We have audited the attached balance sheet of Britannia Industries
Limited (the Company) as at 31 March 2011, the profit and loss account
and the cash flow statement for the year ended on that date annexed
thereto. These fnancial statements are the responsibility of the
Companys Management. Our responsibility is to express an opinion on
these fnancial statements based on our audit.
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 fnancial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the fnancial statements. An audit also includes
assessing the accounting principles used and signifcant estimates made
by Management, as well as evaluating the overall fnancial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
As required by the Companies (Auditors 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 (the Act),
we enclose in the Annexure a statement on the matters specifed in
paragraphs 4 and 5 of the said Order.
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 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 appears from our examination of
those books;
(c) the balance sheet, the profit and loss account and the 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 Act;
(e) on the basis of written representations received from the
directors, as at 31 March 2011 and taken on record by the Board of
Directors, we report that none of the directors is disqualifed as at 31
March 2011 from being appointed as a director in terms of clause (g) of
sub-section (1) of Section 274 of the Act on the said date;
(f) 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 Act 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 31 March 2011;
(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.
ANNEXURE TO THE AUDITORS REPORT
Annexure referred to in our Report to the Members of Britannia
Industries Limited (the Company) for the year ended 31 March 2011. We
report that:
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) The Company has a regular programme of physical verifcation of its
fixed assets by which all fixed assets are verifed in a phased manner
over a period of three years. In our opinion, this periodicity of
physical verifcation is reasonable having regard to the size of the
Company and the nature of its assets. Pursuant to the programme, a
portion of fixed assets have been physically verifed during the year and
no material discrepancies were observed on such verifcation.
(c) Fixed assets disposed off during the year were not substantial, and
therefore, do not affect the going concern assumption.
(ii) (a) The inventory, except goods-in-transit and stocks lying with
third parties, has been physically verifed by the Management during the
year. In our opinion, the frequency of such verifcation is reasonable.
For stocks lying with third parties at the year-end, written
confrmations have been obtained by the Management.
(b) The procedures for 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 inventories. The
discrepancies noticed on verifcation between the physical stocks and
the book records were not material.
(iii) (a) The Company has granted unsecured loans to two companies
covered in the register maintained under Section 301 of the Companies
Act, 1956 (the Act). The maximum amount outstanding during the year
was Rs. 1,080,224 thousands and the year-end balance of such loan was Rs.
12,278 thousands. The Company has not granted any other secured or
unsecured loans to companies/ frms/other parties listed in the register
maintained under Section 301 of the Act.
(b) In our opinion, the rate of interest and other terms and conditions
on which the aforesaid loan has been granted to these companies, is
not, prima facie, prejudicial to the interest of the Company.
(c) In case of loans granted to companies listed in the register
maintained under Section 301, the loans are repayable on demand and the
borrowers have been regular in repayment of principal amount and
interest as demanded.
(d) There is no overdue amount of more than Rupees one lakh in respect
of aforesaid loan
given to the companies listed in the register maintained under Section
301 of the Act.
(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.
(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 with regard
to purchase of inventories and fixed assets and with regard to the sale
of goods and services. We have not observed any major weaknesses in the
internal control system during the course of the audit.
(v) (a) In our opinion and according to the information and
explanations given to us, the particulars of contracts or arrangements
referred to in Section 301 of the Act 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 contracts and
arrangements referred to in (a) above and exceeding the value of Rs. 5
lakh with each party during the year have been made at prices which are
reasonable having regard to the prevailing market prices at the
relevant time.
(vi) The Company has not accepted any deposits from the public during
the year.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
(viii) The Central Government of India has not prescribed the
maintenance of cost records under clause (d) of sub-section (1) of
Section 209 of the Act for any of the products manufactured by the
Company.
(ix) (a) According to the information and explanations given to us and
on the basis of our examination of the records of the Company, amounts
deducted/accrued in the books of account in respect of undisputed
statutory dues including Provident Fund, Investor Education and
Protection Fund, Employees State Insurance, Income-tax, Sales-tax,
Wealth tax, Service tax, Customs duty, Excise duty, Cess and other
material statutory dues have been regularly deposited during the year
by the Company with the appropriate authorities.
There are no dues on account of Cess under Section 441A of the Act
since the date from which the aforesaid section comes into force has
not yet been notifed by the Central Government of India.
According to the information and explanations given to us, no
undisputed amounts payable in respect of Provident Fund, Investor
Education and Protection Fund, Employees State Insurance, Income tax,
Sales tax, Wealth tax, Service tax, Customs duty, Excise duty, Cess and
other material statutory dues were in arrears as at 31 March 2011 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 Wealth tax, Customs duty and Cess which have not been
deposited with the appropriate authorities on account of any dispute.
The particulars of dues of Income-tax, Sales-tax, Service tax and
Excise duty dues as at 31 March 2011 which have not been deposited on
account of disputes are as follows:
Statute/Nature of Amount (Rs.) Period to
which Forum where the dispute is
pending
dues the amount
relates*
Excise duty
(including 12,792,532 1998-2001 Supreme court
service tax)
26,452,708 1994-2007 High court
253,759,761 1980-2010 Tribunal/CESTAT
418,928,063 1991-2011 Appellate Authority up to
Commissioners level
Sales tax / Value 47,724,543 2007-2010 Supreme court
added tax
77,545,789 1989-2010 High court
30,524,318 1996-2010 Tribunal
225,265,297 1980-2010 Appellate Authority up to
Commissioners level
Income tax 299,595,205 1992-2004 High court
9,178,646 1990-1992 Tribunal
16,846,143 2004-2008 Appellate Authority up to
Commissioners level
*The amounts disclosed are net of payments and include interest and
penalties, wherever applicable.
(x) The Company does not have any accumulated losses at the end of the
fnancial year and has not incurred cash losses in the fnancial year and
in the immediately preceding fnancial year.
(xi) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to
banks or debenture holders. The Company did not have any outstanding
dues to any fnancial institutions.
(xii) The Company has not granted any loans and advances on the basis
of security by way of pledge of shares, debentures and other
securities.
(xiii) In our opinion and according to the information and explanations
given to us, the Company is not a chit fund/nidhi/mutual beneft
fund/society.
(xiv) According to the information and explanations given to us, the
Company is not dealing or trading in shares, securities, debentures and
other investments.
(xv) In our opinion and according to the information and explanations
given to us, the terms and conditions on which the Company has given
guarantees for loans taken by others from banks or fnancial
institutions are not prejudicial to the interest of the Company.
(xvi) In our opinion and according to the information and explanations
given to us, the term loans taken by the Company have been applied for
the purpose for which they were raised.
(xvii) According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, we are of
the opinion that the funds raised on short-term basis have not been
used for long-term investment.
(xviii) The Company has not made any preferential allotment of shares
to companies/frms/parties covered in the register maintained under
Section 301 of the Act.
(xix) According to the information and explanations given to us, the
Company has created security or charge in respect of bonus debentures
issued and outstanding at the year end.
(xx) The Company has not raised any money by public issues during the
year.
(xxi) According to the information and explanations given to us, no
fraud on or by the Company during the year has been noticed or reported
during the course of our audit.
for B S R & Co.
Chartered Accountants
Firm registration number: 101248W
Natrajh Ramakrishna
Place : Mumbai Partner
Date : 27 May 2011 Membership number: 32815
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