PGHH_AR_2020

INDEPENDENT AUDITORS’ REPORT Annual Report 2019-20 69 Company Overview Board's Report MD&A CG Report Financial Statement Procter & Gamble Hygiene and Health Care Limited To the Members of Procter & Gamble Hygiene and Health Care Limited Report on the Audit of the Ind AS Financial Statements Opinion We have audited the accompanying Ind AS Financial Statements of PROCTER & GAMBLE HYGIENE AND HEALTH CARE LIMITED ("the Company"), which comprise the Balance Sheet as at June 30, 2020, the Statement of Profit and Loss (including other comprehensive income), the Statement of Changes in Equity, the Statement of Cash Flows for the year then ended and the Notes to the Ind-AS financial statements, including a summary of significant accounting policies and other explanatory information (hereinafter referred to as ‘financial statements’). In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Ind-AS 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 prescribed under section 133 of the Act read with the Companies (India Accounting Standard) Rules, 2015, as amended (Ind-AS), and with other accounting principles generally accepted in India, of the state of affairs of the Company as at June 30, 2020, the profit, total comprehensive income, changes in equity and its cash flows for the year ended on that date. Basis for Opinion We conducted our audit of the Ind-AS financial statements in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the ‘Auditor’s Responsibilities for the Audit of the 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 Ind-AS financial statements under the provisions of the Companies Act, 2013 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 Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Ind-AS financial statements of the current period. These matters were addressed in the context of our audit of the Ind-AS financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report. Sr. Key Audit Matter Auditor’s Response 1. Revenue Recognition (note no. 2.3(a) and 19 to the financial statements) Revenue is measured net of trade discounts, rebates and various types of Marketing and Distribution Activities such as incentives and promotions. The estimation of the various types of discounts, incentives and rebate schemes to be recognised based on sales made during the year is material and considered to be judgmental owing to the varying terms of the agreements with customers which are based on annual contracts or shorter term arrangements. In addition, the value and timing of promotions for products varies from period to period, and the activity can span over a year end. Our audit procedures included: (a) Assessing the appropriateness of the revenue recognition accounting policies, including those relating to discounts and incentives by comparing with applicable accounting standards. (b) Testing the design, implementation and operating effectiveness of the Company’s general IT controls and key IT/manual application controls over the Company’s systems which govern recording of revenue and rebates/schemes in the general ledger accounting system. (c) We tested the design, implementation and operating effectiveness of controls over the calculation of discounts and rebates including review of the independent service auditor’s SOC 1 (Type 2) report with regards to the third party service organization’s system and the suitability of the design and operating effectiveness of IT / manual controls relating to processing of claims.

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