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You can view full text of the latest Auditor's Report for the company.

BSE: 500096ISIN: INE016A01026INDUSTRY: Personal Care

BSE   ` 525.00   Open: 520.55   Today's Range 517.85
525.90
+3.55 (+ 0.68 %) Prev Close: 521.45 52 Week Range 504.00
596.90
Year End :2023-03 

Opinion

1. We have audited the accompanying standalone financial statements of Dabur India Limited (‘the Company’), which comprise the Balance Sheet as at 31 March 2023, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flow, the Statement of Changes in Equity for the year then ended, notes to the standalone financial statements and a summary of the significant accounting policies and other explanatory information.

2. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 (‘the Act’) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards (‘Ind AS’) specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015 and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2023, and its profit (including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.

Basis for Opinion

3. We conducted our audit in accordance with the Standards on Auditing specified under section

143(10) of the Act. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (‘ICAI’) together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

4. Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

5. We have determined the matters described below to be the key audit matters to be communicated in our report.

Key audit matter

How our audit addressed the key audit matter

A. Revenue recognition

Our key procedures included, but were not limited to, the

Refer note 34 to the standalone financial statements.

following:

The Revenues of the Company consists primarily of sale

a) Assessed the appropriateness of the Company’s revenue

of products and is recognized when control of products

recognition accounting policies, including those relating

being sold is transferred to customer and there is no

to rebates and trade discounts by comparing with the

unfulfilled obligation.

applicable accounting standards;

Revenue is measured at fair value of the consideration

b) Tested the design and operating effectiveness of the

received or receivable and is accounted for net of rebates

general IT control environment and the manual controls for

and trade discounts.

recognition of revenue, calculation of discounts and rebates;

The estimation of discounts, incentives and rebates

c) Performed test of details:

recognized, related to sales made during the year, is

i. Tested, on a sample basis, sales transactions to the

material and considered to be complex and subject to

underlying supporting documentation which includes

judgments. The complexity mainly relates to various

goods dispatch notes and shipping documents;

discounts, incentives and scheme offers, diverse range of

ii. Reviewed, on a sample basis, sales agreements and

market presence and complex contractual agreements/

the underlying contractual terms related to delivery of

commercial terms across those markets. Therefore,

goods and rebates to assess the Company’s revenue

there is a risk of revenue being misstated as a result of

recognition policies with reference to the requirements

inaccurate estimates of discounts and rebates.

of the applicable accounting standards;

Key audit matter

How our audit addressed the key audit matter

The Company also focuses on revenue as a key

iii. Assessed the Company’s process for recording of the

performance measure, which could create an incentive

accruals for discounts and rebates as at the year-end

for overstating revenue by influencing the computation of

for the prevailing incentive schemes;

rebates and discounts.

iv. Tested, on a sample basis, discounts and rebates

Considering the materiality of amounts involved,

recorded during the year to the relevant approvals and

significant judgements related to estimation of rebates

supporting documentation which includes assessing

and discounts, the same has been considered as a key

the terms and conditions defined in the prevalent

audit matter.

schemes and customer contracts; v. Obtained supporting documentation for a sample of credit notes issued after the year end to determine whether the transaction was recognized in the correct accounting period.

d) Compared the discount, incentives and rebates of the current year with the prior year for variance/trend analysis and where relevant, conducted further inquiries and testing to corroborate the variances by considering both internal and external benchmarks, overlaying our understanding of industry practices and recent changes in economic environment; and

e) Assessed the appropriateness of the Company’s description of the accounting policy, disclosures related to discounts, incentives and rebates and whether these are adequately presented in the standalone financial statements.

B. Litigations and claims - provisions and contingent

Our key procedures included, but not limited to, the

liabilities

following:

Refer note 46A and 49 to the standalone financial

a) Assessed the appropriateness of the Company’s

statements.

accounting policies relating to provisions and contingent

The Company is involved in direct, indirect tax and other

liability by comparing with the applicable accounting

litigations (‘litigations’) that are pending with different

standards;

statutory authorities.

b) Assessed the Company’s process and the underlying

The level of management judgement associated

controls for identification of the pending litigations and

with determining the need for, and the quantum of,

completeness for financial reporting and also for monitoring

provisions for any liabilities arising from these litigations

of significant developments in relation to such pending

is considered to be high. This judgement is dependent

litigations;

on a number of significant assumptions and assessments

c) Assessed the Company’s assumptions and estimates

which involves interpreting the various applicable rules,

in respect of litigations, including the liabilities or

regulations, practices and considering precedents in the

provisions recognized or contingent liabilities disclosed

various jurisdictions.

This matter is considered as a key audit matter, in view of

in the standalone financial statements. This involved assessing the probability of an unfavorable outcome

the uncertainty regarding the outcome of these litigations, the significance of the amounts involved and the

of a given proceeding and the reliability of estimates of related amounts;

subjectivity involved in management’s judgement as to

d) Performed substantive procedures on the underlying

whether the amount should be recognized as a provision

calculations supporting the provisions recorded;

or only disclosed as contingent liability in the standalone

e) Assessed the management’s conclusions through

financial statements.

understanding relevant judicial precedents in similar cases and the applicable rules and regulations; f) Obtained legal opinions from the Company’s external legal counsel, where appropriate;

Key audit matter How our audit addressed the key audit matter

g) Engaged subject matter specialists to gain an understanding of the current status of litigations and monitored changes in the disputes, if any, through discussions with the management and by reading external advice received by the Company, where relevant, to validate management’s conclusions; and

h) Assessed the appropriateness of the Company’s description of the accounting policy, disclosures related to litigations and whether these are adequately presented in the standalone financial statements.

C. Acquisition of non-current investment in a subsidiary

During the year the Company has acquired controlling interest of 51% of the equity shares capital of Badshah Masala Private Limited, a domestic company headquartered in Mumbai, dealing in FMCG products of the nature of spices and blended products on 02 January 2023 at consideration of ' 481.32 crores.

Our key procedures included, but not limited to, the

following:

a) Read the scheme under acquisition with its salient features conducive to future incremental activity level and profitability of the company.

b) Resolution of the Board of Directors in support of relevant acquisition in Board Meeting.

c) Agreement of acquisition leaving 49% stake with erstwhile promoters and distribution of managerial portfolio in terms of acquisition agreement.

d) Recording of transaction in due adherences of acquisition agreement and accounting norms.

Information other than the Standalone Financial

Statements and Auditor’s Report thereon

6. The Company’s Board of Directors are responsible for the other information. The other information comprises the information included in the Management Discussion and Analysis, Report on Corporate Governance, Business Responsibility and Sustainability Report and Directors’ Report, but does not include the standalone financial statements and our auditor’s report thereon.

Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and Those Charged with

Governance for the Standalone Financial Statements

7. The accompanying standalone financial statements have been approved by the Company’s Board of Directors. The Company’s Board of Directors are responsible for the matters stated in section 134(5) of the Act with respect to the preparation and presentation of these standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, changes in equity and cash flows of the Company in accordance with the Ind AS specified under section 133 of the Act and other accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

• Conclude on the appropriateness of Board of Directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern; and

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

12. Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the standalone financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the standalone financial statements.

13. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

14. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

15. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when,

8. In preparing the financial statements, the Board of Directors are responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intend to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

9. Those Board of Directors are also responsible for overseeing the Company’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Standalone

Financial Statements

10. Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.

11. As part of an audit in accordance with Standards on Auditing, specified under section 143(10) of the Act we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system with reference to financial statements in place and the operating effectiveness of such controls;

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management;

in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Other Matter

16. The financial statements of the Company for the year ended 31 March 2022 included in these standalone financial statements, were audited by the predecessor auditor who expressed an unmodified opinion on those statements on 05 May 2022. Opening balances and carried forward balances pertaining to figures of earlier years have been considered by us on the basis of our predecessor’s certification.

Report on Other Legal and Regulatory Requirements

17. As required by section 197(16) of the Act based on our audit, we report that the Company has paid remuneration to its directors during the year in accordance with the provisions of and limits laid down under section 197 read with Schedule V to the Act.

18. As required by the Companies (Auditor’s Report) Order, 2020 (‘the Order’) issued by the Central Government of India in terms of section 143(11) of the Act we give in the Annexure A, a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

19. Further to our comments in Annexure A, as required by section 143(3) of the Act based on our audit, we report, to the extent applicable, 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 purpose of our audit of the accompanying standalone financial statements;

b) in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

c) The standalone financial statements dealt with by this report are in agreement with the books of account;

d) in our opinion, the aforesaid standalone financial statements comply with Ind AS specified under section 133 of the Act;

e) On the basis of the written representations received from the directors and taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2023 from being appointed as a

director in terms of section 164(2) of the Act;

f) With respect to the adequacy of the internal financial controls with reference to financial statements of the Company as on 31 March 2023 and the operating effectiveness of such controls, refer to our separate Report in Annexure B wherein we have expressed an unmodified opinion; and

g) With respect to the other matters to be included in the Auditor’s Report in accordance with rule 11 of the Companies (Audit and Auditors) Rules, 2014 (as amended), in our opinion and to the best of our information and according to the explanations given to us:

i. the Company, as detailed in note 46 to the standalone financial statements, has disclosed the impact of pending litigations on its financial position as at 31 March 2023;

ii. the Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses as at 31 March 2023;

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended 31 March 2023;

iv. (a) The management has represented that,

to the best of its knowledge and belief, other than as disclosed in the notes to the accounts, no funds have been advanced or loaned or invested (either from borrowed funds or securities premium or any other sources or kind of funds) by the Company to or in any person or entity, including foreign entities (‘the intermediaries’), with the understanding, whether recorded in writing or otherwise, that the intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (‘the Ultimate Beneficiaries’) or provide any guarantee, security or the like on behalf the Ultimate Beneficiaries;

iv. (b) The management has represented that, to the best of its knowledge and belief, other than as disclosed in the notes to the accounts, no funds have been received by the Company from any person or entity, including foreign entities (‘the Funding Parties’), with the understanding, whether

recorded in writing or otherwise, that the Company shall, whether directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (‘Ultimate Beneficiaries’) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and

iv. (c) Based on such audit procedures performed

as considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the management representations under sub-clauses (a) and (b) above contain any material misstatement.

v. The final dividend paid by the Company during the year ended 31 March 2023 in respect of such dividend declared for the previous year is in accordance with section 1 23 of the Act, as applicable. Further, the interim dividend declared and paid by the Company during the year ended 31 March 2023 and until the date of this audit report is in compliance with section 123 of the Act. Further, as stated in note 45 to the accompanying standalone

financial statements, the Board of Directors of the Company have proposed final dividend for the year ended 31 March 2023 which is subject to the approval of the members at the ensuing Annual General Meeting. The dividend declared is in accordance with section 123 of the Act, as applicable

vi. Since requirement of maintenance of accounting software which has a feature of audit trail under Rule 3 of the Companies (Accounts) Rules, 2014 has been deferred from financial year commencing from 01 April 2022 to financial year commencing from 01 April 2023, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 is not applicable for the financial year ended 31 March 2023.

For G Basu & Co

Chartered Accountants Firm’s Registration No: 301174E

Subroto Lahiri

Partner

Place : New Delhi Membership No.: 051717

Date : 04 May 2023 UDIN: 23051717BGYYFE5957