BATA INDIA LIMITED
ANNUAL REPORT 2011
AUDITORS` REPORT
TO
THE MEMBERS OF
BATA INDIA LIMITED
1. We have audited the attached Balance Sheet of Bata India Limited (`the
Company`) as at December 31, 2011 and also the Profit and Loss account and
the cash flow statement 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)
issued by the Central Government of India in terms of sub-section (4A) of
Section 227 of the Companies Act, 1956, we enclose in the Annexure 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:
i. We have obtained all the information and explanations, which to the best
of our knowledge and belief were necessary for the purposes of our audit;
ii. 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 ;
iii. The balance sheet, profit and loss account and cash flow statement
dealt with by this report are in agreement with the books of account;
iv. In our opinion, the balance sheet, profit and loss account and 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.
v. On the basis of the written representations received from the directors,
as on December 31, 2011, and taken on record by the Board of Directors, we
report that none of the directors is disqualified as on December 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.
vi. In our opinion and to the best of our information and according to the
explanations given to us, the said accounts 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;
a) In the case of the balance sheet, of the state of affairs of the Company
as at December 31, 2011;
b) In the case of the profit and loss account, of the profit for the year
ended on that date; and
c) In the case of cash flow statement, of the cash flows for the year ended
on that date.
For S.R. BATLIBOI & CO.
Firm Registration No. 301003E
Chartered Accountants
per Rajiv Goyal
Place: Gurgaon Partner
Date : February 29, 2012 Membership No.: 94549
Annexure referred to in paragraph 3 of our report of even date:
Re: Bata India Limited
(i) (a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets.
(b) Fixed assets have been physically verified by the management during the
year and no material discrepancies were identified on such verification.
(c) There was no substantial disposal of fixed assets during the year.
(ii) (a) The management has conducted physical verification of inventory at
reasonable intervals during the year.
(b) The procedures of physical verification of inventory 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 physical verification.
(iii) (a) As informed, the Company has not granted any loans, secured or
unsecured to companies, firms or other parties covered in the register
maintained under section 301 of the Companies Act, 1956 and as such,
clauses 4(iii) (a) to 4(iii) (d) of the Companies (Auditor`s Report) Order,
2003 (as amended) are not applicable.
(b) As informed, 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 and as such, clauses 4(iii)
(e) to 4(iii) (g) of the Companies (Auditor`s Report) Order, 2003 (as
amended) 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 purchase of
inventory and fixed assets and for the sale of goods and services. During
the course of our audit, we have not observed any major weakness or
continuing failure to correct any major weakness in the internal control
system of the company in respect of these areas.
(v) (a) In our opinion, there are no contracts or arrangements that need to
be entered in the register maintained under Section 301 of the Companies
Act, 1956.
(b) In our opinion and according to the information and explanations given
to us, as there are no transactions that need to be entered into Register
maintained under Section 301 of the Companies Act,1956, paragraph 4(v)(b)
of the Companies (Auditor`s Report) Order, 2003 (as amended) is not
applicable.
(vi) In respect of deposits accepted, in our opinion and according to the
information and explanations given to us, directives issued by the Reserve
Bank of India and the provisions of sections 58A, 58AA or any other
relevant provisions of the Companies Act, 1956 and the rules framed there
under, to the extent applicable, have been complied with.
We are informed by the management that no order has been passed by the
Company Law Board, National Company Law Tribunal or Reserve Bank of India
or any Court or any other Tribunal.
(vii) In our opinion, the Company has an internal audit system commensurate
with the size and nature of its business.
(viii) We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government for the
maintenance of cost records under section 209(1)(d) of the Companies Act,
1956, related to the manufacture of Shoes and are of the opinion that prima
facie, the prescribed accounts and records have been made and maintained.
(ix) (a) Undisputed statutory dues including provident fund, investor
education and protection fund, or employees` state insurance, income-tax,
sales-tax, wealth-tax, service tax, customs duty, excise duty, cess and
other material statutory dues applicable to it have generally been
regularly deposited with the appropriate authorities.
(b) According to the information and explanations given to us, no
undisputed dues payable in respect of provident fund, investor education
and protection fund, employees` state insurance, income-tax, wealth-tax,
service tax, sales-tax, customs duty, excise duty, cess and other material
statutory dues were outstanding, at the year end, for a period of more than
six months from the date they became payable.
(c) According to the records of the Company, the dues outstanding of
income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty
and cess on account of any dispute, are as follows:
Name of the Nature of dues Amount Period to Forum where
statute (Rs. in which the dispute is
thousand) amount pending
relates
Various State MRP-Tax on tax 16,480 1987-88 to High Court,
Sales Tax case 2001-02 Chennai
Acts
Various State Purchase Tax 5,100 1984-85 Supreme Court
Sales Tax Dispute at
Acts Faridabad
Various State Revenue recovery 6,700 1994-95 STAT, Kerala
Sales Tax against non 1998-99
Acts payment of 1999-00
demand in 2000-01
assessment
Various State Tax in dispute 2,780 1991-92 High Court, UP
Sales Tax u/s 92 of
Acts Central Sales
tax Act
regarding
non-submission
of forms
Various State Appeal Against 1,400 1985-87 High Court,
Sales Tax Assessment Order Punjab and Haryana
Acts
Central Excise Excise Duty 1,500 1987-88 CCE(Appeals)
Act, 1944 demand on Kolkata
closing balance
of exempted
footwear.
Central Excise Duty demanded 7,030 1997-1999 Commissioner of
Act, 1944 for sale of Central Excise,
footwear at Chennai
domestic Tariff
area of which
final hearing
before
commissioner
concluded and
order is pending.
Central Excise Duty demanded 870 2005 Commissioner,
Act, 1944 on various CCE Kolkata
chemicals used
for processing
of leather and
subsequent
clearance of
said processed
leather for
manufacture of
footwear
(Exempted)
Central Excise Disallowance for 2,750 1995-97 CESTAT-Chennai
Act, 1944 trade discount
for sale of
footwear to
retail outlet
Central Excise Central Excise 5,100 2004 CESTAT-Kolkata
Act, 1944 for clearance
of "Defective
Duty Demanded
Footwear" without
payment of
Central Excise
Duty, after
necessary
re-processing of
said footwear.
The process
treated as
"MANUFACTURE"
Central Excise Excise duty 15,560 2004-05 Commissioner
Act, 1944 demanded for (Appeal) Kolkata.
movement of raw
material to job
worker without
payment of duty
Central Excise Disallowing of 9,000 2006 CESTAT, Kolkata
Act, 1944 abatement @ 40% 2007
on MRP for 2008
Institutional 2009
Sales. Sale of 2010
Industrial Boots
& Mines Safety
Boots.
Central Excise Non compliance 21,480 2008 CESTAT, Kolkata
Act, 1944 of the condition
of the
notification for
marking MRP on
factory seconds
cleared on
payment of
appropriate
C.E. duty.
Central Excise Exclusion of 3,000 2009 Additional
Act, 1944 sales tax @ 8% Commissioner of
for payment of Central Excise-
an amount equal Kolkata
to 8%/10% on
exempted
footwear as
per CCR
6(3)(b).
Customs Duty demand on 10,340 2001 CESTAT-Kolkata
Act, 1942 account of short
levy of customs
duty (anti
dumping duty)
for which
hearing before
commissioner
concluded and
the order
received.
Customs Wrong availment 83,760 1998-2003 CESTAT-Kolkata
Act, 1942 of concessional
rate of customs
duty etc. against
which the hearing
has not finalized
as yet
Customs Wrong availment 100 2002 DGFT, Kolkata
Act, 1942 of Adv. License
No. P/W/3497630
dt. 7.2.94
Employees` Exemption from 14,195 2007-2008 Regional Director
State ESI through ESI, Kolkata
Insurance Act, Bata Workers
1948 Sickness Benefit
Society
Income Tax Short Term 230,552* 2007-08 ITAT, Kolkata
Act, 1961 Capital Gains
Provident fund Demand for 56,834 2008 High Court,
Act, 1972 payment of Kolkata
provident fund
on the Job
work charges
* As informed, any liability arising on transfer of development rights
under the above reported case would be borne by the Joint Venture Company
in terms of joint development agreement entered in December, 2006.
(x) The Company has no accumulated losses at the end of the financial year
and it has not incurred cash losses in the current and immediately
preceding financial year.
(xi) The Company has neither taken any loan from financial institution or
banks nor issued any debentures, therefore the provisions of Clause xi are
not applicable, hence not commented on.
(xii) According to the information and explanations given to us and based
on the documents and records produced to us, the Company has not granted
loans and advances on the basis of security by way of pledge of shares,
debentures and other securities.
(xiii) In our opinion, the Company is not a chit fund or a nidhi / mutual
benefit fund / society. Therefore, the provisions of clause 4(xiii) of the
Companies (Auditor`s Report) Order, 2003 (as amended) are not applicable to
the Company.
(xiv) In our opinion, the Company is not dealing in or trading in shares,
securities, debentures and other investments. Accordingly, the provisions
of clause 4(xiv) of the Companies (Auditor`s Report) Order, 2003 (as
amended) are not applicable to the Company.
(xv) According to the information and explanations given to us, the Company
has not given any guarantee for loans taken by others from bank or
financial institutions.
(xvi) The Company did not have any term loans outstanding during the year.
(xvii) According to the information and explanations given to us and on an
overall examination of the balance sheet of the Company, we report that no
funds raised on short-term basis have been used for long-term investment.
(xviii) The Company has not made any preferential allotment of shares to
parties or companies covered in the register maintained under section 301
of the Companies Act, 1956.
(xix) The Company did not have any outstanding debentures during the year.
(xx) The Company has not raised any money by way of public issue during the
year.
(xxi) We have been informed that there have been cash and stock shortages
at certain retail locations aggregating to Rs. 8,355 thousands during the
year under audit. A provision of Rs.3,352 thousands has been made in the
books of account of the Company (net of recoveries) and the matter has been
reported to concerned police authorities for further action.
For S.R. BATLIBOI & CO.
Firm Registration No. 301003E
Chartered Accountants
per Rajiv Goyal
Place: Gurgaon Partner
Date : February 29, 2012 Membership No.: 94549 |