Godrej Consumer Products : Standalone

Financial Statements | Standalone

Independent Auditors' Report

To the Members of

Godrej Consumer Products Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the standalone financial statements of Godrej Consumer Products Limited (the "Company"), which comprise the standalone balance sheet as at 31 March 2024, and the standalone statement of profit and loss (including other comprehensive income), standalone statement of changes in equity and standalone statement of cash flows for the year then ended, and notes to the standalone financial statements, including material accounting policies and other explanatory information in which are included the Returns for the year ended on that date audited by the branch auditor of the Company's branch at Singapore.

In our opinion and to the best of our information and according to the explanations given to us, and

based on the consideration of report of the branch auditor on financial statements/financial information

of such branch as was audited by the branch auditor, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 ("Act") in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2024, and its profit and other comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditor's

Responsibilities for the Audit of the

Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered

Accountants of India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence obtained by us along with the consideration of report of the branch auditor referred

to in paragraph (a) of the "Other Matters" section below, is sufficient and appropriate to provide a basis for our opinion on the standalone financial statements.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed

in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

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Revenue recognition

See Note 34 to standalone financial statements

The key audit matter	How the matter was addressed in our audit
Revenue is measured net of any discounts and rebates.	Our audit procedures included:
Recognition and measurement of discounts and rebates	•	Assessing the compliance of revenue recognition accounting
accruals, involves judgement and estimates. This leads to a		policies, including those relating to discounts and rebates,
	with reference to Ind AS 115 Revenue from contracts with
risk of revenue being misstated due to inaccurate estimation
	customers (applicable accounting standard);
over discounts and volume rebates.
•	Testing the design, implementation and operating
Revenue is recognised when the control of the products being
	effectiveness of the Company's general IT controls and key
sold has transferred to the customer.		IT application/ manual controls over the Company's systems,
There is a risk of revenue being overstated on account of		with the assistance of our IT specialists. These IT systems
	enable recording of revenue and computing discounts and
manipulation in the timing of transfer of control, due to the
	volume rebates in the general ledger accounting system;
pressure on the Company to achieve performance targets for
•	Performing substantive testing by selecting statistical samples
the year.
	of revenue transactions recorded for the year as well as
Accordingly, revenue recognition is considered to be a key		period end cut-off and agreeing to the underlying documents,
audit matter.		which included sales invoices and shipping documents;
	•	Performing substantive testing by agreeing statistical samples
		of discounts and rebate accruals and disbursements to
		underlying documents;
	•	Performing a retrospective assessment of discounts and
		rebate accruals with prior period to evaluate the historical
		accuracy; and
	•	Assessing manual journals posted to revenue to identify
		unusual items.
Intangible Assets -impairment assessment
See Note 6 to standalone financial statements
The key audit matter	How the matter was addressed in our audit

The carrying amount of goodwill and brands (indefinite life intangible assets) represent 27% of the Company's total assets.

The identification of relevant Cash Generating Units (CGUs) for the annual impairment evaluation of Goodwill by the Company involves significant judgement.

The annual impairment testing of goodwill and other intangible assets by the Company involves significant estimates and judgment due to the inherent uncertainty involved in forecasting and discounting future cash flows and determining the recoverable amounts.

Accordingly, impairment assessment of goodwill and other intangible assets is considered to be a key audit matter.

Our audit procedures included:

• Evaluating design and implementation and testing operating effectiveness of controls over the Company's process of impairment assessment and approval of forecasts;
• Evaluating Company's basis to identify relevant CGUs;
• Assessing the valuation methodology and challenging the assumptions used, in particular those relating to forecast revenue growth and earnings, weighted average cost of capital and royalty rates, long-term growth rates with the assistance of our valuation specialists;
• Assessing the reliability of the financial projections prepared by the Company by comparing projections for previous financial years with actual results realized and analysis of significant variances,
• Performing sensitivity analysis by assessing the effect of possible reductions in the above assumptions on the recoverable amount; and

• Evaluating the adequacy of disclosures in respect of impairment evaluation of intangible assets in the standalone financial statements.

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Financial Statements | Standalone

Business Combination - Acquisition of business from Raymond Consumer Care Limited

See Note 55 to standalone financial statements

The key audit matter	How the matter was addressed in our audit
The Company has completed the acquisition of FMCG	Our audit procedures included:
business of Raymond Consumer Care Limited effective 8 May	•	We have read the business transfer agreement to understand
2023 pursuant to a business transfer agreement at a total
	the key terms and conditions of the acquisition;
consideration of ` 2,825 crores.
•	We have evaluated the accounting treatment followed by the
The Company has accounted for such acquisition as a business		Company with reference to Ind AS 103;
combination as per Ind AS 103 'Business Combinations' by	•	We have evaluated the design and implementation and tested
recognizing identifiable assets and liabilities at fair value.		the operating effectiveness of key internal controls related to
The measurement of the identifiable assets and liabilities		the Company's valuation process;
•	We have involved our valuation specialists;
acquired at fair value is inherently judgmental.
	-	to gain an understanding of the work of the experts by
Fair value of brands was determined by the Company with
		examining the valuation reports.
the assistance of an external valuation expert using income		-	to critically evaluate the key assumptions (including
approach (royalty relief method), considering the assets being
		revenue projections, royalty rate, terminal growth
measured.
		rate and discount rate) and purchase price allocation
Given the complexity and judgement involved in fair value			adjustments.
	-	to evaluate the valuation of acquired tangible and
measurements and magnitude of the acquisition made by the
Company, this is a key audit matter.			intangible assets based on our knowledge of the
			Company and the industry.
	•	We have assessed the adequacy of the Company's disclosures
		in respect of the acquisition in accordance with the
		requirements of Ind AS 103.
Impairment evaluation of Investments in subsidiaries
See Note 8 to standalone financial statements
The key audit matter	How the matter was addressed in our audit
The carrying amount of the investments in subsidiaries (held	Our audit procedures included:
at cost less impairment) represents 27 % of the Company's	•	Evaluating design and implementation and testing operating
total assets.
	effectiveness of controls over the Company's process of
The investments are assessed for impairment when an		impairment assessment and approval of forecasts;
•	Assessing the indicators for impairment of the subsidiaries
indicator of impairment exists. Due to restructuring of
operations and businesses in overseas geographies, there are		and understanding the Company's assessment of those
impairment triggers requiring evaluation.		indicators;
The impairment assessment involves use of significant	•	Assessing the valuation methodology and challenging the
	assumptions used, in particular those relating to forecast
estimates and judgements due to the inherent uncertainty		revenue growth and earnings, weighted average cost of
involved in forecasting discounting future cash flows and		capital and long-term growth rates, with the assistance of our
determining the recoverable amounts.		valuation specialists;
In view of the significance of these investments and estimates	•	Assessing the reliability of the financial projections prepared
	by the Company by comparing projections for previous
and judgments involved, we consider impairment evaluation
	financial years with actual results realized and analysis of
of investments in subsidiaries to be a key audit matter.
	significant variances;
	•	Performing sensitivity analysis by assessing the effect
		of possible reductions in the above assumptions on the
		recoverable amount; and
	•	Comparing the carrying amount of investments with
		recoverable amount based on discounted cash flow analysis.

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Other Information

The Company's Management and Board of Directors are responsible for the other information. The other information comprises the information included in the annual report, but does not include the financial statements and auditor's report thereon. The annual report is expected to be made available to us after the date of this auditor's report.

Our opinion on the standalone financial statements does not cover the other information and we will 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 identified above when it becomes available 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.

When we read the other information, if we conclude that there is a material misstatement therein,

we are required to communicate the matter to those charged with governance and take necessary actions, as applicable under the relevant laws and regulations.

Management's and Board of Directors' Responsibilities for the Standalone Financial Statements The Company's Management and Board of Directors are responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true

and fair view of the state of affairs, profit/ loss and other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act. The Management and Board of Directors of the Company are responsible for maintenance

of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively

for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

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

The Board of Directors are responsible for overseeing the financial reporting process of the Company.

Auditor's Responsibilities for the Audit of the Standalone Financial Statements

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

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as

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Financial Statements | Standalone

fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Management and Board of Directors.
• Conclude on the appropriateness of the Management and Board of Directors use of the going concern basis of accounting in preparation of standalone financial statements and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the standalone financial statements or, if such disclosures are

inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial statements/financial information of the branch of the Company to express an opinion on the standalone financial statements. For the branch included in
  the standalone financial statements, which has been audited by branch auditor, such branch auditor remains responsible for the direction, supervision and performance of the audit carried out by them. We remain solely responsible for our audit opinion. Our responsibilities in this regard are further described in paragraph (a) of the section titled "Other Matter" in this audit report.

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Other Matter

1. We did not audit the financial statements of one branch included in the standalone financial statements of the Company whose financial statements reflect total assets of ` 0.21 crores as at 31 March 2024, total revenue of ` 1.33 crores, total net profit after tax of ` 0.12 crores and net cash inflows of ` 0.11 crores for the year ended on that date, before giving effects to consolidation adjusments, as considered in the standalone financial statements. The financial statements of this branch has been audited by the other auditor whose report has

363

been furnished to us, and our opinion in so far as it relates to the amounts and disclosures included in respect of this branch, is based solely on the report of such other auditor.

Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

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

• A. As required by Section 143(3) of the Act, based on our audit and on the consideration of report of the other auditor on financial statements
  of such branch as was audited by other auditor, as noted in the "Other Matter" paragraph, we report, to the extent applicable, that:
• 1. 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.
  2. 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 and the report of the other auditor and proper returns adequate for the purposes of our audit have been received from the branch not visited by us, except for the matter stated in the paragraph 2B(f) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014.

1. The report on the accounts of the branch office of the Company audited under Section 143(8) of the Act by branch auditor has been sent to us and has been properly dealt with by us
   in preparing this report.
2. The standalone balance sheet, the standalone statement of profit and loss (including other comprehensive income), the standalone statement of changes in equity and the standalone statement of cash flows dealt with by

this Report are in agreement with the books of account and with the return received from the branch not visited by us.

1. In our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under Section 133 of the Act.
2. On the basis of the written representations received from the directors as on 31 March 2024 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2024 from being appointed as a director in terms of Section 164(2) of the Act.
3. The modification relating to the maintenance of accounts and other matters connected therewith are
   as stated in the paragraph 2A(b) above on reporting under Section 143(3)
   (b) of the Act and paragraph 2B(f) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014.

364

Financial Statements | Standalone

1. 1. With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B".
2. 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 and based on the consideration of the report of the other auditor on separate financial statements of the branch, as noted in the "Other Matters" paragraph:
3. 1. The Company has disclosed the impact of pending litigations as at 31 March 2024 on its financial position in its standalone financial statements - Refer Note 33 and 46 to the standalone financial statements.
   2. The Company did not have any long-term contracts including derivative contracts for which

there were any material foreseeable losses.

1. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

d (i) The management of the Company represented that, to the best of their knowledge and belief, as disclosed in the Note 58(i) to the standalone financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to

or in any other person(s) or entity(ies), including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the

Company ("Ultimate Beneficiaries")

or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

1. The management of the Company represented that, to the best of their knowledge and belief, as disclosed in the Note 58(ii) to the standalone financial statements, no funds have been received
   by the Company from any person(s) or entity(ies), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall directly or indirectly, lend
   or invest in other persons or entities identified in any manner whatsoever by or on behalf
   of the Funding Parties ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
2. Based on the audit procedures performed that have been considered

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	reasonable and	the respective
	appropriate in the	softwares;
	circumstances,
	nothing has come	In the absence
	to our notice that	of independent
	has caused us to	auditor's report for
	believe that the	the period 1 April
	representations	2023 to 31 March
	under sub-clause (i)	2024 in relation to
	and (ii) of Rule 11(e),	controls at service
	as provided under	organisation for
	(i) and (ii) above,	accounting software
	contain any material	used for maintaining
	misstatement.	the books of
		account relating
e.	The interim dividend	to consolidation
	declared and paid	process, which
	by the Company	is operated by a
	during the year and	third-party software
	until the date of	service provider,
	this audit report is	we are unable to
	in accordance with	comment whether
	Section 123 of the	audit trail feature
	Act.	of the said software
		was enabled and
f.	Based on our	operated for the
	examination which	period 1 April 2023
	included test	to 31 March 2024
	checks, except	for all relevant
	for the instance	transactions
	mentioned below,	recorded in the
	the Company has	software.
	used accounting
	softwares for	Further, for the
	maintaining its	period audit trail
	books of account	(edit log) facility
	which has a feature	was enabled and
	of recording audit	operated for
	trail (edit log)	the respective
	facility and the	accounting
	same has operated	softwares, we did
	throughout the	not come across any
	year for all relevant	instance of the audit
	transactions	trail feature being
	recorded in	tampered with.

1. With respect to the matter to be included in the Auditor's Report under Section 197(16) of the Act:
   In our opinion and according to the information and explanations given to us, the remuneration paid/payable by the Company to its directors during the current year is in accordance with the provisions of Section 197 of the Act. The remuneration paid/ payable to any director is not in excess of the limit laid down under Section 197 of the Act. The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) of the Act which are required to be commented upon by us.

For B S R & Co. LLP

Chartered Accountants

Firm's Registration No.:

101248W/W-100022

Vijay Mathur

Partner

Membership No: 046476

ICAI UDIN:24046476BKGPAY7136

Mumbai: 06 May 2024

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Financial Statements | Standalone

Annexure A to the Independent Auditor's Report on the Standalone Financial Statements of Godrej Consumer Products Limited for the year ended 31 March 2024

(Referred to in paragraph 1 under 'Report on Other Legal and Regulatory Requirements' section of our report of even date)

1. (a) (A) The Company has maintained proper records showing full particulars, including quantitative details and situation of Property, Plant and Equipment.

1. 1. The Company has maintained proper records showing full particulars of intangible assets.
2. (b) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has a regular programme of physical verification of its Property, Plant and Equipment by which
3. 
   all property, plant and equipment are verified in a phased manner over a period of 3 years. In accordance with this programme, certain property, plant and equipment were verified during the year. In our opinion, this periodicity of physical

verification is reasonable having regard to the size of the Company and the nature of its assets. No discrepancies were noticed on such verification.

1. 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 (other than immovable properties where the Company is the lessee and the leases agreements are duly executed in favour of the lessee) disclosed in the standalone financial statements are held in the name of the Company.
2. According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not revalued its Property, Plant and Equipment (including Right of Use assets) or intangible assets or both during the year.
3. According to the information and explanations given to us and on the basis of our examination of the records of the Company,

there are no proceedings initiated or pending against the Company for holding any benami property under the Prohibition of Benami Property Transactions Act, 1988 and rules made thereunder

1. (a) The inventory, except goods-in-transit and stocks lying with third parties, has been physically verified by the management during the year. For stocks lying with third parties at the year-end, written confirmations have been obtained and for goods-in-transit subsequent evidence of receipts has been linked with inventory records. In our opinion, the frequency of such verification is reasonable and procedures and coverage as followed by management were appropriate. No discrepancies were noticed on verification between the physical stocks and the book records that were more than 10% in the aggregate of each class of inventory
2. 1. According to the information and explanations given to us and on the basis of our examination of the records of the Company,

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the Company has not been sanctioned any working capital limits in excess of five crore rupees in aggregate from banks and financial institutions on the basis of security of current assets at any point

of time of the year.

explanations given to us the Company has provided loans or stood guarantee to any other entity as below:

Loan

Particulars(` in

Crores)

Aggregate amount during

(d) According to the

information and

explanations given to

us and on the basis of

our examination of the

records of the Company,

there is no overdue

amount for more than

ninety days in respect

of loans given. Further,

Accordingly, clause 3(ii)(b) of the Order is

the year Others

0.03

the Company has not

given any advances in

not applicable to the Company.

1. According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has made investments in companies and other parties and granted loans, unsecured, to other parties during the year, in respect of which
   the requisite information is as below. The Company has not provided any loans to companies, provided guarantees or security or granted advances in the nature of loans, secured or unsecured, to companies or any other parties during the year. The Company has not made any investments in, provided guarantees or security, granted loans and advances in the nature of loans, secured or unsecured, to firms and limited liability partnerships during the year.
2. 1. Based on the audit procedures carried on by us and as per the information and

Balance outstanding as at

balance sheet date0.03 Others

1. According to the information and explanations given to us and based on the audit procedures conducted by us, in our opinion the investments made and the terms and conditions of the grant of loans provided during the year are, prima facie, not prejudicial to the interest of the Company.
2. According to the information and explanations given to us and on the basis of our examination of the records of the Company, the schedule of repayment of loans given to employees (which
   as per the Company's policy are interest free) is stipulated. The repayment of principal has been regular. Further, the Company has not given any advances in the nature of loans to any party during the year.

	the nature of loans to any
	party during the year.
(e)	According to the
	information and
	explanations given to
	us and on the basis of
	our examination of the
	records of the Company,
	there is no loan or
	advance in the nature of
	loan granted falling due
	during the year, which
	has been renewed or
	extended or fresh loans
	granted to settle the
	overdues of existing loans
	given to same parties.
(f)	According to the
	information and
	explanations given to
	us and on the basis of
	our examination of the
	records of the Company,
	the Company has not
	granted any loans or
	advances in the nature
	of loans either repayable
	on demand or without
	specifying any terms or
	period of repayment.
(iv) According to the information
and explanations given to

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