of Central Excise (Appeals)

2009 Commissioner of Central Excise (Appeals)

2009-10 Commissioner of Central Excise

2002-03 (Appeals)

1996-99 Assistant Commissioner

2004-05 Commissioner of Central Excise (Appeals)

2005-06 Commissioner of Central Excise (Appeals)

2006-07 CESTAT

2007-08 CESTAT

2007-09 CESTAT

2007-09 CESTAT

2009-10 Commissioner of Central Excise (Appeals)

2009-10 Commissioner of Central Excise (Appeals)

2007-08 Sales Tax Authority

The Finance Act, September 2004 to Commissioner (Appeals) 1994 November 2004 and February 2005 to June 2008

Central Sales Tax 2001-02 Joint Commissioner (A) Act,1956 and VAT Act of Various states

2006-07 Assistant Commissioner (A)

2004-05 Joint Commissioner (A)

2006-07 Jaipur High Court 2007-08 2008-09

2009-10 Karnataka Tribunal

2003-04 Supreme Court 2004-05 2005-06

2005-06 Deputy Commissioner (Appeals) (West Bengal)

2007-08 Additional Commissioner (West Bengal)

2000-01 Bihar Tribunal

2010-11 Andhra Pradesh High Court

2009-10 Andhra Pradesh High Court

2007-08 Joint Commissioner (A)

2006-07 Joint Commissioner (A)

2005-06 Andhra Pradesh High Court 2006-07 2007-08 2008-09

2005-06 Andhra Pradesh High Court 2006-07 2007-08 2008-09

2001-02 Bihar Tribunal

2002-03 Joint Commissioner (A) 2003-04 2004-05

2002-03 Bihar Tribunal

2004-05 Uttar Pradesh Tribunal

2005-08 Joint Commissioner (A) 2003-04

2003-04 Joint Commissioner (A)

2005-06 Deputy Commissioner (A) 2006-07

2004-05 Deputy Commissioner (A) 2005-06 2006-07

2005-06 Joint Commissioner (A)

2006-07 Joint Commissioner (A)

2006-07 Deputy Commissioner (A)

2002-10 Joint Commissioner (A), Uttar Pradesh Tribunal, Deputy Commissioner (A), Madhya Pradesh High Court, Delhi Tribunal, Additional Commissioner of West Bengal, West Bengal Tribunal, Checkpost of Delhi and Zirakpur

The Customs Act, 2007-08 CESTAT 1962

Income-tax Act, Assessment Year Income-tax Appellate Tribunal 1961 2003-04

Assessment Year 2006-07 Income-tax Appellate Tribunal



Assessment Year 2007-08 Income-tax Appellate Tribunal

Assessment Year 2009-10 CIT (A)

Assessment Year 2006-07 Income-tax Appellate Tribunal

Assessment Year 2007-08 Income-tax Appellate Tribunal

10. The Company does not have accumulated losses as at the end of the financial year, nor has it incurred cash losses in the current financial year, or in the immediately preceding financial year.

11. According to the information and explanations given to us and based on the documents and records produced before us, there has been no default in repayment of dues to banks or debenture holders. There are no dues to financial institutions.

12. According to the information and explanations given to us and based on the documents and records produced before us, the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures or other securities.

13. In our opinion and according to the information and explanations given to us, the nature of activities of the Company does not attract any special statute applicable to chit fund and nidhi/mutual benefit fund/societies.

14. The Company does not deal or trade in shares, securities, debentures and other investments.

15. According to the information and explanations given to us and the records examined by us, the terms and conditions of guarantees given by the Company for loans taken by its subsidiaries from banks are not prima facie prejudicial to the interest of the Company.

16. According to the information and explanations given to us and the records examined by us, on an overall basis, the term loan obtained by the Company was applied for the purpose for which the loan was obtained.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet, the Cash Flow Statement and other records examined by us, the Company has not used funds raised on short term basis for long term investment.

18. The Company has not made any preferential allotment of shares to any parties or companies covered in the register maintained under Section 301 of the Companies Act, 1956.

19. The Company has issued unsecured redeemable non-convertible debentures during the year in respect of which no security is required to be created.

20. The Company has not raised any money through a public issue during the year.

21. Based upon the audit procedures performed by us, to the best of our knowledge and belief and according to the information and explanations given to us by the Management, no fraud on, or by the Company, has been noticed or reported during the year.

For and on behalf of

Kalyaniwalla & Mistry

Chartered Accountants

Firm Regn. No.: 104607W

Daraius Z. Fraser

Partner

M. No.: 42454

Mumbai: April 30, 2012.


Mar 31, 2011

1. We have audited the attached Balance Sheet of GODREJ CONSUMER PRODUCTS LIMITED as at March 31, 2011 and also the Proft and Loss Account and the Cash Flow Statement of the Company for the year ended on that date annexed thereto. 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 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 signifcant 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, issued by the Central Government of India in terms of section 227 (4A) of the Companies Act, 1956, we annex hereto a statement on the matters specifed in paragraphs 4 and 5 of the said Order.

4. As stated in Note 3, Schedule 16: Notes to Accounts, Godrej Household Products Ltd. (GHPL), an erstwhile 100% subsidiary of Godrej Consumer Products Limited (GCPL) was amalgamated on March 31, 2011, with GCPL with effect from April 1, 2010, in accordance with a Scheme of Amalgamation sanctioned by the Honble High Court of Judicature at Bombay. These financial statements include the financial statements of the erstwhile GHPL for the year ended March 31, 2011, which have not been audited by us and have been audited by another auditor whose report has been furnished to us. Our opinion on the financial statements, to the extent they have been derived from the financial statements of the erstwhile GHPL, is based solely on the report of the other auditor.

5. Without qualifying our opinion, attention is drawn to Note 3, Schedule 16: Notes to Accounts, regarding the Scheme of Amalgamation approved by The Honble High Court of Judicature at Bombay whereby the assets and liabilities of the erstwhile Godrej Household Products Limited have been taken over and recorded at their fair values as on April 1, 2010, as determined by the Board of Directors of the Company. In accordance with the Scheme of Amalgamation, an amount of Rs. 3776.83 lac on account of fair valuation of loans and advances, an amount of Rs. 5275.00 lac on account of brand amortization and an amount of Rs. 614.42 lac on account of costs and expenses of amalgamation aggregating to Rs. 9666.25 lac has been charged to General Reserve instead of charging the same to the Proft and Loss Account. Had this amount been charged to the Proft and Loss Account, the proft for the year would have been lower by Rs. 9666.25 lac and the General Reserve would have been higher by Rs. 9666.25 lac

6. Further to our comments in the Annexure referred to in para 3 above and our comments in para 4 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 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 such books.

c) The Balance Sheet, Proft and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account.

d) In our opinion, the Balance Sheet, the Proft and Loss Account and the Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956.

e) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with the notes thereon, give the information required by the Companies Act, 1956, in the manner so required 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 March 31, 2011;

ii) in the case of the Proft and Loss Account, of the proft of the Company for the year ended on that date; and

iii) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

7. On the basis of the written representations received from the Directors as on March 31, 2011 and taken on record by the Board of Directors, we report that none of the Directors is disqualifed as on March 31, 2011, from being appointed as a Director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

Annexure to the Auditors Report

As required by the Companies (Auditors Report) Order, 2003, issued by the Central Government of India in terms of section 227 (4A) of the Companies Act, 1956, we further report that:

1. Fixed Assets:

a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fxed assets.

b) The Company has a program for physical verifcation of fxed assets at periodic intervals. In our opinion, the period of verifcation is reasonable having regard to the size of the Company and the nature of its assets. The discrepancies reported on such verifcation are not material and have been properly dealt with in the books of account.

c) In our opinion, there have been no signifcant disposals of fxed assets during the year which affect the going concern assumption.

2. Inventory:

a) The Management has conducted physical verifcation of inventory (excluding stocks lying with third parties) at reasonable intervals. In respect of inventory lying with third parties, these have substantially been confrmed by them. In our opinion, the frequency of verifcation is reasonable.

b) The procedures of physical verifcation 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 and no material discrepancies were noticed on verifcation between the physical stocks and the book records.

3. Loans and Advances:

a) The Company had granted unsecured loans to two companies listed in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 1586.73 lac and the closing balance amounted to Rs. Nil. The erstwhile Godrej Household Products Limited had granted an unsecured loan, to a party covered in the register maintained under Section 301 of the Act. The maximum amount involved during the year was Rs. 257.14 lac and the year-end balance was Rs. 214.29 lac.

b) In our opinion, the rate of interest and other terms and conditions on which the unsecured loans have been granted to companies / parties listed in the register maintained under section 301 of the Companies Act, 1956, are not prima facie prejudicial to the interest of the Company.

c) The parties to whom the Company had granted loans have repaid / are repaying the principal amounts as stipulated and have also been regular in the payment of interest.

d) There is no overdue amount of loans granted to companies / parties listed in the register maintained under section 301 of the Companies Act, 1956.

e) The Company has not taken any loans, secured or unsecured, from companies, frms or other parties covered in the register maintained under section 301 of the Act.

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 purchases of inventory, fxed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal control system.

5. Transactions that need to be entered in the register maintained under section 301 of the Companies Act, 1956:

a) Based upon the audit procedures applied by us and according to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956, 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 entered in the register maintained under section 301 of the

Annexure to the Auditors Report

Companies Act, 1956 and exceeding the value of Rs. 5.00 lac in respect of any party during the year, have been made at prices which are reasonable, having regard to prevailing market prices at the relevant time.

6. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of section 58A, 58AA, or any other relevant provisions of the Companies Act, 1956 and the rules framed there under. No order has been passed by the Company Law Board, or National Company Law Tribunal, or Reserve Bank of India, or any Court, or any other Tribunal.

7. In our opinion, the Company has an internal audit system commensurate with the size of the Company and nature of its business.

8. We have broadly reviewed the books of account and records maintained by the Company in respect of manufacture of soaps, cosmetics and toiletries pursuant to the Rules made by the Central Government for maintenance of cost records, under section 209(l)(d) of the Companies Act, 1956 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. To the best of our knowledge and according to the information given to us, the Central Government has not prescribed maintenance of cost records under section 209(1)(d) of the Companies Act, 1956, for any other products of the Company.

9. Statutory Dues

a) According to the information and explanation given to us, the Company is regular in depositing undisputed statutory dues, including dues pertaining to Investor Education and Protection Fund, Provident Fund, Employees State Insurance, Income-tax, Sales-tax, Wealth Tax, Service Tax, Custom Duty, Excise duty, Cess and any other statutory dues with the appropriate authorities. We have been informed that there are no undisputed dues which have remained outstanding as at the end of the financial year, 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, wealth tax, service tax, customs duty, excise duty or cess outstanding on account of any dispute, other than the following:

Name of Statute Nature of Dues Amount

Rs. lac

Central Excise Act, Rate differences on account of 61.54 1944 soap scrap.

Cenvat credit availed on input 10.81 services.

Excise duty claim in respect 118.27 of non payment of education cess.

Others 21.94

Excise duty in dispute 18.43 pertaining to erstwhile Godrej Household Products Limited.

Sales Tax Act Interest on sales tax dues. 12.07

Sales Tax Dues 106.41

Sales Tax Dues 17.58

Others 28.62

Sales tax in dispute pertaining 31.70 to erstwhile Godrej Household Products Limited. 66.00

502.78

29.83

89.52

1044.43

44.11

The Entry Tax Act. Entry Tax in dispute pertaining 105.95 to erstwhile Godrej Household Products Limited. 22.67

The Finance Act, Service Tax in dispute 16.21 1994. pertaining to erstwhile Godrej Household Products Limited.

Employees Provident Fund in dispute 252.95 Provident Funds pertaining to erstwhile Godrej and Miscellaneous Household Products Limited. Provisions Act, 1952.

Income-tax Act, 1961 Appeal against order of regular 322.71 assessment u/s 143(3) of the Act.

Demand based on the order of 34.91 regular assessment u/s 143(3) of the Act.

Demand based on the order of 77.56 regular assessment u/s 143(3) of the Act. Others 402.26

Income-tax in ispute 60.72

pertaining to erstwhile Godrej 267.63

Household Products Limited. 106.22

Name of status Period to which the Forum where dispute is amount release pending

Central Excise Act, 2000 - 04 CESTAT 1944

2009-10 Commissioner of Central Excise(Appeal)

2004-08 Assistant Commissioner

1996-99 Assistant Commissioner

2007-08 CESTAT

2002-03, 2006-07 Commissioner of Central Excise (Appeals), Chennai

Sales Tax Act 2001-02 High Court

2004-05 Sales Tax Authority

2009-10 Joint Commissioner (A)

2000-01 Assistant / Joint/ Deputy

2002-03 Commissioner

2007-08 Sales Tax Authority

2003-04

2005-08

2009-10

Financial Years 2002-03, Supreme Court of India 2003-04 and 2004-05

Financial Year 2004-05 Commercial Tax Offcer (West Bengal)

Financial Years 1998-99,Deputy Commissioner Commercial

1999-00, 2001-02, 2002 Taxes (Uttar Pradesh) and Deputy

03, 2003-04, 2004-05, Commissioner Appeals (West Bengal,

2005-06, 2006-07 and Maharashtra, Uttar Pradesh, Andhra

2007-08. Pradesh, Punjab, Orissa, Haryana,Jammu and Kashmir)

Financial Years 2001-02, Joint Commissioner (Appeals) (Uttar 2002-03, 2003-04, 2006- Pradesh, Orissa, Andhra Pradesh and 07 and 2008-09 Tamil Nadu)

Financial Years 1994-95, Sales Tax Tribunal (Bihar, Uttar 1999-00, 2000-01, 2001- Pradesh, Delhi, West Bengal, 02, 2002-03 and 2003-04 Karnataka) Financial Years 1999-00, High Court (Andhra Pradesh, 2000-01, 2001-02, 2004- Madhya Pradesh, Kerala, Rajasthan, 05, 2005-06, 2006-07, Karnataka) 2007-08 and 2008-09

Financial Years 2003-04 Commissioner (Appeals) (Andhra and 2004-05 Pradesh, Bihar, Maharashtra)

The Entry Tax Financial Years 2006-07 Supreme Court of India Act and 2007-08

Financial Years 1999-2000 Commissioner (Appeals) (Madhya to 2003-04 Pradesh)

The Finanacial September 2004 to Commissioner (Appeals) Act 1994 November 2004 and February 2005 to June 2008

Employees Financial Years 2005-06 to Employees Provident Fund Provident Funds Appellate and 2009-10 Tribunal, New Delhi. Miscellaneous Provisions Act 1952

Income tax Act, 1961 Assessment Year 2006-07 CIT(A)

Assessment Year 2008-09 AO

Assessment Year 2009-10 AO

Assessment Year 2003-04 CIT (A) 2006-07 2007-08

Assessment Year 2003-04 Assessing Offcer

Assessment Year 2006-07 Income-tax Appellate Tribunal

Assessment Year 2007-08 Commissioner of Income-tax (Appeals)

10. The Company does not have accumulated losses as at the end of the financial year, nor has it incurred cash losses in the current financial year, or in the immediately preceding financial year.

11. According to the information and explanations given to us and based on the documents and records produced before us, there has been no default in repayment of dues to banks or debenture holders. There are no dues to financial institutions.

12. According to the information and explanations given to us and based on the documents and records produced before us, the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures or other securities.

13. In our opinion and according to the information and explanations given to us, the nature of activities of the Company does not attract any special statute applicable to chit fund and nidhi / mutual benefit fund / societies.

14. The Company does not deal or trade in shares, securities, debentures and other investments.

15. According to the information and explanations given to us and the records examined by us, the terms and conditions of guarantees given by the Company for loans taken by its subsidiaries from banks are not prima facie prejudicial to the interest of the Company.

16. According to the information and explanations given to us and the records examined by us, on an overall basis, the term loan obtained by the Company was applied for the purpose for which the loan was obtained.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet, the Cash Flow Statement and other records examined by us, the Company has used funds raised on short term basis for long term investment. The Company has used short term borrowings to the extent of Rs. 6993.26 lac for the acquisition of long term investments.

18. The Company has not made any preferential allotment of shares to any parties or companies covered in the register maintained under section 301 of the Companies Act, 1956.

19. The Company has issued unsecured redeemable non-convertible debentures during the year in respect of which no security is required to be created.

20. The Company has not raised any money through a public issue during the year.

21. Based upon the audit procedures performed by us, to the best of our knowledge and belief and according to the information and explanations given to us by the Management, no fraud on, or by the company, has been noticed or reported during the year.

For and on behalf of

KALYANIWALLA & MISTRY

CHARTERED ACCOUNTANTS

Firm Regn. No.: 104607W

Daraius Z. Fraser

PARTNER

M. No.: 42454

Mumbai: May 2, 2011.


Mar 31, 2010

1. We have audited the attached Balance Sheet of GODREJ CONSUMER PRODUCTS LIMITED as at March 31, 2010 and also the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date annexed thereto. 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 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, issued by the Central Government of India in terms of section 227 (4A) of the Companies Act, 1956, we annex hereto 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 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 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 such 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 our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956.

e) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with the notes thereon, give the information required by the Companies Act, 1956, in the manner so required 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 March 31, 2010;

ii) in the case of the Profit and Loss Account, of the profit of the Company for the year ended on that date; and

iii) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

5. On the basis of the written representations received from the Directors as on March 31, 2010 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on March 31, 2010, from being appointed as a Director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

Annexure to the Auditors Report

As required by the Companies (Auditors Report) Order, 2003, issued by the Central Government of India in terms of section 227 (4A) of the Companies Act, 1956, we further report that:

1. Fixed Assets:

a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

b) The Company has a program for physical verification of fixed assets at periodic intervals. In our opinion, the period of verification is reasonable having regard to the size of the Company and the nature of its assets. The discrepancies reported on such verification are not material and have been properly dealt with in the books of account.

c) In our opinion, there have been no significant disposals of fixed assets during the year which affect the going concern assumption.

2. Inventory:

a) The Management has conducted physical verification of inventory at reasonable intervals. In our opinion, the frequency of verification is reasonable.

b) The procedures of 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 and no material discrepancies were noticed on verification between the physical stocks and the book records.

3. Loans and Advances:

a) The Company has granted unsecured loans to two companies listed in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 1473.93 lac and the closing balance amounted to Rs. 1439.60 lac.

b) In our opinion, the rate of interest and other terms and conditions on which the unsecured loans have been granted to companies listed in the register maintained under section 301 of the Companies Act, 1956, are not prima facie prejudicial to the interest of the Company.

c) The parties to whom the Company had granted loans have repaid the principal amounts as stipulated and have also been regular in the payment of interest.

d) There is no overdue amount of loans granted to companies listed in the register maintained under section 301 of the Companies Act, 1956.

e) The Company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintained under section 301 of the Act.

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 purchases of inventory, fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal control system.

5. Transactions that need to be entered in the register maintained under section 301 of the Companies Act, 1956:

a) Based upon the audit procedures applied by us and according to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956, 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 entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of Rs. 5.00 lac in respect of any party during the year, have been made at prices which are reasonable, having regard to prevailing market prices at the relevant time.

6. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of section 58A, 58AA, or any other relevant provisions of the Companies Act, 1956 and the rules framed thereunder. No order has been passed by the Company Law Board, or National Company Law Tribunal, or Reserve Bank of India, or any Court, or any other Tribunal.

7. In our opinion, the Company has an internal audit system commensurate with the size of the Company and nature of its business.

8. We have Proadly reviewed the Pooks of account and records maintained Py the Company in respect of manufacture of soaps, cosmetics and toiletries pursuant to the Rules made by the Central Government for maintenance of cost records, under section 209(l)(d) of the Companies Act, 1956 and are of the opinion that prima facie, the prescriPed 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. To the best of our knowledge and according to the information given to us, the Central Government has not prescribed maintenance of cost records under section 209(1 )(d) of the Companies Act, 1956, for any other products of the Company.

9. Statutory Dues

a) According to the information and explanation given to us, the Company is regular in depositing undisputed statutory dues, including dues pertaining to Investor Education and Protection Fund, Provident Fund, Employees State Insurance, Income-tax, Sales-tax, Wealth Tax, Service Tax, Custom Duty, Excise duty, Cess and any other statutory dues with the appropriate authorities. We have been informed that there are no undisputed dues which have remained outstanding as at the end of the financial year, 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, wealth tax, service tax, customs duty, excise duty or cess outstanding on account of any dispute, other than the following:

Name of Nature of Dues Amount Statute (Rs. Lac)

Central Rate differences on account of soap 61.54 Excise scrap.

Act, 1944 Cenvat credit availed on input 10.81 services.

Excise duty claim in respect of non 118.27 payment of education cess.

Special Rate for value addition. 830.85

Others. 20.73

Sales Tax Interest on sales tax dues. 12.07 Act Sales Tax Dues. 106.41

Sales Tax Dues 17.58

Others. 32.53

Income- Appeal against order of regular 668.48 tax Act, assessment u/s 143(3) of the Act. 1961

Appeal against order of regular 639.82 assessment u/s 143(3) of the Act.

Appeal against order of regular 322.71 assessment u/s 143(3) of the Act.

Appeal against order of regular 116.89 assessment u/s 115WE(3) of the Act.







Income- tax Act, 1961

Name of Period to Forum where dispute Statue which the is pending amount relates

Central Excise Act, 1944 2000-04 CESTAT

2009-10 Commissioner of Central Excise (Appeal)

2004-08 Assistant Commissioner 2008-10 CESTAT

1996-99 Assistant

2007-08 Commissioner

2008-09 CESTAT Sales Tax Act 2001-02 High Court

2004-05 Sales Tax Authority

2009-10 Joint Commissioner (A)

2000-01 Assistant / Joint/

2002-03 Deputy Commissioner

2003-04 Sales Tax Authority

2006-08 2009-10

Income- tax Act, 1961 Assessment CIT(A) Year 2004-05

Assessment CIT(A) Year 2005-06

Assessment CIT(A) Year 2006-07

Assessment CIT(A) Year 2006-07

Name of Nature of Dues Amount Statute (Rs. Lac)

Demand based on the order of regular 406.10 assessment u/s 143(3) of the Act.

Others. 8.95

Name of Period to Forum where dispute Statue which the is pending amount relates

Assessment AO Year 2008-09

Assessment CIT (A) Year 2003-04 2006-07 2007-08

10. The Company does not have accumulated losses as at the end of the financial year, nor has it incurred cash losses in the current financial year, or in the immediately preceding financial year.

11. According to the information and explanations given to us and based on the documents and records produced before us, there has been no default in repayment of dues to banks. There are no dues to financial institutions or debenture holders.

12. According to the information and explanations given to us and based on the documents and records produced before us, the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures or other securities.

13. In our opinion and according to the information and explanations given to us, the nature of activities of the Company does not attract any special statute applicable to chit fund and nidhi / mutual benefit fund / societies.

14. The Company does not deal or trade in shares, securities, debentures and other investments.

15. According to the information and explanations given to us and the records examined by us, the terms and conditions of guarantee given by the Company for loans taken by its subsidiary from banks are not prima facie prejudicial to the interest of the Company.

16. According to the information and explanations given to us and the records examined by us, on an overall basis, the term loans, which have been repaid during the year, were applied by the Company for the purpose for which they were obtained.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet, the Cash Flow Statement and other records examined by us, the Company has not used funds raised on short term basis for long term investment.

18. The Company has not made any preferential allotment of shares to any parties or companies covered in the register maintained under section 301 of the Companies Act, 1956.

19. The Company did not issue any debentures during the year.

20. The Company has not raised any money through a public issue during the year.

21. Based upon the audit procedures performed by us, to the best of our knowledge and belief and according to the information and explanations given to us by the Management, no fraud on, or by the company, has been noticed or reported during the year, except in one case where certain claims amounting to Rs. 2,424.18 lac have been made on the Company on account of the unauthorised, illegal and fraudulent acts of one of its employee whose services have since been terminated. The Company has been legally advised that it has a strong legal case in the matter.

For and on behalf of

Kalyaniwalla & Mistry

Chartered Accountants Firm Regn. No.: 104607W

Daraius Z. Fraser

Partner

M. No.: 42454

Mumbai: April 26, 2010.

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